Experts: China poses threats to U.S. through technology transfers

Flag of China. Photo: Flickr

WASHINGTON — China’s systematic technology transfers through industrial espionage, state-sponsored theft and infiltrating academia are acts of war and should be combated aggressively, experts and members of Congress said Thursday.

“We need to quit talking about Russia,” NanoMech Chairman and CEO James Phillips said in an open hearing held by the Permanent Select Committee on Intelligence. “There is a real war going on, a cyber war like never before, invading the United States every day, trying to take over in terms of all our science and technology.”

By aggressively acquiring U.S. intellectual property, China has gained and consolidated economic and military advantages, said House Intelligence Committee Chairman Rep. Devin Nunes, R-Calif. “Congress should give [the federal government] the ability to ensure China is not posing a national security risk through acquisition of sensitive U.S. assets.”

Specifically, Congress should give more authority to the Committee on Foreign Investment in the United States, a group composed of several government agencies to determine whether national security is threatened by the takeover of a U.S. business by a foreign power, according to Nunes and Michael Brown, former CEO of Symantec.

Reps. Jim Himes, D-Conn., and Terri Sewell, D-Ala., asked Brown what Congress should do to ensure a “win” on this battlefield.

“Any of the steps we take to deter technology transfer from China — which include both CFIUS reform and changes to export controls — needs to be coordinated with allies to be effective,” Brown responded.

He also said Chinese hackers may be emboldened by Russian hacking activities.

He recommended more aggressive enforcement against intellectual property theft through sanctions on Chinese firms, naming ZTE, and changing U.S. laws so that Chinese firms can be successfully sued in U.S. courts.

Brown said the main way China has been transferring edgy technologies is through investments in early-stage firms, saying it funded 16 percent of all U.S. venture deals in 2015, 10 percent in 2016 and 11 percent in the first 10 months of 2017.

Rep. Adam Schiff, the top Democrat on the committee, said one issue is Chinese students who study in the United States and return to China.

Elsa Kania, an adjunct fellow at the Center for a New American Security, agreed that China has been involved in many education-related activities that result in technology transfer, including a Duke PhD student who allegedly appropriated sensitive research funded by the U.S. military on metamaterials.

The United States should take “direct countermeasures” to stop China from gaining access to tech talents through greater enforcement and outreach to academia to raise awareness of the risks, Kania said.

The United States has a critical mass of the world’s leading artificial intelligence experts, and the Chinese government is trying “aggressively” to make up for that talent gap in order to emerge as an AI superpower by supporting what their officials call “national champions” — Baidu, Alibaba, Tencent and iFlytek, she said.

“Students who are from universities under the Chinese military are different from foreign talents whom we can encourage to come and stay,” Kania said in an interview. “I don’t think the scrutiny should be at the national level.”


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