PRC Legislation and Report

The chair and ranking member of a Senate committee mark out their perspectives on how the US should change its foreign policy to address the PRC.

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Before the Senate Foreign Relations Committee held its hearing on competition between the United States (US) and the People’s Republic of China (PRC), committee Republicans and the top Democrat articulated their views on how the US should respond to the PRC’s rise in the form of legislation for the former and a report for the latter. There is agreement the PRC’s actions poses problems for the US in a variety of ways, but there are significant differences in the proposed policy solutions to the PRC. A significant limit that should be acknowledged are the Constitutional limits on how far Congress can direct or influence the powers of the President to conduct foreign policy. Consequently, these Members direct the executive branch to report on certain ideal actions, which can create pressure on Administration officials to comply so long as there is not conflict with current Administration policy.

Chair Jim Risch (R-ID), East Asia, The Pacific, and International Cybersecurity Policy Subcommittee Chair Cory Gardner (R-CO), Near East, South Asia, Central Asia, and Counterterrorism Subcommittee Chair Mitt Romney (R-UT), and Multilateral International Development, Multilateral Institutions, and International Economic, Energy, and Environmental Policy Subcommittee Chair Todd Young (R-IN) introduced the “Strengthening Trade, Regional Alliances, Technology, and Economic and Geopolitical Initiatives Concerning China Act” (STRATEGIC Act) (S.4272), a comprehensive package of policy and funding changes the US should make to counter the rise of the PRC, some of which necessarily pertains to technology issues.

In their press release, Risch, Gardner, Romney, and Young highlighted “[k]ey provisions:”

• Tackle China’s economic practices that distort global markets and hurt U.S. businesses, especially intellectual property (IP) theft and mass government subsidization and sponsorship of Chinese companies.
• Confront tech competition by increasing technology collaboration with allies and partners.
• Safeguard institutions from malign and undue PRC influence.
• Strengthen U.S. posture in the Indo-Pacific to protect its interests, allies, and partners.
• Prioritize cooperation over conflict when possible on areas such as arms control, North Korea, and the environment, if the PRC demonstrates good faith and transparency.

The STRATEGIC Act would, among other things do the following:

• Not later than 1 year after the date of the enactment of this Act, and not less frequently than annually thereafter, the Secretary of State, in coordination with the Secretary of Commerce, the United States Trade Representative, and the Director of National Intelligence, shall create a list (referred to in this section as the ‘‘intellectual property violators list’’), which identifies all centrally administered, state-owned enterprises:
  • a significant act or series of acts of intellectual property theft that subjected a United States economic sector or particular company incorporated in the United States to harm; or
  • an act or government policy of involuntary or coerced technology transfer of intellectual property ultimately owned by a company incorporated in the United States.”
• Not later than 1 year after the date of the enactment of this Act, and annually thereafter, the Secretary of State, in coordination with the United States Trade Representative and the Secretary of Commerce, shall publish an unclassified report in the Federal Register that comprehensively identifies and measures—
  • subsidies provided by the Government of the PRC to enterprises in the PRC in contravention of agreed trade and other rules; and
  • discriminatory treatment favoring enterprises in the PRC over foreign market participants.
• The President, acting through the Secretary of Commerce, and in consultation with the Secretary of State and any other individuals the President determines should be consulted, shall issue regulations requiring United States entities with at least $100,000,000 of assets or other investment in the PRC to submit a semiannual report regarding the impact of the corporate social credit system on the ability of such United States companies to conduct business or otherwise operate in the PRC.
• Not later than 180 days after the date of the enactment of this Act, and annually thereafter for the following 5 years, the Secretary of State, in consultation with the Director of National Intelligence and the Secretary of the Treasury, shall submit an unclassified report to the appropriate congressional committees that describes the risks posed to the United States by the presence in United States capital markets of companies incorporated in the PRC.
• The Secretary of State, in coordination with the heads of other participating executive branch agencies, shall establish and develop a program to facilitate and encourage regular dialogues between United States Government regulatory and technical agencies and their counterpart organizations in allied and partner countries, both bilaterally and in relevant multilateral institutions and organizations
• The Secretary of State, in coordination with the Secretary of Commerce, is authorized to establish a program to facilitate the contracting by United States embassies for the professional services of qualified experts, on a reimbursable fee for service basis, to assist interested United States persons and business entities with supply chain management issues related to the PRC
• The President, acting through the Secretary of State, should undertake regular efforts to coordinate with other members of the coalition…to establish and advocate for norms, standards, and regulations to ensure that the development and application of new and emerging technologies uphold the goals of shared prosperity, security, and commitment to human rights, including through engagement in international organizations and standards-setting bodies
• The President shall establish an interagency working group to provide assistance and technical expertise to enhance the representation and leadership of the United States at international bodies that set standards for equipment, systems, software, and virtually-defined networks that support 5th and future generations mobile telecommunications systems and infrastructure, such as the International Telecommunication Union and the 3rd Generation Partnership Project; and work with allies, partners, and the private sector to increase productive engagement.
• The President may issue a finding that a country constitutes a significant threat to the national security of the United States and should be designated a ‘country of national security concern’
• Ban Senate confirmed Department of State officials from representing countries of national security concern and ban the confirmation by the Senate for Department of State nominees who have represented such nations.
• The Secretary of State shall establish, within the Bureau of International Organization Affairs of the Department of State, the Office of Integrity in the United Nations System
• Not later than 180 days after the date of the enactment of this Act, the Secretary of State, in consultation with the Secretary of Agriculture, the Administrator of the United States Agency for International Development, the Director of the United States Fish and Wildlife Service, the Administrator of the National Oceanic and Atmospheric Administration, and the heads of other relevant Federal agencies, as appropriate, shall develop a strategy for cooperation with the PRC to combat wildlife and related trafficking

