The Coronavirus and America's Small Business Supply Chain — Congressional Testimony, by Tim Morrison, Senior Fellow, Hudson Institute
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- Congressional materials
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- 2020-03-12
Summary
Written testimony of Tim Morrison, Senior Fellow at the Hudson Institute, before the U.S. Senate Committee on Small Business & Entrepreneurship on March 12, 2020, titled The Coronavirus and America's Small Business Supply Chain and addressed to Chairman Rubio and Ranking Member Cardin. The testimony criticizes the Chinese Communist Party's early handling of COVID-19 and discusses U.S. reliance on the People's Republic of China for pharmaceuticals and other health care commodities. It asks the committee to survey strategic sectors where businesses depend on the PRC for supply chains, to consider tools of economic statecraft, and to consider legislation promoting an American market in strategic sectors like healthcare, citing H.R. 4710. It also urges investigation of PRC influence in the WHO. Endnotes and an author biography follow.
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“The Coronavirus and America's Small Business Supply Chain — Congressional Testimony, by Tim Morrison, Senior Fellow, Hudson Institute.”
Dated 2020-03-12. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2020-03-12-morrison-testimony/
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CONGRESSIONAL TESTIMONY
The Coronavirus and America’s
Small Business Supply Chain
BY TIM MORRISON
Senior Fellow, Hudson Institute
Testimony before the U.S. Senate Committee on Small Business & Entrepreneurship
March 12, 2020
Chairman Rubio, Ranking Member Cardin, and members Communist Party (CCP) conducts its affairs domestically
of the Senate Small Business Committee, I thank and internationally, including by distorting free markets to the
you for the invitation to testify here today, and for the detriment of our small-, medium-, and large scale businesses,
opportunity to represent the Hudson Institute, to share my our national security, and our health security.
views on “The Coronavirus and America’s Small Business
Supply Chain.” Let’s start with the cold reality and the simple fact that the
Chinese Communist Party initially concealed the fact of the
As you may know, prior to joining the Hudson Institute, I spent viral outbreak of what we now know as COVID-19 from the
18 months at the White House National Security Council; for Chinese people, international healthcare authorities like the
approximately 12 of those months, I was privileged to lead World Health Organization (WHO), and other nation states,
the Counterproliferation and Biodefense directorate, which including the United States.
included the team of exceptional professionals who drafted
and have implemented the National Biodefense Strategy, According to the World Health Organization (WHO), the
an Executive Order to modernize influenza vaccination, and National Health Commission of the PRC initially knew of
coordinated the interagency and international response to the the “Wuhan virus” as early as December 8, 2019. Yet, initial
outbreak of Ebola in the Democratic Republic of Congo. That substantive disclosures to the WHO did not take place until
team, despite uninformed rhetoric to the contrary, was never approximately January 11, 2020.1
dismantled and continues to serve today as the United States
responds to COVID-19. I don’t think it’s too much to ask how many people in the
United States and elsewhere have been infected, gotten sick,
Based on the expertise you have gathered here today, I will or worse as a consequence of the Chinese Communist Party’s
focus my testimony on the manner in which the Chinese decision to sit on the fact of this epidemic?
In fact, I think you as our elected officials must demand the And we seem to nonchalantly accept China’s behavior when
answer to this question and determine how to respond. it involves predatory economics against our businesses or
those of its mercantilist clients in the “One Belt, One Road”
This is not a new phenomenon when dealing with the CCP, ecosystem in Africa, Asia, and, increasingly, Europe.
unfortunately.
But this is all part-and-parcel of the same corrupt Chinese
Many of us will remember the outbreak of SARS in 2003, Communist Party that concealed the existence of COVID-19
which the communist party also concealed from the Chinese when we could have taken steps to protect the American
people and world until it was a full-blown epidemic. people before this virus reached our shores.
Alarmingly, the Chinese Communist Party has continued to A few weeks ago, I wrote an op-ed on the extent of how China
censor information on such Chinese social media apps as might use, with either benign or malignant intent, the leverage
WeChat.2 It is actively denying information to its people. we gave it over the U.S. health care system.5
By now, we all have heard about Dr. Li Wenliang, who was I will not repeat myself here today, but I will focus on a few key
among the first to call attention to the spread of COVID-19 in points, without preempting what my colleagues will likely have
China. It’s been reported that his dissemination of his findings to say.
about the then-unidentified virus on a WeChat chat room
ultimately attracted the attention of authorities, which In 2004, as Ms. Gibson will likely explain, the United States
led to his detention. He tragically died from the virus as stopped making penicillin domestically. This happened without
a result.3 a vote in this body. It happened without decision in the
Executive Branch. I am aware of no part of our government
At the same time, the Chinese Internet has been overtaken by that was consulted about this decision.
conspiracy theories that the “Wuhan virus” actually originated
in the United States, not in Wuhan province. It was a decision made in a corporate board room based
on short-term decision focused on showing a profit on a
Does anyone in this hearing room actually think the Chinese balance sheet.
