U.S. Poised to Further Tighten Technology Exports to China After Balloon Incident, Wall Street Journal, Feb. 10, 2023.
By Ian Talley
Newly formed House panel might also press for tougher measures to slow advancement of Chinese military capabilities
China risks losing even more access to Western technology after a suspected spy balloon traversed the U.S., as Washington and its allies consider punishing Beijing with stiffer restrictions on products it needs to advance its military and economic might.
Current and former security officials say the balloon, which the U.S. said carried antennas and sensors for collecting intelligence and communications, underscores the national security threat posed by China and will build political support for stronger protections of U.S. technology.
“It certainly adds fuel to the fire, bolstering the case of the China hawks,” said Martijn Rasser, a former senior Central Intelligence Agency officer now at the Center for a New American Security, a Washington-based think tank.
Beijing and Washington have sought to reduce tensions in recent months, seeking to put relations between the two nuclear-armed superpowers on a more even keel. But now, the Biden administration is looking to add about six Chinese government-backed companies with links to the balloon program to the Commerce Department’s entities list, which imposes barriers to conducting business with the blacklisted firms, The Wall Street Journal reported previously, citing U.S. officials.
Those companies would be added to an already long list of Chinese entities and companies that the U.S. in recent years has targeted with a range of sanctions for what officials say are activities that threaten U.S. national security interests.
The Biden administration last year slapped export controls on advanced chip-manufacturing equipment to China, and the Trump administration before that cut off China’s Huawei Technologies Co. from many of its U.S. suppliers.
White House press secretary Karine Jean-Pierre told reporters Thursday the U.S. would “explore taking action against PRC entities linked to the PLA that supported the balloon’s incursion into U.S. airspace,” referring to the People’s Republic of China and the People’s Liberation Army.
“We will also look at broader efforts to expose and address the PRC’s larger surveillance activities that pose a threat to our national security and to our allies and partners as well,” she said.
Many national security analysts have been sounding the alarm about China’s surveillance practices in recent years, but the balloon offered the American public a visible picture of the Chinese threat as it crossed much of the nation.
China has said the balloon was used for “research, mainly meteorological, purposes” and had blown off course, and that the U.S. has overreacted to the incident.
In addition to action by the Biden administration, the newly formed House Select Committee on the Strategic Competition Between the U.S. and the Chinese Communist Party is also likely to press for tougher U.S. measures to slow China’s advance, said Emily Benson, a senior fellow at the Center for Strategic and International Studies.
“This is a really concrete example of an issue that Washington has so far not succeeded in penetrating the American public’s mind,” Ms. Benson said. “This could be kind of a pivotal moment for the American psyche to really start to realize that China is important and that this is a policy area they should be tuning in to.”
Members of Congress will feel growing pressure to take a more hard-line stance, she said, and that could in turn pressure the White House to pursue tougher policies.
Many of the same advocates for more stringent export controls are also pushing to broaden the controls to include sectors such as artificial intelligence.
“The U.S., along with key allies, should consider a new method for multilateral controls in targeted technology areas,” Richard Ashooh, a former assistant secretary of commerce for export administration, told the House Financial Services Committee on Tuesday.
The administration also has been developing an outbound investment screening program that would vet U.S. investments overseas for potential national security threats from China. Analysts say the White House could face calls to roll it out more quickly than originally planned.
U.S. officials said they have briefed more than three dozen governments on the balloon incident and that international coordination is critical to responding to China as a threat.
Tom Tugendhat, the U.K.’s security minister who met with U.S. counterparts Wednesday, said as Western allies consider expanding their export control policies, all international trade with China must be viewed through a national security lens.
“The reality is that the way in which the Chinese state is structured poses challenges to all,” he said in an interview Wednesday, pointing to the Communist Party’s control over every major industry and laws that require all companies to cooperate with the government’s intelligence services.
“We’ve got to realize that this is a whole-of-government effort,” Mr. Tugendhat said, with trade examined for the risk of Chinese “future exploitation, either for monopoly power, or in some cases, for intelligence collection.”