The Commerce Department has done little to stop the export of technology-related products to China despite several pushes by the White House and Congress to limit tech transfers that could benefit the Chinese Communist Party.
The Commerce Department has approved the vast majority of technology-based export requests being sent to China, according to data reviewed by the Wall Street Journal. Of the $125 billion in exports sent from the United States to China, only half a percent required a license or approval. And of that half-percent, most were approved. The approval rate was revealed as the U.S. attempts to increase pressure on innovation to combat China’s race further to exceed the U.S. in innovation.
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An estimated 94% of tech-related applications, or 2,652 in total, were approved, according to the Wall Street Journal. This implies that the U.S. has continued to send semiconductors, aerospace components, AI elements, and other technologies overseas.
The Chinese import of semiconductors from the U.S. more than doubled from $2.6 billion in 2017 to $6.94 billion in 2021.
While Congress passed the Export Control Reform Act in 2018 in hopes of slowing down the sharing of emerging technology outside the U.S., critics claim that progress and implementation have been slow. While the department maintains a list of restricted entities for trade, the list does not block trade with said entities. This is why, as Rep. Michael McCaul (R-TX) noted, the Commerce Department issued more than $100 billion worth of export licenses to suppliers of blacklisted companies such as Huawei.
McCaul pointed to the October 2021 testing of a hypersonic missile as an example of American resources funding Chinese military developments. “It is likely that U.S. software and tools contributed to the creation of this weapons system, because of our country’s permissive export controls and licensing policies with China,” McCaul wrote in a letter alongside other members of the China Task Force. “If this is not the clarion call to overhaul export controls and our technology and research collaboration with [China] and its Military-Civil Fusion strategy, liberal democracies may cede more ground to a genocidal, authoritarian regime.”
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The Biden administration and Congress have made efforts to challenge China’s growth as an economic powerhouse through the recently passed CHIPS Act. The legislation, which Biden signed last week, will provide billions of dollars to fund new semiconductor plants in the U.S. and limit it to companies that have decided to build the factories or expansions in the U.S. and not in China.
