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

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. Field programable gate arrays (FPGAs) can be used in an array of telecommunication devices, such as cell phone towers or in advanced military radars.

For most countries, the U.S. is able to verify that exported dual-use items will be confined for civilian uses, and not be devoted to military purposes. However, as it relates to China, the line between civilian and military uses is obliterated. Under the terms of General Secretary Xi Jinping’s Military-Civil Fusion (MCF) strategy, civilian Chinese entities must divert technology of military value to the People’s Liberation Army (PLA) or Ministry of State Security (MSS). This might not be as serious a problem as it currently is if the U.S. could verify the final destination and use of every piece of controlled technology. But the U.S. does not have an effective end-use verification mechanism in place for China. Under the U.S.-China End-Use Check Agreement, the American right to conduct inspections expires after 180 days. In light of these facts, the United States and all other nations should acknowledge that every dual-use technology transferred to the PRC is likely to be used to further modernize China’s military or enhance the domestic surveillance capabilities of an oppressive regime. 

The problem could be solved if the Bureau of Industry and Security (BIS) would adopt a presumption of denial standard for controlled technologies bound for China. Unfortunately, BIS has exercised a willful blindness in believing both American companies and Chinese entities claims that the technologies in question will be used strictly for civilian purposes. On the American side, these claims are rooted in naivete. Chinese entities are simply lying. Sadly, BIS, the one organization that is specifically charged with the national security reviews of transfer requests and export policies, is more beholden to U.S. commercial interests than with U.S. national security interests. Its permissive attitude to export controls has led to high rates of approval for the transfer of militarily useful technology to China: 91% in 2022.

In addition, BIS often sets the parameters for controlled technologies so narrowly as to largely defeat their purpose of the control. Case in point: recent controls for semiconductors, semiconductor manufacturing equipment, and specialized circuit breakers are so narrowly defined that any technologies that fall outside the parameters are green-lighted to the PRC, and one must assume to the People’s Liberation Army (PLA) and the Ministry of State Security (MSS) also. For example, NVIDIA announced plans to export reconfigured chipsets that fall just under the new export controls parameters released on October 7, 2022. Though falling short of the standards prescribed by the October 7 controls, these reconfigured semiconductors will nonetheless still be very valuable to Chinese companies’ development of artificial intelligence. There is no reason to believe that they will not be diverted to the PLA and MSS either. 

Additionally, the Wassenaar Arrangement (WA) – the multilateral export control regime for dual-use technologies – is also outdated as a meaningful tool. First, the regime does not recognize China as a potential adversary. Second, Russia’s participation in the WA means it has become nearly impossible to establish new controls for dual-use commodities, in particular emerging technologies. Consequently, attempts to establish meaningful multilateral controls on new or emerging technologies through the WA are failing.  Clearly BIS is falling down on the job, and American companies cannot be expected to know their customer in an environment of growing CCP obfuscation to police themselves. Congress now needs to act to toughen the standards for exporting controlled technology to China—ideally by imposing presumption of denial policies for all controlled items. It’s time to stop the willfully blind trust in the Chinese government’s promises of where America’s most sensitive technology is going.