A Huge Week for American Policies on Chinese Technology, But More Must Be Done

The Bureau of Industry and Security (BIS) made waves last Friday when it announced new (and long-awaited) export controls to restrict the People’s Republic of China’s (PRC’s) ability to both purchase and manufacture certain high-end chips used in military applications. It also put YMTC on the Unverified List and made clear that this action could be a prelude to the Entity List.

Multiple commentators have highlighted the significance of these moves. Greg Allen of the Center for Strategic and International Studies (CSIS) described the moves as “an unprecedented degree of U.S. government intervention to not only preserve chokepoint control but also begin a new U.S. policy of actively strangling large segments of the Chinese technology industry—strangling with an intent to kill.”  Thomas Friedman of the New York Times said the new regulations are “a formidable new barrier when it comes to export controls that will block China from being able to buy the most advanced semiconductors from the West or the equipment to manufacture them on its own.”

While China Tech Threat welcomed BIS’s actions, they should be the beginning, not the end, of tough actions targeting companies like YMTC. Other leaders in Congress share this view that more needs to be done:

  • Senate Majority Leader Chuck Schumer remarked, “These restrictions on the transfer of advanced U.S. manufacturing technology are absolutely necessary, but there is still much more that needs to be done to stop the Chinese Communist Party from cheating and stealing its way to technological dominance… I continue to urge the Biden administration to act swiftly on other export control actions and to add YMTC to the Entity List to protect America’s technology supply chains and American consumers.”
  • Senator Tom Cotton called it “a good first step” in America’s economic confrontation with China but also demanded “The Commerce Dept. should blacklist more Chinese tech firms & stop slow-walking its legal requirement to identify and protect emerging, foundational technologies.”
  • Representative Michael McCaul, ranking member of the House Foreign Affairs Committee, stated, “These rules are a step in the right direction and a long time coming. If BIS implements and enforces these rules to the strictest of standards, then it will strike at the core of the CCP’s strategic objectives.”

Other leaders also see the threat of YMTC and other Chinese semiconductor companies. Representative Val Demings of Florida praised the package: “Today’s new rules put American interests first, not corporate bottom lines, and will protect our national security and our economic edge in advanced computers and technology.”

It’s not just American leaders who have woken up to China’s dangerous technological ambitions. In a speech on October 11, Jeremy Fleming, the head of the UK’s electronic intelligence agency, echoed remarks by both Britain’s foreign intelligence chief and domestic security head earlier this year when he proclaimed that Beijing’s relationship with technology is “the national security issue that will define our future. ” Saying the Chinese government has “deliberately and patiently set out to gain strategic advantage by shaping the world’s technology ecosystems,” Fleming contrasted Western approaches to tech with what China’s leadership is doing:

“We and our like-minded allies see technology as a way to enable greater freedoms, greater prosperity, greater global collaboration. And yes, fair competition. But the Chinese leadership’s approach is to also see it as a tool to gain advantage through control: of their markets, of those in their sphere of influence and of course of their own citizens… In an increasingly complex and interconnected world, we see this as a major risk to our future security and prosperity… Without the collective action of like-minded allies, the divergent values of the Chinese state will be exported through technology.”

The new unilateral export controls the U.S. implemented this week can become even more powerful if our allies, such as the UK, can apply identical controls. As Greg Allen commented, “The United States needs to ensure that all of its allies are rowing in the same direction when it comes to keeping China’s semiconductor industry down.” The Biden Administration should now heed bipartisan calls and embark on a diplomatic pressure campaign to coordinate export controls impacting propped up Chinese chip makers like YMTC and CXMT.