U.S. - China Relations

In recent years, tensions between the United States and China have introduced new challenges—especially related to economic and defense issues. China is a major trading partner for the United States but it is also developing its military capabilities, which poses challenges to the U.S. military. Additionally, foreign students and scholars—nearly a third of whom are from China—have made substantial contributions to university research efforts and are involved in developing many of the nation’s leading-edge civilian and defense-related technologies. However, there is a concern that some foreign students and scholars will "export" sensitive information to their home countries, which may be hostile to U.S. interests.

Federal agencies could improve how they address these issues.

For example:

• A 2018 investigation by the Commerce Department found that the domestic economy and global free markets were adversely affected by substantial chronic global excess steel production led by China.  In response, the President placed tariffs on some imports of steel and aluminum products from China (and other countries) in 2018. Commerce can exclude some products from these tariffs in certain circumstances. However, Commerce rejected thousands of requests for exclusion because companies made errors in their applications. The agency also did not decide most of the requests in a timely manner. Commerce made changes to its procedures for deciding such requests, but it did not update its public guidance to reflect these changes.  
• Universities perform important research on behalf of the U.S. government, though these efforts face certain challenges and risks. U.S. agencies have identified several factors indicating the types of students—such as being from a country of concern like China—who may pose a greater risk of transferring technology to foreign entities. The Department of Homeland Security’s Immigration and Customs Enforcement (ICE) keeps a database related to these factors but hasn't assessed if it needs updating to capture additional data related to these risks. Also, some ICE data that may indicate students' access to technology is incomplete. Additionally, conflict of interest policies require researchers to disclose information that may indicate potential conflicts and help to address potential threats. However, federal grant-making agencies need to improve their policies to protect U.S. research from undue foreign influence.  
• Enforcement agencies involved in addressing threats to university research have underscored the importance of education and outreach, and they have targeted their outreach by analyzing risk factors to identify universities at greater risk. However, Commerce’s enforcement office has not implemented a mechanism to periodically reassess these risk factors in light of new and evolving threats. Further, universities report challenges working with DOD because of DOD officials’ inconsistent interpretation of export controls, including how to assess whether a university is engaging in fundamental research.   

Physical Security Mechanisms Selected Universities Employ to Safeguard Export-Controlled Items

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The 10 countries with the most foreign drug establishments manufacturing drugs for the U.S. market as of June 2021 

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• The 2022 National Defense Strategy prioritizes deterring aggression from China—the most consequential strategic competitor—in the Indo-Pacific. China has transformed what was an obsolete military into one that can challenge the U.S. military across the spectrum of conventional and unconventional capabilities. There are a number of actions that DOD could take to better position it to address challenges posed by China—such as strengthening cybersecurity and addressing F-35 and Navy maintenance issues.