On March 8, 2023, Director of National Intelligence Avril Haines delivered opening testimony at a Senate Select Committee on Intelligence hearing for the Annual Threat Assessment of the U.S. Intelligence Community. DNI Haines emphasized the national security challenges posed by China, Russia, Iran, and North Korea, as well as transnational issues, such as climate change, terrorism, and emerging technologies. The opening testimony and public hearing is available to view here, and the transcript is below.

Remarks as prepared for delivery by
The Honorable Avril Haines
Director of National Intelligence

Annual Threat Assessment
Opening Statement
Senate Select Committee on Intelligence

March 08, 2023

Chairman Warner, Vice Chairman Rubio, Members of the Committee, thank you for the opportunity to be here today, alongside my wonderful colleagues and on behalf of the extraordinary public servants we lead in the Intelligence Community to present the IC’s annual threat assessment.

Before I start, I just want to publicly thank the men and women of the Intelligence Community, whose work we are presenting today. From the collector to the analyst and everybody in between who made it possible for us to bring you the annual threat assessment in hopes that this work will help keep our country safe and prosperous, thank you.

This year’s assessment notes that during the coming year, the United States and its allies will face an international security environment dominated by two sets of strategic challenges that intersect with each other and existing trends to intensify their national security implications.

First, great powers, rising regional powers, and an evolving array of non-state actors are vying for influence and impact in the international system, including over the standards and rules that will shape the global order for decades to come. The next few years are critical as strategic competition with China and Russia intensifies, in particular, over how the world will evolve and whether the rise of authoritarianism can be checked and reversed. Other threats are, of course, also individually significant, but how well we stay ahead of — and manage — this competition will be fundamental to our success at navigating everything else.

Second, challenges that transcend borders — including climate change, human and health security, and economic needs made worse by energy and food insecurity, as well as Russia’s unprovoked and illegal invasion of Ukraine — are converging as the planet emerges from the COVID-19 pandemic and all at the same time as great powers are challenging longstanding norms for transnational cooperation. Further compounding this dynamic is the impact that rapidly emerging technologies are having on governance, business, society, and intelligence around the world.

Given that background, perhaps needless to say, the People’s Republic of China — which is increasingly challenging the United States economically, technologically, politically, and militarily around the world — remains our unparalleled priority. The Chinese Communist Party, or CCP, under President Xi Jinping will continue efforts to achieve Xi’s vision of making China the preeminent power in East Asia and a major power on the world stage.

To fulfill Xi’s vision, however, the CCP is increasingly convinced that it can only do so at the expense of U.S. power and influence, and by using coordinated, whole-of-government tools to demonstrate strength and compel neighbors to acquiesce to its preferences, including its land, sea, and air claims in the region and its assertions of sovereignty over Taiwan.

Last October, President Xi secured his third five-year term as China’s leader at the 20th Party Congress, and, as we meet today, China’s national legislature is in session, formally appointing Xi and confirming his choice to lead the PRC’s State Council, as well as its ministries and the leaders of the military, legislative, and judicial branches. After more than a decade serving as China’s top leader, Xi’s control over key levers of power gives him significant power and influence over most issues.

Xi has surrounded himself with like-minded loyalists at the apex of the Party’s Standing Committee, China’s highest decision-making body, and we assess that during the course of Xi’s third term they will together attempt to press Taiwan on unification; undercut U.S. influence, which they perceive as a threat; drive wedges between Washington and its allies and partners; and promote certain norms that favor China’s authoritarian system.

You may have seen Xi’s recent criticism during his speech on Monday of what he referred to as America’s “suppression of China,” reflecting his longstanding distrust of U.S. goals and his apparent belief that the United States seeks to quote-unquote “contain” China.

Xi’s speech this week was the most public and direct criticism that we have seen from him to date and probably reflects growing pessimism in Beijing about China’s relationship with the United States, as well as Xi’s growing worries about the trajectory of China’s domestic economic development and indigenous technology innovation — challenges that he now blames on the United States.

