China

4 Export Control Fallacies and Their Rebuttals

Posted on by China Tech Threat
By Steve Coonen Writing in the Wall Street Journal last week, professors Henry Farrell and Abraham Newman criticize American export control policies as having the potential to create more problems then they solve. Pointing the finger at America as a force for destabilization is divorced from the reality of the global export control landscape. China’s commitment to using American technologies to build up its military has necessitated export controls targeting the country’s chip sector. Here are four fallacies promoted in the article (in italics) and my rebuttals: Fallacy #1: The U.S. is to blame for export control-related global disruptions “A new tit-for-tat is emerging, and as China responds to the turn in American policy, there is a risk that the… Read More

Actions Speak Louder Than Words – Willful Blindness Series Recap

Posted on by China Tech Threat
With Labor Day around the corner, the unofficial end of summer is almost here. So, here’s our final plug for beach reading from CTT special advisor Steve Coonen. Coonen, who spent more than two decades in uniform as an Army artillery and foreign affairs officer and then nearly 14 years as an analyst at the Defense Technology and Security Administration (DTSA), wrote a nine-part summer series for CTT on America’s broken export control system.  The need to expose the administration’s willful blindless as it relates to export controls could not be more timely. Multiple outlets are reporting that one outcome of Commerce Secretary Gina Raimondo’s visit to China is an agreement between the U.S. and China to begin a series… Read More

Ca$h Over Country: Biden Administration Must Stop U.S. American Chipmaker

Posted on by China Tech Threat
With Secretary of Commerce Raimondo visiting China this weekend, Dr. Roslyn Layton penned an op-ed for the National Security Institute demanding the Biden Administration stop American semiconductor equipment manufacturers from profiting on the Chinese legacy chip sector. Rather than seek new economic cooperation with China, Dr. Layton argues the Secretary should be focused on preventing the sale of some of the world’s most sensitive tech equipment to legacy chipmakers. The problem is that three American companies – Applied Materials, KLA, and Lam Research – have made billions selling their chipmaking tools, including for legacy chips, to China. Dr. Layton notes: “As can be documented from public data, these three companies have grown their combined revenues from China by 102% between… Read More

CTT-CPA “Ca$h Over Country” Report Exposes How Three U.S. Toolmakers Are Boosting Dangerous Chinese Legacy Chipmakers

Posted on by China Tech Threat
A new report co-authored by Coalition for a Prosperous America Chief Economist Jeff Ferry and CTT co-founder Roslyn Layton reveals how American semiconductor equipment manufacturing companies are earning billions from Chinese legacy chip manufacturers. That bad choice is undermining American national and economic security: American semiconductor equipment manufacturers (SEMs) have succeeded in lobbying the U.S. government to permit them to sell some of the world’s most complex technology to Chinese government-aligned firms making legacy chips. As can be documented from public data, American SEMs Applied Materials, KLA, and Lam Research have grown their combined revenues from China by 103% between 2018 and 2022. .kb-image_8d3de2-89 .kb-image-has-overlay:after{opacity:0.3;} The Department of Commerce’s mission is to foster economic growth, and also to prevent adversaries… Read More

Fixing the Failings of the Interagency Export Control Review System

Posted on by China Tech Threat
By Steve Coonen As I established in my paper Willful Blindness released in May, the Commerce Department’s Bureau of Industry and Security (the unit within the U.S. government primarily responsible for stopping the Chinese military from obtaining American technologies) has become a rubber stamp for the export of controlled technologies to China. Case in point: In 2022, the U.S. Commerce Department’s Bureau of Industry and Security (BIS) approved over 91% of applications for the export of controlled technologies to China, even greater than 2021’s 88% rate.  Yes, BIS needs to do a better job of denying tech exports to China. But BIS is not entirely at fault—it is just one cog in the broken federal machine tasked with defending U.S.… Read More

