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By The ICAS Team
U.S. Tightens Restrictions on Huawei Access to Technology and Chips
By Lauren Feiner
CNBC, August 17
The Trump administration announced on Monday it will further tighten restrictions on Huawei Technologies, aimed at cracking down on its access to commercially available chips. The U.S. Commerce Department actions will expand restrictions announced in May aimed at preventing the Chinese telecommunications giant from obtaining semiconductors without a special license – including chips made by foreign firms that have been developed or produced with U.S. software or technology. In a statement Monday, Secretary of State Mike Pompeo said the Commerce Department added 38 Huawei affiliates to the U.S. government’s economic blacklist.
Trump Signals Pressure on Alibaba, Other Chinese Companies After ByteDance
By Danielle Wallace
Fox Business, August 16
President Trump signaled he would increase pressure on Chinese-owned companies, such as e-commerce giant Alibaba, after his latest moves against TikTok’s parent company, ByteDance.
At a press conference in Bedminster, N.J., on Saturday, Trump was asked whether he would consider banning other Chinese-owned companies, such as Alibaba. “Well, we’re looking at other things, yes,” Trump said without going into detail.
Corporate America Worries WeChat Ban Could Be Bad for Business
By John D. McKinnon and Lingling Wei
The Wall Street Journal, August 13
U.S. companies whose fortunes are linked to China are pushing back against the Trump administration’s plans to restrict business transactions involving the WeChat app from Tencent Holdings Ltd., saying it could undermine their competitiveness in the world’s second-biggest economy. More than a dozen major U.S. multinational companies raised concerns in a call with White House officials Tuesday about the potentially broad scope and impact of Mr. Trump’s executive order targeting WeChat, set to take effect late next month. One aim of the call was to seek clarity on the precise meaning of the executive order signed by Mr. Trump last week, which barred ‘any transaction that is related to WeChat’ by Americans but left details of what is actually to be banned by the Commerce Department to be worked out. Apple Inc., Ford Motor Co., Walmart Inc. and Walt Disney Co. were among those participating in the call.
TikTok Tracked User Data Using Tactic Banned by Google
By Kevin Poulsen and Robert McMillan
The Wall Street Journal, August 11
TikTok skirted a privacy safeguard in Google’s Android operating system to collect unique identifiers from millions of mobile devices, data that allows the app to track users online without allowing them to opt out, a Wall Street Journal analysis has found. The tactic, which experts in mobile-phone security said was concealed through an unusual added layer of encryption, appears to have violated Google policies limiting how apps track people and wasn’t disclosed to TikTok users. TikTok ended the practice in November, the Journal’s testing showed.
Huawei: Smartphone Chips Running out Under US Sanctions
By Joe McDonald
Associated Press, August 8
Chinese tech giant Huawei is running out of processor chips to make smartphones due to U.S. sanctions and will be forced to stop production of its own most advanced chips, a company executive says, in a sign of growing damage to Huawei’s business from American pressure. Production of Kirin chips designed by Huawei’s own engineers will stop Sept. 15 because they are made by contractors that need U.S. manufacturing technology, said Richard Yu, president of the company’s consumer unit. He said Huawei lacks the ability to make its own chips.
Qualcomm Lobbies U.S. to Sell Chips for Huawei 5G Phones
By Asa Fitch and Kate O’Keeffe
The Wall Street Journal, August 8
The American chip company Qualcomm Inc. is lobbying the Trump administration to roll back restrictions on the sale of advanced components to the Chinese telecom giant Huawei Technologies Co., wading into the intensifying technology battle between the U.S. and China. Qualcomm is telling U.S. policy makers their export ban won’t stop Huawei from obtaining necessary components and just risks handing billions of dollars of Huawei sales to the U.S. firm’s overseas competitors, according to a presentation reviewed by The Wall Street Journal that the San Diego-based company has been circulating around Washington. Qualcomm is lobbying to sell chips to Huawei that the Chinese company would include in its 5G phones.
