US Needs Clearer Export Controls, Industry Support to Counter China's Tech Rise, Senator Says

The U.S. needs a clearer approach to its export control regime and should coordinate more closely with allies to counter China’s technological rise, Sen. Mark Warner, D-Va., said, adding that the U.S. needs to better communicate to industry about the risks of doing business with China and its government-sponsored human rights abuses.

Warner, speaking during a Sept. 16 virtual event hosted by the National Democratic Institute, said U.S. export control regimes are taking too long to restrict shipments of sensitive technologies. He also said the administration should better use its export control authorities to block U.S. companies and researchers from collaborating on advanced technologies with Chinese state-controlled companies and research institutions.

“We need clear prohibitions, beyond the slow and convoluted export control regime, on U.S. companies facilitating state-sponsored repressive efforts,” said Warner, who is vice chairman of the Senate Select Committee on Intelligence. “U.S. companies and researchers should not be collaborating on biometric profiling, facial recognition, [artificial intelligence], or other anti-democratic efforts by [Chinese Communist Party (CCP)]-affiliated companies and research institutions.” The Bureau of Industry and Security, which leads U.S. export control efforts for advanced technologies, declined to comment.

Beyond its own export control regimes, the U.S. should increase outreach with allies to collaborate on technology development and partner against China, Warner said. Besides North Atlantic Treaty Organization members, he said, the U.S. should pursue more technology cooperation with Japan, India, South Korea and Israel “to ensure that we don't lose the technology race” with China.

“For years, we've assumed that we'd lead and our partners would simply follow,” Warner said. “But we've seen that when the United States fails to lay out a clear vision, our allies chart their own courses.”

More outreach with industry can also help, Warner said. Although the administration has issued guidance on repression in China, including a July business advisory on human rights abuses in the Xinjiang region (see 2007010040), more can be done, Warner said. “United States companies should not benefit from or facilitate state-sponsored regressive efforts,” he said. “That requires the U.S. government to lead a rigorous information campaign with the private sector.” U.S. officials have said they are working on more measures to dissuade companies from doing business in China (see 2007300044).

Warner said he has worked on a “bipartisan basis” for the past two years to bring together U.S. CEOs and university presidents to share “classified intelligence briefs on the CCP’s strategies and tactics.” Although the outreach needs to continue, he said it is working. “Everyone for so long had the idea that they couldn't miss getting into the Chinese market,” Warner said. “There's a growing recognition from many Americans that the price of going into China may be a price that's too high, particularly when time and again they've seen their intellectual property stolen.”

Warner also said bipartisan support is growing for U.S. “industrial policy tools” to compete with Chinese state-backed companies and government subsidies, particularly in the advanced technology and semiconductor sectors. Warner’s comments came the same day the Semiconductor Industry Association and the Boston Consulting Group released a study advocating for “robust federal incentives” for the U.S. semiconductor industry. SIA said government incentives could “reverse the decades-long trajectory of declining [U.S.] chip production.”

“We've got to take this on,” said Warner, who helped introduce a bill in June that would provide more federal support for U.S. semiconductor research and development (see 2006110038). SIA applauded the bill, but funding remains an issue (see 2007240010). “In core technologies around semiconductors, the U.S. still remains in the lead. But our leadership may be in jeopardy,” Warner said. “If we make a move in this direction, it would mean we would have a wider set of firms, including a whole variety of American firms, able to compete against Huawei.”