Pentagon criticises China’s policies for impact on R&D
China’s “industrial policy aggression” has forced US companies to move their research and development abroad in exchange for access to markets, according to a report from the US’s Department of Defense ( DoD).
The DoD said this could hinder the US’s IP development and its access to the latest manufacturing technologies.
As a result, the US’s overall competitiveness will decrease on a global level, the report said. For example, the US is at risk of losing its leadership in industries including artificial intelligence (AI), quantum computing and robotics.
According to the report, China’s “Made in China 2025” initiative focuses on developing emerging industries including AI, quantum computing and robotics.
In order to develop these technologies, China relies on “the evasion of US export control restrictions to acquire IP and critical technologies”. This includes by applying restrictive customs barriers, “burdensome” licensing requirements and “discriminatory” regulatory standards, the report said.
The report, “ Assessing and strengthening the manufacturing and defense industrial base and supply chain of the US”, was published in September.
To advance its goals, China has launched several projects involving technologies such as core electronics and quantum communications that the Pentagon believes are intended to challenge the US.
The report also highlighted previous findings from earlier US Trade Representative (USTR) research that indicated that China uses both legal and illicit industrial policy tools to force technology transfer and IP from the US to the benefit of Chinese companies.
“State-backed actors are buying and stealing differentiating IP on an unprecedented scale, targeting key US technology, infrastructure, and materials and exploiting the free-market system to access and acquire key components of the US industrial base, leaving defence capabilities vulnerable,” said the DoD.
This is the latest in a long-standing dispute between China and the US.
In August, Chinese state media criticised US President Donald Trump for his trade policies, accusing him of being his own “street fighter-style deceitful drama of extortion and intimidation”.
It follows a USTR report that accused China of stealing trade secrets and illegal technology transfer.
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