Trump Reverses Course on TikTok, Opening Door to Microsoft Bid
By Ana Swason and Mike Isaac
The New York Times, August 6
President Trump gave the go-ahead for Microsoft to pursue an acquisition of TikTok, in his first public comments about the popular Chinese-owned video app after he had threatened to ban it from the United States entirely. At the White House on Monday, Mr. Trump said that TikTok would shut down on Sept. 15 unless Microsoft or another company purchased it, and that he had suggested in a call this weekend that the chief executive of Microsoft ‘go ahead’ with the acquisition. Mr. Trump said such a purchase would funnel a large amount of money to China, and argued that the United States should receive money in return for letting the deal happen, without explaining how that would work.
China Criticizes Trump for ‘Double Standards’ Over TikTok
Bloomberg News, July 30
China’s government blasted the U.S. for flouting the rules of global trade and business by threatening to ban TikTok, in Beijing’s strongest defense yet of ByteDance Ltd.’s viral video app. When asked about Trump’s scrutiny of TikTok, Foreign Ministry spokesman Wang Wenbin accused Washington of unfairly singling out Chinese companies. ‘China’s companies and their products have provided diversity of choices for U.S. consumers. We hope the U.S. can heed the voice from the market to provide an open, just, fair business environment for foreign countries and stop politicizing economic issues.’
U.S. Formalizes F-16 Jet Sale to Taiwan With China Tensions High
Anthony Capaccio
Bloomberg, August 14
“Taiwan formally signed an agreement to buy 66 of the latest model F-16 jets built by Lockheed Martin Corp., a move likely to further inflame tensions between the U.S. and China. Taiwan’s purchase of the F-16s marks the first sale of advanced fighter jets to the island since President George H.W. Bush announced approval for 150 F-16s in 1992. A $62 billion figure announced by the Pentagon on Friday is the upper limit of numerous contracts if all potential foreign customers placed their maximum desired number over the decade.”
Exclusive: U.S.-China Trade Deal Review Postponed as China Ramps up Farm, Energy Purchases
David Lawder and Andrea Shalal
Reuters, August 14
“The United States and China have delayed a review of their Phase 1 trade deal initially slated for Saturday, sources familiar with the plans told Reuters, citing scheduling conflicts and the need to allow time for more Chinese purchases of U.S. exports. No new date for the initial six-month compliance review between U.S. Trade Representative Robert Lighthizer, U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He has been agreed.”
China Holds Military Exercises near Taiwan in Warning to US
Kathrin Hille
Financial Times, August 13
“China’s military said on Thursday it conducted exercises near Taiwan ‘to safeguard national sovereignty’ in the face of rising US diplomatic exchanges with Taipei, underlining mounting tensions in the region.”
Designation of the Confucius Institute U.S. Center as a Foreign Mission of the PRC
Michael R. Pompeo, Secretary of State
U.S. Department of State, August 13
“Today, the Department of State designated the Confucius Institute U.S. Center as a foreign mission of the PRC, recognizing CIUS for what it is: an entity advancing Beijing’s global propaganda and malign influence campaign on U.S. campuses and K-12 classrooms. Confucius Institutes are funded by the PRC and part of the Chinese Communist Party’s global influence and propaganda apparatus. The goal of these actions is simple: to ensure that American educators and school administrators can make informed choices about whether these CCP-backed programs should be allowed to continue, and if so, in what fashion.”
China Banks Act to Comply With Trump Sanctions on Hong Kong
Bloomberg News, August 12
“China’s largest state-run banks operating in Hong Kong are taking tentative steps to comply with U.S. sanctions imposed on officials in the city, seeking to safeguard their access to crucial dollar funding and overseas networks. Major lenders with operations in the U.S. including Bank of China Ltd., China Construction Bank Corp., and China Merchants Bank Co. have turned cautious on opening new accounts for the 11 sanctioned officials, including Hong Kong Chief Executive Carrie Lam, according to people familiar with the matter. At least one bank has suspended such activity.”
