QUESTION:  We’ve talked a lot about the economic issues between China and the U.S.  I want to really focus on the military and on the risks that have to do with national security.  Can you talk us through the massive risks that exist today in terms of China and the U.S.’s national security?

SECRETARY POMPEO:  When you think about risk from the military perspective, it’s all about capacity and intent.  That is, what do they have the ability to do, and what is it they seek to do?  And we’re concerned on both fronts.  We’ve watched President Xi make a commitment that said he wouldn’t go to the South China Sea and build up militarily, and yet he has done so.  We’ve watched them engage in a very significant arms buildup, not only in the quantity of arms but in their lethality, their capability, and their capacity.

And so on both fronts is something that America needs to make sure that we do all we can to ensure that we stay in a posture where we can deter this threat so that we don’t ever have to send our soldiers, sailors, airmen, and Marines to a war.  I can’t imagine that happening amongst these two superpowers.  It’s our job at the State Department to make sure we never put America in that position.

QUESTION:  So let me stay on that theme for a moment, because there is speculation that the Chinese have not only stolen intellectual property from our companies, costing them tens of billions of dollars every year, but also from the Department of Defense.  There is speculation that there is, for example, a buildup in terms of stealth technology which they stole from the United States, some Marine secrets that they’ve stolen.  Can you characterize that?  Is that a fact?

SECRETARY POMPEO:  I can’t say a whole lot, other than it’s the case that we worry about it every day.  The threat of theft not only of commercial intellectual property but of military technology is real, and we’re doing our best to prevent that from happening.  I am confident that it is imperfect and that other countries have obtained some of this.  You can look at some of these systems and you see similarities that suggest that they may well have not created these from scratch.

QUESTION:  The Japanese apparently had to alert and scramble their own fighters 628 days last year – that would be twice a day – to react to coercion in the waters.  China’s rise is impacting the Indo-Pacific.  So give us your sense of that, about this gray zone operation, if you will, intimidating and coercion of other ships from other countries coming in the South China Sea.

SECRETARY POMPEO:  So President Trump laid down a strategy to expressly push back against that.  It’s what we call our Indo-Pacific strategy.  It has many components.  There is a commercial component.  There is a diplomatic component to it.  But there is also a military component to it to make sure that we guarantee for America that these sea lanes remain open.

So your point about Chinese sailing in places that they haven’t sailed before, Chinese aircraft flying with more frequently pushing boundaries up against places where they would normally fly, is a very real risk, and it’s something that United States Department of Defense has pushed back against too.  You’ve seen increased frequency of our activities in those very same places to ensure that U.S. commercial traffic can continue to have access to those sea lanes.  They’re very important for our economy and for America’s economic growth.

QUESTION:  So this is basically operating below the level of conflict —

SECRETARY POMPEO:  That’s right.

QUESTION:  — and yet gaining dominance in the region.  Do you believe that the U.S. has a comprehensive, whole-of-government strategy to fight this?

SECRETARY POMPEO:  Yes, I do.  We need to go execute it.  We need to execute it with great vigor.  The great news is here this isn’t a partisan issue.  I have spoken to nearly every member of the United States Senate about these issues.  Democrats and Republicans alike understand these concerns, express their willingness to support America’s efforts to push back against it, and I am convinced we will be successful in doing so.

QUESTION:  I was reading a good piece earlier.  It’s called, “America Begins to See the Consequences of the Past Policy Errors.”

SECRETARY POMPEO:  Yeah, Maria, this is a really good point.  We’re late to the game.  We just – we watched this happening.  And kind of like when you put the frog in the pot and turn the heat on, you didn’t see the temperature rising as quickly as we should have.  Frankly, that’s true about – for the whole world.  I think the whole world is waking up to these concerns.  And so we spend a great deal of time making sure that we have the right strategy, that we have resourced it properly, but also in sharing it with our allies in the region – Singapore, Vietnam, all of these countries in East Asia and Southeast Asia – ensuring that they too understand these risks so that they can be part of the team, part of the alliance that pushes back against this Chinese threat.

QUESTION:  So should we be breaking formally against past administrations in terms of maintaining this neutrality when it comes to China?

