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U.S.-China Economic and Security Review Commission, Overseas Chinese Students and Scholars in China’s Drive for Innovation, October 7, 2020

Commission statement: This report surveys an array of programs and policies the Chinese government has established over decades to exploit the scientific expertise of Chinese students and scholars studying in the United States for the purpose of accelerating China’s economic and military modernization. While the report examines the elaborate system of incentives the Chinese government employs to induce Chinese students and scholars to contribute scientific expertise to China’s national modernization goals, it does not intend to “profile” students from China, or to evaluate the degree of agency Chinese students and scholars have when faced with the opportunity to participate in these government-sponsored programs. This report assumes these programs target a minority of the overall Chinese student body, and that the majority of Chinese students contribute positively to U.S. research and society.

October 7, 2020
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"The U.S.-China Economic and Security Review Commission was created by the United States Congress in October 2000 with the legislative mandate to monitor, investigate, and submit to Congress an annual report on the national security implications of the bilateral trade and economic relationship between the United States and the People’s Republic of China, and to provide recommendations, where appropriate, to Congress for legislative and administrative action."

This report was prepared by Commission staffers Anastasya Lloyd-Damnjanovic and Alexander Bowe. The pdf of the full report is available at the link below.

Executive Summary

•Chinese leaders have long viewed advanced science and technology (S&T) as key to China’s comprehensive national power and sought to acquire it through licit and illicit means from developed countries like the United States. Since the 1990s, China’s government has built a sprawling  ecosystem of structures, programs, and incentives to coopt and exploit Chinese students and scholars for the S&T they acquire abroad.

•This  ecosystem  sponsors  promising  Chinese  students  and  scholars  at  U.S.  and  other  foreign  universities, incentivizes their return to China for the long term, and employs transnational organizations to channel S&T know-how from those remaining abroad back to mainland China. The purpose of this ecosystem is to leverage the resources of American universities to provide the technology and talent Beijing needs to win its national competition with the United States.

•Many  programs  associated  with Beijing’s S&T  transfer  ecosystem—including  scholarships  to study  abroad, talent  recruitment  plans,  and  entrepreneurship parks—contribute to China’s military-civil  fusion  strategy  by collecting specific technologies and know-how that improve the capabilities of the People’s Liberation Army (PLA) and advance the goals” of the Chinese Communist Party (CCP).

•The overall population of Chinese students and research scholars in the United States rose dramatically from around 68,000 in the 2006–2007 school year to about 370,000  in  January 2020, a trend driven by China’s modernization policies and reinforced by U.S. policy decisions and the interests of colleges and universities in diversifying their revenue sources in the wake of the Great Recession. Approximately 130,000 of these students and  scholars  are pursuing graduate degrees in science,  technology,  engineering, and  mathematics  (STEM) fields. Chinese students and scholars, who constitute roughly a third of all foreign students in the United States, have made significant contributions to academia and the U.S. economy. The majority of Chinese students and scholars  who come  to the United  States engage in legitimate  academic activities  and  are  part of the  cultural exchange that undergirds U.S. influence in the world. However, a minority of undetermined size participates in China’s technology transfer apparatus and supports a system antithetical to U.S. national security interests.

•Fewer than five percent of visa applications flagged as technology transfer risks are ultimately denied. U.S. agencies involved in screening for illicit technology transfer continually struggle with analyst shortages and high backlogs of analytical reviews assessing technology transfer risk. Moreover, the existence of interagency concern about possible transfer of sensitive technologies is not always a legal basis for denying applications.

•U.S. law does not account for the global and increasingly integrated nature of China’s technology acquisition architecture or its shift toward prioritizing licit transfer of  S&T knowledge. The  Chinese  government aggressively seeks to acquire scientific knowledge, technical processes, and expertise considered “fundamental research” because of its potential applications to commercial and military technologies. U.S. law permitting the legal transfer of this knowledge is predicated on potentially outdated  assumptions that do not  consider  the increasingly close involvement of both U.S. and Chinese academia in sensitive research.

•The scope and voracity of the  Chinese  government’s S&T acquisition  and exploitation ecosystem has concerning implications for the United States. When Chinese students and scholars trained at U.S. universities return to China to commercialize research they developed overseas, U.S. firms that would have employed them lose a  first-mover  opportunity, and  the U.S. institutions  that  funded  them—including U.S. taxpayers—are deprived of a return on their  investment. More  worryingly, because Beijing  has promulgated a strategy of “military-civil  fusion”  and  dictated  that  those  with  S&T  expertise should serve the cause of national rejuvenation, state-affiliated institutions likely absorb and leverage this expertise to improve China’s military capabilities and further the interests of the CCP.

 

 

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Events

October 29, 2020 - 4:00pm
The USC U.S.-China Institute and the USC Center on Transnational Law and Business look at what might be the aims of the next administration by focusing on technology, trade and investment ties.