The Hill and White House Get Tighter on the CPP’s Abuses

Rep. Michael McCaul (R-TX) and Sen. Bill Hagerty (R-TN) on Monday urged Commerce Secretary Gina Raimondo to add Chinese chipmaker Yangtze Memory Technologies Company (YMTC) to the department’s Entity List, citing ties to the Chinese military. The lawmakers wrote in the letter that urgency is needed to make sure memory chip supply does not become a “point of leverage” for China over the U.S. China’s “irrational state subsidies and non-financial support” to firms such as YMTC pose a threat to U.S. and its allies because memory chips have applications in defense, aerospace, artificial intelligence, they note. Both men sit on committees that have jurisdiction over export controls; McCaul is the ranking member of the House Foreign Affairs Committee and Hagerty is the… Read More

Rep. Pfluger: We Are Exporting Our Innovation and Subsidizing China’s Ability to Make It

Last week the U.S. House Foreign Affairs Committee took up the Ensuring American Global Leadership and Engagement (EAGLE) Act, which seeks to boost U.S. competitiveness with China. During the markup (see video starting around 3 hr, 31 min) , Representative August Pfluger (R-TX11) introduced an amendment to add Yangtze Memory Technologies Company (YMTC) to the U.S. Entity List.   “[Semiconductors] are a vital component to every single device, computing product that we use,” Rep. Pfluger said. “The [People’s Republic of China] seeks self-sufficiency in semiconductor manufacturing so it can control the means of production, supply its growing demand for semiconductors both in military and also civilian use, and increase its leverage over trading partners.” In the U.S. Air Force, Rep.… Read More

Senators Introduce Legislation to Address the China Tech Threat

Yesterday, Senators Rubio and Markey introduced the Secure Equipment Act of 2021. According to the press release, the bill is “to direct the Federal Communications Commission (FCC) to clarify that it will no longer review, or approve, applications from companies on the Commission’s “Covered List.” It would also halt any further sales or implementation of technology from Huawei, ZTE, Hytera, Hikvision, and Dahua – all Chinese Communist Party (CCP) state-backed or directed firms – in the U.S. regardless of whether federal funds are involved. Here at China Tech Threat, we applaud this bipartisan effort to secure our national security and help protect the privacy, security and prosperity of all Americans. While this bill takes important steps, it is by no… Read More

States Must Be Vigilant the American Rescue Plan Doesn’t Open the Door to CCP Exploitation

This month President Biden signed the American Rescue Plan, a $1.9 trillion pandemic recovery package that was among the President’s top priorities upon taking office. The bill includes $350 billion that will go directly to state and local governments, much of which will be invested in information technology and system upgrades. Bundled in the plan is $7.59 billion to provide devices and Internet services to teachers and students; $2 billion to improve unemployment networks; $128.5 billion for local schools, including to build remote learning capabilities; $39.6 billion for higher education, part of which will support remote learning; and $20 billion to modernize state-based marketplaces, like insurance exchanges.    Each of those areas present a valuable target to the Chinese government,… Read More

What to Expect, the Next Four Years

Earlier this week, China Tech Threat’s Roslyn Layton and Coalition for a Prosperous America’s (CPA) Jeff Ferry put out a new report on “Maintaining U.S. Leadership in Semiconductors and Countering China’s Threats.” They discussed it yesterday as part of CPA’s annual conference on “What to Expect, the Next Four Years.” In framing the discussion and summarizing the paper, Roslyn noted: American consumers were once told that Chinese IT was a good thing. That approach created many problems, including loss of manufacturing prowess and personal information, as well as increased cyberattacks and data breaches. Now we have a national security issue, and it’s playing out in many areas, including the semiconductor industry. Semiconductors are the building blocks of all electronics. They… Read More

BIS, Allies Must Coordinate on Export Controls to Keep Advanced Tech from Renegade Actors

Stephen Ezell is the Vice President for Global Innovation Policy at the Information Technology and Innovation Foundation (ITIF), and he is a leading observer of international semiconductor policy. His new report, Moore’s Law Under Attack: The Impact of China’s Policies on Global Semiconductor Innovation, describes how China’s state-directed strategy to vault into a leadership position in the semiconductor industry distorts the global market with massive subsidization, IP theft, state-financed foreign firm acquisitions, and other mercantilist practices. China’s inferior innovators thus have a leg up—and the global semiconductor innovation curve is bending downward. Ezell estimates there would be 5,100 more U.S. patents in the industry annually if not for China’s innovation mercantilist policies. To address the challenge Chinese innovation mercantilism poses… Read More

Exclusive Interview: Potential Commerce Under Secretary Nominee Analyzes Vital Bureau

China has a clear mission to achieve global military supremacy and is prepared to build, buy, siphon, or steal the latest and greatest tech to get there. When we’re dealing with China, it’s not business as usual, and we need to be vigilant to make sure sensitive technologies in particular are directed to their intended uses and don’t fall into rogue military hands. As the U.S. looks at policy levers to protect our leadership and interests, a little known bureau within the Department of Commerce called the Bureau of Industry and Security (BIS) is on the front lines for strategic trade control. In recent weeks, the Wall Street Journal and Financial Times have speculated about who will lead the 450-person… Read More

William Galston in the WSJ: U.S. Should Step Up the Tech Fight against China

The United States should step up domestic investment in its semiconductor industry and strengthen export controls to stop the People’s Republic of China from acquiring semiconductor manufacturing equipment, columnist William Galston writes in the Wall Street Journal this week. Galston applauds the Trump Administration’s joint efforts with the Netherlands to “block the sale of Dutch-made semiconductor manufacturing equipment to China’s largest chip maker.” It is “good news,” he adds, that the Biden administration intends to “continue such efforts and also work with allies to maintain the West’s technological edge in areas that will be crucial to defense as well as the economy.” The Wall Street Journal reported last week that the Biden administration is working with allies to stay ahead… Read More

Report: The Detrimental Impact of China’s Mercantilist Policies on the Semiconductor Industry

In his new report, Stephen Ezell, Vice President of Global Innovation Policy at Information Technology and Innovation Foundation (ITIF), explores how China’s aggressive strategy to distort and harm the global semiconductor market is continues to hurt the U.S and the market at large.    In highlighting the growth of the industry, he explains “a thriving global semiconductor industry depends upon three critical conditions: fair access to global markets, market-based competition to reduce artificial overcapacity and significant price declines, and minimal intellectual property theft.” To contextualize this, he uses the example of Applied Materials, ASML, KLA Tencor, and Lam Research, a collection of US and European companies that “manufacture the machines and tooling equipment that run semiconductor fabs.” Ezell explains that… Read More

Importance of Crucial BIS Post in International Spotlight

During the past week top international newspapers have noted the vital importance of President Biden’s choice to head the Commerce Department’s Bureau of Industry and Security (BIS). The 450-person agency “oversees the nation’s export-control rules, giving it a big role in deciding which technologies are exported to China…” The Wall Street Journal said the pick will “offer clues to how the White House will address security risks posed by Chinese tech companies.” At the same time, the Financial Times wrote that the “once low-profile post… has emerged as a as a key battleground for China hawks in Washington who want to push Joe Biden to take a hard line on technology exports to Beijing.” Two candidates have emerged as possible… Read More