Communist Party isn’t tacitly accepting, if not actively
promoting, this misinformation?4 And it was a decision prompted by China’s Made in 2025 plan
to dominate what the CCP determined were strategic sectors
It is an inescapable conclusion that due to the insecurity, which Chinese industry should control globally.6
corruption, and lack of moral legitimacy of the Chinese
Communist Party, it fears the kind of openness and But that’s where we are during this global public health
transparency that we in the West take for granted. emergency.
Too often we turn our backs on the CCP’s malevolence And so we are here today to ask, “on a good day, what does
because it only affects the Uyghurs or Tibetans, or the Chinese it mean to rely on the People’s Republic of China for our basic
people themselves. We don’t think it affects us. health care commodities?”
HUDSON INSTITUTE The Coronavirus and America’s Small Business Supply Chain 2
Larry Wortzel, a member of the U.S.-China Commission will Can we realistically expect to enforce our security guarantees
tell you about his blood pressure medicine making him sick in East Asia against aggression by the People’s Republic of
because it was contaminated with rocket fuel in a Chinese China when we can’t even ensure our own health care security
manufacture facility. Rocket fuel.
7
here at home?
Surgeons around the country may tell you about the hundreds This committee has a role to play to reverse this situation. I ask
if not thousands of surgeries that were canceled because you to consider the following:
millions of surgical gowns had to be recalled because they
were manufactured in the PRC and may not have been sterile First, I urge you to conduct a comprehensive survey of the
when they were packaged up and sent to the United States. 8
strategic sectors where small-, medium-, and large-scale
This was January of this year. businesses depend on the People’s Republic of China for
their supply chains. You can start with the Made in China
What about a bad day? What about malign intent? 2025 plan.
For example, what if this body passes a resolution demanding Second, the term “industrial policy” is considered by
a high-level visit of an American official to Taiwan, in some economic theorists and purists to be dirty words.
furtherance of the Taiwan Travel Act of 2018? But understand this, China Inc—China’s state sponsored
capitalism—has destroyed the free market in many sectors,
What if the United States chooses to sanction Huawei, or from 5G to Active Pharmaceutical Ingredients. Just look at the
another Chinese state-proxy, for the Uyghur suppression? PRC’s Made in China 2025 plan for the roadmap. The CCP
has not been shy about this—it does not think we will respond
What if the Chinese Communist Party decides to retaliate to its predations.
to these sovereign decisions by cutting off the shipment of
medicine to the U.S.? You cannot expect American producers and innovators—
especially small businesses—to try to survive against the full
Think it can’t happen? economic might of the Chinese Communist Party all alone.
Ask the Japanese who lost access to rare earth elements from Continuing to refuse to fight back against such predatory
the PRC in 2010 over a territorial dispute.9 economics is also known as “unilateral disarmament.”
Already, we are seeing shortages of basic medication like I ask you to think about all of the tools of economic statecraft
acetaminophen—otherwise known as “Tylenol”—which, you can use to support American producers in strategic
of course, we depend on factories located in the PRC industries.
to produce. 10
For example, I know several of you were involved in the
The PRC’s state-owned Xinhua, a communist party propaganda passage of the BUILD Act in 2018. This was an effort to
outlet, recently noted that the PRC could “plunge [the U.S.] into leverage private sector investment in international development
the mighty sea of coronavirus” if it wanted to do so. 11
to counter China Inc.
HUDSON INSTITUTE The Coronavirus and America’s Small Business Supply Chain 3
What other tools are available to do the same at the Small Garamendi and Hartzler, would leverage the resources of
Business Administration or the Export-Import Bank? the Defense Production Act and the market power of the
Department of Defense through TRICARE and the Department
I urge you, do not allow America’s job creators and innovators of Veterans Affairs, to create new opportunities for ensuring
to continue to be unilaterally disarmed. Their government can domestic supply chains.
and should defend them from foreign aggression.
Lastly, I know several of you are on the Senate Foreign
Third, consider legislation to promote the development of an Relations Committee and related national security committees.
American market in strategic sectors like healthcare. I encourage you to investigate the influence of the PRC in
international organizations like the WHO. Ask yourselves why,
Chairman Rubio, your amendment to last year’s NDAA despite meeting all of its established criteria, the WHO still has
concerning reliance on the PRC for pharmaceuticals is a key not labeled COVID-19 a “pandemic.”12 What influence, what
step. You sounded the alarm on this risk. tools of suasion, is the PRC using against the WHO?
As does H.R. 4710, the Pharmaceutical Independence Long- I want to thank you for the opportunity to testify here today. I
Term Readiness Reform Act, introduced by Representatives stand ready to answer your questions.
Endnotes
1 “Emergencies Preparedness, Response: Novel Coronavirus—China,” World Health Organization, accessed March 9, 2020, https://www.who.
int/csr/don/12-january-2020-novel-coronavirus-china/en/.
