Rulemaking on China Buying Advanced US Tech Needs Urgent Action, Lawmaker Says

November 1, 2019 Updated: November 4, 2019

A Republican lawmaker is calling for the U.S. government to accelerate plans to establish rules on exports of critical technologies to China, while expressing a “deep concern” at the current rate of the regulatory rollout.

“While our regulatory process moves slowly, China is sprinting ahead to acquire critical technology by any means necessary,” U.S. Rep. Michael McCaul (R-Texas), ranking member of the House Foreign Affairs Committee, said in a letter to Secretary of Commerce Wilbur Ross, seen by Reuters and dated Oct. 18.

A Commerce Department spokesperson told The Epoch Times via email on Nov. 1 that “the department has received the letter and is currently reviewing it.”

The letter seeks an update and timeline on rules, mandated by a law passed last year, to beef up oversight of exports of critical U.S. technologies. The regulations are meant to quell purported risks to national security amid a rising threat from China.

That threat was highlighted during a recent Washington panel discussion, as a U.S. defense official sounded the alarm over Beijing’s current lead in a number of emerging revolutionary technology industries. Panelists at the headquarters of the Center for Strategic and International Studies (CSIS) said America’s relationship with the Chinese Communist Party (CCP) must change when it comes to technology transfers.

A CSIS panelist, Michael Brown, the director of the Defense Innovation Unit at the Department of Defense, warned on Oct. 29 about the near-term direct costs of China’s technology thefts, including how U.S. companies will lose market share due to China’s “Made in China” 2025 plan, which he said is a large import substitution plan to transfer economic output from other countries to China.

China has built up its technology largely on what it’s stolen from the West, with the costs of intellectual property theft amounting to an estimated $600 billion annually, while inextricably threatening U.S. national and economic security.

The United States has set technology standards for the past 50 to 80 years, particularly since World War II, Brown said. However, he said that’s under threat, now that China leads in a number of important emerging technologies such as hypersonics, quantum sciences, autonomy, artificial intelligence (AI), genetic engineering, and others.

McCaul, in his letter, asked, “How does the U.S. government ensure engagement by the U.S. private sector with China’s high-tech sector does not lead to a U.S. company supporting Chinese efforts to acquire cutting-edge technology for China’s armed forces?”

The law mandating the rules, known as the Export Control Reform Act, sought to make it harder to export key technologies to adversaries such as China, as part of a bid to maintain an American innovation edge for economic and security purposes.

It mandated that the Commerce Department draft new rules to tighten controls of sales of emerging or cutting-edge technologies and so-called foundational technologies, those seen as essential to making key items like semiconductors.

While the agency sought public comment in November 2018 on how to draft its emerging technology rules, it has yet to issue any proposed or finalized measures. Commerce hasn’t yet sought industry input on how to design its foundational rulemaking.

Eileen M. Albanese, director of the office of national security and technology transfer controls at the Bureau of Industry and Security, who was also a panelist at the CSIS event, said that an “Emerging Technology Technical Advisory Committee” has been formed and will meet with the bureau later this year.

She said at the panel that the agency would propose emerging technology rules “shortly.”

Reuters contributed to this report 

Follow Bowen on Twitter: @BowenXiao3