The US supposedly limits the sale of technology to China
Tech that can be used for military purposes
The reality is vastly different
Welcome to China Uncensored, I’m Chris Chappell.
There’s a quote that’s sometimes ascribed to
Lenin , “The capitalists will sell us the rope with which we will hang them.”
There’s another quote ascribed to Lenin,
“I’m gonna be reincarnated as The Rock and make my eyebrow raise famous.”
While it’s *possible* Lenin never said either of those things,
the sentiment of the first quote is true. Because that’s exactly what the US is doing with China.
The Chinese Communist Party, in their own internal speeches,
talk about spreading International Communism and destroying the United States.
And the US is selling them the technology they need to do it.
I guess because to make money it was either this or
Delivering for Postmates. “No tip, again? That’s it! I’m selling China some rope.”
And by rope, I mean sensitive military technology.
“The U.S. continues to send to China an array of semiconductors,
aerospace components, artificial-intelligence technology
and other items that could be used to advance Beijing’s military interests.”
Now you’re probably thinking what I first thought—doesn’t the US have all kinds of export
restrictions on selling sensitive technology to China? Especially things with military potential?
And isn’t the Commerce Department always adding Chinese companies to the entity list,
a list of foreign companies and people the US puts
trade restrictions on? The answer is: yes but no.
On paper, yes, the US has all kinds of restrictions on trade with China.
For instance, in 2018, Congress passed the Export Control Reform Act.
It put a bunch of restrictions on emerging and foundational technologies,
things like AI and quantum computing.
China is known for IP theft so we really don’t want to be selling them that technology.
Although we can maybe sell them that DALL-E Art generator thing.
Steal away, China. You can have this monstrosity.
Plus there’s the entity list, which lists specific Chinese companies
that US companies can’t sell things to,
either because they do things like use slave labor, or they’re connected to China’s military.
Now I always thought the whole idea of the entity list was stupid.
Because the Chinese Communist Party has what it calls military civil fusion.
According to the US State Department, this eliminates “barriers between China’s
civilian research and commercial sectors, and its military and defense industrial sectors”.
In other words, there’s no distinction in selling sensitive technology to private Chinese companies
versus the Chinese Commmunist Party’s military. The military can just take
any piece of sensitive technology sold to any private Chinese company.
But it turns out the entity list is stupid for more reasons than I thought.
Get this.
According to Washington DC based research and data
analytics firm Kharon, there are “tens of thousands of Chinese entities that may meet
the U.S. criteria for military end-user export restrictions”.
In other words, they should probably be on the entity list.
Out of those tens of thousands, guess how many are currently on the Commerce
Department’s entity list? I’ll give you a moment.
It’s 70. That’s right, 70 out of potentially tens of thousands.
And it gets worse. Just because one of these companies is on the entity list,
that doesn’t mean US companies can’t sell to them.
They just need to get a license, and the Commerce Department usually grants it.
Because who wants to drive for Postmates when you can be selling noose rope?
For the entirety of US exports to China in 2020,
“[Commerce] officials required a license for less than half a percent...Of that fraction,
the agency approved 94%...[of] applications for technology exports to China.”
That’s how, in less than a year, the Commerce Department granted
100 billion dollars worth of export licenses
to US companies that supplied telecom giant Huawei, and China’s largest chip maker SMIC.
Those are military-linked Chinese companies! That’s why they’re on the entity list.
Which apparently means nothing. It’s profit over self-preservation.
This is like a lamb selling a wolf a knife, a fork, and a Foreman Grill.
But hey, at least those companies had to get licenses from the Commerce Department.
Why even go through that hassle, because “In some cases, U.S. companies are able
to sell technology to Chinese customers on the entity list without even applying for licenses.”
For example, all a US company needs to do is make a product overseas,
and then it can freely sell it to a Chinese company,
even if it's on the entity list. Those are the Commerce Department’s own rules!
And some sensitive tech isn’t even restricted,
like semiconductor-equipment manufacturing tools. Those can be used to make semiconductors,
which can then be used for everything from missiles to stealth jets.
Sales to China of those manufacturing tools have more than doubled since 2017.
Yes, even after a trade war and Covid.
But hey, as long as their checks clear.
I’m sure we can trust them.
More after the break.
Welcome back. So the Commerce Department has
failed to stop US companies from exporting sensitive military tech to China.
But the US government does know China is a threat.
The State, Defense, and Energy Departments are all freaking out about this.
According to the Wall Street Journal,
the Pentagon’s top China export-controls analyst even resigned over this issue.
He told colleagues he had no problems trading with or feeding China,
but that he had a huge problem with arming China.
Meanwhile, the Commerce Department says this is all part of a plan.
It says, “It is focused on long-term, strategic competition with China.”
And in the short term, that involves approving basically every single sale
of sensitive tech to Chinese companies that then can give it to the Chinese military.
But then some say if the US has restrictions on trade with China that are too tight,
China will just buy the tech from our allies, like Germany.
Kevin Wolf , a senior Commerce official during the Obama administration,
said, “We need our allies to have the same controls. It is that simple and logical.”
Of course, who knows how long that would take. And here’s a solution. If our allies are really
so keen on providing sensitive military technology to a regime that uses rape as a form of torture,
let’s sanction them, too. Germany can’t sell technology to Iran because that would violate US
sanctions. Why are we treating China differently? There have been attempts to make the Commerce
Department understand the threat. Back in 2019, Matthew Pottinger , then the deputy
national security advisor, had a meeting with Commerce officials where he “accused
them of working against administration policy on China in favor of helping U.S. businesses.”
He said the Commerce Department “has struggled to reconcile its mission
to protect U.S. national security with the…objective of promoting U.S. exports”.
In other words, we’ve got rope to sell!
And China Uncensored would not be possible without the support from viewers like you.
As a thank you to fans who contribute on our crowd funding platform on Patreon, or
our exclusive social media platform on Locals, we answer their questions at the end of each episode.
Today’s question comes from, Black Label “What if we drop a money bomb on China?
I know the CCP controls all aspects of their economy, but what if we drop counterfeit Yuan
all over the country. Would that be too much for the CCP to handle?”
I love that question. Also,
are you The Joker, by chance?
So I think this question gets to the heart of the matter. If the US did something like that,
it would mean there had been a societal level decision that the Chinese regime
was an enemy that needed to be destroyed. And as you can see from the Commerce Department,
there’s a lot of powerful people that just don’t view China that way.
Here’s actual footage of exactly how they view China.
Basically you’re asking why doesn’t the US just blow up the Chinese economy.
The way to do that isn’t by flooding China with counterfeit yuan.
It’s just by cutting off the flood of US dollars. Actually meaningfully sanction the
Chinese regime and Chinese officials. Force US companies to leave China. Sanction allies
that undermine global national security by supporting the Chinese Communist Party.
This way, the US doesn’t have to do anything as unethical as counterfeiting money.
The US would just be doing the right thing—pulling US investment out of
China. Stop giving money to the Chinese Communist Party. That’s how you really stand up to evil.
Plus dropping counterfeit yuan would never work because no one uses cash anymore.
Thanks for your question and your support, Black Label.
And thank you for watching. As always leave a like and a comment for the algorithm,
and join the China Uncensored 50 Cent army over at Patreon.com/ChinaUncensored.
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Once again, I’m Chris Chappell. See you next time.