Trade was barely touched on during the virtual meeting of President Joe Biden and Chinese President Xi Jinping, said Anna Ashton, vice president of government affairs for the U.S.-China Business Council. Ashton, who was speaking on a Nov. 23 Twitter panel hosted by Neysun Mahboubi, a research scholar at the University of Pennsylvania's Center for the Study of Contemporary China, said that follows a pattern in the administration. She said that "they are unabashedly reframing the relationship… as a competitive one," which makes her wonder where the commercial relationship fits in. The recent panel was reacting to the earlier video call (see 2111160004).
Exports to China
The Bureau of Industry and Security should clarify that certain hospitals affiliated with entries on the Entity Listed are not subject to Entity list restrictions, said Tory Tibor, global head of trade compliance for medical device company Olympus. Tibor said the clarification would help address confusion among third parties, including forwarders, about what types of entities are captured by Entity List controls.
The Bureau of Industry and Security added 27 entities to the Entity List for illegally selling technology to China, North Korea and other sanctioned countries, for supporting China’s military modernization efforts or for contributing to Pakistan’s nuclear and missile programs, the agency said Nov. 24. The Entity List additions include a range of laboratories and companies operating in the semiconductor, microelectronics and machinery sectors in China, Japan, Pakistan and Singapore, including several major Chinese chip companies.
The Bureau of Industry and Security hasn’t done enough to restrict exports of sensitive technologies to Chinese artificial intelligence companies, Republican senators said in a Nov. 15 letter to Commerce Secretary Gina Raimondo. The senators urged BIS to “expeditiously review and then add” to the Entity List all A.I. suppliers to China’s military, including those listed in a recent report by Georgetown University. In a report last month, university researchers said very few A.I. suppliers to China face specific U.S. export controls (see 2110290018).
A bipartisan congressional commission called on the U.S. to take more aggressive steps to stop China from acquiring sensitive U.S. technologies, including through more export controls and sanctions. The recommendations, released Nov. 17 by the U.S.-China Economic and Security Review Commission as part of its annual report to Congress, could make sweeping changes to how the Commerce Department imposes certain export controls and how U.S. agencies coordinate trade restrictions.
The Bureau of Industry and Security needs to better enforce its foreign direct product (FDP) rule, which is not adequately stopping Huawei and other Chinese companies from acquiring certain sensitive U.S.-produced technology, eight Republican senators said in a Nov. 15 letter to Commerce Secretary Gina Raimondo. The senators said Commerce’s “lax enforcement” of the rule has encouraged other technology firms to sell to companies on the Entity List, said the lawmakers, who all serve on the Senate Committee on Commerce, Science and Transportation.
The Senate is “likely” to vote on the annual defense policy bill this week, which could include the Senate-passed U.S. Innovation and Competition Act of 2021, Senate Majority Leader Chuck Schumer, D-N.Y., said. In a Nov. 14 letter to lawmakers, Schumer said “there seems to be fairly broad” bipartisan support for adding USICA to the National Defense Authorization Act, which would allow a USICA negotiation with the House “to be completed alongside” the NDAA before the end of the year. The House plans to write its own version of USICA.
The U.S. needs to strike a better balance between targeting Chinese technology theft and encouraging open and collaborative technology research environments, the Center for Strategic and International Studies said in an Oct. 28 report. While the government is concerned Chinese students and scientists work as “‘nontraditional collectors’ in pursuit of [China’s] technology priorities,” CSIS said those risks “can and must be dealt with while simultaneously maintaining the fundamental openness of the system.”
“Very few” of the Chinese military’s artificial intelligence equipment suppliers face specific U.S. export controls, allowing China’s defense industry access to a range of sensitive U.S. technologies, Georgetown’s Center for Security and Emerging Technology said in an October report. The absence of specific export restrictions over AI suppliers highlights significant “gaps” in U.S. export control policies, the report said, and could lead to “lapses in due diligence” by U.S. exporters.
The U.S. should continue to impose export controls on advanced semiconductor manufacturing equipment and machinery but be careful about restricting sales of finished semiconductor products to China, Chinese economics and technology policy experts said. Controls on finished products may risk hurting U.S. semiconductor exporters and would not stop China from importing those goods elsewhere, they said.