He also wants to message his populace and regional actors that the US bears the responsibility for any coming increase in tensions.

Despite this more public and directly critical rhetoric, however, we assess that Beijing still believes it benefits most by preventing a spiraling of tensions and by preserving stability in its relationship with the United States.

Specifically, Beijing wants to preserve stability in East Asia, avoid triggering additional economic punishments from U.S. sanctions and U.S. partners, and showcase a steady relationship with the United States to help avoid setbacks in its other relationships around the world, even while signaling opposition to claimed U.S. provocations, including the shoot-down of the PRC balloon.

He wants a period of relative calm to give China the time and stability it needs to address growing domestic difficulties.

Xi’s principal focus is on domestic economic development, which is not assured. In fact, the IC assesses that China’s long-term economic growth will continue to decelerate because China’s era of rapid catch-up growth is ending and structural issues — such as debt, demographics, inequality, overreliance on investment and suppressed consumption — remain.

And although the CCP may find ways to overcome its structural challenges over the long-term, in the short-term the CCP continues to take an increasingly aggressive approach to external affairs, pursuing its goal of building a world-class military; expanding its nuclear arsenal; pursuing counter-space weapons capable of targeting U.S. and allied satellites; forcing foreign companies and coercing foreign countries to allow the transfer of technology and intellectual property in order to boost its indigenous capabilities; continuing to increase global supply chain dependencies on China with the aim of using such technologies and dependencies, rather, to threaten and cut off foreign countries during a crisis; expanding its cyber pursuits and increasing the threat of aggressive cyber operations against the U.S. homeland and foreign partners; and expanding influence operations, including through the export of digital repression technologies.

The CCP will also seek to reshape global governance in line with his preferences and governance standards that support its monopoly of power within China. Beijing is elevating PRC candidates and policies at the UN; attempting to gain buy-in for Xi’s development and global initiatives; promoting blocs like the Shanghai Cooperation Organization as a counterweight to the West; and shaping multilateral groupings, such as the formerly 17+1 forum in Eastern Europe, but with mixed success.

In brief, the CCP represents both the leading and most consequential threat to U.S. national security and leadership globally and its intelligence-specific ambitions and capabilities make it for us our most serious and consequential intelligence rival.

During the past year, the threat has been additionally complicated by a deepening collaboration with Russia, which also remains an area of obviously intense focus for the Intelligence Community.

In fact, when we were last before you for an ATA hearing, it was only a few weeks after Russia’s unprovoked and illegal invasion of Ukraine. Now, we are over a year into the war, which is reshaping not only Russia’s global relationships and strategic standing but also our own, strengthening our alliances and partnerships in ways that President Putin almost certainly did not anticipate — often precipitating the very events that he was trying to avoid, such as Sweden and Finland’s petition to join NATO.

On the battlefield, there is currently a grinding attritional war in which neither side has a definitive military advantage and the day-to-day fighting is over hundreds of meters — currently focused largely in Donetsk — as Russia tries to capture the remainder of the Oblast.

The Russians are making incremental progress on Bakhmut, which is not a particularly strategic objective, but are otherwise facing considerable constraints, including personnel and ammunition shortages, dysfunction within the military’s leadership, exhaustion, as well as morale challenges.

Even as the Russian offensive continues, they are experiencing high casualty rates. Putin is likely better understanding the limits of what his military is capable of achieving and appears to be focused on more modest military objectives for now.

Export controls and sanctions are hampering Russia’s war effort, particularly by restricting access to foreign components necessary to produce weapons systems.

If Russia does not initiate a mandatory mobilization and identify substantial third-party ammunition supplies, it will be increasingly challenging for them to sustain even the current level of offensive operations in the coming months and, consequently, they may fully shift to holding and defending the territories they now occupy.

In short, we do not foresee the Russian military recovering enough this year to make major territorial gains, but Putin most likely calculates that time works in his favor and that prolonging the war — including with potential pauses in the fighting — may be his best remaining pathway to eventually securing Russian strategic interests in Ukraine, even if it takes several years.

