Secretary Esper from Munich: We adapt and prepare our force to deal with China…

Good morning, it’s a pleasure to be with you today. I want to thank the Munich Security Conference for inviting me to speak today. I can see that the event has grown considerably in size and scope since I was last here, which is a testament to the leadership of Ambassador Ischinger and his team. I’d like to speak to you today about the number one priority of the United States Department of Defense: implementing the National Defense Strategy.

The NDS states that we are now in an era of Great Power Competition, with our principal challengers being China, then Russia, and that we must move away from low intensity conflict and prepare once again for high-intensity warfare. At the same time, it recognizes that our second tier priorities are rogue states such as North Korea and Iran. And finally, dealing with Violent Extremist Organizations will likely be an enduring threat for years to come.

Being in Europe, I know that there has been much discussion about the challenges from Russia, so this morning I want to focus on the Pentagon’s top concern: the People’s Republic of China. Next year will mark the 20th anniversary of a decision that fundamentally altered the course of international affairs: China’s admission into the World Trade Organization.

I was working in the United States Senate at the time, and two competing arguments over China’s membership dominated the public debate. The prevailing notion of the day was that, if we allowed the PRC into the WTO and other multilateral institutions, China would continue on its path of economic reform and eventually become a market-oriented trading partner. More broadly, increased engagement with the liberal world order would also spur political opening and help transform the PRC into a responsible global stakeholder.

The more skeptical voices argued that, if granted membership, China would use the benefits of free trade and an open international order to grow its economy and access the technology required to build a strong military and security state capable of expanding the reach of their authoritarian rule. These were both credible arguments, but we all know which one is winning right now. It’s not the former.

In fact, under President Xi’s rule, the Chinese Communist Party is heading even faster and further in the wrong direction – more internal repression, more predatory economic practices, more heavy-handedness, and most concerning for me, a more aggressive military posture.

It is essential that we – as an international community – wake up to the challenges presented by China’s manipulation of the long-standing international, rules-based order that has benefited all of us for many decades.

The Communist Party and its associated organs, including the People’s Liberation Army, are increasingly operating in theaters outside its borders, including Europe, and seeking advantage by any means, and at any cost.

Let me state up front, though, the United States does not seek conflict with China. In fact, we look for areas of cooperation when our interests converge in the hope that they will choose the other path they didn’t take twenty years ago.

Just look at the nearly 18 tons of medical supplies the United States recently provided to the PRC to help fight the coronavirus. And last week, we announced more than $100 million in assistance to China and other countries affected by that virus. The world is too interconnected for us not to work together to solve some of our toughest problems.

However, to be a responsible member of the international community, China must be transparent and respect the sovereignty, freedom, and rights of all nations. Unfortunately, their current behavior leaves great cause for concern.

The United States’ National Defense Strategy recognizes this critical challenge as we adapt and prepare our force to deal with China in this new era of great power competition. The PRC’s growing economic, military, and diplomatic power often manifests itself in ways that are threatening, coercive, and counter to the rules-based international order.

Over time, we have watched them seize and militarize islands in the South China Sea, and rapidly modernize their armed forces, while seeking to use emerging technologies to alter the landscape of power and reshape the world in their favor ….and often at the expense of others.

I continue to stress to my friends in Europe – and just this past week again at the NATO Defense Ministerial in Brussels – that America’s concerns about Beijing’s commercial and military expansion should be their concerns as well.

This September will mark the 75th commemoration of the end of World War II, and the birth of the international rules-based order that has supported security and prosperity across the globe. The United States, our NATO allies, and partners across the Indo-Pacific have sacrificed blood and treasure over the decades to protect and preserve it. Yet, the PRC seeks to undermine and subvert this system, the same one that allowed them to rise and become what they are today.

As we speak, Communist China is exerting financial and political pressure, publicly and privately, on many Indo-Pacific and European nations – large and small – while pursuing new strategic relationships worldwide. In fact, the smaller the country, the heavier the hand of Beijing. Through its Belt and Road Initiative, for example, the PRC is leveraging its overseas investments to force other nations into sub-optimal security decisions.

This has wide-reaching ramifications for the United States and our allies in critical areas like data security, interoperability, and military readiness. While we often doubt the transparency and forthrightness of Beijing, when it comes to their security aims, we should take the Chinese government at its word.

By 2035, the PRC intends to complete its military modernization, And, by 2049, it seeks to dominate Asia as the preeminent global military power. Furthermore, the global community should be deeply concerned about the Party’s use of artificial intelligence and other cutting-edge technologies to surveil and repress Muslim minorities, journalists, and pro-democracy protestors.

To make matters worse, the government is now exporting these tools worldwide in a manner that could bolster other authoritarian regimes. China’s rapid ascent has stirred much debate over the primacy of the United States and the West in the 21st century. I understand this topic is part of this year’s Munich Security Conference report.

