from Net Politics and Digital and Cyberspace Policy Program

Can the Trump Administration Curtail Chinese Espionage Without Damaging U.S. Innovation?

An employee is pictured inside a clean room of German semiconductor manufacturer Infineon in Regensburg on February 12, 2013. Michael Dalder/Reuters

According to the New York Times, the White House wants to further limit China's access to U.S. technologies by barring their citizens in U.S. universities from performing sensitive research. That might do more harm than good. 

May 2, 2018

An employee is pictured inside a clean room of German semiconductor manufacturer Infineon in Regensburg on February 12, 2013. Michael Dalder/Reuters
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As part of its push back against Beijing’s industrial policy and trade practices, the Trump administration is considering restrictions on China’s access to U.S. technology. So far, the focus has been on Chinese companies’ investment in frontier technologies and reform of the Committee on Foreign Investment in the United States. The New York Times is reporting, however, that the White House is also looking into new measures to block “Chinese citizens from performing sensitive research at American universities and research institutes over fears they may be acquiring intellectual secrets.” While it is clear that the administration should do all it can to protect sensitive technologies from theft, there are real risks that the provisions will be drawn too broadly, badly damaging scientific discovery, innovation, and U.S competitiveness.

According to the Times, the White House is looking at changing the deemed export laws, blocking Chinese researchers from working on projects in research areas of high importance to China such as advanced microchips and artificial intelligence. Currently, Chinese engineers at lntel or a postdoc at Carnegie Mellon who works with sensitive technologies that are controlled for export is “deemed” an export, and the company or university must obtain a license for that employee or student to use the technology in the lab. The proposed changes appear to expand what defines contact and the numbers of technologies a Chinese national might come into contact with that would require a licenses.

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We have been here before. In the early 2000s, the intelligence community warned that Chinese spies were taking advantage of loopholes in deemed export regulations that defined status by residence or citizenship, not nationality. People in the intelligence community and the Pentagon told their contacts in the business community the story of fourteen Chinese who became Canadian citizens, entered the United States, and eventually worked with sensitive technology in U.S. universities and company labs.

Back then, the Commerce Department’s proposed revision—requiring that deemed export licenses be issued on the basis of country of birth, not citizenship—set off protests in the tech and academic community. The Association of American Universities, the National Science Foundation, and other scholarly organizations, for example, complained that the new provisions would provide little security and impose a high cost on scientific discovery and the U.S. economy. University officials also warned that they would effectively make Chinese students “second class” citizens in U.S. universities, crippling recruitment of foreign scholars.

Commerce eventually withdrew the provisions, and, while the Bush and Obama administrations considered other limits on Chinese access to technology, the default remained to embrace openness as one of the great competitive strengths of the U.S innovation system. According to this line of thinking, the United States will never effectively prevent the theft of all transformative technologies, and therefore the federal government should ensure that the U.S. economy remains the world’s most competitive. If the goal is to protect U.S. technology as well as maintain an innovation system built on global collaboration, the better policy option is to focus on counterintelligence, increasing training to university officials and providing greater resources to the FBI to review students on a case-by-case basis, and to zero in on individuals who trigger significant attention.

Given the Trump administration’s skepticism of globalization, the world trading system, and China’s efforts to acquire technology, it is highly unlikely that these arguments, which have dominated since the Cold War, will again prevail. The alliance of the business community and academia may only be able to limit the damage, not change the direction of policy. The belief that the United States benefited from open, global innovation is about to be tested, and the stakes could not be higher.

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