Also, before the Senate Foreign Relations Committee’s hearing on the People’s Republic of China, Ranking Member Bob Menendez (D-NJ) released a report “The New Big Brother: China and Digital Authoritarianism,” a year-long “effort to provide a holistic study of the threats posed to the United States, our allies, and the international community” by “digital authoritarianism” defined as “[t]he use of information and communications technology (ICT) products and services to surveil, repress, and manipulate domestic and foreign populations.” Menendez proposes targeted proposals so the US can push back on the digital authoritarianism of the PRC and other nations such as the Russian Federation. Some of these ideas could get folded into the STRATEGIC Act or similar legislation in order to garner Democratic support for a Republican bill.

Menendez explained the problem:

• The growth and development of the digital domain worldwide has fundamentally changed how individuals, companies, and nations interact, work, and communicate –and with it the structure of global governance. Digitally-enabled technologies ranging from the Internet to mobile communications to emerging technologies, such as artificial intelligence, are accelerating the transmittal and receiving of information, enabling greater trade interactions and economic development, securing communications for our military and our allies, and aiding in the development of even newer, more capable technologies, amongst many other benefits. The United States has not only played a primary role in developing these new technologies, but it has worked to ensure the digital domain operates with openness, stability, reliability, interoperability, security, and respect for human rights.
• These principles are under threat from authoritarian regimes, however, which see the advent of new technologies in a far more sinister light: as a means of surveilling and controlling populations, stifling the free flow of information, ensuring the survival of their governments, and as tools for malign influence campaigns worldwide. While multiple authoritarian governments have begun to utilize the digital domain in this manner, the People’s Republic of China is at the forefront of developing and expanding a new, different, and deeply troubling governance model for the digital domain: digital authoritarianism.
• The rise of this new and worrying model of digital authoritarianism holds the potential to fundamentally alter the character of the digital domain.

In the cover letter to the report, Menendez asserted

The report’s comprehensive analysis of China’s digital authoritarianism describes how the People’s Republic of China is successfully developing and implementing its malign governance model internally and, increasingly, making inroads with other countries to also embrace its new digital doctrine. It further illustrates how the expansion of digital authoritarianism in China and abroad has drastic consequences for U.S. and allied security interests, the promotion of human rights, and the future stability of cyberspace. Consequently, the report calls for a series of both Congressional and Executive actions designed to counter China’s efforts to expand its model of digital authoritarianism; to strengthen U.S. technological innovation; and, to reinvigorate our diplomatic endeavors around the globe on digital issues.

