BLUMENTHAL DELIVERS OPENING STATEMENT AT HEARING ON CHINA’S CYBERSECURITY THREAT

[WASHINGTON, DC] - U.S. Senator Richard Blumenthal (D-CT), Chair of the Senate Judiciary Subcommittee on Privacy, Technology and the Law, delivered opening remarks at today's hearing on "Big Hacks & Big Tech: China's Cybersecurity Threat." During the hearing, Blumenthal raised concerns about cybersecurity risks posed by Chinese hacking of American telecommunications firms and the threats Big Tech's connections to China pose to our democracy, national security, and economy.

Blumenthal pointed to the recent Salt Typhoon cyberattack, which impacted numerous phone companies in the United States, "We are still learning each week about how sprawling and catastrophic this hacking campaign was, but what we know now-and it's publicly known-should galvanize action now. We need to ensure these specific types of hacks will never happen again. The Federal Communications Commission has the legal authority. Right now, it has the power to set and enforce security standards, and I urge the FCC to start a rulemaking process and investigation."

"Again, and again, America is caught flat-footed by Chinese spying," Blumenthal continued. "The breaches of the Office of Personnel Management, Equifax, the countless defense contractors breached, espionage risk from Huawei, DJI, and TikTok. The list goes on. We need to radically rethink how we are protecting against Beijing's spying and influence."

Blumenthal also raised concerns about Big Tech's connections to China, especially as Elon Musk becomes increasingly involved in government affairs, "Relevant to this hearing, Tesla makes half of its cars and as much as a third of its sales in China. Elon Musk is so concerned about protecting Tesla's market access that he pledged to uphold 'core socialist values in China.' He has been parroting Chinese talking points on Taiwan. Senior Chinese officials are even looking to use Mr. Musk to influence the White House."

Senator Blumenthal concluded by highlighting the need for his bipartisan legislative framework with Ranking Member Josh Hawley (R-MO), which would establish guardrails for artificial intelligence, "I hope we can turn this framework into real rules to prevent American AI technologies from being used against us as well as deal with the broad set of threats we discussed today."

Video of Blumenthal's opening remarks can be found here. The full transcript of Blumenthal's statement is available below.

U.S. Senator Richard Blumenthal (D-CT): Welcome to this hearing of the subcommittee on Privacy, Technology and the Law, and thank you to our witnesses for being here. Thank you to my colleagues. Apologies for my keeping you waiting. Our focus this afternoon is the threat that Chinese hacking and interference poses to our democracy, to our national security, to our economy-including tech's ties and its vulnerability to the Chinese government.

According to the FBI and DHS, ahead of this month's election, a Chinese hacking group dubbed "Salt Typhoon" broke into several American phone companies to spy on political and government targets. The Wall Street journal has reported that those targets included the Vice President-Elect, our colleague Senator Vance, Senate staff, members of the Harris campaign, and possibly others. And I want to enter into the record that article from the Wall Street Journal reporting on that spying and hacking. Without objection.

Those reports also reveal that Chinese hackers had targeted the wiretapping capabilities used by law enforcement and that hackers were able to compromise private human communications and call records. Think of it for a moment-a foreign adversary attempted to wiretap both presidential campaigns during the past election. We are still learning each week about how sprawling and catastrophic this hacking campaign was, but what we know now-and it's publicly known-should galvanize action now.

We need to ensure these specific types of hacks will never happen again. The Federal Communications Commission has the legal authority. Right now, it has the power to set and enforce security standards, and I urge the FCC to start a rulemaking process and investigation. It can be started under this administration, carried forward under the next. There should be bipartisan unity on the urgency of that action.

This isn't the first time we have faced an urgent crisis created by Chinese hacking and malign influence. Again and again, America is caught flat-footed by Chinese spying. The breaches of the office of personnel management, Equifax, the countless defense contractors breached, espionage risk from Huawei, DJI, and TikTok. The list goes on. We need to radically rethink how we are protecting against Beijing's spying and influence.

This year, Congress took an important initial step to address these risks. Congress imposed limits on Chinese state affiliated apps operating in the U.S. That includes TikTok, but it could also apply to Chinese social media apps that take TikTok's place like WeChat.

I want to be clear that the law requires the divestment of TikTok's American operations next year. The president can extend the deadline once but he can't ignore the law. If he wants to change the law, he can try, but I can tell him and tell the American people sentiment is pretty strong here in favor of that law.

Even as Chinese companies undermine our national security, our American ones often do the same. China has used economic coercion to enlist American companies for its own agenda, and we have given them a free pass far too often. Companies like Apple have acted as partners of the Chinese government to censor ideas and information in China. They blocked independent media and they have helped the CCP crackdown on dissent. Human rights and democratic values, but also our national and economic security, are at stake as a result of China's leverage-its economic leverage-and these conflicts of interest involving American companies.

Relevant to this hearing, Tesla makes half of its cars and as much as a third of its sales in China. Elon Musk is so concerned about protecting Tesla's market access that he pledged to uphold "core socialist values in China." He has been parroting Chinese talking points on Taiwan. Senior Chinese officials are even looking to use Mr. Musk to influence the White House, and I'd like to enter into the record without objection that Wall Street journal report.

Meanwhile, the Department of Defense and other agencies are becoming more reliant on Mr. Musk, SpaceX and now, he has been promised power over the entire federal government. Those extensive economic ties and China's willingness to exploit them are a dangerous combination-a real risk to this country. It's a broad issue. Mr. Musk and Tesla are far from the only ones in big tech facing this situation. Apple complies with China censorship and surveillance demands because 20% of its sales in 80% of its suppliers are based in China. When forced to choose between American security and hugely profitable access to the Chinese market, Americans may doubt that SpaceX, Mr. Musk, Tim Cook, and other technology leaders will side with America.

This subcommittee has focused on artificial intelligence for the past two years. Opponents of regulations often cite a race to AI with China as an excuse to avoid regulation and do nothing, but according to Reuters, Chinese researchers are using meta-AI models for military purposes. Big Tech companies have provided computing power and collaborate with Chinese AI companies. And I'm going to put that Reuters report in the record, without objection.

So, if this is a race, why are we giving opponents a huge head start? That is why Senator Hawley and my bipartisan framework on AI includes export controls and limits on providing AI models and computing power to Chinese companies. Those export controls are a fundamental part of our framework. I hope we can turn this framework into real rules to prevent American AI technologies from being used against us as well as deal with the broad set of threats we discussed today.

Thank you all for being here, and I'll turn to the Ranking Member.

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