Taiwan Seeks to Start Free-Trade Talks With U.S.
Chun Han Wong
The Wall Street Journal, August 12
“Taiwanese President Tsai Ing-wen said she wants to start talks on a free-trade pact with the U.S., part of a broad effort to deepen her island democracy’s partnership with Washington and resist pressure from Beijing. In an online speech aired Wednesday, Ms. Tsai said starting trade negotiations are among her second-term priorities in strengthening relations with the U.S., a major trading partner and key arms supplier for Taiwan.”
Intelligence Community’s Top Election Official: China and Iran Don’t Want Trump to Win Reelection, Russia Working to ‘Denigrate’ Biden
Alex Marquardt, Evan Perez, Zachary Cohen and Veronica Stracqualursi
CNN, August 8
“The US intelligence community’s top election security official said in a statement Friday that China ‘prefers’ an outcome where President Donald Trump is not reelected in November and Russia is working to ‘denigrate’ former Vice President Joe Biden’s White House bid. ‘We assess that China prefers that President Trump — whom Beijing sees as unpredictable — does not win reelection,’ said William R. Evanina, director of the National Counterintelligence and Security Center, in a statement updating the election threat landscape heading into the November election. ‘China has been expanding its influence efforts ahead of November 2020 to shape the policy environment in the United States, pressure political figures it views as opposed to China’s interests, and deflect and counter criticism of China.’”
U.S. Government Contractor Embedded Software in Apps to Track Phones
Byron Tu
The Wall Street Journal, August 7
“A small U.S. company with ties to the U.S. defense and intelligence communities has embedded its software in numerous mobile apps, allowing it to track the movements of hundreds of millions of mobile phones world-wide, according to interviews and documents reviewed by The Wall Street Journal.”
Exclusive: Taiwan in Talks to Make First Purchase of Sophisticated U.S. Drones – sources
Mike Stone
Reuters, August 6
“The United States is negotiating the sale of at least four sophisticated aerial drones to Taiwan for the first time, according to six U.S. sources familiar with the negotiations, aircraft that can keep watch over huge swathes of sea and land. While the State Department tacitly authorized the sale of the unmanned aerial vehicles, two of the people said, it is not known whether the U.S. officials have approved exporting the drones with weapons attached, one of them said.”
China Vows Retaliation if Any U.S. Action Against Journalists
Yew Lun Tian and Brenda Goh
Reuters, August 3
“China vowed on Tuesday to retaliate if the United States persisted with ‘hostile action’ against Chinese journalists who may be forced to leave in coming days if their U.S. visas are not extended. Chinese foreign ministry spokesman Wang Wenbin told reporters at a daily briefing that no Chinese journalist in the United States had been granted a visa extension since the United States, on May 11, limited their stay to 90 days, with an option to extend. ‘If the U.S. persists, China will take a necessary and legitimate response to safeguard its rights,’ he said.”
U.S. Sanctions China’s Paramilitary in Xinjiang
Bethany Allen-Ebrahimian
Axios, July 31
“The Trump administration has announced it will sanction the Xinjiang Production and Construction Corps (XPCC), a paramilitary organization operating in Xinjiang, where Chinese authorities, aided by the XPCC, are [allegedly] perpetrating a cultural and demographic genocide against ethnic minorities. The Trump administration also said it would sanction two Chinese Communist Party officials affiliated with the XPCC, according to a press release from the Department of Treasury.”
A Deadly Coronavirus Was Inevitable. Why Was No One Ready?
