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Feb. 11, 2021
Notes from the Pentagon

Biden ends disclosures on China institutes

By Bill Gertz
The Department of Homeland Security has dropped plans for a federal rule that would have required American schools and universities to disclose agreements with Chinese government-funded Confucius Institutes on their campuses.

A Federal Register notice said the rule, first proposed Dec. 31 at the end of the Trump administration, was withdrawn Jan. 26 without comment.

Confucius Institutes and Confucius Schools operate as education centers that ostensibly teach Chinese culture and language. Federal authorities, however, say the institutes are stalking horses for covert Chinese government influence efforts.

Sen. Marco Rubio, Florida Republican, said the institutes engage in covert influence operations designed to sway American public opinion and teach half-truths about China. Under pressure from the Trump administration, scores of the institutes were closed.

“For years, I have raised the alarm about the threat posed by Chinese government-run Confucius Institutes, and the FBI has warned that the Communist Party uses these entities to infiltrate American schools,” Mr. Rubio told Inside the Ring. “President Trump and his administration took a positive step in mandating schools and universities disclose their partnerships with these agents of Chinese government influence. That President Biden would undo this important action is deeply disturbing.”

Mr. Rubio said that by failing to hold China accountable for running foreign influence operations, “the Biden administration is calling into question its stated commitment to maintain a policy that treats China as a strategic competitor and protects American interests and values from its malign influence.”

Rep. Michael T. McCaul of Texas, the ranking Republican on the House Foreign Affairs Committee, said the institutes pose security threats to the education system.

“By quietly backing away from the proposed rule without consulting Congress, the Biden administration is sending a concerning signal about its scrutiny of [Chinese] influence in academia, and telling academic institutions that they don’t need to be transparent about their ties to China’s regime,” Mr. McCaul said.

A State Department official told Inside the Ring Wednesday the reports that the Biden administration had pulled the draft rule were misleading. The Office of Management and Budget under Mr. Trump failed to complete a review of the rule prior to Jan. 20, the official said, leaving it “stuck in OMB’s interagency review on Inauguration Day.”

White House Chief of Staff Ron Klain ordered a freeze of all regulatory processes that day, automatically resulting in the withdrawal of rule targeting the Confucius Institutes.

“The Biden administration will treat Confucius Institutes as part of our overall approach of how best to respond to China’s use of information operations and other coercive and corrupting efforts to undermine and interfere in democracies,” the official said.

The proposed rule was recommended in a 2019 report by the Senate Homeland Security and Governmental Affairs Committee in a staff report. The report said the institutes were paying universities and schools hundreds of thousands of dollars to serve as hosts.

FBI Director Christopher A. Wray said in 2018 that the bureau was monitoring the Confucius Institutes over concerns that they were being used for propaganda and espionage. Some FBI investigations were linked to the institutes, he said.

“We do share concerns about the Confucius Institutes,” he told a Senate hearing. “We’ve been watching that development for a while. It’s just one of many tools that they take advantage of.”

A Chinese government official, Liu Zhongshan, was arrested in October 2019 on federal visa fraud charges related to the recruitment of American technology experts.

The Justice Department criminal complaint in the case revealed that Mr. Liu used a Confucius Institute at a U.S. university as part of the recruitment scheme. It was the first time a federal criminal case was linked to one of the Chinese institutes.

The State Department last year designated the headquarters of the Confucius Institutes in Washington as a foreign mission, a label that recognizes the institutes as entities of the Chinese government. That designation remains in place.

In December, then-Secretary of State Mike Pompeo also spoke out against the institutes and urged universities to shutter the centers.

The more than 100 Confucius Institutes on U.S. campuses contributed to the current “left-leaning” campuses that Mr. Pompeo said “are rife with anti-Americanism and present easy targets for their anti-American messaging.”

The State Department “has made very clear these Confucius Institutes are literally up to no good,” said Mr. Pompeo, noting that many have been recognized as problems and closed.

China’s government has funded American universities to the tune of $1.3 billion since 2013, Mr. Pompeo said.

