Chinese Government Funding

Why BIS End-Use Checks in China Are Useless

Posted on by China Tech Threat
By Steve Coonen Quoting an old Russian proverb, President Ronald Reagan once remarked, “Trust, but verify.” Reagan’s words may have been appropriate as the U.S. negotiated an arms control agreement with the USSR. But when it comes to inspecting how China is using American technologies, the U.S. government should adapt his words to go a step further: “Distrust and verify.” At their root, the Bureau of Industry and Security’s (BIS) end-use checks in China are practically useless. Under the terms of the U.S.-China end-use check agreement, it is impossible for U.S. export control officers (ECOs) to verify the ultimate destinations or end-uses of U.S. technology. With other countries, U.S. export control officers can conduct post-shipment verifications (PSV) with few restrictions… Read More

The State of Michigan is Building Momentum Against Banning Contracts with the PRC

Posted on by China Tech Threat
In March of 2023, more than 100 residents in rural Michigan revolted against a decision to allow Chinese-owned firms to build a battery plant in the area, wanting to protect their land from the threats of the PRC. The revolt made it clear Michigan residents do not want ties to China within the state. One way Michigan leaders can heed the concerns of residents is by ending contracts with government restricted Chinese technology companies.  In our recent report, China Tech Threat revealed  that the state of Michigan spent $3,428 on restricted Chinese technology from Lenovo, that the state does not provide any details on which departments use the technology, (see our Michigan fact sheet here). This dangerous Chinese government-owned technology… Read More

China Tech Threat’s Exclusive Interview with Congresswoman Radewagen

Posted on by China Tech Threat
During a House Foreign Affairs Committee hearing on February 28, Rep. Aumua Amata Coleman Radewagen asked BIS Under Secretary Alan Estevez, “How many PRC chips are you comfortable having in DoD systems and critical infrastructure?”  We interviewed the Congresswoman afterwards to understand her perspective and what she hopes to achieve. Q1: What would you have liked to hear from BIS Under Secretary Estevez when you asked him “How many PRC chips are you comfortable having in DoD systems and critical infrastructure?”   “Ideally, zero. If that’s not the case, which it seems it’s not at all, it should be an active plan to move toward, not eventually but soon. We should develop clear goals and aggressive progress markers, including priorities… Read More

Advanced! Advanced! Advanced! What About Legacy Chips?

Posted on by China Tech Threat
If you watch what comes out of the Commerce Department on semiconductors – especially as it relates to CHIPS and export controls – you’ll notice an emphasis on advanced and leading edge chips. The U.S. aims to be the “premier destination” for leading edge chips and has “been intentional” about limiting China’s access to advanced chipmaking equipment. But what seems like an almost exclusive concentration on leading edge chips highlights two problems: First, all chips matter. Advanced and leading edge chips are no doubt important, but we can’t forget about legacy chips. These critical chips are in automobiles, planes, home appliances, medical devices, military systems, and more. A new report from CSIS underscores their strategic importance:  “Despite the name, legacy… Read More

New China Tech Threat Paper Details Hundreds of Millions of Dollars in U.S. State Government Purchases of Lexmark and Lenovo Equipment

Posted on by China Tech Threat
On Thursday, China Tech Threat released a report rife with new research into how 28 U.S. states have created massive vulnerabilities for their citizens by purchasing at least $230 million worth of technology made by Chinese-owned and operated companies Lexmark and Lenovo since 2015.  While the Chinese Communist Party (CCP) is capable of exploiting many kinds of technology to spy on Americans, steal from them, or commit cyberattacks, Chinese companies are especially dangerous because of the CCP’s 2017 National Intelligence Law, which obligates Chinese companies to turn over any information Beijing demands. That puts Americans’ financial, personal, and health data at risk, in addition to sensitive organizational and government data. .kb-image_7275e7-74.kb-image-is-ratio-size, .kb-image_7275e7-74 .kb-image-is-ratio-size{max-width:400px;width:100%;}.kb-image_7275e7-74 figure{max-width:400px;}.kb-image_7275e7-74 .image-is-svg, .kb-image_7275e7-74 .image-is-svg img{width:100%;}.kb-image_7275e7-74 .kb-image-has-overlay:after{opacity:0.3;} The… Read More

U.S. Ready to Double Down on Huawei, Why Not SMIC?

