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Among the gravest U.S. security concerns is a wide-ranging Chinese government program that aims to meld commercial and government-controlled technology companies in a way that allows Beijing to bolster China’s domestic tech industry — and compete internationally — while also accessing data on users worldwide.
In a nod to the issue in October, the Pentagon added more Chinese companies with ties to the Chinese government, including the world’s biggest drone maker, DJI Technology, and surveillance tech maker Zhejiang Dahua Technology to a blacklist that would block Americans from investing in them. Then the Federal Communications Commission issued a ruling in November that banned sales or the import of Dahua equipment for national security reasons.
“The department is determined to highlight and counter the People’s Republic of China’s military-civil fusion strategy,” the Pentagon said when announcing the blacklist additions.
DJI has long been a leading supplier of drones to U.S. law enforcement, including the FBI and Department of Homeland Security, and its products can be found everywhere from the battlefield in Ukraine to the hands of recreational users across the U.S., including near airports and other critical infrastructure. American officials are worried that the Chinese government could use footage and data gathered from these drones to map out critical infrastructure or tamper with the technology used by law enforcement.
Another big part of China’s civil-military fusion project is its semiconductor industry.
Beijing has funneled money into the industry to keep newer, smaller companies afloat while they build up resources and a customer base. The “effort is intended to create and leverage synergies between economic development and military modernization,” a Center for a New American Security report explained, “allowing the defense and commercial enterprises to collaborate and synchronize their efforts through the sharing of talent, resources, and innovations.” The program is “startlingly expansive in scope, including everything from efforts in big data and infrastructure to logistics and national defense mobilization.”
The depth of the collaboration in China between the government and private enterprise goes far beyond anything the U.S. and its NATO allies have done in funding incubators to encourage commercial tech firms to work with the federal government. In the U.S., Silicon Valley generally keeps the Pentagon at arm’s length, unwilling to hand over its intellectual property to the government bureaucracy — a refusal that is all but impossible to make in China where start-ups often have little choice but to work with the government.
What THE U.S. CAN DO
Both the Trump and Biden administrations have tried to use sanctions and blacklists against Chinese companies and individuals involved in military production to ensure their products don’t become integrated into the backbone of the U.S. technology sector, but it remains unclear how effective those sanctions will be in the long-term as the dynamic Chinese economy, and tech sector, continues to evolve at a fast pace. Some analysts have questioned whether that approach can even be effective, given the at times limited understanding in Washington over how deep the ties run between the commercial sector and the military in China, and how U.S. companies can compete.
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