2 “Coronavirus: Chinese app WeChat censored virus content since 1 Jan,” BBC News, March 4 2020, https://www.bbc.com/news/world-asia-
china-51732042
3 Patrick Mendis, Joey Wang, “Made in China: Coronavirus Chaos Could Have Been Avoided,” National Interest, March 7, 2020, https://nation-
alinterest.org/feature/made-china-coronavirus-chaos-could-have-been-avoided-130422
4 Gerry Shih, “Conspiracy theorists blame U.S. for coronavirus. China is happy to encourage them.” The Washington Post, March 5, 2020,
https://www.washingtonpost.com/world/asia_pacific/conspiracy-theorists-blame-the-us-for-coronavirus-china-is-happy-to-encourage-
them/2020/03/05/50875458-5dc8-11ea-ac50-18701e14e06d_story.html
5 Tim Morrison, ”Coronavirus Tests U.S. Medical System’s Unhealthy Reliance on China for Drugs and Supplies,” NBC News, February 6, 2020,
https://www.hudson.org/research/15695-coronavirus-tests-u-s-medical-system-s-unhealthy-reliance-on-china-for-drugs-and-supplies
6 Robert Atkinson, “China’s Biopharmaceutical Strategy: Challenge or Complement to U.S. Industry Competitiveness?” Information Technology
& Innovation Foundation, August 12, 2019, https://itif.org/publications/2019/08/12/chinas-biopharmaceutical-strategy-challenge-or-comple-
ment-us-industry
7 Anna Edney, “Pentagon sees security threat in China’s drug-supply dominance,” Bloomberg, August 5, 2019, https://www.stripes.com/news/
pacific/pentagon-sees-security-threat-in-china-s-drug-supply-dominance-1.593249
HUDSON INSTITUTE The Coronavirus and America’s Small Business Supply Chain 4
8 Jonathan Lapook, “Surgical gown recall leaves medical centers scrambling,” CBS News, January 31, 2020, https://www.cbsnews.com/
news/surgical-gown-recall-leaves-medical-centers-scrambling-2020-01-31/
9 Justin McCurry, “Japan-China row escalates over fishing boat collision,” The Guardian, September 9, 2010, https://www.theguardian.com/
world/2010/sep/09/japan-china-fishing-boat-collision
10 David Lazarus, “With most drug ingredients coming from China, FDA says shortages have begun,” Los Angeles Times, February 28, 2020,
https://www.latimes.com/business/story/2020-02-28/column-coronavirus-china-drugs?
11 Twitter account of Yanzhong Huang (@YanzhongHuang) https://twitter.com/YanzhongHuang
12 Maria Cheng, “U.N. Declines to Label COVID-19 as a Pandemic While Outbreaks Multiply,” Associated Press, March 7, 2020 https://time.
com/5798797/un-who-coronavirus-outbreak-classification/
HUDSON INSTITUTE The Coronavirus and America’s Small Business Supply Chain 5
About the Author
TIM MORRISON
Senior Fellow, Hudson Institute
Tim Morrison is a senior fellow at Hudson Institute, specializing in Asia-Pacific security, missile defense, nuclear
deterrent modernization, and arms control.
Most recently, Mr. Morrison was deputy assistant to the president for national security in the Trump administration.
He served as senior director on the National Security Council for European affairs, where he was responsible for
coordinating U.S. government policy for 52 countries and three multilateral organizations.
For 17 years, Mr. Morrison worked in a variety of roles on Capitol Hill. From 2011 through July 2018, he served on the House Armed
Services Committee staff, initially as staff director of the Subcommittee on Strategic Forces and ultimately as policy director of
the Committee. As policy director, Mr. Morrison led implementation of Chairman Mac Thornberry’s priorities, including overseeing
implementation of the Trump administration’s National Security Strategy and National Defense Strategy, prohibition of Chinese
Communist Party-linked information technology and video surveillance technology, and House-passage of the Foreign Investment
Risk Review Modernization Act (FIRRMA) and the Export Control Reform Act (ECRA) as part of the Fiscal Year 2019 National Defense
Authorization Act.
From 2007 until 2011, Mr. Morrison was the national security advisor to U.S. Senator Jon Kyl (AZ), the Senate Republican Whip,
where he assisted in coordinating national security policy and strategy for the Senate Republican Conference and led policy
initiatives on nuclear weapons, arms control, export controls, and economic sanctions.
Mr. Morrison has a B.A. in political science and history from the University of Minnesota. He also has a J.D. from the George
Washington University Law School. He is an intelligence officer in the United States Navy Reserve, serving since 2011.
About Hudson Institute
Hudson Institute is a research organization promoting American leadership and global engagement for a
secure, free, and prosperous future.
Founded in 1961 by strategist Herman Kahn, Hudson Institute challenges conventional thinking and
helps manage strategic transitions to the future through interdisciplinary studies in defense, international
relations, economics, health care, technology, culture, and law.
Hudson seeks to guide public policy makers and global leaders in government and business through a
vigorous program of publications, conferences, policy briefings and recommendations.
Visit www.hudson.org for more information.
Hudson Institute
1201 Pennsylvania Avenue, N.W.
Fourth Floor
Washington, D.C. 20004
+1.202.974.2400
info@hudson.org
www.hudson.org
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