Posted on by China Tech Threat
The Biden administration is reportedly considering cutting Huawei, a well-known Chinese telecom giant with “inextricable ties to the Chinese Communist Party (CCP),” off from American suppliers, including the likes of Intel and Qualcomm. As a precursor, the Commerce Department is said to have told some American companies it will no longer issue licenses for U.S. tech exports to the CCP-backed company. At the end of last year, Huawei declared “business as usual” despite U.S. export controls and is believed to be backing projects in China for an “import-independent semiconductor supply chain.” Martijn Rasser, a technology expert at CNAS, described the Biden administration’s action on Huawei as a “really significant move.” He added, “The actions by the Commerce Department are partly… Read More

Despite U.S. Export Controls, SMIC Posts Record Revenue

Posted on by China Tech Threat
Last week, China’s largest chipmaker, Semiconductor Manufacturing International Corp (SMIC), recorded record revenue with $7.2 billion in earnings and said it’s moving forward with expansion plans despite uncertainty in the industry. For the second year in a row, SMIC’s earnings rose over 30% despite ongoing U.S. sanctions and export controls. Contrast that with fellow Chinese chip bellwether YMTC, which has faced significant headwinds since its placement on the Entity List late last year. Several reports point to the state-owned chipmaker laying off employees, dramatically slashing equipment orders, and potentially halting expansion plans. What gives SMIC an edge? As Nikkei Asia reports, “Capital expenditure will mainly be spent on expanding capacity for mature, or older generations, of chips and on infrastructure… Read More

China’s Use of American Chips for Nuclear Programs Shows Necessity of Export Control Enforcement

Posted on by China Tech Threat
Tight export control enforcement is as necessary as ever. That’s the takeaway from a blockbuster Wall Street Journal story on January 29, which brings China’s strategy of using American technologies to arm its military – and circumvent U.S. export controls in the process – into sharp focus. The Journal reports that “the state-run China Academy of Engineering Physics (CAEP) has managed to obtain the semiconductors made by U.S. companies such as Intel Corp. and Nvidia Corp. since 2020 despite its placement on a U.S. export blacklist in 1997.” The Journal further reports that CAEP – the top research arm of China’s nuclear weapons program – acquired the chips through resellers, which may have used or marketed them as chips for… Read More

“He and His Company Should Clearly Commit Not to Proceed” – the New York Times Spotlights Apple’s Dangerous Dance with YMTC

Posted on by China Tech Threat
Ever since reporting on an Apple-YMTC deal first emerged earlier this year, national security-focused experts and legislators alike have sounded the alarm on the grave damage such a partnership would hold (see CTT’s extensive report on how the Chinese government was poised to infiltrate iPhones with YMTC chips). Now the New York Times is paying attention, too. On November 8th, the Times’ Apple beat reporter, Tripp Mickle, published an article detailing cracks in Apple’s foundation in China. Besides China’s COVID-related lockdowns that have snagged supply chains hurting its business, Apple is now under fire from lawmakers who see the YMTC threat for what it is. That’s in large part due to the work of James Mulvenon. As the Times reports:… Read More

New CTT Memo on Export Controls: “Five Areas to Watch During This Critical 60 Day Window”

Posted on by China Tech Threat
On October 27, China Tech Threat released a new memo calling attention to five priority areas worthy of attention in the wake of the Department of Commerce’s new China-focused export controls issued on October 7. The new set of rules have been described as “wreaking havoc on China’s chip industry” and “strangling with intent to kill.” But it’s hard to gauge their full impact after only three weeks. Alan Estevez, the Under Secretary of the Bureau of Industry and Security, has said “we are not done” on focusing on the Chinese semiconductor sector. We’re now 20 days into an important 60 day window that will mark a critical time for analysts, reporters, and industry observers to assess how serious the… Read More