Randy's Blog

RSS Feed
Posted by Randy | June 14, 2013
On May 29, 2013 Smithfield Foods, Inc. and Shuanghui International Holdings Limited announced that they have entered into a merger agreement.  Smithfield Foods is a $13 billion company and the world’s largest pork processor and pig producer, while Shuanghui International and its subsidiaries are the majority shareholders of China’s largest meat processing enterprise.

This $4.7 billion transaction, if approved by the Committee on Foreign Investment in the United States, will be the largest to date of a U.S. corporation by a Chinese Enterprise. 

The Committee on Foreign Investment in the United States (CFIUS) is an interagency organization that oversees the national security implications of foreign investment in the U.S. economy.  Under current law, CFIUS has 30 days to conduct a review, 45 days to conduct an investigation, and then the President has 15 days to make his ultimate determination of whether a deal threatens to impair the national security. The President is the only officer with the authority to suspend or prohibit mergers, acquisitions, and takeovers. 

As the largest takeover of a U.S. company by a Chinese buyer, I formally requested a briefing from CFIUS regarding the potential impacts of this merger on national security, the economic market, and international trade, as well as the review and investigative process CFIUS would undertake in such a case. 

Question of the week:  Do you believe that this purchase necessitates CFIUS review and investigation to ensure the safety and security of America’s citizens, as well as the preservation of national economic interests, food safety, and environmental standards?

(  ) Yes.
(  ) No.
(  ) I don’t know.
(  ) Other (leave your comments below).
Take the instaPoll here.

Find the results of last week’s instaPoll here
Posted by Randy | May 31, 2013
This week, news reports surfaced indicating that designs of some of our military’s most advanced weapons systems were compromised by a sustained strategy of Chinese cyber espionage. More than two dozen major weapons systems, critical to U.S. regional missile defense for Asia, Europe and the Persian Gulf, as well as combat aircraft and ships, were the targets of these attacks. 

In January, the Defense Science Board warned that U.S. “security practices have not kept up with the cyber adversary tactics and capabilities.” While China has worked diligently to build a sophisticated military over the past decade, these breaches will only serve to accelerate the development of their growing capabilities.

These cyber intrusions follow reports of an attack last week that hackers from Iran infiltrated software that controls U.S. oil and gas pipelines.  As one report noted, “The developments show that while Chinese hackers pose widespread intellectual-property-theft and espionage concerns, the Iranian assaults have emerged as far more worrisome because of their apparent hostile intent and potential for damage or sabotage.”

Question of the week:  What should the response by the U.S. government be to these cyber attacks? 

(  ) Invest more in technology to counter these attacks
(  ) Encourage more information sharing within industry and the government 
(  ) Increase penalties for hackers that steal intellectual property from U.S. companies
(  ) Create a security clearance system for employees of private sector companies for cyber security threat sharing
(  ) Increase penalties against those who cause or attempt to cause damage to a computer that powers critical infrastructure, such as energy and water and food supply systems
(  ) Enact a federal data breach law
(  ) I don’t know.
(  ) Other (leave your comments below).
Take the instaPoll here.

Find the results of last week’s instaPoll here.                  
Posted by Randy | May 20, 2013

I wanted to share with you an article I wrote that was published by National Review, regarding China as a military competitor.  We must acknowledge China’s military ambitions and their potential consequences for U.S. interests in the region.  By assessing the intentions of the Chinese, the United States will be better prepared to evaluate our interests in Asia and act accordingly.  

As Chairman of the Congressional China Caucus, I want to hear your thoughts on how the United States should address China’s military modernization. 

Time to Admit China Is a Military Competitor

By J. Randy Forbes

May 17, 2013 1:56 PM

The early-May release by the Defense Department of its annual report to Congress on China’s military developments is a prime opportunity to reevaluate how the United States frames the future of its security relationship with Beijing. For too long, politicians and pundits of both parties have refused to clearly state the obvious: The U.S. and China are engaged in a long-term peacetime competition with economic, diplomatic and, yes, military components. The sooner Washington begins speaking honestly about our relationship with China, the sooner we’ll have policies that adequately address the challenges facing our two countries.

As China’s economic development continues and its regional aspirations expand, its military modernization has continued apace. This reality, and the necessity of the United States’ remaining a force in Asia-Pacific for the sake of regional stability, makes many in Washington uncomfortable. Indeed, the pressure to refrain from speaking openly about the issue has led some U.S. officials to begin referring to China as a national “Voldermort.”

It’s immensely counterproductive to avoid speaking openly and truthfully about the Sino-American rivalry and its future trajectory. By failing to acknowledge China’s military ambitions and their potential consequences for U.S. interests in the region, American policymakers are choosing timidity when resolute leadership is required.

