New CTT Data Indicates States Continue To Spend Millions on Restricted Tech

States Making Progress to Curtail Further Spending China Tech Threat’s original 2020 research found that nearly 40 states had contracts to purchase technology Chinese government-owned technology manufacturers Lenovo and Lexmark. Beginning in Fall 2022, we began to re-examine data from each state to determine if the states have made payments to either company, how much was spent, and where those products were deployed. As of May 2023, we verified payments from 48 states totaling more than $285 million since 2015, with some states spending as much as $47 million on Lexmark or Lenovo products. (Read the briefing paper here.) In January 2024 we returned to this research in select states and discovered that states currently debating bills to stop the… Read More

Washington Post Report on China Strategy To Target and Influence State and Local Officials

“The ruling Chinese Communist Party has long had a strategy of using “the local to surround the center” Amidst fresh warnings to Congress by FBI Director Chris Wray about CCP hackers targeting American infrastructure and preparing to “wreak havoc and cause real-world harm to American citizens and communities,” a new Washington Post report details China’s strategy of targeting state and local officials to get around tensions in Washington.   The January 30 story examines the escalating risk of ground-level connections undermining national policy or even disrupting the democratic process. New Zealand University of Canterbury Professor Marie Brady, who focuses on Chinese influence operations, told the Post the ruling Chinese Communist Party has long had a strategy of using “the local to… Read More

Commerce Department Commissions Survey of U.S. Companies to Create Trusted Legacy Chip Supply

Secretary Raimondo and her team have closed out 2023 with welcome action to stem the tide of a China-dominated legacy space. In early December, China Tech Threat commended the Commerce Department for directing the first allocation of CHIPS Act funding to support domestic production of semiconductors. Then, on December 21, the Commerce Department announced that it would commission a survey asking U.S. companies to report how they source legacy chips—the chips which are essential to the functioning of virtually every single electronic device. “Legacy chips are essential to supporting critical U.S. industries, like telecommunications, automotive and the defense industrial base. Addressing non-market actions by foreign governments that threaten the U.S. legacy chip supply chain is a matter of national security,”… Read More

Deck the Halls with China Tech Threat’s Holiday Reading List

Coonen: Defense Spending Increases Will Be Irrelevant If We Don’t Curtail China Acquisition Of U.S. Technology. Following his praise of Congress for increasing defense spending and military capabilities in the Indo-Pacific in the National Defense Authorization Act (NDAA), former Defense Technology Security Administration Senior Advisor and CTT Special Advisor Steve Coonen warns that increased spending could be irrelevant without complimentary export control policies to curtail China’s ability to use U.S. technology against us. Citing Russia’s use of Chinese-made DJI drones that contain American cutting-edge technology, Coonen warns: “Far from dissuading diversion, U.S. export control policies are an open invitation for the Chinese Communist Party to send U.S. technology to whichever end user they desire. In this case, U.S. loopholes are… Read More

The U.S. Has Work to Do at Home to Stop the PLA’s Modernization

By Steve Coonen In a sign that it still knows how to do at least one thing right, Congress has lately been busy preparing the U.S. military to fight and win against the People’s Liberation Army (PLA). In December, the annual National Defense Authorization Act (NDAA) passed the House of Representatives with increases in defense spending and military capabilities in the Indo-Pacific. These desperately needed steps will help America’s warfighters (and those of our partners and allies) deter Chinese military aggression. But these actions will ultimately be irrelevant if the Biden Administration and Congress do not similarly curtail China’s ability to use U.S. technology to modernize the People’s Liberation Army. Both branches of government would be wise to implement recent… Read More

Raimondo Talks Tough at Reagan Defense Forum But Challenges Remain  

Last weekend Secretary of Commerce Gina Raimondo spoke at the annual Reagan National Defense Forum, one of the signature events on the national security calendar. As the name might suggest, the gathering is traditionally popular with right-leaning national security figures, so credit a Democratic Secretary of Commerce for making an appearance. While she did have comments worth applauding, it’s clear the administration is still focused on advanced chips and needs to broaden its focus to counter threats at the legacy chip level for the sake of our national security and economic prosperity.   CTT has long argued that U.S. semiconductor equipment companies are putting cash over country (see our report by that name) by selling some of the world’s most sensitive… Read More

Caught Red Handed: Applied Materials Allegedly Illegally Exporting Tech to China

For years China Tech Threat has warned that U.S. export controls have been insufficient to stop the transfer of American technology to the Chinese military. In our August 2023 report, Cash Over County, we explained how American semiconductor equipment manufacturers Applied Materials, KLA, and Lam Research grew their combined revenues from China by 103% between 2018 and 2022—strengthening the Chinese military and intelligence apparatuses in the process. Apparently, the greed infecting at least one of these companies is worse than we thought. Reuters reports that the Justice Department is investigating Applied Materials for allegedly selling hundreds of millions of dollars’ worth of equipment to China in violation of U.S. export controls. The alleged infractions took place in 2021 and 2022,… Read More

As Biden and Xi Meet, Chinese Tech Threats Continue to Grow

President Biden and Chinese President Xi Jinping will meet in San Francisco today. In the lead-up to the meeting, Treasury Secretary Janet Yellen said that the U.S. seeks “a pragmatic economic strategy: one that protects our vital national security interests while seeking a stable and healthy economic relationship.” It sounds wonderful. But the most pragmatic strategy is one that recognizes the extent to which China is threatening the U.S. through technology. If left unchecked, multiple ongoing Chinese efforts in the tech arena will continue to damage both American national security and prosperity. Begin with semiconductors. China has responded to the U.S. restrictions imposed on advanced chips (14nm and lower in node size) in October 2022 by subsidizing the production of… Read More

New Report Warns of Chinese Control of Legacy Chips

The Silverado Policy Accelerator is out with an excellent new report on how the Chinese government is using subsidies to grow China’s semiconductor industry, put Western firms out of business, and make the world dependent on Chinese legacy (or “foundational”) chips. Foundational Fabs: China’s Use of Non-Market Policies to Expand Its Role in the Semiconductor Supply Chain hits on many of the same notes which China Tech Threat’s Every Chip Matters did earlier this year. As Foundational Fabs’ executive summary states: The Chinese industry is already impacting the global industry by putting downward pressure on prices for some products and capturing market share. This is critical as foundational semiconductors account for three-quarters of global foundry capacity, are essential to applications… Read More

Experts React to Disappointing New Round of Export Controls at “Cash Over Country” Event

A year ago, BIS issued a landmark set of export controls designed to hinder China’s ability to make advanced semiconductors (and with good reason, since China’s major semiconductor companies are tied to the Chinese military). While encouraging at the outset, they’ve ultimately proved to be inadequate because of loopholes and a too-narrow focus on advanced chips. When reporting first trickled in that BIS was going to add additional provisions to the October 7 rules, optimism was brewing that BIS may expand them to cover legacy chips. After all, addressing China’s drive to dominate the legacy chip sector would be a logical step for protecting American national and economic security. That optimism was rooted in comments from Commerce Secretary Gina Raimondo,… Read More