American firms selling sensitive tech to China must wake up to possible Communist Party seizure: US official

A US State Department official has given American companies a “wake-up call” on China’s military-civil fusion strategy, as Washington plans further steps to limit China's access to sensitive US technology.

Christopher Ashley Ford, assistant secretary for International Security and Non-Proliferation, called for the US government and companies to step up the vetting of Chinese firms buying from American companies to ensure the technology could not be used to strengthen China’s military.

“Your Chinese partner may have had the best of purely commercial intentions when your cooperation began. But it is clear that if the Communist Party wants your technology your partner will be required to provide it,” Ford said in a speech to the American Chamber of Commerce on Thursday.

Top US officials have drawn up plans to stop Chinese companies buying optical materials, radar equipment, semiconductors and other American products, Reuters reported on Thursday, citing sources familiar with the plans.

China’s foreign ministry spokeswoman Hua Chunying responded to the Reuters report, saying China’s policy was “above board,” and alluded to the argument that China showed technological superiority in its fight against the global Covid-19 pandemic.

“There is no such a thing as ‘theft’ or ‘diversion’ of foreign technology. In this fight against the Covid-19, China is actually ahead of the US in some areas. We used things in this fight that the US does not even have. How could the US accuse us of stealing from them things that they do not even have?” she said, speaking in the daily press briefing on Thursday.

In 2014, China made the policy of “military-civil fusion” a national strategy. In 2017, China set up a top-level party organisation to coordinate military-civil fusion, headed by President Xi Jinping.

“I offer you today both a wake-up call and an outstretched hand,” Ford said, and invited businesses to participate in the process, and to help policymakers develop “best practices” that would address the threat and not hurt the economy.

Ford also blasted China’s broader economic policies, like the “Made in China 2025" strategy of industrial support to high tech and advanced manufacturing companies. He also warned against Chinese students and scientists who may “appear to be legitimate,” but might in fact be working for the Chinese military.

“[It] can be difficult for the [People’s Republic of China’s] Western technology targets to ascertain whether their partner is a ‘true’ or ‘purely’ civilian economic actor or whether that partner is there at least in part on behalf of the [military-civilian fusion] apparatus,” Ford said.

Rather than cooperate, China sought to “turn the tables” on US companies and “crush them in the international marketplace with state-subsidised competition,” he said.

Ford has repeatedly accused China of diverting US commercial technology for military uses.

Last month, China’s foreign ministry accused US multinationals of having their own version of ‘military-civil fusion’, after Ford published an article about China’s practices on the US State Department website.