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Tech War: U.S. Whole-of-Government Approach to China is a Force Multiplier

The U.S. government has adopted and is implementing a “whole-of-government” strategy to counter China. The whole-of-government approach entails a range of legal and policy measures to curb China’s access to U.S. technology, by lawful and unlawful means. These measures include, but are not limited to, stricter curbs on foreign investment in U.S. technology; restrictions on exports of “emerging technologies” like artificial intelligence; exclusions of Chinese firms from U.S. government and private supply chains through company bans; prosecutions of intellectual property theft; measures to counter “academic espionage” in American academic and research institutions; and, indirectly, and, indirectly, sanctions enforcement.

Huawei, Questions About Ownership, and the Foreign Agents Registration Act

The United States has adopted a whole-of-government approach to counter China’s “economic aggression” or “economic espionage,” umbrella terms that encompass a range of conduct including IP theft, forced technology transfer, academic espionage, and influence operations in the United States. The whole-of-government approach illustrates that the most strategically significant and complex confrontation between the United States and China is not the “trade war.” Rather, the race to dominate future technologies like artificial intelligence and 5G underpins the most complex legal and policy issues between the two nations. The U.S.-China tech war, and the United States’ whole-of-government strategy, has put Chinese technology companies under the hot light of U.S. legal and political scrutiny. Companies like Huawei and ZTE, relative unknowns in the United States until recently, have found themselves on the wrong side of U.S. law enforcement.

Protect Our Universities Act Restricts Foreign Student Participation in “Sensitive” Academic Research

The “Protect Our Universities Act of 2019” is a a bill “to create a task force within the Department of Education to address the threat of foreign government influence and threats to academic research integrity on college campuses, and for other purposes.” Among other things, the Bill would restrict foreign student participation in federally funded academic research deemed “sensitive” to national security.

Infographic: U.S.-China Trade and Policy Issues

This graphic depicts key issues between the United States and China, as identified by the United States as of January 26, 2019. This is not an exhaustive depiction, but captures key categories and sub-categories of Chinese state and private practices, state policies, and state structural characteristics that are the subject of U.S. government complaints (as raised from within and outside of the Trump Administration).

Brain Drain: Emerging Technologies Export Controls Could Spur Tech Inversions

The Department of Commerce, Bureau of Industry and Security, has begun the process of identifying “emerging technologies” that are essential to national security and, consequently, require export control. New export controls on emerging technologies could be burdensome, depending on the content of regulations and the manner of their enforcement. If the new regulatory regime is burdensome to the point that it prohibits (legally or practically) some emerging technology transfers to foreign parties, companies and others involved in emerging technologies– particularly their development–may seek arrangements, without evading or otherwise violating ECRA or applicable regulations, to ease collaborations and other engagement with foreign parties, including by some form of technology inversion.

BIS Rulemaking on Emerging Technologies Export Controls- Analysis

The Department of Commerce, Bureau of Industry and Security on Nov. 19 published an Advance Notice of Proposed Rulemaking (ANPRM) on the “Review of Controls for Certain Emerging Technologies.” The ANPRM implements the Export Control Reform Act of 2018 and raises diverse legal, regulatory, policy, and commercial issues that cut across sectors and industries. Commerce seeks to advance national security goals without harming the United States’ capacity to lead in science, technology, engineering, and manufacturing. This Regulatory Update provides analysis of the ANPRM, the relevant legal framework, and considerations for commentators.

Sovereign Wealth Funds: Governance & Risk for SWFs and Companies They Fund

Private companies that receive SWF and SOE investment, as well as the investors who arrange or co-invest with state-linked firms, should, when screening investments and assessing nonfinancial risk before and after the point of investment (and when additional investment is under consideration), the quality and risk inherent in the corporate structure and governance, as well as the business conduct controls of SWFs and SOEs, may affect them in the near- to longer term. In doing so, they should take a lesson from the PIF situation, post-Khashoggi.