Defense Officials: US Needs Coordinated China Tech Strategy

“China is the embodiment of the military technology transfer challenge”

Michael Griffin, under secretary of Defense for research and engineering, says it’s time to look at China’s efforts as a whole, not as a series of individual actions. (Bill Clark/CQ Roll Call)

Chinese efforts to acquire U.S. intellectual property and technology are pervasive and not limited to cyber theft, defense and intelligence officials told members of the House Armed Services Committee on Thursday.

Beijing is also investing in U.S. companies, sending students to American universities, embarking on joint business ventures and cheating on trade agreements, said Anthony Schinella, national intelligence officer for military issues at the Office of the Director of National Intelligence.

“China is the embodiment of the military technology transfer challenge,” he said.

Between 2007 and 2017, Chinese firms invested $40 billion in U.S. companies, including $5.3 billion last year, Schinella said.

For Michael Griffin, undersecretary of Defense for research and engineering, it is time to look at China’s efforts as a whole, not as a series of individual actions. One place to start, he said, is the Committee on Foreign Investment in the United States, which approves or disallows deals involving foreign involvement in U.S. companies.

“In the CFIUS process, historically we look at one deal at a time,” Griffin said. “I think it is the broader pattern that is of more concern.”

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Even companies outside the technology sector have highly networked operating systems, Griffin said. This creates a vulnerability every time the systems are upgraded with foreign technology, he said.

“We don’t look at Chinese investments from the perspective of the mischief that might be made simply by having foreign ownership and, in some cases, control of such avenues,” he said. “We are today not drawing distinctions in our industrial policies between friends and allies and partners and people who behave in an adversarial manner.”

The bulk of evidence points to China as the main problem, he said.

Griffin and other witnesses called for a “whole of government approach” to address the issue, which prompted Rep. Rick Larsen to push back, saying the officials were tossing the term around “like candy at a Fourth of July parade.”

“You throw that term around to make it sound like you’re doing it, but I don’t think you are,” the Washington Democrat said.

Larsen noted that the Commerce Department holds regular meetings with U.S. companies to discuss ways to get involved in China’s Belt Road Initiative, which envisions a huge land and sea trading network for Beijing across Asia. He also criticized the Pentagon officials for being unable to discuss broadly the national security implications of President Donald Trump’s decision to withdraw from the Trans-Pacific Partnership, a trade deal the United States struck with 11 other countries in 2016 that would have set up a trading bloc of countries along the East Asian coast and the West coasts of North and South America.

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