Betsy McKay and Phred Dvorak
The Wall Street Journal, August 13
“When Disease X actually arrived, as Covid-19, governments, businesses, public-health officials and citizens soon found themselves in a state of chaos, battling an invisible enemy with few resources and little understanding—despite years of work that outlined almost exactly what the virus would look like and how to mitigate its impact. Governments had ignored clear warnings and underfunded pandemic preparedness. They mostly reacted to outbreaks, instead of viewing new infectious diseases as major threats to national security. And they never developed a strong international system for managing epidemics, even though researchers said the nature of travel and trade would spread infection across borders.”
China Already Has Your Data. Trump’s TikToK and WeChat Bans Can’t Stop That
Aynne Kokas
The Washington Post, August 11
“Data exfiltration by Chinese firms from the United States is so pervasive that targeting a few big names merely distracts from the severity of the problem. Large numbers of firms serving U.S. consumers — whether they’re physically based in China or in the United States — are under pressure by the Chinese government to exfiltrate data. Combined with data gathered through hacks of Equifax, Marriott, Anthem and the U.S. government’s Office of Personal Management, the Chinese government has a treasure trove of information to support intelligence-gathering activities for decades to come, regardless of last week’s bans.”
Trade May Still Be the Ballast in U.S.-China Relations — At Least for Now
Claire Reade
Center for Strategic & International Studies, August 10
“On a pragmatic level, many of the recent blunt actions taken by the United States call out known problems (such as intellectual property theft) or just mirror the restrictions China has imposed on the United States for years. These reciprocity-based actions could look to China as if the United States is just catching up to, or imitating Chinese policy in many respects, rather than delivering unexpected, serious blows to China’s regime. …[K]eeping trade relations smooth and the Phase One trade deal going helps Trump’s U.S. agriculture base and buoys the U.S. stock market.”
“Note, too, the other side of this coin—these circumstances also give China leverage that may keep the Trump administration from taking measures that go too far, since truly outraging China could blow up the Phase One deal and trade progress with the risk of major damage to both U.S. markets and farmers. Last, China may see value in trying to reestablish the commercial sector as the stabilizing ballast for the China relationship with the United States regardless of the outcome of November’s election. The Phase One trade deal is a concrete way to create more optimism among foreign firms. Given the huge attraction of China’s market for business across the globe, China can anticipate that this strategy should bear fruit. ”
“For USTR and American industry, on policy matters, the deal offers real, even if incremental, progress on long-standing, significant market access barriers and other problems across many sectors in China. Massive agriculture product barriers have been ripped down, financial services market access is happening, and legal changes to intellectual property are underway that could be very helpful. Despite its aggressive foreign policy and tightening domestic political climate, China is making the most market opening progress it has in years in multiple economic sectors. It is also important to show U.S. strength in enforcing China’s commitments to get everything won through the trade deal. If the administration lets the Phase One deal die, it becomes difficult to justify the pain caused by the lengthy trade war. Trump could be painted as a dealmaking failure.”
Respect History, Look to the Future and Firmly Safeguard and Stabilize China-US Relations
Yang Jiechi, Member of the Political Bureau and director of the Office of the Foreign Affairs Commission of the Communist Party of China Central Committee
Ministry of Foreign Affairs of the People’s Republic of China, August 7
“China-US relations are now faced with a new international and domestic environment. To safeguard and stabilize the relationship against this backdrop, the right attitude is to respect history, keep pace with the times, and build on past achievements, and not to distort and deny history, or turn back the wheel of history.”
“On developing relations with the US, China has all along pursued a consistent policy stance, and showed great stability and continuity. We are committed to developing a China-US relationship featuring non-conflict, non-confrontation, mutual respect and win-win cooperation. In the meantime, we are resolved to safeguard our sovereignty, security and development interests. The fundamental goal of China’s development is to bring about a better life for the Chinese people and contribute more to regional and global peace, stability, development and prosperity. Dialogue and cooperation between China and the US does not just benefit one side, nor is it a favor granted by one side to the other. It features equality and mutual benefit. China values principles, reason and credibility as well as mutual respect and win-win cooperation. The international community has made it clear that it hopes to see a healthy and stable China-US relationship and does not want to see confrontation or conflict between the two countries. Some US politicians, out of self-serving interests, have resorted to coercive means to force other countries to take sides. This is deeply deplorable to the international community, and those US politicians will never get their way.”