Ukraine, of course, also faces challenges. Ukraine’s prospects for success in a major spring offensive will probably hinge on a number of factors. At present, the Ukrainian Armed Forces remains locked in a struggle to defend against Russian offensives across eastern Ukraine. While these Russian assaults are costly for Russia, the extent to which Ukrainian forces are having to draw down their reserves and equipment, as well as suffer further casualties, will all likely factor into Ukraine’s ability to go on the offensive later this spring.

The IC continues to monitor Putin’s reactions and his nuclear saber rattling. Our analysts assess that his current posturing is intended to deter the West from providing additional support to Ukraine as he weighs a further escalation of the conflict. He probably still remains confident that Russia can eventually militarily defeat Ukraine and wants to prevent Western support from tipping the balance and forcing a conflict with NATO.

And, of course, the already considerable human toll of the conflict is only increasing. In addition to the many tens of thousands of casualties suffered by the Russian and Ukrainian militaries, more than 8 million people have been forced to flee Ukraine since Russia invaded. There is widespread reporting of atrocities committed by Russian forces, including deliberate strikes against non-military targets such as Ukraine’s civilian population and civilian infrastructure, particularly its energy facilities and electric grid. Russia and its proxy groups almost certainly are using so-called filtration operations to detain and forcibly deport tens of thousands of Ukrainian civilians to Russia. The IC is engaged with other parts of the U.S. Government to document and hold Russia and Russian actors accountable for their actions.

The reaction to the invasion from countries around the world has been resolute, hurting Russia’s reputation and generating criticism at home.

Moscow has suffered losses that will require years of rebuilding and leave it less capable of posing a conventional military threat to Europe and operating assertively in Eurasia and on the global stage. As a result, Russia will become even more reliant on asymmetric options — such as nuclear, cyber, and space capabilities — and on China.

Our assessment also covers Iran, which continues to pursue its longstanding ambitions for regional leadership and is a threat to U.S. persons directly and via proxy attacks. Iran also remains a threat to Israel, both directly through its missile and UAV forces and indirectly through its support of Lebanese Hizballah and other proxies. Most concerning, Iran has accelerated the expansion of its nuclear program, stating that it is no longer constrained by JCPOA limits, and has undertaken research and development activities that would bring it closer to producing the fissile material necessary for completing a nuclear device following a decision to do so.

North Korea similarly remains a proliferation concern as it continues its efforts to steadily expand and enhance its nuclear and conventional capabilities targeting the United States and our allies, periodically using aggressive and potentially destabilizing actions to reshape the regional security environment in its favor and to reinforce its status as a de facto nuclear power.

In addition, regional challenges — such as interstate conflicts, key cases of instability, and poor governance developments — also pose growing challenges. In Africa and the developing world, increased poverty, hindered economic growth, and widened inequality are creating the conditions that are feeding domestic unrest, insurgencies, democratic backsliding, authoritarianism, and cross-border conflict spillover.

Several parts of the Middle East will remain plagued by war over the year, insurgencies, and corruption. In the Western Hemisphere, persistent economic weakness, insecurity, and corruption are fueling public frustration and anti-status quo pressures that very likely will present governance challenges to leaders, while also posing sustained spillover migration, criminal, and economic challenges for the United States.

Throughout the world, countries are struggling to maintain democratic systems and prevent the rise of authoritarians, in some cases because Russia and China are helping autocrats take or hold power.

As I noted at the outset, transnational challenges interact in this complex system along with more traditional threats and often reinforce each other, creating compounding and cascading risks to U.S. national security. For example, climate change remains an urgent threat that will increasingly exacerbate risks to U.S. national security as the physical impacts increase and geopolitical tensions mount over the global response to the challenge.

And, now entering its fourth year, the COVID-19 pandemic remains one of the most significant threats to global public health, at a cost of more than 6.5 million lives and trillions of dollars in lost economic output to date. In addition to direct effects of the pandemic, resultant economic, human security, political, and national security implications of COVID-19 continue to strain recovery efforts, presenting both known and unforeseen challenges that probably will ripple through society and the global economy during the next year and for years to come.