SECRETARY POMPEO:  So it’s complicated.  We have big, commercial relationships with China; important components of our economic well-being are tethered to China today.  But it is the case, and the President quite rightly, whether it was making sure that we have fair, reciprocal, free trade with China, his decision on Chinese technology – these are things that previous administrations refused to do, put America, as you said, behind where we should have been.  We were too late to the game.  But President Trump and the team recognizes this challenge, and we are now determined to put in place all the resources needed to push back against it.

QUESTION:  Let me ask you about these comments that were made recently.  Admiral Davidson, who took over as the Indo-Pacific combatant commander, said in front – as well as Chairman Dunford – testified in front of the Senate Armed Services Committee that we would not win in a war against China.

SECRETARY POMPEO:  Yeah, I didn’t hear him say that exactly.  I would always be long on America.  I hope it never comes to that.  I can’t imagine that it will.  But —

QUESTION:  They have the largest military in the world.

SECRETARY POMPEO:  America is very capable.  I don’t want to spend a lot of time getting in details, but I am very confident.  I was a former soldier; I know the greatness of America’s fighting men and women.  I am convinced that there is no power in the world that America couldn’t, if required, handle in a way that would protect America’s interests all throughout the world.

QUESTION:  What are the implications of no trade deal with China?  Do the two largest economies have to have a partnership?

SECRETARY POMPEO:  We may or may not get a deal.  I couldn’t tell you the answer to that.  Much will turn on whether China is prepared to do what President Trump has asked them to do.  It’s pretty simple, right?  A fair, reciprocal set of trading rules that apply to both countries.  President Trump is perfectly prepared to allow American companies to compete against Chinese companies, but he’s not prepared to allow them to continue to steal our intellectual property, force American businesses to transfer their technology.  He’s not prepared to allow them to put tariffs on American goods when there aren’t any tariffs on their goods coming into our country.

I hope that there is a deal.  I hope there is an arrangement that will work to the benefit of each of our two countries.  But if there’s not, I am very convinced the American economy will continue to grow.

QUESTION:  Should we be worried about them lashing out at the United States?  I mean, now we know that China is considering U.S. rare earth export curbs, these rare earth that are 17 chemical elements used in high-tech consumer equipment.  There was a story recently the Chinese have taken all their panda bears.  I mean, this is sort of opening up into consumerism and where people can understand what this means, that China may stop the exporting of important chemicals that the U.S. needs.

SECRETARY POMPEO:  I always – when I hear these concerns, these worries, I’m always reminded that the American people have lost and suffered for decades under the current rules.  So there’s this – somehow this idea that President Trump’s decision to push back against China caused problems for the American economy, when, in fact, the challenges have been the fact that the Chinese were in a trade war with us a long time ago.  We are simply trying to get back to fair, to reasonable, to reciprocal, to transparent.  That’s the President’s mission.

I can’t predict what the Chinese will ultimately do, how they’ll make their decisions.  Will they attempt to respond?  They did, and they put some counter-tariffs on when President Trump initially put his tariffs on.  I’m sure they’ll take actions in response.  But the American people should know that China has had an unfair trade relationship with the United States for an awfully long time, and President Trump’s singular focus is to push back against it.

QUESTION:  Coming up, part two of my exclusive interview with the Secretary of State.  He weighs in on Chinese technology giant Huawei and intellectual property theft right after this break.

(Break.)

QUESTION:  Welcome back.  Chinese telecom giant Huawei part of U.S.-China trade tensions, intellectual property theft and espionage, causing concern, part two now of my exclusive interview with the Secretary of State Mike Pompeo.

What do the American people need to understand about Huawei?  This fight with Huawei is getting worse.  The chairman of Huawei over the weekend gave an interview basically saying I’m not going to take the President’s call if he calls me, we don’t need the United States.  There’s real espionage that’s going on, isn’t there?

SECRETARY POMPEO:  So Huawei is an instrument of the Chinese Government.  They are deeply connected.  It’s something that’s hard for Americans to understand.  We would – our companies cooperate with the United States Government; that is, they comply with our laws; but no president directs an American private company.  That’s very different in China.  They just simply operate under a different set of rules.  That’s the most fundamental thing I think people need to try and get their head around.  If it’s the case that the Chinese Communist Party wanted to get information from technology that was in the possession of Huawei, it is almost certainly the case that Huawei would provide that to them.  That deep connectivity exists inside the way their political economy operates.  That’s very different than the United States.  That’s the threat that President Trump sees from Huawei.

