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Lawmakers Press Biden Administration for Tougher Curbs on China Tech

Republican lawmakers are faulting the Biden administration’s enforcement of restrictions on China’s access to American technology, saying that the administration is still allowing semiconductors and other American innovation to flow to Beijing that could ultimately aid China in a military conflict.

In a report released on Thursday, the House Foreign Affairs Committee said the administration had failed to enforce export controls that limit sales of advanced technology to China. The federal government has been steadily ramping up limits on sales to China of advanced chips and chip-making equipment over the past few years. The United States has also placed restrictions on Chinese companies or organizations accused of aiding the Chinese military or Russia’s war effort, or participating in human rights abuses in Xinjiang.

But Republican lawmakers said the administration had not done enough to enforce the rules and criticized the office in charge of policing export controls. The report faulted the Commerce Department’s Bureau of Industry and Security for being too close to the technology industries it regulates. Many tech companies sell products and services to China and have pushed for more lenient rules in order to retain access to a large and growing market.

In particular, the report said the administration had granted too many special licenses allowing American companies to export restricted products to China, in some cases issuing those exemptions over the objections of defense and intelligence officials.

In a statement, a spokesman for the Bureau of Industry and Security said that the Biden administration had been thoughtful and vigorous in expanding the restrictions, and had added more than 1,100 parties to a restricted trade list, including more than 300 firms and organizations in China.

The spokesman said that the department was constantly assessing and updating its export controls, and looked forward to reviewing the report and working with members of Congress to achieve national security objectives.

Semiconductor companies have pushed back against the restrictions, saying that overly broad controls could push China to develop its own technologies and ultimately undercut American industry leadership.

Gina Raimondo, the secretary of commerce, said at a defense forum on Saturday that the administration was “building a more muscular Commerce Department” to take on China, including issuing “historic controls” that for the first time denied an entire country specific technologies.

But she argued that her department was badly in need of funding to complete that mission. The Bureau of Industry and Security “has the same budget today as it did a decade ago. We have twice as many licensing requests. I get calls from members of Congress, Democrat and Republican, constantly: ‘Why aren’t you doing more?’” Ms. Raimondo said.

“I agree with you. I have a $200 million budget. It’s like the cost of a few fighter jets,” she added. “Fund this operation like it needs to be funded so we can do what we need to do to protect America.”

But several Republican lawmakers said Tuesday that they would withhold funding increases until the department changed its practices and moved forward with additional sanctions on Chinese companies like telecom giant Huawei. They cited government data showing that the agency had approved the sale of $60 billion in U.S. technology to Huawei over a six-month period in 2020 and 2021.

“Any conversation about additional resources must be matched with actions that demonstrate B.I.S. is being reformed into a true national security agency that will do what needs to be done to counter China and other adversaries,” Representative Michael McCaul, chairman of House Foreign Affairs Committee, and two other Republican lawmakers said in a statement.

The congressional report recommended a series of overhauls, including giving Defense Department officials a greater say in the approval of special licenses to supply technology to China.

A House aide said the committee would begin working to craft legislation as early as next week, and to seek bipartisan support for the changes. The committee will hold a hearing next Tuesday with Biden administration officials who oversee export controls.

The Biden administration recently restricted the export to China of an entire category of cutting-edge semiconductors used to create artificial intelligence, as well as the equipment to manufacture those chips. The administration also extended its rules extraterritorially, regulating products that use American technology but are manufactured outside the United States.

Officials with the Bureau of Industry and Security have said they work closely with other government officials to carefully review licenses for sales to China. In 2022, the bureau and its other agency partners reviewed more than 5,000 applications for exports to China, about a quarter of which were not approved, officials said.

But critics say Biden officials have not gone far enough to restrain some of China’s most advanced firms, like Huawei or server make Inspur.

Over the past year, the Biden administration considered clamping down on the special licenses that have allowed American companies to continue supplying certain goods to Huawei, but paused the effort this spring as it worked to mend ties with the Chinese government, according to people familiar with the matter.

Some China critics also expressed outrage last month when the Biden administration rolled back a trade restriction on a Chinese institution accused of aiding human rights abuses in Xinjiang. The Chinese government had complained that the restrictions were an impediment to cooperation between the governments on restricting fentanyl.

In a briefing in November, a state department official said that the administration had decided that removing the restrictions was an appropriate step to secure an agreement on fentanyl that could save thousands of American lives.

The fight over the Bureau of Industry and Security, formerly a relatively obscure agency, has grown more intense as its responsibilities have escalated in recent years, to include keeping American technology from reaching adversaries in China, Russia, North Korea and Iran.

Gregory Allen, a senior fellow at the Center for Strategic and International Studies, said that, in comparison to the capacity of other governments, the bureau’s abilities were impressive. But the demands on the bureau had exploded after Russia invaded Ukraine and the Biden administration placed controls on China.

The bureau was understaffed, and its technology and databases were outdated, Mr. Allen said.

“From my perspective, that’s unacceptable,” he said. “The United States has put export controls at the heart of technology and national security policy. We need that capacity to be incredibly robust.”

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