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China’s Technology, Economy and Military Are All Advancing at an Alarming Rate, Say CSIS Panelists

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Photo of CSIS panel by Masha Abarinova

WASHINGTON, October 29, 2019 – With China’s technological advancement proceeding at a concerning rate for America, a panel at the Center for Strategic and International Studies Tuesday discussed the ways in which the U.S. can improve its technology transfer policies.

David Hanke, partner at Arent Fox LLP, called China the foremost important national security challenge of this generation. Both the public and private sectors, he said, should be alarmed by a world where China is dominant militarily, economically, and technologically.

The U.S. can provide a more offensive front, Hanke said, by publicly naming and imposing sanctions on bad actors involved in intellectual property theft. This would help address the weaponization of investment as well as export controls.

America has lost $600 billion annually to intellectual property theft by Chinese actors, said Michael Brown, director of the Defense Innovation Unit at the U.S. Department of Defense.  If China causes American companies to lose market share over time to global competitors, that will significantly impact GDP as well as compromise national security.

Brown introduced some of the basic principles of the Defense Innovation Unit’s Technology Transfer Policy Toolkit, which combines both defensive and proactive policies.

The defensive policies, he said, would modernize export controls and strengthen the processes enforced by the Committee on Foreign Investment in the United States. On the other hand, proactive policies would help the U.S. maintain global preeminence in science and technology, by increasing federal investment and implementing incentives for long-term research and development in the tech sector.

If the federal government knows the end use of new technology, Brown said, it can make sure that the technology rests in good hands, by cooperating with global allies and applying continuous review of the product.

A multi-faceted approach is required to respond to tech transfer challenges, said Thomas Feddo, assistant secretary for investment security at the U.S. Department of Treasury. Not all foreign investment is benign, he said, however the U.S. needs to maintain an open-investment environment to provide as much clarity as possible to the public about any risks.

Improvements are already being made on the federal level to address these risks, Feddo said. The Department of Treasury, for instance, is developing an office dedicated to the enforcement of mitigation agreements between domestic and foreign investors. Additionally, CFIUS is working to foster company compliance with the government, using multilateral engagement to share best practices with allied countries.

The Export Control Reform Act of 2018 helped mitigate tech transfer risk in several ways, said Eileen Albanese, director of the Office of National Security and Technology Transfer Controls at the U.S. Department of Commerce. The most important part of the bill, she said, required the president to establish a formal and continuous processes for identifying emerging technologies.

With the formalization of this process, Albanese continued, federal agencies must consider multilateral agreements and the impact export controls may have to American innovation.

Specificity on compliance is key, she said. Not only would the clarity help facilitate best practices for innovation, but it would also identify the emerging technologies that are essential to U.S. national security.

China

New Leadership and Priorities for Republican-Led Energy and Commerce Committee

The new chair renamed three subcommittees, hinting at the GOP’s goals for the coming term.

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Photo of Rep. Cathy McMorris Rodgers in 2018 by Gage Skidmore, used with permission

WASHINGTON, January 27, 2023 — Rep. Cathy McMorris Rodgers, R-Wash., recently named chair of the House Energy and Commerce Committee, announced on Wednesday the new Republican leadership and membership of each subcommittee, giving insight into which members of Congress will be at the forefront of key technology decisions over the coming term.

McMorris Rodgers also announced changes to the committee’s structure, renaming three subcommittees and shifting some of their responsibilities. The changes aim to “ensure our work tackles the greatest challenges and most important priorities of the day, including lowering energy costs, beating China and building a more secure future,” McMorris Rodgers told Fox News.

Rep. Frank Pallone, Jr., D-N.J. — now the committee’s ranking member after serving as chair for the past four years — announced on Friday each subcommittee’s Democratic membership and leadership, and named Rep. Kim Schrier, D-Wash., as the vice ranking member for the full committee.

Rep. Kelly Armstrong, R-N.D., who will serve as the committee’s vice chair, is a vocal critic of Big Tech. In 2021, he was one of several Republicans who championed major reforms to Section 230 of the Communications Decency Act.