China’s growth over the years has been remarkable, but in many ways it is fueled by theft, coercion, and exploitation of free market economies, private companies, and colleges and universities. American and European institutions and corporations face the brunt of these malign activities, and we have seen a multitude of examples where our economies and companies have suffered as a result.

But Beijing’s bad behavior will only take them so far. The world is increasingly aware of its motives – and responding in turn. Regrettably, rather than change course, Party leadership continues its rampant technology theft, while resolving to eventually end its reliance on foreign innovation altogether, independently develop its own systems, and then dominate critical sectors and markets.

Huawei and 5G are today’s poster child for this nefarious activity. History has proven time and again, though, that authoritarianism breeds corruption, promotes conformity, smothers free thinking, and suppresses freedom. In stark contrast to this are our values, sense of fairness, and culture of opportunity, which encourage disruption and unleash the very best of human intellect, spirit, and innovation.

This is why it is critical that, together, we directly and unambiguously, address Beijing’s actions and intentions, so that we are never intimidated, duped, or pushed into bad security, economic, or political choices. And maybe, just maybe, we can get them on the right path. Again, make no mistake, we do not seek conflict with China. That’s not what we want; not at all. Rather, we seek fair and open competition in the economic realm.

And in general, we simply ask of Beijing what we ask of every nation: to play by the rules, abide by international norms, and respect the rights and sovereignty of others. To restore an equal footing, the Department of Defense is doing its share.

We are focused on deterring bad behavior, reassuring our friends and allies, and defending the global commons. And to maintain the peace, through strength, we are implementing the United States’ National Defense Strategy. As part of this strategy, we are doing our part to safeguard American innovation and reinvigorate our industrial base.

Thanks to our largest Research and Development budget in 70 years, we are investing in cutting-edge technologies and accelerating the modernization of our force, while at the same time, divesting from legacy systems and re-investing those savings into hypersonic missiles, artificial intelligence, autonomous systems, and other game-changing technologies.

Unlike China and others, we will use these advanced capabilities to help keep the peace, promote prosperity, ensure security, and protect the sovereignty of all freedom-loving countries. For example, while Beijing uses artificial intelligence to tighten its grip over its people, the Department of Defense has established well-regarded principles for the lawful and ethical use of AI.

While the PRC develops and deploys long-range fires to intimidate and threaten its neighbors, we are investing in both conventional and advanced missile defense capabilities to protect the homeland, our interests, and our allies.

And while Communist China is weaponizing the space domain through the development of directed-energy weapons and killer satellites, the Pentagon is standing up its first new military service in over 70 years – the United States Space Force – to ensure freedom of use, commerce and navigation in, to, and through space, for all. Simply put, the contrast between China’s malevolent actions and United States’ leadership couldn’t be more obvious.

At the same time, we are protecting these high-tech breakthroughs from theft and exploitation by strengthening our foreign investment laws, supply chains, export controls, university-based research, and cyber defenses – all of which have been longstanding attack points of the Chinese government.

We are encouraged that our allies and partners are beginning to take similar actions, as they thoroughly assess the long-term threats and challenges posed by China. Among these concerns is a dependence on emerging technologies that could inject serious risk into our defense cooperation. Reliance on Chinese 5G vendors, for example, could render our partners’ critical systems vulnerable to disruption, manipulation, and espionage.

It could also jeopardize our communication and intelligence sharing capabilities, and by extension, our alliances. To counter this, we are encouraging allied and U.S. tech companies to develop alternative 5G solutions, and we are working alongside them to test these technologies at our military bases as we speak.

In the long run, developing our own secure 5G networks will far outweigh any perceived gains from partnering with heavily subsidized Chinese providers that ultimately answer to Party leadership. In short: let’s be smart; let’s learn from the past; and let’s get 5G right so we don’t regret our decisions later.

The reality of the 21st century is that many economic decisions are also national security decisions. We are not asking our partners to reject engagement with China; just the opposite. We want you to show them the right path, and nudge them down it.

In the meantime, though, we ARE asking our friends to clearly choose a global system that supports democracy, protects human rights, and safeguards our greatest asymmetric advantages: our values, our shared interests, and our unmatched network of alliances and partnerships.

We feel that the choice is clear, but recognize it may be tough; that the economic challenges may take a toll in the short run; but our collective future may hang in the balance if we fail to make the hard choices now for the long run.

The United States does not want an adversarial relationship with China. It is a great country with an extraordinary history, a rich culture, and a wonderful people. Rather, we want China to behave like a normal country that adheres to the international rules and order that generations before us have fought hard to protect and preserve. And that means the Chinese government needs to change its policies and behaviors. If the PRC will not change its ways, then defending this system must be our collective priority.

We can only do this by making greater investments in our common defense; by making the hard economic and commercial choices needed to prioritize our shared security; and by working together to maintain a ready and capable alliance network that is prepared to deter any threat, defend any Ally, and defeat any foe.

Thank you for your time, and I look forward to your questions.