QUESTION:  What about the limits on Huawei actually limiting the growth of 5G in the United States?  There was speculation today, an article basically saying that the administration’s offenses aimed at stopping Huawei may, in fact, limit the growth of 5G in the United States.

SECRETARY POMPEO:  I don’t know if that’s true or not.  I couldn’t tell you.  I’ve always found our economy to be incredibly robust, incredibly dynamic.  When obstacles pop up or a particular business falls away, someone steps in to fill those shoes, to make up for it.  It’s the dynamism that’s the competitive nature of the United States economy.

I suppose there’s a possibility it’ll slow it down for a little while, but I am convinced that American ingenuity, American know-how, frankly Western – not even just American – European and Western democracies will move to fill whatever gap there is so that these technologies will continue to advance to provide world-class services at affordable prices to American consumers.

QUESTION:  Well, what do we need to know about artificial intelligence?  Is the Chinese ahead of us on AI, and are they using it – well, they’re certainly using it to track their citizens.  But should we be worried if the Chinese are ahead of us on AI?

SECRETARY POMPEO:  We should always seek to be the technology leaders all across the world.  It’s the hallmark of the American economy.  We need to do everything we can to make sure that our educational institutions, our research facilities, our companies, have incentives to continue to build out those systems so that we are the world’s leader in technology.  It’s what’s created the foundation for the American economy for an awfully long time.

China has clearly made progress.  There are almost certainly places where they’re ahead of us.  But I remain very confident that the democratic system that we have, the competitive spirit, the animal spirits in the United States of America, almost always drive out state-run institutions from the competitive landscape.  I have no doubt that they’ll do so here.

QUESTION:  What are you hearing from your – our friends in Europe in terms of dismantling their Huawei infrastructure?  You tried to make the case, communicate the risks a couple of months ago when you were with various leaders in Europe.  Have they changed their mind?  Are they still pushing back?

SECRETARY POMPEO:  Maria, they are becoming educated as well.  They are learning.  It’s not a critique; we were slow to see it as well.  It’s important that we continue to share information.  There’ll be places where they have better information than we do, and we ought to share the information about those risks.  We are interdependent in terms of our communications systems with them.  We have Western-based, rules-ordered, privacy-focused systems that we jointly engage in.  That’s what technology needs to look like in the next 10, 20, 30 years as well.  We need Western values embedded in these systems.

QUESTION:  And final question here.  Is the President planning to do a similar TPP-type arrangement with others in Asia to combat China?  Because there is speculation that maybe we should have stayed in TPP, and now seeing that it’s much more difficult than people expected with China.

SECRETARY POMPEO:  You saw the President’s effort this weekend, right – he’s talking about free trade agreement with Japan this past weekend.  I am very confident we will continue to build out our trade relationships through all parts of Asia.  Whether that’ll be part of a multilateral agreement or a series of bilateral agreements, I don’t know the answer to that.  The President will ultimately make that decision.

QUESTION:  Mr. Secretary, would you like to add anything else that I may have missed that’s important to understand about the Chinese threat?

SECRETARY POMPEO:  No, only this:  There is also enormous – it’s not economic in the purest sense, but humanitarian concerns as well.  We’ve seen as they continue to collect information and use it in ways that are antithetical to what you and I understand about how human beings ought to be treated.

We’ve focused on these million Uighurs that are in these terrible situations in these camps in one of the provinces, but it’s broader and bigger than that.  The complete absence of political freedom inside of this country is something that the American people need to continue to watch and see, because it has an impact on our economic relations to them with as – our economic relationship with them as well.

QUESTION:  And to explain Uighurs, basically the Chinese have rounded up Muslims, Tibetans, put them in these re-education camps, and they are being guarded by machine guns.

SECRETARY POMPEO:  That’s right.  They are not allowing these people to move freely.  They are indoctrinating them with Chinese thought, Chinese thinking, in ways that the West just wouldn’t do.  It’s different, it’s historic, and it’s important.

QUESTION:  Mr. Secretary, thank you.

SECRETARY POMPEO:  Thank you very much.

U.S. Department of State

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