In July, then-Attorney General William P. Barr also criticized the activities of Confucius Institutes, noting that they “have been accused of pressuring host universities to silence discussion or cancel events on topics considered controversial by Beijing.”

“Universities must stand up for each other; refuse to let the [Chinese Communist Party] dictate research efforts or suppress diverse voices; support colleagues and students who wish to speak their minds; and consider whether any sacrifice of academic integrity or freedom is worth the price of appeasing the CCP’s demands,” Mr. Barr said.

In a bid to prevent China from cornering the global market on rare-earth elements critical to high-tech weapons and electronics, the Pentagon recently announced a defense contract to build a rare-earth processing plant in Texas.

The contract award to Lynas Rare Earths Ltd. was announced Feb. 1 under the Defense Production Act for a plant to process light rare-earth elements.

Such elements “are critical to numerous defense and commercial applications, including petroleum refining, glass additives, and magnets used in electric vehicle drivetrain motors and precision-guided munitions,” the Pentagon said in announcing the contract. “Upon completion of this project, if successful, Lynas will produce approximately 25% of the world’s supply of rare-earth element oxides.”

The U.S. subsidiary of the Australian and Malaysian company will receive $30.4 million for the project to be built in Hondo, Texas, complementing operations in Australia and Malaysia.

The new plant will be co-located with a proposed heavy rare-earth separation facility funded by the Pentagon that was announced in April.

The Pentagon said the new plant is part of a U.S. government strategy to produce secure and reliable sources of critical minerals under a 2017 executive order. That order said American reliance on foreign imports of critical materials is a “strategic vulnerability,” both to the military and the civilian economy.

Rare-earth elements are not in short supply. However, there is a bottleneck in the processing and refinement of the minerals for use in high-tech products. China produces about 80% of rare-earth elements imported into the United States.

In 2019, Chinese President Xi Jinping visited a Chinese rare-earth industrial complex and called for a new “Long March” in the trade war with the United States. Chinese state media reports suggested Beijing could even cut off rare-earth exports to the United States, as it did in 2010 in a trade dispute with Japan.

The Pentagon has also been stockpiling rare-earth stock and pushed new rules to “transition defense supply chains to non-Chinese sources of rare-earth element magnets.” Domestic production of rare-earth elements used in neodymium-iron-boron magnets has been encouraged, as has research to speed up development of rare-earth processing technology.

Lynas is the largest producer of rare-earth elements outside China. The Texas plants will produce around 5,000 tons of minerals annually.

Chinese Communist Party-affiliated voices reacted harshly to a recent article by Strategic Command head Adm. Charles Richard warning that a nuclear war with China or Russia is no longer unthinkable.

Jiang Tianjiao, a professor at the Fudan Development Institute of Fudan University, wrote in the flagship state-controlled outlet People’s Daily that the prospect of a nuclear war was “groundless.”

Citing China’s official policy of not using nuclear arms first in a conflict, Mr. Jiang wrote, “As long as the U.S. does not launch a nuclear strike against China first, it does not need to worry that China will start a nuclear war.”

The article went on to assert that by issuing the warning, Adm. Richard “intends to keep Biden administration’s mouth shut.”

“A typical Democrat, Biden prefers to pursue arms control, and he participated in arms control negotiations between the U.S. and the former Soviet Union during the Cold War,” Mr. Jiang said. “Therefore, his administration desires to make new achievements in arms control.

“To reduce the threat of a nuclear war, [President Obama] tried to sign an executive order to adopt the no-first-use policy of nuclear weapons at the end of his term, which was strongly resisted by conservatives,” he noted. “Today, the Biden administration is likely to complete Obama’s unfinished work and reiterate no-first-use of nuclear weapons.”

Mr. Jiang then said Adm. Richard “hyped” the danger of a nuclear war in a bid to prevent “progressives” now in power from restricting the use of nuclear weapons.

Adm. Richard “wants to modernize America’s nuclear arsenal,” he said.

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