The committee’s new names hint at some of the ways that the committee’s priorities may shift as Republicans take control. The former Consumer Protection and Commerce Subcommittee is now titled the Innovation, Data and Commerce Subcommittee and will be chaired by Rep. Gus Bilirakis, R-Fla., alongside Ranking Member Jan Schakowsky, D-Ill.

Bilirakis and McMorris Rodgers have already announced the subcommittee’s first hearing, which will focus on U.S. global technology leadership and competition with China.

The Communications and Technology Subcommittee, now led by Chair Bob Latta, R-Ohio, and Ranking Member Doris Matsui, D-Calif., also emphasized competition with China in the announcement of a hearing on the global satellite industry.

Latta has previously spoken out against the total repeal of Section 230, but he has also expressed concerns about the extent to which it protects tech companies. In an April 2021 op-ed written jointly with Bilirakis, Latta accused social media platforms of engaging in “poisonous practices… that drive depression, isolation and suicide.”

The Environment, Manufacturing and Critical Minerals Subcommittee, formerly known as the Environment and Climate Change Subcommittee, will be led by Chair Bill Johnson, R-Ohio and Ranking Member Paul Tonko, D-N.Y.

The Energy Climate, and Grid Security Subcommittee, formerly known as the Energy Subcommittee, will be led by Chair Jeff Duncan, R-S.C., and Ranking Member Diana DeGette, D-Colo.

The Health Subcommittee will be led by Chair Brett Guthrie, R-Ky., and Ranking Member Anna Eshoo, D-Calif. The Oversight and Investigations Subcommittee will be led by Chair Morgan Griffith, R-Va., and Ranking Member Kathy Castor, D-Fla.

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Unrealistic Fears About Chinese Tech Distract From Real Privacy Concerns, Panelists Say

Panelists argued that ethical concerns about digital privacy and AI are not unfounded, but rather unfairly targeted at certain countries.

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WASHINGTON, January 23, 2023 — The TikTok bans that have been implemented by several state governments and universities illustrate a misguided approach to tech policy that targets certain countries at the expense of addressing broadly applicable privacy concerns, said panelists at a Broadband Breakfast Live Online event on Wednesday.

Some of the often-discussed security threats coming from Chinese tech products “are being imagined in a way that is completely detached from reality,” said Yangyang Cheng, a research scholar and fellow at Yale Law School’s Paul Tsai China Center. This misdirected focus diverts attention away from other concrete risks presented by artificial intelligence and social media, she added.

In December, Rep. Mike Gallagher, R-WI, called for a national TikTok ban, calling the app “digital fentanyl” and claiming it was being utilized by the Chinese Communist Party to influence young Americans. Such allegations are unrealistic and xenophobic, Cheng said, but still have the power to broadly shape American society.

For example, several universities have now banned the use of TikTok on the schools’ Wi-Fi and equipment. Access to a particular social media app is not itself a fundamental right, but “fundamental rights with regards to academic freedom, freedom of expression, government’s role in a society are being shaped, and some fundamental freedoms are being infringed on… in the name of banning TikTok,” Cheng said. “That is the concrete harm here.”

The rhetorical focus on a potential TikTok ban and other “combative” issues takes away from more important discussions, such as the fact that the U.S. lacks comprehensive privacy legislation, said Kate Kaye, an independent tech journalist. Unlike the U.S., China has legislation allowing people to opt out of algorithmic social media targeting, she added.

Attempts to establish “very minor ethical guidelines” in U.S. artificial intelligence research have been met with significant pushback from researchers who question whether it is their responsibility to consider ethical questions or data privacy, Kaye said.

Cheng argued that ethical concerns about digital privacy and artificial intelligence are not unfounded, but rather unfairly targeted at certain countries. For example, the U.S. government has placed certain restrictions on Chinese digital surveillance firms, citing potential human rights violations, but similar technologies are being developed and used in the U.S. and Europe.

The “rhetorical China threat umbrella” has even been used to argue against such ethical regulations, with U.S. tech companies claiming that such restrictions will impede their ability to compete with their Chinese counterparts, Cheng said.