The U.S. Cannot Continue to Export Dual-Use Technologies to China

Posted on by China Tech Threat
By Steve Coonen As anyone who has seen the new film Oppenheimer can attest to, the U.S. government has historically gone to great lengths to prevent military tools from falling into the hands of our adversaries. So why is the federal government continuing to rubber stamp the export of dual-use technologies to our greatest adversary? Dual-use technologies are those which can be used for both military and civil purposes. Some items common to both civilian and military hardware, such as nuts, bolts, screws, seals, etc., pose no national security concerns. But others do. For example, the seemingly innocuous carbon fiber filament used to make high-performance brake pads is also the same material used to manufacture nose cones for ballistic missiles.… Read More

Biden Administration Finally Acknowledges Legacy Chips; Will Action Follow Soon Enough?

Posted on by China Tech Threat
Up to this point, the U.S. has been laser focused on squeezing China’s ability to acquire and manufacture advanced semiconductors. Legacy semiconductors were not in their purview. That seems to be changing as Bloomberg reports that the U.S. and Europe are now “growing alarmed by China’s rush into legacy chips.” This encouraging development comes on the heels of comments by Commerce Secretary Gina Raimondo at a recent AEI event, where she acknowledged China’s massive investment in legacy chips, called it a problem, and said the U.S. and its allies need to get ahead of it. We’ve written extensively on the value of legacy chips, which are critical to national security and many other purposes. To put it plainly, U.S. policy shouldn’t focus exclusively on one… Read More

Challenges Still Loom Large on the Eve of the CHIPS Act One Year Anniversary

Posted on by China Tech Threat
On August 9th of last year, President Biden signed the CHIPS and Science Act to restore American semiconductor manufacturing. Commerce Secretary Gina Raimondo described the impetus in response to China’s ominous ambitions: Over the past decade, China’s leaders have made clear that they do not plan to pursue political and economic reform and are instead pursuing an alternative vision of their country’s future… [T]hey are accelerating their efforts to fuse their economic and technology policies with their military ambitions. … Semiconductors are ground-zero… As we approach the one-year anniversary, four challenges remain paramount:  #1. U.S. Export Controls Still Ignore Legacy Chinese Manufacturers  Legacy (or mature) chips are critical to defense systems, critical infrastructure, automobiles, medical devices, consumer electronics, and other… Read More

China Evades U.S. Chip Controls – When Will We Respond?

Posted on by China Tech Threat
A recent joint column for Foreign Policy makes the point that if the Biden “administration wants to succeed in holding a chokepoint over national security-sensitive supercomputing, [BIS] will have to get more creative.” That’s true, and time is ticking. To put a finer point on why, Tim Fist of CNAS, Lennart Heim of Governance of AI, and Jordan Schneider of Rhodium Group cite reports of blacklisted Chinese entities exploiting weaknesses in U.S. policy and smuggling chips. For example: “[B]lacklisted facial recognition company SenseTime has been using intermediaries to smuggle banned components from the United States, mirroring the approach taken by China’s top nuclear weapons lab, the state-run Chinese Academy of Engineering Physics. And despite being blacklisted for human rights abuses,… Read More

Out of the Dark, Into the Light: Exposing Vulnerabilities in the U.S. Defense Supply Chain

Posted on by China Tech Threat
Two years ago, the Bureau of Industry and Security (BIS) put China-based encryption chip maker Hualan Microelectronics on the Entity List for “acquiring and … attempting to acquire US-origin items in support of military modernization for [China’s] People’s Liberation Army.” But as WIRED’s Andy Greenberg writes, Hualan and its subsidiary Initio still supply chips to Western manufacturers of encrypted hard drives that count NASA, NATO, and the U.S. military as customers. The FAA and other government agencies have bought encrypted hard drives with these chips too, per federal procurement records. It’s alarming that the federal government would purchase products from or containing components of Entity Listed companies. It’s also a symptom of a much larger problem of the federal government not… Read More