On December 12, 2023, U.S. House of Representatives, select Committee on the Strategic Competition Between the United States and the Chinese Communist issued a 53 page report titled, “Party, Reset, Present, and Build: A Strategy to Win America’s Economic Competition with the Chinese Communist Party.” Unsurprisingly, the report notes concerns with market access and intellectual property theft. The report also takes on U.S. companies, including venture capitalists for funding China’s development, and China's WTO participation. The report sets forth three pillars with key findings:
Pillar I: Reset the Terms of Our Economic Relationship
with the PRC
1. The PRC’s economic system is incompatible with the WTO and
undermines U.S. economic security.
2. Despite the heightened risks associated with U.S.
investment in Chinese companies, the full extent and distribution of that risk
and the implications for U.S. national security and financial stability remain
3. The United States lacks a contingency plan for the
economic and financial impacts of conflict with the PRC.
4. The PRC uses an intricate web of industrial policies,
including subsidies, forced technology transfer, and market access
restrictions, to distort market behavior, achieve dominance in global markets,
and increase U.S. dependency on PRC imports.
5. The widespread adoption of certain PRC-developed
technologies in the United States poses a significant risk to U.S. national
security and data protection concerns and threatens long-term U.S.
Pillar II: Stem the Flow of U.S. Capital and Technology
Fueling the PRC’s Military Modernization and Human Rights Abuses
1. American investors wittingly and unwittingly support the
PRC’s defense industry, emerging technology companies, and human rights abuses.
2. U.S. export controls have been slow to adapt to rapid
changes in technology and attempts by adversaries to blur the lines between
private and public sector entities, particularly the PRC’s strategy of
3. The Committee on Foreign Investment in the United States
(CFIUS) needs additional authorities and tools to effectively evaluate inbound
investments from the PRC.
4. The PRC exploits the openness of the U.S. research
environment to steal U.S. intellectual property (IP) and transfer technology to
advance its economic and security interests to the detriment of the United
Pillar III: Invest in Technological Leadership and Build
Collective Economic Resilience in Concert with Allies
1. The United States is falling behind in the race for
leadership in certain critical technologies.
2. The PRC is gaining on the United States in the race for
3. By working with allies, the United States can increase
U.S. exports, reduce supply chain reliance on the PRC, and counter the PRC’s
economic and technology mercantilism.
4. The United States is dangerously dependent on the PRC for
critical mineral imports.
5. The United States’ dependence on the PRC for
pharmaceutical and medical device supply chains poses a distinct national
6. Through its Belt and Road Initiative, the CCP has expanded
its influence around the world and gained significant positions in key supply
chains and strategic infrastructure, such as ports and space facilities.
The findings are followed by
specific policy prescriptions. For example, for pillar two, finding four, the
policy prescriptions include:
Recommendation 4: Strengthen U.S. research security and
defend against malign talent recruitment.
1. Build upon cross-agency disclosure guidance produced under
National Security Presidential Memorandum 33 (NSPM-33) by the National Science
Foundation (NSF) to mitigate research security risk by requiring all federal
research funding applicants to disclose details about past, present, and
pending relations and interest with foreign governments, foreign government
controlled entities, or entities located in foreign adversary countries, in the
past five years for themselves and any key member of their team who will be
involved in fundamental research supported by the grant and update such
disclosure annually throughout the funding period.
2. Create and maintain an unclassified database using
open-source information to keep track of PRC research entities that engage in
defense and military research and civil military fusion programs. This database
can inform U.S. universities and researchers about current and future research
collaborations and help federal grant-providing agencies vet grant proposals
for risk mitigation.
3. Enact legislation that would prohibit U.S. entities from
engaging in research collaborations with PRC entities involved with military
and defense research and development (R&D), to include those that are on
the International Trade Administration’s Consolidated Screening List, the
Department of Defense’s Chinese Military Companies List, and the U.S. Air
Force’s China Aerospace Studies Institute’s list of PRC Defense Science and
Technology Key Labs.
4. Require U.S. research institutions to obtain an export
control license if they intend to use any export-controlled item that has a
clear and distinct national security nexus, during the course of research
collaboration on critical and emerging technologies with any foreign adversary
5. Exercise oversight on enforcement of existing rules in
Sec. 117 of the Higher Education Act of 1965 (HEA) (P.L. 89–329) that requires
U.S. universities to disclose of foreign gifts and contracts reaching certain
threshold to the Department of Education.
6. Strengthen Sec. 117 of HEA by requiring U.S. universities
to apply the “know-your-customer/donor” rule to understand who the benefactors
are for foreign gifts and contracts channeled through U.S.-incorporated 501c(3)
7. Require the Department of State to establish “human
rights” and “military end-use” guardrails in any Science and Technology
Agreement with the PRC and ensure sufficient consultations with appropriate
Congressional committees throughout the negotiation process, as outlined in the
Science and Technology Agreement Enhanced Congressional Notification Act of
2023 (H.R. 5245).
8. Require universities that receive federal grants for
fundamental research to fully implement NSPM-33, to create and implement
risk-based security reviews to detect and counter PRC malign influence and
technology transfer risk.