Concerns about economic competition are ‘repackaged’ as security risks

Potential risks related to technology can be divided into three categories, which are sometimes improperly conflated, Cheng said. First, technical risks can entail built-in design flaws that make devices or software vulnerable to hacking. While these problems are still complicated, they are relatively straightforward to observe and define.

Another category is regulatory risks, referring to the guidelines and restrictions that are placed on data collection, storage and usage.

Risks in these two categories are “not specific to any individual country or political system,” Cheng said. While the security concerns raised by the U.S. government about Chinese tech companies like Huawei and TikTok are “not necessarily unfounded,” those same risks are present in products from several other countries, she added.

“There is an overemphasis on the policing or surveillance capabilities of the Chinese state, without seeing the reality that data is being commodified and basically packaged as capital, so it can just be bought and sold relatively freely by data brokers and other third parties,” Cheng said.

This potential overemphasis on certain countries’ companies falls into the third risk category, which Cheng termed geopolitical risks. One such geopolitical concern expressed by some U.S. lawmakers is that it is harmful for a Chinese company like TikTok to have such a large market share.

However, this concern is sometimes couched in language about data privacy or security, Cheng said. “What we are seeing is that actual concerns about geopolitics or economic competition are being repackaged and somehow hand-waved to the first two types — technical or regulatory risks.”

Many of the national security conversations taking place in the U.S., on a bipartisan basis, are propelled by “profit-driven motives,” Kaye said.

Our Broadband Breakfast Live Online events take place on Wednesday at 12 Noon ET. Watch the event on Broadband Breakfast, or REGISTER HERE to join the conversation.

Wednesday, January 18, 2023, 12 Noon ET – Welcoming the Chinese New Year, Navigating a High Tech Cold War

Tensions between the U.S. and China are continuing to grow, and the battle over information technology and policy often appears to be at the heart of the conflict. Chinese telecommunications equipment giant Huawei has been effectively barred from the U.S. market for over a year, and the Federal Communications Commission recently tightened restrictions with a new rule that will keep Huawei, ZTE and other companies from surveilling American citizens. Meanwhile, ByteDance’s TikTok has been banned from U.S. government devices, and some politicians argue that it also should be banned from the devices of its 100 million U.S. users. How will this power struggle play out over the coming year, and what are the implications of both countries’ decisions?

Panelists:

  • Dr. Yangyang Cheng, Research Scholar in Law and Fellow at Yale Law School’s Paul Tsai China Center
  • Kate Kaye, Independent Tech Journalist and Writer
  • Drew Clark (moderator), Editor and Publisher, Broadband Breakfast

Panelist resources:

Dr. Yangyang Cheng is a Research Scholar in Law and Fellow at Yale Law School’s Paul Tsai China Center, where her work focuses on the development of science and technology in China and US‒China relations. Her essays on these and related topics have appeared in The New York Times, The Guardian, The Atlantic, WIRED, MIT Technology Review, and many other publications. Trained as a particle physicist, she worked on the Large Hadron Collider (LHC) for over a decade, most recently at Cornell University and Fermi National Accelerator Laboratory.

Kate Kaye is a tech journalist who tells deeply-reported stories with words and sound. Her work has been published in ProtocolMIT Technology Review, CityLab, OneZero, Fast Company, and many other outlets, and it’s been heard on NPR, American Public Media’s Marketplace and other radio programs and podcasts. Kate covered AI and data as senior reporter for Protocol until the publication suddenly shut down in November 2022.

Drew Clark (moderator) is CEO of Breakfast Media LLC. He has led the Broadband Breakfast community since 2008. An early proponent of better broadband, better lives, he initially founded the Broadband Census crowdsourcing campaign for broadband data. As Editor and Publisher, Clark presides over the leading media company advocating for higher-capacity internet everywhere through topical, timely and intelligent coverage. Clark also served as head of the Partnership for a Connected Illinois, a state broadband initiative.

Graphic by Adobe Stock

WATCH HERE, or on YouTubeTwitter and Facebook.

As with all Broadband Breakfast Live Online events, the FREE webcasts will take place at 12 Noon ET on Wednesday.