“The Chinese people sincerely hope that the virus will be contained in the US as soon as possible to minimize its impact on the American people. Some US politicians should immediately stop politicizing and stigmatizing the virus and scapegoating China. The US should fulfill its duty to its own people, live up to its international responsibility as a major country, and work with the international community to promote global cooperation in COVID-19 response and to save lives.”
America’s Huawei Challenges
Scott Kennedy and Shining Tan
Center for Strategic & International Studies, July 31
“In contrast to unconditional engagement advocates, we propose a range of limits, including restricting the sale of Huawei 5G equipment and other broader limits in technology exports and investment, when necessary to protect national security. However, unlike decoupling advocates, we do not believe in the fundamental assumption, that the less connectivity there is with China, the better it would necessarily be for American national security. This is a debatable assumption, and to the extent that our work starts a genuine conversation in Washington over this, it will have served its purpose. …”
“Hence, unlike decoupling advocates, our approach tries to embed pragmatic restraints within a broader framework that recognizes the benefits to our economy and national security if we can build a relationship consistent with our standards for fair commerce and the need to protect us from a wide range of risks.”
“Our analysis on the pros and cons of various policy options recognizes that Huawei is quite formidable. A range of actions, both fair and unfair – for which it may be impossible to disentangle their relative importance – have made the company of almost 200,000 employees an imposing global force. The evidence we present here is not meant to heap praise on Huawei or show admiration for the company, but rather to highlight that this is a major challenge and that a simplistic strategy of trying to put the company out of business is unrealistic.”
“The bottom line of this overview is corralling Huawei is no simple task. We conclude that a strategy of ‘principled interdependence’ is likely to be more successful than outright decoupling. Huawei is an imposing firm with a global footprint and multiple business lines, and as a result, an effective approach will require extensive consultation and collaboration with firms and governments across the Americas, Europe, Asia and elsewhere. Moreover, given Huawei’s prominence, any actions adopted toward it are likely to have fundamental implications for the entire information and communications technology (ICT) landscape. Hence, as governments tackle the immediate challenges, they also need to keep in mind the type of corporate behavior, industry development, and governance norms they hope build over the long term.”
The United States, China, and the contest for the Fourth Industrial Revolution
Rush Doshi
The Brookings Institution, July 31
(Editor’s note: This is a prepared statement before the U.S. Senate Committee on Commerce, Science, and Transportation, Subcommittee on Security for the hearing “The China Challenge: Realignment of U.S. Economic Policies to Build Resiliency and Competitiveness.”)
“It is increasingly clear to most observers that China is pursuing a robust, state-backed effort to displace the United States from global technology leadership. This effort is not driven entirely by commercial considerations but geopolitical ones as well. Beijing believes that the competition over technology is about more than whose companies will dominate particular markets. It is also about which country will be best positioned to lead the world.”
“China believes it is well-positioned to outcompete the United States in the competition for the Fourth Industrial Revolution and that it has four main advantages: (1) heavy investment in R&D; (2) superior institutions and industrial policies supporting China’s ambitions; (3) manufacturing prowess and centrality to global supply chains; and (4) a more robust operation to set the global technology standards that could determine the future of key industries.”