Russia’s aggression against Ukraine has aggravated COVID-19-related fragilities in the global economy, raised commodity prices, fueled market volatility, and contributed to food insecurity and financial instability. The combination of elevated energy and food prices has increased the number of individuals facing extreme poverty and food insecurity.

Affected countries will struggle to reverse those trends through 2023, even if global food prices stabilize. Russia’s war in Ukraine can be blamed for these intensifying effects, something much of the world also understands and that others — including China — will have to come to terms with as they consider to what extent they want to continue assisting or enabling Russia.

Climate change, the pandemic, and conflicts are exacerbating irregular migration, and, in the Western Hemisphere, push and pull factors that drive migrants to the United States — such as deteriorating socioeconomic and security conditions, misperceptions of U.S. policies, and employment opportunities in the United States — will almost certainly persist through 2023.

Transnational criminal organizations exploit migrants through extortion, kidnapping, and human trafficking, including sex trafficking and forced labor. These organizations also continue to pose a direct threat through the production and trafficking of lethal illicit drugs, massive theft, financial and cyber crimes, money laundering, and eroding the rule of law in partner nations.

In particular, the threat from illicit drugs is at historic levels, with the robust supply of synthetic opioids from Mexican TCOs continuing to play a major role in driving American overdose deaths to over 100,000 annually.

And terrorism, of course, remains a persistent threat, but the problem is evolving. Individuals and cells adhering to ideologies espoused by ISIS, al-Qa‘ida, and transnational racially or ethnically motivated violent extremist movements, in particular, pose significant threats to U.S. persons, facilities, and interests.

And then two indirect threats that I think are worth highlighting in the report.

New technologies — particularly in the fields of AI and biotechnologies — are being developed and proliferating faster than companies and governments are able to shape norms governing their use, protect against privacy challenges associated with them, and prevent dangerous outcomes that they can trigger. The convergence of emerging technologies is likely to create breakthroughs that are not as predictable and that risk a rapid development of more interconnected, asymmetric threats to U.S. interests.

Relatedly, foreign states’ malicious use of digital information and communication technologies will become more pervasive, automated, targeted, and complex during the next few years, threatening to distort publicly available information and probably outpacing efforts to protect digital freedoms and, at the same time, educate audiences on how to distinguish fact from propaganda. Authoritarian governments usually are the principal offenders of digital repression, and, of course, democracies with open information environments are the most vulnerable to them.

In closing, I want to bring to your attention an absolutely crucial authority that will expire at the end of this year if Congress does not act — Section 702 of the Foreign Intelligence Surveillance Act. I can tell you without hesitation that Section 702 was relied upon in gathering intelligence that was relevant to putting together this assessment, as it is hard to overestimate, frankly, the importance of this authority to our work across the board.

FISA Section 702 provides unique intelligence on foreign intelligence targets at a speed and reliability that we cannot replicate with any other authority.

Section 702 was originally enacted with the primary focus of enabling the U.S. Government to quickly collect on the communications of terrorists abroad. The authority allows the IC to acquire foreign intelligence from non-U.S. people located outside of the United States who are using U.S. electronic communications service providers.

702 is still vital to our counterterrorism mission, as evidenced by its key role in the United States Government’s operation against former al-Qa‘ida Ayman Zawahiri. But 702 is now principally relied upon for vital insights across a range of high priority threats — malicious cyber actors targeting U.S. critical infrastructure, U.S. Government efforts to stop components of weapons of mass destruction from reaching foreign actors, and even key intelligence related to threats emanating from China, Russia, North Korea, and Iran.

I realize that 702 is a powerful authority, and it is incumbent on all of us in the Intelligence Community to ensure that the privacy and civil liberty interests of Americans are built into its design and implemented at every level. Over the last many years, we have significantly expanded oversight and dedicated resources to compliance in order to do just that — and we welcome the opportunity to work with you on reauthorizing this critical authority.

Thank you so much for your patience. We look forward to your questions.

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