SUBSCRIBE to the Broadband Breakfast YouTube channel. That way, you will be notified when events go live. Watch on YouTubeTwitter and Facebook

See a complete list of upcoming and past Broadband Breakfast Live Online events.

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Semiconductor Supply Chain Control is Critical, But Export Restrictions May Hurt U.S. Companies, Event Hears

The CHIPS and Science Act, while a good step, should not preclude developing a secure supply chain with other countries.

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Screenshot of Hudson Institute event panelists

WASHINGTON, January 12, 2023 — Gaps in the domestic microelectronics supply chain both expose potential U.S. vulnerabilities and highlight the importance of a multilateral approach with international allies, according to speakers at a Hudson Institute panel on Wednesday.

Semiconductors and microelectronics play a key role in computing, healthcare, military systems and countless other critical applications. But their manufacturing process is extremely complex and relies on a tenuous supply chain with several potential points of failure.

For example, 70 percent of the world’s capacity for photoresist — a light-sensitive polymer that plays an important role in the electronics industry — is concentrated in just four companies, all of which have operations in the same part of Japan, said Neal Anderson, strategy lead for the semiconductor market at chemicals company Chemours.

This is “not necessarily a single point of failure, but when you look at it from a geographic perspective, it presents the same amount of risk,” Anderson explained.

Chemours is the only U.S.-based manufacturer of PFA, a fluoropolymer that is “used pretty ubiquitously across the semiconductor infrastructure and semiconductor fabrication facilities,” Anderson said.

“Earlier this year we became aware of a $35 gasket that was holding up an $80 million tool that was holding up the opening of a semiconductor fab[rication plant]… It just really illustrated the challenges and how one simple piece like that can create fragility across that supply chain.”

In addressing this problem, the U.S. government should refine its priorities for domestic manufacturing and focus on developing “end segments” for critical industries, said Travis Kelly, president and CEO of Isola Group. “Once we define ‘Hey, these are the critical end segments that we want to have a resilient and secure supply chain for,’ we need to figure out what that demand signal is.”

Kelly, who also serves as chairman for the Printed Circuit Board Association of America, noted that recent legislative activity — including last summer’s passing into law of the CHIPS and Science Act, which subsidizes domestic semiconductor manufacturing — is a good step forward. 

However, it could be a mistake to prioritize domestic manufacturing at the expense of developing a secure supply chain between countries with distinct resources and technological advantages, he added. “You can’t bring everything back to the U.S. because that’s too much of a myopic view — it’s a global economy.”

New export restrictions may do more harm than good

An argument often raised in debates about the microelectronics supply chain is that the U.S. has lost its lead, but this applies only in very limited circumstances, said Rich Ashooh, vice president for global government affairs at Lam Research. While the volume manufacturing of chips has largely moved overseas, the U.S. maintains a lead in the tool industry, building the machines for chip fabrication facilities.

“It’s a very small number of companies that integrate these very complex technologies, and that does make for a fragile system, but the system has worked and the US is in the lead,” Ashooh said. “Now… U.S. policymakers have decided to change the system under which that lead was achieved.”

Ashooh was referring to export restrictions announced by the U.S. Commerce Department in October, prohibiting U.S. companies from exporting chip production technology and equipment to China. Industry leaders have warned that these restrictions risk making American companies less competitive in global markets.

“Everyone agrees that semiconductor leadership is a national security concern,” Ashooh said. “But if that’s the case, we need to ask ourselves seriously about whether or not the government is aware that they changed the system overnight and there is no clear replacement for it.”

If the U.S. puts excessive bilateral sanctions on China, this could have the “unintended consequence” of driving innovation in China and causing future problems for the U.S. market, Anderson said. A better approach would be multilateral, with the U.S. working alongside a “regional like-minded coalition.”

The importance of a multilateral approach was echoed by other panelists, including Bryan Clark, senior fellow at the Hudson Institute and director of the Center for Defense Concepts and Technology.

If the supply chain is examined “from just the U.S. lens, it gets really complicated… but if you look at this instead as the lens of the U.S. and its allied countries, that seems like a coalition of both customers and providers that may be relatively self-contained,” Clark said.

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