Romney Warns of China Threat While Leading Foreign Relations Committee Nominations Hearing

WASHINGTON—U.S. Senator Mitt Romney (R-UT) today served as Ranking Member at a Senate Foreign Relations Committee nominations hearing for ambassadorships to Malaysia, Azerbaijan, Palau, and Djibouti, and Deputy Chief Executive Officer of the United States International Development Finance Corporation. During his questioning, he warned of the threat China poses to our national and global security and asked the witnesses how they would approach their service to combat this threat—whether it be safeguarding U.S. supply chains, obtaining critical mineral independence, and discouraging other countries from partnering with the Chinese Communist Party for investment.

Excerpts from Senator Romney’s questioning can be found below:

Senator Romney: Thank you, Mr. Chairman. And I want to pursue the discussion which Chairman Menendez began with regards to the DFC [Development Finance Corporation]. I have watched, if you will, through a business lens, economic lens, as China has carried out what many would consider a brilliant strategy of investing in critical minerals and materials that are essential for the technologies of today and tomorrow. And their Belt and Road has not been randomly carried out, providing opportunities for development, but instead has been focused on securing those resources, such as buying mines, then putting in place rail lines that take the materials from that mine to a port, then buying the port to make sure that they can have access to take those materials to China.

It’s a series of actions which would probably be illegal for a corporation to take under U.S. law, but they’re not subject to U.S. law. And we look to DFC to counter this, although with a fraction of the resources that China has already employed and also historically with less focus on our strategic objectives and more on simply development and helping lift people out of poverty, a noble goal in of itself. But I wonder if you could expand on the extent to which you believe it is an important role for DFC to pursue America’s economic interests and strategic interests in securing for us many of the minerals and resources that are necessary to be competitive.

The Honorable Nisha Desai Biswal: Thank you, Senator. I do believe that not only is it critically important for the United States, but it’s important for the global community that there not be monopolistic reliance on any single actor for critical minerals, critical and essential supply chains. And I think if confirmed, I would want to work with DFC to continue to support the diversification of important supply chains, to invest in projects that build capacity on critical minerals and build the ability of nations to carry out trade in those minerals in multiple different directions. I believe that DFC is already doing some important work in that respect, not only in Africa, but also a nickel mine in Brazil that DFC is working with in parts of Asia, etc. And if confirmed, Senator, I would want to continue to lean into that direction as well.

Romney: I would hope that as you consider various alternatives and, I’m sure the list of projects that you might invest in is enormously long, that in carrying out those evaluations and the selection of various projects, that in each write up, there is an element that deals with the strategic either military or economic or political interests of the United States of America.Do you agree with that?

Bisawal: I do, Senator. And I do think that as we are advancing those strategic objectives, they are very much aligned with the development impact of the projects that we are financing, and I would want to showcase that as well.

Romney: Mr. Kagan, with regards to Malaysia, thank you for those responses. With regards to Malaysia, what is their feeling right now?I know we in this country take great pride in the fact that we have lots of friends and our foes around the world don’t have a lot of friends. But I would submit that one of the reasons we have so many friends is because we’ve been the superpower, the sole superpower. And when there becomes alternatives and in fact, in a region where we meet that might not even be the strongest, that friendship ends up being strained. What is your sense now of the Malaysian people, as well as its government, in terms of their sentiment with regards to the U.S. and with regards to the PRC?

Mr. Edgard D. Kagan: Thank you very much for that question, Senator. I think you’ve put your finger on what is our broader challenge across the region, and I think certainly in Malaysia, and that is that there is a great reservoir of goodwill towards the United States, at least when I served there for 2014 to 2017.

I was constantly struck at the web of connections and web of ties that we have between our peoples and how powerful they are. Andthe U.S. has been a very important investor and a very important trading partner in Malaysia. And I think the quality of U.S. investment in Malaysia has had a particular impact, in particular the amount of training, the amount of investment that American companies have made in developing their staff. And you see that in the number of companies that have been started by people who used to work at U.S. companies. But at the same time, there’s no question that they are looking to see what we can do now. And I think that they, my experience has been that they are eager to do more with the United States.

But at the same time, that they’re looking to other opportunities in the region and they’re open to the significant inflows of investment and trade with China. That creates a challenge for us. I think that we can meet that challenge by being engaged and if confirmed, I would want to help lead that from the position of U.S. Ambassador to Malaysia. But look, we’re going to be working very hard at this for a long time to come. I think that we’re going to need to be flexible. We’re going to need to be engaged and we’re going to need to work with our allies and partners to strengthen our hand as we try and meet these challenges.

Romney: Mr. Libby, I’m interested in your perspective of the people of Azerbaijan and how in the region there is a reaction to Russia’s invasion in Ukraine—whether that’s changed public opinion, whether that’s changed political sentiment there, perspective of the government, and what you see in terms of that dynamic.

Mr. Mark W. Libby: Thanks, Senator. That’s one of the things that makes this region so fascinating and so critically important.Azerbaijan is, to my knowledge, the only country that borders both Russia and Iran. And so, it sits right smack in the middle of a strategic region and its role in the former Soviet space is obviously very important. Azerbaijan has had an interesting balancing act to play, but they have been quite helpful with regard to supporting Ukraine, fuel, food assistance, and even after this dam was destroyed last week, sending a new package of aid. They voted for the U.N. General Assembly resolution condemning the invasion and reaffirming Ukraine’s territorial integrity. This is an interesting and fairly forward-leaning place for a country in the former Soviet space. If I’m confirmed, I think part of my job is going to be to try and get Azerbaijan further down that track.

Obviously, there’s ties of kinship and ties of trade and so forth. But Azerbaijan has its own potential role as a conduit, as an energy source, and as a counterbalance to Russian influence in the region. And that’s one of the reasons that makes it so important. 

Romney:  Thank you. Ambassador Kierscht, my understanding is that Djibouti has recently agreed to allow China to build an enormous facility in the port to accommodate an aircraft carrier or substantial military resources that China might have. Clearly, the PRC is making a play to have greater and greater influence in Djibouti. What should we be doing? And I know there’s only so much an ambassador can do, and you want to have relationships with the people there and you want to interact with them. But do we need to be making far more private sector investments? Do we need to have more of an industrial policy where we’re investing in projects in that country ourselves to be more competitive? What actions do we need to take to make sure that this key player at the gateway to the Red Sea remains a friendly nation? 

The Honorable Cynthia Kierscht: Thank you, Senator Romney, for raising that very critical question. I would like to identify several things that in my current role as Ambassador to Mauritania we are working on because I think we do need to look at ways that we can push back against China. For example, in Mauritania, we have just launched a new project to help the Mauritanians combat illegal, unregulated, and unreported fishing done by the PRC in their offshore waters, which robs Mauritania really, of one of their prime natural resources. If confirmed, I would seek to pursue similar avenues. But I think the U.S. has a really good story to tell about what we bring to the table—our transparency, our values, working with civil society, listening, and learning from our partners.

In Djibouti in particular, we are working together with them to achieve their, as stated, economic development goals which seek to develop their human capital and create jobs. We have, through our USAID colleagues there right now, we are working on several large programs in order to do just that. We are helping them do job creation as well as youth employment through workforce development programs, energy, education, and health programing. We are also providing them with very robust security assistance in addition to our base. They have the only bilateral FMF allocation on the continent of Africa, and we provide them with other state and DOD security assistance as well. But again, as you noted, we should probably also lean into engaging our private sector, using the tools that we have, such as the Development Finance Core, ExIm, USTDA, to really bring our private sector into that market as well. And if confirmed, I would seek to leverage all of those tools.