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 ranking member of the Senate Banking, Housing and Urban Affairs national security and international trade and finance subcommittee.

China Tech Threat has been continually vocal about the concerns of YMTC. Last year, CTT founder Roslyn Layton warned that given ties to the People’s Liberation Army, YMTC and other Chinese state-owned chip makers “must be added to the Entity List [or at least designated as a Military End User] to ensure critical US technology is not weaponized against Americans.”

Further, the White House also flagged their concern with YMTC earlier this summer in their recent 100-day supply chain review report. They noted: “Even though YMTC’s 3D-NAND memory technology is untested and significantly less advanced than global leaders, it still represents a watershed moment in China’s semiconductor ambitions, especially because YMTC was only founded in July 2016. YMTC has received an estimated $24 billion in subsidies from Chinese government sources, which was essential to the firm’s rapid development.”

Also earlier this week, in collaboration with the U.S. Department of State, the U.S. Department of the Treasury, the U.S. Department of Commerce, the U.S. Department of Homeland Security and the Office of the U.S. Trade Representative, the U.S. Department of Labor issued an updated Xinjiang Supply Chain Business Advisory.

According to the press release, “The updated advisory alerts businesses to the heightened risks of supply chain and investment links to entities complicit in state-sponsored forced labor and other human rights abuses in Xinjiang and throughout China as part of labor transfer programs.”

“The labor and human rights abuses against Uyghurs and other minorities in Xinjiang, China, are egregious, systematic and ongoing,” said U.S. Secretary of Labor Marty Walsh. “Any company doing business in this region should take heed: these are reprehensible and illegal practices, and the goods produced under these conditions have no place in the U.S. economy.”

Both the letter and advisory show positive steps to create policy and law to protect the security, privacy, and prosperity of all Americans. We applaud the members of congress and the administration.