China’s Determined Effort to Build an S&T Infrastructure

By drawing on the resources and infrastructure of the state, ostensibly private Chinese companies can more easily gain access to technologies abroad. MOST’s international outreach efforts have helped Chinese companies sign investment, licensing, and production agreements with foreign tech companies; hire foreign research and development (R&D) personnel to work in China; and identify cutting-edge research among academia and government laboratories. These accomplishments, in turn, contribute to the PRC’s “going out” strategy and goals set forth in state policies including Made in China 2025.(5)

We arrive at this conclusion by examining 642 “international technological cooperation opportunities” (国际技术合作机会) identified by China’s S&T diplomats from 2015 to 2020. Filed by PRC embassy and consulate staff, these reports reflect the Chinese.

government’s assessments of more than 300 foreign companies, universities, research institutions, and individuals who are pioneering technology products in a variety of fields—and how likely they would be to partner with Chinese firms, share intellectual property (IP), or establish joint ventures in China. We offer the following observations about the methods by which S&T diplomats seek technology, the content of the projects that interest them, and the locations and success of their technology acquisition efforts:

·  Methods: S&T diplomats use a variety of state-sponsored methods, including the PRC’s expansive foreign influence apparatus, to monitor technology developments overseas. After identifying or cultivating “international technical cooperation opportunities,” they often advise Chinese firms to purchase equity, invest specific amounts of money, or strike patent license agreements with foreign companies

·  Content: When vetting potential partners, S&T diplomats tend to recommend investment positions that advance Chinese equity in supply chains relevant to the Chinese Communist Party’s (CCP) stated development objectives. Half of all projects assessed in this report are related to biotechnology or artificial intelligence (AI). PRC diplomats also frequently sought to acquire components and systems currently used by the militaries of the United States and U.S. allies.

·  Locations: Nearly half of all technology projects referred by Chinese S&T diplomats originated in Russia, the United States, the United Kingdom, and Japan. Prior to its closure in July 2020, the PRC consulate in Houston, Texas, referred the most S&T projects of any Chinese diplomatic post in the world. Still, fewer than 12 percent of projects in our dataset originated in the United States. NATO members and U.S.- designated Major Non-NATO Allies hosted more than 70 percent of the S&T projects targeted by Chinese diplomatic personnel from 2015 to 2020, underscoring the need for U.S. policymakers to coordinate with allies and partners, who share the brunt of Chinese technology acquisition efforts.

·  Success: Chinese diplomats seem to be successful in acquiring foreign technology. After investigating a limited sample of 30 companies identified as “cooperation opportunities,” we find that about half actually establish partnerships with enterprises in China or otherwise expose their IP after S&T diplomats identify them as potential partners.

1. Anna Puglisi, “The Myth of the Stateless Global Society,” in William C. Hannas and Didi Kirsten Tatlow, Beyond Espionage: China’s Quest for Foreign Technology (Milton Park: Routledge, 2020): p. 80.

2. Puglisi, “The Myth of the Stateless Global Society,” 80. See also Ted Fishman, China, Inc.: How the Rise of the Next Superpower Challenges America and the World (New York: Simon & Schuster, 2005); “Made in China 2025: Global Ambitions Built on Local Protections” (U.S. Chamber of Commerce, 2017), https://www.uschamber.com/sites/default/files/final_made_in_china_2025_r… t_full.pdf; and Michael Brown and Pavneet Singh, “China’s Technology Transfer Strategy: How Chinese Investments in Emerging Technology Enable A Strategic Competitor to Access the Crown Jewels of U.S. Innovation” (Defense Innovation Unit Experimental, January 2018), https://admin.govexec.com/media/diux_chinatechnologytransferstudy_jan_2018 _(1).pdf.

3. William Hannas, James Mulvenon, and Anna Puglisi, Chinese Industrial Espionage: Technology Acquisition and Military Modernisation, (Milton Park: Routledge, 2013); and “China’s Innovation Ecosystem” (World Economic Forum, 2016), http://www3.weforum.org/docs/WEF_GAC_On_China_Innovation_WhitePaper_ 2016.pdf.

4. William Hannas and Huey-meei Chang, “China’s Access to Foreign AI Technology: An Assessment” (Center for Security and Emerging Technology, September 2019), https://cset.georgetown.edu/research/chinas-access-toforeign-ai-technology/.

5. Tai Ming Cheung et al., “Planning for Innovation: Understanding China’s Plans for Technological, Energy, Industrial, and Defense Development” (Institute on Global Conflict and Cooperation, July 28, 2016), https://www.uscc.gov/sites/default/files/Research/Planning%20for%20Innov… n%20- %20Understanding%20China’s%20Plans%20for%20Tech%20Energy%20Indu strial%20and%20Defense%20Development072816.pdf.