The reality is this: Over the past decade, China has been developing military capabilities designed to deny the United States access to the waters and airspace of the western Pacific. Through the acquisition of anti-ship ballistic missiles designed to target American aircraft carriers, advanced aircraft capable of hitting U.S. and allied bases around the region, and large numbers of modern submarines, Beijing has clearly signaled its intention to subvert the balance of power that has anchored peace in Asia for six decades, and to do so in ways inimical to American interests.

This is not simply the case of a rising power seeking a military befitting its economic might; rather, China has specifically geared its military development to areas of perceived American weakness with the objective of restricting U.S. action in East Asia.

Speaking clearly about Beijing’s actions and intentions is not a fatalistic acceptance that Sino-American conflict is inevitable, or even likely. Instead, by realistically appraising Chinese intentions, the United States will be better prepared to assess our interests in Asia and act accordingly.

With 80 percent of global trade traveling by sea, a substantial amount of that through the waters of East Asia, allowing the United States to be pushed out of the region is simply unacceptable. American military power, particularly our navy, has ensured the peaceful, liberal order that currently predominates in East Asia. As our fleet has slowly atrophied from the nearly 600 ships of the Reagan era to 283 today, the ability of the United States to uphold its obligations and interests around the world has become sorely tested. Even as the Chinese are developing sophisticated systems to target our perceived vulnerabilities, the U.S. is expected to experience major shortfalls in areas from attack submarines and surface combatants to Air Force long-range bombers. Understanding, and speaking clearly about, our interests in Asia and the challenges we face is critical to fixing the military gaps we have incurred over the last decade.

The Pentagon’s latest report on Chinese military modernization is an excellent opportunity for leaders in both parties to begin the process of speaking honestly about the China challenge. Our future relations with China are not preordained. Sound policy based on American strength and rooted in longstanding American interests is achievable only through recognition that China is a long-term competitor of the United States across a range of areas, including the military. The sooner we are comfortable admitting this fact, the better our chances of marshaling the resources to maintain a free and prosperous Asia.

Posted by Randy | November 30, 2012
Last the weekend, China’s Defense Ministry released video and pictures of a Chinese J-15 fighter jet taking off and landing from its aircraft carrier, the Liaoning.

The news marks a significant milestone for China 14 years after it acquired the unfinished carrier from the Ukraine, 18 months after its first sea trials and two months after its commissioning into the People’s Liberation Army Navy. Though significant work lies ahead to make the Liaoning combat operational,  the commencement of carrier-based, fixed-wing flight operations puts China in elite company, with only five other nations with these current capabilities – The U.S., Russia, France, India and Brazil.  

This comes during a time of increasing concern among China’s neighbors in the Pacific, many of which remain embroiled in territorial disputes with China over the long-term regional intentions of the People’s Liberation Army and the Chinese Communist Party.  This week, Congressman Forbes moderated an important discussion at the Foreign Policy Initiative entitled, “All Eyes on Asia: Perspectives From Our Allies” between representatives of several nations in the region on their security concerns and the re-rise of China.

Additionally, click here to read about Congressman Forbes’ work as Chairman and founder of the Congressional China Caucus, whose primary mission is to investigate and educate its members on the emergence of China’s global reach and the consequences of its growing international, economic, and political influence on U.S. interests.

Question of the week: Given China’s growing military capabilities, do you consider China….

( ) a partner of the United States
( ) friendly, but not a partner of the United States
( ) a competitor to the United States
( ) an adversary to the United States
( ) I don't know
( ) Other (Leave your comments below)

Take the poll here.

Find out the results of last week’s instapoll here.

Find out the results of my instapoll about the “Fiscal Cliff” here.
Posted by Randy | March 07, 2012
Just days after the Department of Defense failed to release its annual report to Congress on China’s military power, China announced that its military spending will top $100 billion for the first time. This a double-digit increase on last year's military spending, and comes “as China’s neighbors are increasingly unnerved by the country’s growing assertiveness in pressing territorial claims,” according to the Washington Post.

The news of this increase alone fuels concerns about China’s long-term intentions. Taken within the context of DoD military power report delay, it raises significant questions about our nation’s long-term strategy, or lack thereof, for responding in an era of Chinese military modernization.  The DoD report is critical for the United States to be able to evaluate its own defense strategy in light of a dramatic military buildup by China in the Western Pacific.  Each day without the report is another without a necessary tool to understand the Department of Defense’s perspective on China in light of this continued military buildup.

