June Newsletter

China Tech Threat Questions Commerce Department’s Export Control Policy.

In advance of Bureau of Industry and Security (BIS) Under Secretary Alan Estevez’s July 14 appearance before the U.S. Senate Banking Committee hearing on export controls, China Tech Threat (CTT) issued a memo on BIS’ failure to apply China-related export controls. The memo highlights the potential dissonance between Estevez’s stated long-term priority to “stop [China] from using our technology against us” and Commerce Secretary Gina Raimondo’s assertion that “selling a commodity product to a Chinese company is in and of itself not problematic.” ICYMI: During the hearing, Virginia Senator Mark Warner told Estevez he is “really concerned” about YMTC and added that it deserves an investigation and ultimately an Entity List designation.

CTT To Advise State Lawmakers On Threats From China Tech Contracts.

At the annual American Legislative Exchange Council meeting next week, CTT Co-Founder Dr. Roslyn Layton will present to state lawmakers about China’s strategy to infiltrate state governments through technology. Conference members will consider a model policy to help states restrict the purchase of risky technology. CTT previously released research revealing that 40 of 50 states have contracts with restricted Chinese government vendors, and recently issued a memo to state policy leaders that detailed four policies to counter China tech threats, including restricting Chinese government owned or operated companies from providing tech products to state governments, universities and local school districts.

CTT FOIA Seeks Disclosure Of Secretary Raimondo Meeting With Top 3 Chip Machine Makers.

In an additional effort to call on Secretary Raimondo to clarify the agency’s murky position on export control enforcement and sales of American semiconductor manufacturing equipment to China, CTT issued a Freedom of Information Act (FOIA) request. The FOIA requests the details of meetings Sec. Raimondo held with the CEOs of the top U.S. chip machine makers.

Legislators Concerned BIS Is Failing To Implement Export Controls, Benefiting China.

Last month, Texas Representative Michael McCaul, Chairman of the China Task Force, hosted a roundtable with other Task Force members centered on the actions that must be taken to prevent the Chinese Communist Party from obtaining critical U.S. technology. A consistent theme throughout the discussion was how ineffective export controls currently are with Rep. Scott Perry (PA-10) stating, “we can effectively say there are no export controls regarding the Communist Party of China.” Rep. McCaul also warned of conflicting priorities at BIS: “The Bureau of Industry and Security puts too much emphasis on industry and very little if nothing on security and that has to change.” Leaders are looking to see if BIS Under Secretary Alan Estevez could tip the scales back in favor of security.

State Lawmakers Warned They Are Targets Of China’s Aggressive Influence Campaign.

A July 6 notice by the U.S. National Counterintelligence and Security Center (NCSC) is just the latest in a series of recent evidence of China’s aggressive campaign to exert influence at the state and local levels. The new NCSC notice specifically details China’s strategy to collect personal information on state and local leaders and their associates – targeting such leaders early in their careers with the aim of using them for Chinese interests should they reach higher office. CTT has studied the security risks to states and issued a report about purchases of Chinese IT equipment and recently issued a memo to state policymakers, outlining key policy recommendations for states to counter China tech threats.

U.S. Government On Export Controls: Do As I Say, Not As I Do.

Bloomberg reports that the Commerce Department is lobbying the Dutch technology company ASML to stop selling advanced chipmaking equipment to China. That effort has raised the question – if the U.S. government is lobbying other nations to curb exports of sensitive technologies, why isn’t the Commerce Department using its power to put export controls on certain American chipmaking technologies bound for China? CTT posed a three potential reasons why the Commerce Department isn’t exercising its own export control authority: 1) Commerce may not have its policy figured out yet; 2) A new policy on China chipmaking champion YMTC may be developed, but not ready for a rollout; 3) Commerce just doesn’t care.