'Very Few' AI Suppliers to China Face Specific Export Controls, Report Finds

“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.

Just 22 of the Chinese military’s 273 “known” AI equipment suppliers, or 8%, “face specific limitations” under U.S. export controls or sanctions, CSET said. The report said that about 91% of those known AI suppliers aren’t listed on the Entity List, 83.5% aren’t listed on the Treasury Department’s Chinese Military-Industrial Complex Companies List, and 91.2% aren’t listed on the Defense Department’s List of Chinese Military Companies. “Because most institutions that supply AI-related equipment are new and not subject to end-use controls,” the report said, “the Chinese military is frequently able to access or acquire technology from abroad, including from the United States.”

CSET said some Chinese suppliers frequently source foreign data or components and resell them to sanctioned Chinese defense companies or entities. The report specifically named Beijing Zhongtian Yonghua Technology Development Co., Ltd., which is not listed under any U.S. export control or sanctions regime but was awarded a contract in 2020 to supply “intelligent sensor equipment” to the China Aerospace Science and Technology Corp., which is listed on DOD’s Chinese military company list (see 2006250024).

CSET said Zhongtian Yonghua is listed in a Chinese online business directory as a distributor of “instrumentation equipment produced by companies” in the U.S. and Japan. “Multiple companies engage in similar activity,” the report said.

A Commerce Department spokesperson said Oct. 29 that the agency "continually reviews available information to assess whether parties should be added to the Entity List," but said the list isn't "the only means" for preventing China's military from acquiring U.S. technologies. The spokesperson specifically pointed to the agency's military end-use and end-user restrictions (see 2109300061).