China Commission Says Western Support Has Advanced CCP Goals

Western capital markets, led by the U.S., and corporate outsourcing to give China the “dirty work” and the “low end” tech commodities trade has finally come to this: China is nearly on par with the U.S. in advanced technologies. When that parity arrives, it means the West is losing.

“In the U.S.-China rivalry, the nation with the most advanced technology will be the nation with the biggest economy. With four times our population, if China got to parity on tech with us, it would have four times our GDP and a bigger military. Parity means the West is losing,” said Jacob Helberg, a commission with the U.S. China Economic and Security Review Commission. “Tech dominance should be our north star.” 

Helberg was speaking during Thursday’s Commission hearing titled Current and Emerging Technologies in U.S.-China Economic and National Security Competition. The hearing focused on China’s progress in making gains in the high tech space, where China was positioned in different high end technology markets, and worries of new dependencies.

Commissioner Michael Wessel said U.S. support for Chinese companies have helped them become dominant players in key segments of the global economy. He named a few – semiconductors, telecommunications, biotech and the entirety of the EV battery supply chain at a time when the U.S. and Europe are enticing consumers and manufacturers to buy into the post-fossil fuels transportation economy.

“These new technologies are already disrupting our economy and security interests,” Wessel said during the first panel discussion on Thursday morning. “China’s efforts to gain a decisive edge of emerging technologies are clear, systemic, and are underpinned by government policies and investment,” he added, without clarifying policy specifics, or if those policies included those made here. Regardless, Wessel said that China’s inroads into key areas of advanced tech, coupled with government aid, “presents a significant challenge to U.S. interests across various industries.”

Wessel went on to name two industries in particular – EV batteries and biotech.

China’s growing prowess in biotech makes the U.S. increasingly dependent on China and one day they will be less dependent on the U.S. for agriculture while the U.S. will be more dependent on China, he said, “for things like amino acids, vitamins, and life saving drugs.”

Wessel said that China’s progress in EV battery technology – where it is both a top 10 manufacturer along with Japanese and Korean companies, and an innovator in the space – “has helped it dominate critical nodes of the supply chain and is potentially creating a security risk. Western support for these companies have advanced the goals of the CCP.”

Nazak Nikakhtar, Partner at Wiley Rein LLP [Testimony] and a former Trump administration official working in the Commerce Department, said in the Q&A period that the Defense Department (DoD) is reliant on China for hundreds of electronics. Without China manufacturers, F-16s and aircraft carriers would not get built.

She summed up what is at stake, and how a Chinese Frankenstein monster economy out muscles the U.S. despite our financial resources and human capital.

“Drones are emblematic of the problem. We have (China’s) DJI drones flying around the country. And we have a drone security act which ends in 2028 – that prohibits the DoD from buying drones from China, even though waivers are eligible,” she said about the porousness of Washington’s trade restrictions. “DJI is banned by the DoD because DJI was involved in forced labor. Yet we didn’t even sanction DJI on Homeland’s Uyghur Forced Labor List. We are good at talking about the problem, but do not utilize the laws we have to address the problem. We are stifling development here because of it. There are a number of drone makers here who would love to expand into this market, but they cannot because of China price competition and their dominance of the drone market.”