“Recommendations for U.S. Policy:”
Americans Fault China for Its Role in the Spread of COVID-19
Laura Silver, Kat Devlin and Christine Huang
Pew Research Center, July 30
“Americans’ views of China have continued to sour, according to a new Pew Research Center survey. Today, 73% of U.S. adults say they have an unfavorable view of the country, up 26 percentage points since 2018. Since March alone, negative views of China have increased 7 points, and there is a widespread sense that China mishandled the initial outbreak and subsequent spread of COVID-19. ”
“Around two-thirds of Americans (64%) say China has done a bad job dealing with the coronavirus outbreak. Around three-quarters (78%) place a great deal or fair amount of the blame for the global spread of the coronavirus on the Chinese government’s initial handling of the COVID-19 outbreak in Wuhan. More Americans also think the U.S. should hold China responsible for the role it played in the outbreak of the coronavirus (50%) than think this should be overlooked in order to maintain strong bilateral economic ties (38%). But, when asked about economic and trade policy toward China, Americans are slightly more likely to prefer pursuing a strong economic relationship (51%) to getting tough on China (46%). Still, more support getting tough on China now than said the same in 2019, when 35% held that view.”
Book Launch: U.S. Strategy in the Asian Century
Event hosted by the Wilson Center, August 18
VIRTUAL EVENT: China Unveiled: The Search for Transparency
Event hosted by the Heritage Foundation, August 18
How Can Diplomacy Avert a New Cold War with China?
Event hosted by National Committee on U.S.-China Relations, August 17
Online Event: Book Launch: How Southeast Asia is Responding to China’s Rise
Event hosted by Center for Strategic & International Studies, August 17
Tensions in the Taiwan Strait
Event hosted by Vermont Council on World Affairs, August 13
Online Event: Tenth Annual South China Sea Conference, Session Two
Event hosted by Center for Strategic & International Studies, August 12
Online Event: Countering Chinese Espionage
Event hosted by Center for Strategic & International Studies, August 12
President Tsai Ing-wen Discusses the Diplomatic, Security, and Economic Challenges Facing Taiwan
Event hosted by Center for American Progress, August 12
The National Security Law Impact on US-China Relations
Event hosted by South China Morning Post, August 12
Bilateral Breakdown: Science and Education in the Crossfire
Event hosted by National Committee on U.S.-China Relations, August 6
China’s Power and Influence in a Post-COVID-19 World
Event hosted by the Jackson Institute for Global Affairs, August 6
Anti-Asian Racism in the United States: Current Issues and Sino-U.S. Relations
Event hosted by National Committee on U.S.-China Relations, August 5
Online Event: The New China Rules
Event hosted by Center for Strategic & International Studies, August 5
FPCI Virtual Discussion: “Calming Troubled Waters in the South China Sea”
Event hosted by Foreign Policy Community of Indonesia, August 19
Fateful Decisions: Choices that Will Shape China’s Future
Event hosted by National Committee on U.S.-China Relations, August 20
China Aerospace Studies Institute Conference 2020 – PRC Space
Event hosted by the Air University, September 17
Choices: Great Power Competition: China, Russia, & the U.S.
Event hosted by International Relations Council, October 13
Michael R. Pompeo, Secretary of State
The Clean Network program is the Trump Administration’s comprehensive approach to guarding our citizens’ privacy and our companies’ most sensitive information from aggressive intrusions by malign actors, such as the Chinese Communist Party (CCP). Today, I am announcing the launch of five new lines of effort to protect America’s critical telecommunications and technology infrastructure.
These programs are rooted in internationally accepted digital trust standards and built upon the 5G Clean Path initiative, announced on April 29, 2020, to secure data traveling on 5G networks into U.S. diplomatic facilities overseas and within the United States.
The five new lines of effort for the Clean Network are as follows:
Momentum for the Clean Network program is growing. More than thirty countries and territories are now Clean Countries, and many of the world’s biggest telecommunications companies are Clean Telcos. All have committed to exclusively using trusted vendors in their Clean Networks.
The United States calls on our allies and partners in government and industry around the world to join the growing tide to secure our data from the CCP’s surveillance state and other malign entities. Building a Clean fortress around our citizens’ data will ensure all of our nations’ security.
The Institute for China-America Studies is an independent nonprofit, nonpartisan research organization dedicated to strengthening the understanding of U.S.-China relations through expert analysis and practical policy solutions.
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