The U.S. needs multilateral initiatives to counter Chinese tech transfer

--FILE--Chinese soldiers browse online news on desktop computers at a garrison of the PLA (People's Liberation Army) in Chongqing, China, 14 November 2013.Chinese leaders have made the passage of a cybersecurity law a priority for this year, despite protests from the U.S. against the country's growing restrictions on technology firms. Zhang Dejiang, chairman of the standing committee of China's National People's Congress, said in a work report Sunday (8 March 2015) that formulating laws for cybersecurity, antiterrorism and national security were major tasks for 2015. The cybersecurity law, which official media had previously disclosed was in the works, is still being drafted. Details haven't been announced.No Use China. No Use France.

China’s efforts to acquire dual-use technology through overseas talent have sparked intense debates in the United States. Just like exports and foreign investments, the flow of students and researchers across borders can be an important avenue for technology transfer. And many in Washington are therefore concerned that the U.S. government isn’t doing enough to control the flow of Chinese talent between the two countries.

In response to these concerns, the White House announced on May 29 that it would bar visas for Chinese students and researchers deemed to have ties to the country’s military. Recognizing the need to strike the right balance between openness and protection, State Department officials stressed the policy is meant to be “very, very narrowly targeted.” Meanwhile on Capitol Hill, far more expansive restrictions on Chinese researchers are being considered.

But unilateral U.S. actions are unlikely to thwart China’s ability to acquire technology from abroad. For the same reason that a go-it-alone approach to export controls and investment screening is widely considered ineffective, a purely domestic focus when it comes to Chinese talent is liable to fail. Unilateral measures to protect widely available technologies will simply lead Beijing to target other countries, moving the problem elsewhere instead of solving it. Without multilateral initiatives, even well-targeted U.S. countermeasures are unlikely to reduce China’s ability to acquire sensitive dual-use technology and know-how from overseas.

Chinese talent and technology transfer

China has invested heavily in deepening its bench of scientific talent, which it sees as crucial to building a high-tech economy and military. Many of these investments focus on its domestic education and research systems. But its more controversial policies are those aimed at talent based abroad.

Chinese students and researchers first began going abroad in significant numbers in the 1970s and 1980s. The Chinese Communist Party (CCP) initially supported this outflux of talent, with the hope of building China’s domestic science and technology ecosystem. Deng Xiaoping believed that 90 percent of Chinese students who went abroad would come back, but those hopes were quickly shattered, with only a small fractionof those who left the country to study returning to China.

In the 1990s and 2000s, the CCP adapted its strategy to accommodate those who did not want to return, encouraging them to serve from “two bases” (两个基地) by using their positions abroad to keep Beijing abreast of technology developments, to set up collaborative projects, and to help recruit and train other researchers. In recent decades, the CCP built a large-scale intelligence and policy infrastructure to spot and recruit overseas scientists, engineers, and entrepreneurs.

China’s talent policies look impressive on paper, but in practice have had only mixed success. More than 85 percent of Chinese students graduating with STEM PhDs from U.S. universities stay in the United States after graduating. Contrary to reporting about a “reverse Chinese brain drain,” that number has not decreased in recent years. Many of those who do return to China often leave the country again after a few years. As one senior CCP official charged with talent work recently complained, “the number of top talents lost in China ranks first in the world.” One recent study found that a large majority of top Chinese AI researchers are based outside of China, most of them in the United States. 

Yet China’s efforts still pose a challenge for the U.S. government. Even small numbers of returnees can accelerate Chinese innovation if they possess the right know-how. And those who remain in the United States can still play a role in technology transfer. It’s difficult to estimate the magnitude of these risks—the rate at which overseas talent serves from “two bases” isn’t known, nor is there much up-to-date information on the relative quality and impact of returnees.

In the face of this uncertainty, some have argued for targeted measures while others have proposed far-reaching restrictions. Neither approach, however, is likely to be effective unless the U.S. government works with allies and partners.         

The need for allies and partners

Today, the United States and its allies and partners are not cooperating but competing for Chinese talent. A group of Canadian policy experts recently argued that “as the U.S. continues to build a wall to exclude researchers from countries that it deems hostile, Canada should not only keep its doors open, but also actively attract and retain international talent-seeking opportunities outside the U.S.” Chinese students are already looking to the European Union as a more attractive place to work and study. As one Western scientist in China told Nature last year, “If visa problems continue, Chinese researchers will simply try to strengthen their relationships with researchers in Europe.”

This competitive dynamic poses a problem for U.S. policymakers, because much of the research and development in fields they are concerned about—biotechnology, AI, and other emerging dual-use fields—already happens outside of the United States. For example, Pan Jianwei, the “father of quantum” in China, did his training not at a U.S. university but in Germany.

And while Chinese students and researchers still go to the United States in large numbers, it is far from the only destination. The United States hosts less than 40 percent of Chinese students abroad. The majority are in Five Eyes countries, Japan and South Korea, and Western Europe. The same is true for recipients of many Chinese scholarship and talent programs. If the Chinese government wants to send someone abroad to gain know-how in a particular field, the United States is typically not their only option.

The United States’ ultimate goal is not to prevent China from acquiring sensitive dual-use technology from the United States alone, but to prevent China from acquiring sensitive dual-use technology, period. Experts therefore worry that measures like the recent presidential proclamation will be ineffective because, as one former State Department official put it, “the Chinese military will have other sources in other countries.” Unless it works with allies and partners, the United States could lose out on valuable talent while failing to achieve its main goal.

This concern is widely recognized when it comes to export controls and investment screenings. U.S. export control law includes processes to test for foreign availability, and the 2018 Foreign Investment Risk Review Modernization Act directed the U.S. government to collaborate with allies and partners to facilitate coordination and information sharing. Unfortunately, none of the many recent legislative proposals on research security or visa screening include similar multilateral initiatives. 

An agenda for multilateral action

Multilateral collaboration on talent and technology transfer would seek to limit the CCP’s ability to send and use talent abroad to acquire sensitive technologies. One goal, for example, could be to prevent Chinese military officers from getting cutting-edge training abroad, as they have in the past. Successful collaborative efforts would require action on at least two fronts.

First, despite signs of change, awareness of China’s technology transfer practices is relatively low in many countries. For instance, the European Union still does not have transparency requirements that can help assess risk built into its scientific grants. To raise awareness, the U.S. government should reach out to allies and partners to discuss the underlying problems and options for coordinated countermeasures. It should also create mechanisms for sharing relevant intelligence, without which it may be difficult for allies and partners to successfully implement any countermeasures. The State Department has taken small steps in this direction, but much more needs to be done.

Second, the U.S. government should combine collaboration on technology protection with collaboration on innovation. This will provide additional incentives to implement protections and compensate for any Chinese talent and funding that allies and partners may have to forego. Recent research, including a report proposing an “alliance innovation base,” explores why such incentives are necessary and how they could be structured.

If the United States is to prevent China from acquiring sensitive dual-use technology and know-how through talent, it will need to work closely with allies and partners. Without such collaboration, unilateral U.S. countermeasures risk being ineffective at best and counterproductive at worst.

Remco Zwetsloot is a research fellow at Georgetown’s Center for Security and Emerging Technology.