In a separate document, Menendez pulled out the key findings and recommendations made by staff:

Key Findings

• China’s efforts to advance and proliferate its information and communications technology (ICT) hardware and systems, both in China and overseas, represent not only a desire to continually expand its economy, but also a push to establish, expand, internationalize, and institutionalize a model for digital governance that this report describes as “digital authoritarianism.”
• If left unchecked, China, not the U.S. and our allies, will write the rules of the digital domain, opening the doors for digital authoritarianism to govern the Internet and associated technologies.
• To CCP leadership, the digital domain is a space that must be controlled by the Party. As such, development of new digitally enabled technologies must operate in line with Party principles. Without such control, CCP leaders fear these technologies could weaken the CCP’s hold over its citizens.
• By building out so much of the digital infrastructure in the developing world, China could end up dominating a large portion of the global communications market, positioning it to potentially pressure other governments or conduct espionage.
• At the United Nations, China has played a counterproductive role in efforts to build consensus on a free and fair future of cyberspace. China’s behavior echoes its consistent undermining of UN efforts that could highlight its own poor human rights record
• The Administration’s current policy is insufficient to combat China’s digital authoritarianism, and its alienation of allies has further stunted the United States’ ability to influence other countries away from China’s digital authoritarianism model.
• The surveillance system in Xinjiang has aided in the detention of possibly more than 2 million Uyghurs, ethnic Kazakhs, and members of other Muslim groups in Xinjiang, according to the U.S. State Department. In Xinjiang, Chinese government and police authorities retain what amounts to near absolute control of the entire ICT domain, and, through that control, have been able to repress and subjugate Uyghurs and other ethnic minorities in the region.
• Foreign technology platforms are restricted from operating in China, allowing Chinese platforms that offer similar services to thrive and expand into new markets. Thanks to this market inefficiency, China now retains some of the most valuable Internet companies in the world by market capitalization, including Alibaba, Tencent, and Baidu.
• The United States currently does not have a domestic 5G supplier for the equipment that makes up the Radio Access Network (RAN) for 5G. Instead, countries seeking viable alternatives to Chinese 5G RAN infrastructure rely on companies such as Swedish company Ericsson, South Korea-based Samsung, or Finnish firm Nokia to build out core components of their layer of the 5G infrastructure.
• The United States could find a future advantage by leading on mmWave technologies, since 1) this band is the spectrum where ultra-fast innovations may arise and 2) a fully actualized 5G network will see devices seamlessly utilize and transition between both the sub-6 and mmWave bands.

Recommendations

• It is critical that the United States government stimulate technological innovation in the United States by increasing government research and development funding, adopting a more extensive industrial policy, developing and attracting superior talent to the United States’ technology sector, strengthening bilateral and multilateral technology initiatives with like- minded allies and partners, and ensuring a competitive advantage for domestic companies in overseas markets.
• Create an Industry Consortium on 5G: Congress should create a consortium comprised of leading U.S. telecommunications and technology companies that would be mandated to create the American 5G telecommunications alternative, exploring both cost-effective hardware and software solutions.
• Establish a Digital Rights Promotion Fund: Congress should establish and authorize a Digital Rights Promotion Fund, which will provide grants and investments directly to entities that support the promotion of a free, secure, stable, and open digital domain and fight against the authoritarian use of information and communications technologies. The fund will provide these groups, especially those existing in countries experiencing undue surveillance or other forms of digital authoritarianism, the resources needed to better push back against the spread of digital authoritarianism. Groups able to receive money would include:
  • Local activist organizations promoting a free digital domain and working to counter oppressive surveillance regimes in countries where digital authoritarianism is apparent or on the rise.
  • Nonprofit organizations that advocate for the adoption of international governance standards for the digital domain based on openness, transparency, and the rule of law, including the protection of human rights.
  • Think tanks and other institutional bodies that provide scholarship and policy recommendations for best paths forward to protect against the rise of authoritarian surveillance.
• Establish a Cyber Service Academy: Through legislative action, Congress should establish a new federal service academy similar to our other military service academies, with the specific aim of developing the future of our technology force. In addition to providing students a four year undergraduate education, the academy shall prepare students to become future military leaders in key digital and emerging technology fields, including robotics, artificial intelligence (AI), and cybersecurity.
• Build a Coalition of Likeminded Allies on Critical Technology Issues: The President should lead an international effort, in coordination with our allies and partners, to counter Chinese efforts to develop and proliferate digital domain products, technologies, and services that are not predicated on free, democratic values.
• Establish and Empower New Cyber Leadership within the State Department: Congress should pass the Cyber Diplomacy Act of 2019, or similar legislation, that establishes a new office or bureau of cyber issues at the State Department, which shall report to the Under Secretary for Political Affairs.

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