Chinese Diplomats Are the Driving Force in Beijing’s Foreign Technology Acquisition: Report

June 10, 2021 Updated: June 15, 2021

A recent report found that Chinese science and technology (S&T) diplomats had acted as Beijing’s brokers, identifying overseas collaboration, investment, or acquisition opportunities for Chinese entities to acquire foreign technology and advancing the Chinese Communist Party’s (CCP) industrial policy.

“These accomplishments, in turn, contribute to the PRC’s (Chinese Communist Party’s) ‘going out’ strategy and goals set forth in state policies including made in China 2025,” said the “China’s Foreign Technology Wish List” report released in May by the Center for Security and Emerging Technology (CSET), a Washington-based think tank.

The “going out” strategy was proposed by the Chinese Communist Party in 1999 to encourage domestic companies to invest overseas. CSET uncovered the party’s goal of foreign technology acquisition.

The state-sponsored approaches the diplomats undertook include identifying China’s domestic needs; monitoring cutting-edge technology among foreign entities, academia, government laboratories, and individual researchers; organizing matchmaking activities to help Chinese companies sign investment, licensing and production agreements with foreign tech companies; and hiring foreign personnel to work in China, the study shows.

It examined 642 reports on cooperation opportunities, involving more than 300 foreign companies, universities, research institutions, and individuals under Beijing’s interest.

These reports were documented by overseas Chinese embassies and consulates, where over 140 S&T diplomats were stationed worldwide.

The analysis found 190 cases of international technology cooperation involving biotechnology, another 171 related to artificial intelligence and machine learning, and some related to integrated circuit design or semiconductor manufacturing equipment. Most projects came from Russia (112), followed by the United States (77), the United Kingdom (62), and Japan (57).

Thirty diplomat-recommended foreign companies were randomly surveyed by CSET, 14 of which were found to have formed joint ventures, patent licensing agreements, or exclusive deals with Chinese companies, or otherwise have been purchased—through which China can successfully acquire its technology.

The report also highlighted the Chinese consulate in Houston for its important role in China’s global S&T information-gathering operations.

The consulate was shut down last July over allegations of espionage activities related to American research and technology.

Prior to its closure, the Houston consulate referred the most S&T projects of any Chinese embassy or consulate worldwide, the report said. Nearly 90 percent of the U.S. programs had been referred since January 2015.

After the consulate in Houston was closed, only one S&T cooperation project from the United States was released online by the Department of International Cooperation of China’s Ministry of Science and Technology.

James Lewis, an expert of the Center for Strategic and International Studies, said although China still relies on Western technology, the goal is to end its dependence and to dominate the global market.

He expressed concern to VOA News over Beijing’s mingling of business practices with illegal ones, such as intellectual property theft and espionage.