Read about the letter I sent to Secretary of Defense Leon Panetta, asking him to comply with the law and release the report on China’s military power: http://forbes.house.gov/News/DocumentSingle.aspx?DocumentID=282971
Posted by Randy | February 23, 2012

According to a new forecast by the research group IHS Global Insight, China is set to double its defense spending between 2011 and 2015. This increase from $119.8 billion to $238.2 billion will exceed the combined spending of the next twelve largest defense budgets in the Asia-Pacific region, solidifying China's status as a regional superpower.

This increase in military capability has been enabled by China's rapidly expanding economy. From 2000 to 2009, China's defense budget grew by an average of 12 percent annually. The projected surge of China's gross domestic product over the next three years will accelerate this growth, allowing for an annual increase in defense spending of 18.75 percent.

This rise is unlikely to subside anytime soon, notes IHS Asia-Pacific chief economist Rajiv Biswas. He says “Beijing has been able to devote an increasingly large portion of its overall budget towards defense and has been steadily building up its military capabilities for more than two decades. This will continue unless there is an economic catastrophe.”

I recently discussed the issue of China’s growing defense budget and ways that the United States can meet China’s military challenges in an article I wrote for Aviation Week. You can read that article here.

Posted by Randy | January 19, 2012
Yesterday, the Administration announced that it had rejected plans for construction of the Keystone XL Pipeline from the tar sands of Alberta, Canada to U.S. Gulf Coast Refineries.  Although several environmental studies related to construction had been completed, the Administration continued to delay issuing a final decision on construction of the pipeline.  As a result, Congress issued a requirement at the end of last year that the Administration issue a decision within 60 days of the President signing the payroll tax cut extension into law.  The rejection has been applauded by organizations that had resisted construction of the pipeline due to environmental concerns, but has also been opposed by the U.S. Chamber of Commerce and other business organizations that point to the estimated 120,000 jobs and steps toward energy independence the pipeline would create.  TransCanada, the corporation seeking the permit to construct the pipeline, must now find another recipient for its 830,000 barrels of oil a day it plans to export.  In November, Canadian Prime Minister Stephen Harper indicated that China may be interested in procuring the North American energy.

Question of the Week: Do you support the Administration's decision opposing construction of the Keystone XL Pipeline?

(  )  Yes, I support the Administration's decision regarding construction of the Keystone XL Pipeline.
(  )  No, I oppose the Administration's decision regarding construction of the Keystone XL Pipeline.
(  )  Other (share your thoughts below)
(  )  I am unsure.

Take the poll here.

Find the results of last week's instaPoll here.

Read Congressman Forbes' statement in regard to the Administration's decision here.
Posted by Randy | January 19, 2012
Don't miss this article I wrote for Aviation Week magazine on the need for U.S. long-term military and diplomatic effort in the Western Pacific.

Click the image to expand the article or click here.

Posted by Randy | January 17, 2012
The Wall Street Journal has just launched a real time “Econtracker” that provides a good snapshot of China’s economic growth. The indicators include China’s Gross Domestic Product, Fixed Asset Investment, Export, Foreign Exchange Reserves and more. 

Check it out here or by clicking the chart below.

Posted by Randy | January 11, 2012

A new piece from The Diplomat titled “China’s 2012 Challenges” lays out twelve key challenges that the People’s Republic of China and the Chinese Communist Party will face during the next year.  These challenges range from the need for economic reforms, to social instability and expected friction in the South China Sea.  It is vital that American policymakers know and understand these challenges while prioritizing U.S. foreign policy initiatives.  Here are three of the twelve challenges identified in the piece:

  • The run-up to Beijing’s once-in-a-decade political transition in October 2012 is likely to generate intensified clampdowns internally and assertive rhetoric abroad as China faces rising domestic challenges, and finds itself constrained internationally. Fearful neighbors may further strengthen ties with the United States. Pariah/failed state “allies” North Korea, Pakistan, and Iran will likely experience problems that affect China’s own interests.
  • China’s government will likely tighten domestic media reporting guidelines, as it remains highly concerned about social unrest and seeks to suppress news that might create controversy ahead of October 2012. Investors will have to take particular care that important data points are not swept under the table.
  • There is a heightened risk that inflation will exceed expected levels. If growth falters as real estate prices continue to fall and the economies of major trading partners remain weak, Beijing may be forced to loosen lending restrictions. Such monetary supply expansion would very likely push inflation well beyond the 2.8% figure that Li Daokui of People’s Bank of China forecasts for 2012.

The piece can be read in its entirety here: http://the-diplomat.com/china-power/2012/01/08/chinas-2012-challenges/