Lincoln Network Event: US to experience severe industrial loss without US Semiconductor Policy

On January 22, the Lincoln Network hosted a panel titled “The Future of U.S. Semiconductor Policy: Answering the China Chip Challenge.” Panelists included China Tech Threat Co-Founder Dr. Roslyn Layton, Stephen Ezell, Vice-President, Global Innovation Policy at the Information Technology and Innovation Foundation (ITIF), Dr. James Mulvenon, Director of Intelligence Integration at SOSi and Dan Lips, Director of Cyber and National Security at Lincoln Network. In the most critical part of the conversation, host Alexiaa Jordan commended Dr. Layton for clearly stating the steps the US can take in order to secure their policy, as well as naming the companies that this policy must address. In a follow up to this, Dr. Mulvenon noted that when US export control policy… Read More

Chinese ‘Advanced Persistent Threats’ Have U.S. Companies and Consumers in Their Crosshairs

The People’s Republic of China is ramping up cyber-attacks against the United States—and not just against government agencies, but U.S. businesses and consumers as well. “For too long, U.S. networks and data have been exposed to cyber threats based in China which are using that data to give Chinese firms an unfair competitive advantage in the global marketplace,” acting Secretary of Homeland Security Chad Wolf said in an advisory to U.S. businesses last month. The advisory notes that China’s Data Security Law of 2020 “represents an even greater shift in the [Chinese Communist Party’s] attitude away from protecting Chinese data systems as a defensive mechanism, and toward collecting data as an offensive act.” A 2017 intelligence law requires Chinese companies… Read More

Listen: Dr. Roslyn Layton and Dr. Jim Lewis on CSIS’ ChinaPower Podcast

Ahead of the inauguration of President-elect Joe Biden, China Tech Threat founder Roslyn Layton joined Bonnie Glaser and Jim Lewis on the Center for Strategic and International Studies’ (CSIS) ChinaPower podcast. Ms. Glaser is the senior advisor for Asia at CSIS and host of the ChinaPower podcast. Dr. Lewis is senior vice president and director of the Strategic Technologies Program at CSIS. China’s ambitions to dominate the global tech markets, coupled with its Military-Civil Fusion strategy, present a unique challenge to U.S. policymakers. Chief among those, notes Ms. Glaser, is striking the right balance between protecting dual-use technologies and fostering continued demand for American-made products, which will help continue to drive innovation. Despite controls on semiconductors and semiconductor manufacturing equipment (SME), U.S.-born products… Read More

Hudson Institute: The Importance of the Defense Industrial Base

On January 14, The Hudson Institute hosted a virtual discussion entitled “A Discussion on the Defense Industrial Base with Government Leaders.” The panel featured leaders from the Defense Department including Ellen Lord, Under Secretary of Defense for Acquisition and Sustainment and Robert Work, Former Deputy Secretary of Defense. Senator Mark Warner (D-VA) and Bryan Clark, Senior Fellow & Director, Center for Defense Concepts and Technology at Hudson Institute, also joined the conversation that was moderated by Jeb Nadaner, Deputy Assistant Secretary of Defense for Industrial Policy, Office of the Secretary of Defense for Acquisition and Sustainment at the U.S. Department of Defense. From the outset, the theme of the conversation centered on the need to address threats to our defense… Read More

As YMTC Booms, China Aims to Dominate Flash Memory Industry

Despite China’s struggles other the years to seed its domestic semiconductor manufacturing equipment (SME) industry, the rise of Yangtze Memory Technologies Co. (YMTC) threatens to unseat non-PRC firms. That state-sponsored growth could position the People’s Republic of China to unseat the United States as a leader in next-generation flash memory, or so-called 3-D NAND memory, Dr. Roslyn Latyon writes in Forbes today. “YMTC is focused on 128-layer and 196-layer chips, leapfrogging over earlier generations,” a new report by James Mulvenon, head of SOS International. Estimates indicate the company could capture seven to 15 percent of global 128-layer product production by 2024. Like SMIC, YMTC has ties to the People’s Liberation Army; it is partially owned by the Tsinghua Unigroup, which… Read More

Trump Administration Publishes List of Chinese and Russian Companies with Military Ties

The U.S. Department of Commerce published a list of Chinese and Russian companies with military ties on Monday. U.S. companies will be restricted from selling certain goods and technology to those named. The final list includes 103 entities, 14 fewer than on a draft obtained by Reuters in November. Fifty-eight are Chinese companies, 31 fewer than before. Commerce Secretary Wilbur Ross said the list will “assist exporters in screening their customers for military end users.” Only days before, the Department of Commerce added more than 60 Chinese companies to the Entity List, including China’s largest semiconductor maker, SMIC. “China’s corrupt and bullying behavior both inside and outside its borders harms U.S. national security interests,” Secretary Ross said in a statement… Read More

S&P Dow Jones to Remove 21 Blacklisted Companies

The S&P Dow Jones Indices will remove 21 Chinese companies with ties to the People’s Liberation Army from its global stock and bond benchmarks, Reuters reported on Thursday. Last month President Trump issued an executive order preventing U.S. investors from owning or selling shares of Chinese companies with ties to the country’s government and military. “Through the national strategy of Military-Civil Fusion, the PRC [People’s Republic of China] increases the size of the country’s military-industrial complex by compelling civilian Chinese companies to support its military and intelligence activities,” the executive order states. “Those companies raise capital by selling securities to United States investors that trade on public exchanges both here and abroad… In that way, the PRC exploits United States… Read More

Report to Congress: U.S. Must Do More to Counter China

This week the U.S.-China Economic and Security Review Commission (USCC) presented its Annual Report to Congress. The 575-page analysis is frank in its assessment of China’s growing threat to U.S. economic and national security interests. The Chinese Communist Party (CCP) is moving from “catching up” to “surpassing” the United States on economic, diplomatic and military fronts, vice chair Carolyn Bartholomew said in prepared testimony. “China’s leaders have grown increasingly aggressive and antagonistic.” Robin Cleveland, chair of the Commission, expressed similar alarm in her opening statement. “China is an adversary presenting unique and immediate threats to our economic and security interests… [T]he challenges posed by the Chinese Communist Party are not partisan—they are American concerns.” Among its key policy recommendations, the… Read More

China’s Big Presence in the U.S. Stock Exchange

Last month the bipartisan U.S.-China Economic and Security Review Commission released a report of Chinese companies listed on NASDAQ and NYSE. It finds there are 217 Chinese companies with a total capitalization of $2.2 trillion—including 13 national-level state-owned enterprises (SOEs). While many of these companies disclose that they are headquartered in China, others use offshore entities to obfuscate their nationality, locations and parent companies. That lack of transparency is problematic on several levels. Lack of Accountability The Public Company Accounting Oversight Board (PCAOB), a nonprofit watchdog created by Congress to audit the auditors of publicly-traded companies, is unable to inspect the work of companies based in the People’s Republic of China (PRC) and Hong Kong. The PCAOB explains, “Chinese cooperation… Read More