The U.S. Has Work to Do at Home to Stop the PLA’s Modernization

By Steve Coonen

In a sign that it still knows how to do at least one thing right, Congress has lately been busy preparing the U.S. military to fight and win against the People’s Liberation Army (PLA). In December, the annual National Defense Authorization Act (NDAA) passed the House of Representatives with increases in defense spending and military capabilities in the Indo-Pacific. These desperately needed steps will help America’s warfighters (and those of our partners and allies) deter Chinese military aggression. But these actions will ultimately be irrelevant if the Biden Administration and Congress do not similarly curtail China’s ability to use U.S. technology to modernize the People’s Liberation Army. Both branches of government would be wise to implement recent recommendations from the House Foreign Affairs Committee’s 90-day review of the Bureau of Industry and Security (BIS).

This year alone has yielded numerous examples of how the Chinese government has exploited the porous U.S. export control system to weaponize American technology against us. Most recently, on December 18, multiple members of Congress wrote a letter to Defense Secretary Lloyd Austin expressing concern over Chinese-made DJI drones. Even though Russia is using DJI drones on the battlefields of Ukraine, and Hamas used them to disable Israeli surveillance systems and attack Israeli troops on October 7, these drones “still likely contain critical components from American companies,” according to the letter. It continued: “America’s adversaries are using DJI drones that contain American cutting-edge technology to harm U.S. national security interests.” The worst part is that DJI apparently continues to source American parts, despite being on the Entity List. The U.S. government is still somehow granting licenses to DJI, despite a formal presumption of denial policy applied to the company.

The presence of DJI drones in Ukraine is a microcosm for China’s diversion of U.S. technology to Russia, which Vladimir Putin’s army is in turn using to slaughter innocent Ukrainians. A recent Kyiv School of Economics Institute study revealed that more than two-thirds of technological components in Russian equipment recovered on the battlefield originated from companies headquartered in the U.S. Undoubtedly, because of Western sanctions (and lax export controls) Russia is acquiring a huge proportion of that technology from China. Far from dissuading diversion, U.S. export control policies are an open invitation for the Chinese Communist Party to send U.S. technology to whichever end user they desire. In this case, U.S. loopholes are costing Ukrainian lives.

There are numerous other examples of American technology supporting Chinese military ambitions abound from just 2023 alone. SMIC—a Chinese military supplier—could be facing a windfall from producing a chip for Huawei’s new phone made with American semiconductor tooling. U.S. export control officials can also take credit for helping build China’s so-called Great Undersea Wall of electronic sensors and submarines. For those who would claim there is no proof of American technology being used in this way (since we cannot take apart a Chinese navy submarine or dive to the bottom of the South China Sea and remove sensors), the fact that the PLA’s spy balloon was chock-full of U.S. tech should serve as the canary in the coal mine.  

At least one entity within the U.S. government is recognizing the need to reform the Bureau of Industry and Security to close these loopholes. On December 4, the House Foreign Affairs Committee released a report on its 90-day review of the Department of Commerce’s Bureau of Industry and Security (BIS). The review does a great job of exposing how lax and ineffective U.S. export controls and policies have contributed to a growing Chinese military threat. To wit, the report says, “For more than 20 years, the Chinese Communist Party (CCP) has circumvented our export controls and deceived the U.S. officials in charge of administrating them.” The review also helpfully calls out an obstinate U.S. export control bureaucracy whose unwillingness to control America’s most sensitive and emerging technologies further imperils national security: “We can no longer accept an export control bureaucracy that is reactive to technological advances and fails to impose controls on emerging technology until that technology is being weaponized.”

The review concludes with several recommendations, including that BIS implement a much-needed (in my view) policy of denial for all national security-controlled technologies bound for China. Unfortunately, the Committee’s hope that the same bureaucracy which has consistently failed American national security can willfully implement urgent reforms is most likely doomed to go unfulfilled. If Congress genuinely wishes to see its recommendations enacted, then it will need to force changes to BIS through legislative mandates. Absent a major overhaul of BIS and the U.S. export control system more broadly, the PLA will grow stronger, and Xi Jinping will have more confidence in his armed forces. The deterrent value of a bulked-up U.S. defense budget will be eroded, and the chances of a U.S.-China armed conflict will increase. America’s warfighters deserve an export control system that helps it deter, fight, and win wars, not one that enables our greatest adversary to win an arms race—and any future battles with the U.S.