Foreign policy is never a one dimensional game. With the superfast news cycle many Westerners are exposed to, the common observer could be forgiven for thinking that relations between any given set of countries evolves solely around one issue. Unpacking the complexity and multiple layers of a phenomenon, especially something as nuanced as international relations, is not what the modern media specializes in.
But a small amount of attention is often enough to understand that things are not as simple as they seem.
A lot has been said about the Chinese-American trade war that has ensued in the recent period. Last month, President Donald Trump imposed tariffs on nearly $200 billion of Chinese imports and then threatened more levies if China retaliated. China then hit back with tariffs on about $60 billion of U.S. imports. The basis for the administration’s decision to trigger this economic conflict was, according to Trump and other officials’ own statements, primarily, well…economic. According to Trump’s narrative, China has been “taking advantage” of the U.S. for years, and not “playing by the rules” everyone else is abiding by.
Now this picture certainly has some truth to it. But it’s only half of the story.
The most often cited iniquities of China have to do with state intervention in the market, giving private companies an unfair advantage through government support and the like. Failing to enforce intellectual property laws are also a commonly discussed issue. In addition to these concerns, however, is a much more sinister activity on the part of the Chinese government. The fact is, the US-Chinese economic dispute is strongly tied into one of the longest trends in the recorded history of espionage—China’s systematic theft of foreign technology.
The threat of Chinese theft of technological secrets, especially those with military applications, has plagued the United States intelligence apparatus for decades. The People’s Republic of China (PRC) continues to come up with new and innovative ways of capturing the scientific talent of the West at-large, and the U.S. specifically. Much of the administration’s current policy on China, including many acts in the economic sphere, has been to combat this massive effort orchestrated by the leadership in Beijing.
Most recently, the U.S. Department of Energy (DOE) decided to enact its own set of restrictions on China. On 11 October, DOE announced a series of measures to prevent China’s “illegal diversion of US civil nuclear technology for military or other unauthorized purposes.” According to DOE head, Secretary of Energy Rick Perry, “The United States cannot ignore the national security implications of China’s efforts to obtain nuclear technology outside of established processes of U.S.-China civil nuclear cooperation.”
The restrictions are pretty straightforward: No more transfer of nuclear-related technology to Chinese companies. Period. China and its state-owned China General Nuclear Power Company (CGNPC) will still be able to make requests for technology in specific cases, but there will be a “presumption of denial” for these requests as well.
The background for DOE’s decision is important for appreciating these new restrictions in proper context. Beginning last year, the National Security Council (NSC) led a review of China’s efforts to obtain nuclear material, equipment and advanced technology from U.S. companies. The review was prompted by concerns that China was attempting to acquire American intellectual property “to the detriment of US businesses and military interests,” as officials put it.
What was the catalyst for these concerns? Well, there were a number of instances. The whole 40-year history of Chinese espionage, in fact. But the more recent case that seems to have driven the NSC’s recent investigation was the indictment in 2016 of a Chinese-American nuclear engineer, Allen Ho. Ho, a naturalized U.S. citizen, pleaded guilty last year to conspiring to produce “special nuclear material” in China in violation of the U.S. Atomic Energy Act which restricts such operations by U.S. citizens outside of very specific parameters. China’s CGNPC was also charged in the conspiracy. As if this wasn’t damning enough, adding to the list of China’s misdeeds were recent charges announced by the Justice Department against several Chinese intelligence officers. DOJ announced on 10 October that Chinese Ministry of State Security (MSS) operative Yanjun Xu was arrested and charged with “conspiring and attempting to commit economic espionage and steal trade secrets from multiple US aviation and aerospace companies.” According to the Department’s statement, Xu has already been extradited to the United States.
So you see, the “trade war” is not just about the economic factors connected to the movement of goods between China and the U.S. The claim of the administration is not just about PRC taking advantage of America in an economic sense. China is using its ability to extract products from the United States as a means of stealing military and other technological secrets.
Of course, the considerations of free-flowing markets (which means the free movement of goods) and protecting American technology clash. DOE understands this. In its official press release announcing the measures against China, the Department asserted, despite potential market impacts, restrictions are necessary when looking at the big picture. “These efforts are necessary to strike an appropriate balance between the long-term risk to US national security and economic interests, as well as the immediate impact to the US nuclear industrial base.”
Furthermore, prohibitions on exports should really be seen as completely in conflict with bolstering the market. On the contrary, preventing China from robbing the United States of its technology helps ensure long-term U.S. gains by safeguarding its investments in innovation, research, and development.
China’s exploitation of the U.S. is an unfortunate reality. But it is the key issue more than any other that will need to be sorted out between Washington and Beijing before any understanding on trade can be reached.
