8th December 2023 – (Washington) A new report released by the House Foreign Affairs Committee on Thursday calls for the Biden administration to take immediate action to strengthen U.S. export controls and prevent the “haemorrhaging” of sensitive U.S. technology to China. The report argues that the current approach to regulating technology exports has failed to prevent the flow of advanced U.S. technology to China, which can be used to strengthen its military and threaten national security.
The report, titled “The China Threat: Proposals for Enhancing U.S. Export Controls,” highlights the need for stricter enforcement of existing rules and the implementation of new measures to prevent the unauthorised transfer of U.S. technology to China. The report notes that despite the Biden administration’s efforts to address the issue, there are still significant loopholes in the current system that allow U.S. technology to be exported to China.
One of the key recommendations of the report is to deny licenses for all exports to China that have been restricted due to national security concerns. Currently, some licenses are approved on a case-by-case basis, allowing U.S. technology to be exported to China. The report argues that this approach has failed to prevent the flow of sensitive technology to China and that a stricter approach is needed.
Another recommendation is to prohibit companies on the Commerce Department’s trade restriction list, known as the Entity List, from using cloud services. The report notes that Chinese artificial intelligence company SenseTime, which was added to the Entity List in 2021, has been able to buy chips through other subsidiaries and use cloud services, despite the restrictions.
The report also calls for reforms to the Commerce Department’s Bureau of Industry and Security, which oversees export controls. The report argues that the bureaucracy surrounding export controls must be reformed to break free of its post-Cold War, free trade mentality and adopt a more robust approach to regulating technology exports.
The report’s release comes ahead of a scheduled Committee hearing with Commerce Department officials on Tuesday. The hearing is expected to focus on the issue of U.S. technology exports to China and the measures being taken to address the problem.
In a statement, House Foreign Affairs Committee Chairman Michael McCaul said, “If the United States is determined to outcompete China, the fossilised licensing bureaucracy that oversees export controls must break free of its post-Cold War, free trade mentality.”
A spokesperson for the Commerce Department did not have an immediate comment on the report’s recommendations.