The U.S. shouldn’t scrap its Science and Technology Agreement (STA) with China when it expires later this month, and should instead update the deal to better address areas for cooperation around critical technologies, former U.S. officials and technology policy experts said this week. But they also acknowledged that continuing the agreement could be challenging, particularly because of rising tensions between the two sides along with a congressional push to restrict more American technology from being shared with Beijing.
Exports to China
Rep. Rick Larsen, D-Wash., one of the shrinking number of members of Congress who advocate for engaging with China rather than punishing it, recently published a white paper of his views on how to manage competition with China, how to use both offensive and defensive measures to compete with China, how to improve U.S. governance and competitiveness, and how to identify areas of cooperation.
The U.S. needs to better protect agricultural technology from Chinese theft and push Beijing to reduce tariffs on U.S. crops, American farmers told lawmakers last week. Speaking during a panel in Iowa organized by the House Select Committee on China, at least one farmer said U.S. trade policy should focus more on securing free trade deals, which would help exporters become less reliant on China.
House Republicans this week urged the Biden administration not to strike a deal with Beijing after Chinese officials reportedly offered to restart counter-narcotics activities with the U.S. in exchange for lifting certain trade restrictions. Beijing asked the U.S. to lift restrictions on the Ministry of Public Security’s Institute of Forensic Science, The Wall Street Journal recently reported. The institute was added to the Entity List in 2020 for its ties to human rights violations.
Two U.S. Navy servicemembers, Jinchao Wei and Wenheng Zhao, were arrested in California as part of two separate cases for "transmitting sensitive military information" to China, DOJ announced Aug. 3.
Two U.S. semiconductor companies said they still see opportunities to sell into the Chinese market despite sweeping export controls announced by the U.S. in October (see 2210070049) and potentially more restrictions coming soon.
China will soon impose export controls on certain unmanned aerial vehicles and related equipment in what is said is an effort to safeguard its national security. The restrictions, effective Spet. 1, will cover certain UAVs and their engines, infrared imaging equipment, radars, lasers, radio communication equipment, jamming equipment and more, China’s Ministry of Commerce announced July 31, according to an unofficial translation. It added that “all other civilian drones that are not included in the control are prohibited from being exported for military purposes.”
The top lawmakers on the House Select Committee on China urged the Commerce Department to strengthen its Oct. 7 China chip controls, saying Chinese firms have “identified workarounds.” In a letter last week to Commerce Secretary Gina Raimondo, Reps. Mike Gallagher, R-Wis., and Raja Krishnamoorthi, D-Ill., said the interim final rule’s threshold for the “bidirectional transfer rate of 600 Gbyte/s should be lowered sufficiently to prevent clever engineering that bypasses the regulations.” They also said the rule, which will be updated in the coming months when finalized by the Bureau of Industry and Security (see 2307260071), should address Chinese firms using cloud computing services to “outsource their advanced computing needs” and evade the export controls (see 2303210037 and 2305160092).
The U.S. Court of Appeals for the 9th Circuit, in a July opinion, reversed a California district court's decision acquitting Yi-Chi Shih, an employee at China-based firm Chengdu RML, of conspiracy to violate export control laws via his export of semiconductors to China. Judges Andrew Hurwitz and Ryan Nelson said "a rational factfinder could find that the exported [monolithic microwave integrated circuits] were not exempt from the [Export Administration Regulations] as fundamental research."
The Bureau of Industry and Security shouldn’t renew the one-year authorizations it gave to certain foreign chip companies as part of its Oct. 7 China chip controls unless the agency makes “significant” changes to the restrictions when it finalizes the controls in the coming months, said Derek Scissors, a China policy expert with the American Enterprise Institute. Scissors said extending the licenses beyond their October expiration would “undermine” the Biden administration’s goal of denying China advanced semiconductor technology and unfairly advantage foreign companies over U.S. firms.