US companies must stop helping China become a military power


The US Department of Defense recently released its annual report report on China’s military might, which shows that the Chinese military has made astounding progress in “modernizing its capabilities and improving its skills in all areas of warfare” in a relatively short period of time. The report also made it clear that one of the main goals of modernizing the Chinese military is to fight and win wars “against a powerful enemy,” a not-so-subtle reference in the United States.

The Chinese military’s most significant advance is its navy, which was almost non-existent four decades ago and is now the largest in the world, “with an overall combat strength of around 355 ships and submarines, including approximately more than 145 large surface ships. combatants. In contrast, the US Navy has a combat force of 293 ships at the start of 2020. The DOD report also points out that the People’s Liberation Army (PLA) Chinese has invested heavily in cutting-edge technologies such as artificial intelligence (AI).

The goal of the PLA is to “make weapons systems and military operations more networked and self-sufficient” and to change “the future of war faster than expected”. Some military experts to believe China is already ahead of the United States in the AI ​​arms race.

How did the PLA manage to modernize at such astonishing speed? Besides the heavy investments of the Chinese government, Western companies have played a crucial role. Here are three examples.

German engines propelled the Chinese navy

German media recently disclosed that several types of Chinese navy warships are “powered by engines developed or built by German manufacturers.” MTU, one of the German manufacturers, “was a regular supplier of engines for Luyang III class guided missile destroyers through a licensed production facility in China.” Luyang-class destroyers are equipped with advanced weapon systems and can launch land attack cruise missiles, long-range surface-to-air missiles, and anti-submarine missiles.

In addition, MTU supplied “engines which were used in the Chinese Song class submarines”. A powerful navy has enabled China to expand its territorial claim in the South China Sea, intimidate neighboring countries, disrupt standard trade and exploration activities, and strengthen its ability to invade Taiwan.

MTU insists it did not directly supply its engines to the Chinese Navy. It has simply entered into business transactions with Chinese companies that are supposed to buy its engines for civilian use. However, MTU engines are so-called dual-use technologies that do not require an export license or government control. Recognizing these legal loopholes, the Chinese government pursued a strategy of developing military-civilian fusion, which “integrates and exploits scientific and technological innovations in the military and civilian sectors” and “combines military and civilian expertise and knowledge. “.

In practice, the Chinese military relies on Chinese civilian companies to acquire cutting-edge dual-use equipment and technologies for military development, while escaping the export controls of the European Union and the United States. This approach has greatly aided the development of the Chinese military in AI and semiconductors, often with the enthusiastic cooperation of Western companies.

Americans Help Speed ​​Up Chinese Army AI

A team of researchers from the Center for Security and Emerging Technology at Georgetown University published a report last month, which highlights the crucial role American companies play in providing China with data, software and funding for the country’s AI development. The report reveals that Western companies have supplied various Chinese PLA military units with commercial, off-the-shelf autonomous drones and AI-enabled surveillance software – off-the-shelf AI tools.

The report also reveals that most of the advanced computer chips at the heart of Chinese military AI systems are designed by American companies such as Intel, Nvidia and Xilinx. In addition, US-based venture capital firms are funding Chinese companies that provide the Chinese military with AI-based combat and cybersecurity management software.

The most troubling aspect is that, since most Chinese military suppliers also sell equipment and technology to civilian companies, many of them are not blacklisted by the US Treasury Department or the Department of the United States. Defense. These companies have had virtually free rein to acquire sensitive technology and equipment with few or no restrictions.

US companies help China develop chips

Like AI, the semiconductor industry is another area where Western companies have lent a hand to the Chinese military. Semiconductor chips are essential components of almost all electronic devices, from computers to healthcare to the military and more. According to the Chinese government Made in China 2025 Initiative, the semiconductor sector is one of the top ten industries that the government has heavily subsidized, in hopes of making China self-sufficient in chipmaking and dominant in global high-tech manufacturing.

For the sake of national security, the Trump administration imposed strict restrictions on the export of US semiconductor chip technology to Chinese companies supplying the Chinese military. One such Chinese company on the U.S. export control list is China’s Semiconductor Manufacturing International Corporation (SIMC).

SIMC is a national champion identified by Beijing to lead the development of semiconductor chips in China. It has received large government grants and is supported by several Chinese state-owned enterprises that are also providers of the PLA. The Biden administration extended the export control list, prohibiting Americans from investing in 59 Chinese companies allegedly linked to the defense technology or surveillance sectors.

US companies invested despite China’s atrocities

Despite these restrictions, the Wall Street Journal reports that Silicon Valley venture capital firms such as Sequoia and chipmakers like Intel and their Chinese subsidiaries have helped develop the Chinese semiconductor industry by exporting sensitive technological know-how, investing in Chinese chipmaking companies and raising funds from foreign investors to finance Chinese chipmaking start-ups.

Companies like Intel have made their voices heard in their home countries, to take a position against what they claim to be systemic racism and racial injustice. Yet, at the same time, they have shown little concern in helping Beijing in its military development, even though Beijing is committed to gross human rights violations against its own people, constitutes a threat to liberal democracy and has the ambition to spread authoritarianism in the world.

Thanks to these American companies, Chinese companies have made significant progress in key technologies and are rapidly closing the gap with Western chipmakers in technology and manufacturing. These technological advancements helped build the Chinese military into a powerhouse and empower the Chinese Communist Party powerful tools to advance its geopolitical ambitions and disrupt the liberal world order.

Passing laws can come too late

In a statement, Senator Bob Casey (D-Pa.) critical these US companies for prioritizing “their bottom line regardless of the broader US economy or our national security.” He and Sen. John Cornyn (R-Texas) are working on legislation that “would screen outward US investment and the offshoring of critical supply chains and technology industry resources to adversaries like China and Russia.”

While such legislation is a welcome initiative, it may not be the most effective and timely solution, as a bill takes months of deliberation. By the time it becomes law and actually goes into effect, it may be too late as technological advancements take place on a daily basis and China may have already acquired everything it needs to be technically self-sufficient before the bill. does not become law.

Since Western companies are more interested in improving their bottom line than in national security, stopping their continued assistance to the Chinese military requires market-based solutions, in addition to legislation.

For example, Microsoft’s LinkedIn recently pulled out of China because it finally realized it couldn’t straddle two opposing political and value systems and be successful. The growing censorship demanded by Beijing threatened the company’s reputation and subjected it to enormous legal risks at home, which ended up hurting its profits around the world. Patriotic shareholders of Western companies should cite LinkedIn as an example to demand that management be responsible for subjecting their company to the risks of helping modernize the Chinese military.

Another way to get the attention of Western companies is that some of their most essential domestic customers, like the Defense Ministry, are stepping down and demanding that companies choose a path between liberal democracy and the regime. Chinese bossy. A company that is committed to helping the Chinese military at the expense of US national security does not deserve to have millions, if not billions of dollars in contracts with the US government. Such a business should not be allowed to profit American taxpayers. Hopefully Western companies will finally change their behavior when management realizes that they are hurting their bottom line if they continue to operate as usual.


Comments are closed.