US agency not doing enough to halt tech to China’s military, report says

The US-China Economic and Security Review Commission report, due to be published on Tuesday June 8, said the Commerce Department had been slow to create a list of sensitive technology that should be scrutinised before being exported to China.

The lag in developing the list of emerging and foundational technologies, as required by a 2018 law, may exacerbate national security risks, the report said.

The Commerce Department, entrusted to strengthen US export control laws, “has, to date, failed to carry out its responsibilities,” states the report, titled, ‘Unfinished Business: Export Control and Foreign Investment Reforms.’

In a statement, the Commerce Department declined to respond to the lack of a list, but noted it had published four rules on controls on emerging technologies and more are pending. It also said it had expanded the military end-user rule and added companies to its entity list, which restricts US suppliers from selling to certain Chinese-owned companies such as Huawei Technologies and Hangzhou Hikvision.

In 2018, Congress tightened US export policies and the process for screening foreign investment in response to efforts by Chinese entities to get hold of sensitive US technology and use civilian innovation for the military. This April, it extended its economic blacklist of Chinese firms by adding seven supercomputing organisations, which it believes are assisting Chinese military efforts. 

The report questions whether the Commerce Department’s inspector general should investigate the two-year delay in developing this list. It also asks whether it should delegate the authority to enforce export controls to another agency.

Congress passed the Export Control Reform Act of 2018 to make it harder to export key technologies to adversaries such as China. The law directed the Commerce Department to work with other agencies to identify emerging or innovative technologies, along with so-called foundational technologies essential to making key items such as semiconductors, that should be controlled.

In November 2018, the department published 45 examples of emerging technologies, including face and voice recognition, but no list was ever finalised. It has yet to propose a list of foundational technologies and instead will ask for input in August of this year about how to define the category.

Eric Hirschhorn, a former Commerce under-secretary, said the criticism of the agency was unfair. “They’re already controlling emerging technologies to the extent that it can be done, which is limited by the need to be specific,” he said. “Foundational technologies are, by definition, widely available outside the US, which makes controlling them difficult, if not impossible.”

The department has proposed to regulate software for gene editing, which can make it easier to develop biological weapons, but the rule has not been finalised. It also released an interim rule on geospatial imagery involving AI neural networks.

The US Congress created the US-China commission two decades ago to report on the national security implications of trade with China. Carolyn Bartholomew, who was appointed by Speaker of the House Nancy Pelosi, now chairs it.