Easy Chinese Money Acquires Sensitive Technology Under the Guise of Research

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Easy Chinese Money Acquires Sensitive Technology Under the Guise of Research
Easy Chinese Money Acquires Sensitive Technology Under the Guise of Research

Since China has problems producing cutting-edge technology, it must find other means. One resource is contracting American universities to do research and development, which then allows it to compete with the U.S. in the marketplace.

This aggressive tactic has not endeared the Chinese to American politicians or businessmen. Such work with universities facilitates unfair trade practices, espionage and the stealing of sensitive data.

On their part, American universities extend welcoming arms for easy Chinese money. Research contracts valued at $2.32 billion between 2012 and 2024 provide technology that may have military or other uses. This possible abuse is raising concerns in Congress about potential national security risks.

Across nearly 200 U.S. colleges and universities, a web of agreements with Chinese businesses thrives. China also uses these contacts to influence American students to be more favorably disposed toward communism.

The sharing of American expertise presents a moral dilemma for universities and policymakers. These deals give China a one-sided strategic advantage and spark debates on the boundaries of collaboration with a hostile power.

These contracts and other financial incentives represent substantial amounts of money to the universities. China gives large donations for high-profile projects that attract a lot of attention. However, research contracts involve significantly more money.

Indeed, the total value of university contracts linked to China over the past decade surpassed reported Chinese donations by 250 percent, aligning with similar trends from other nations.

Another source of revenue comes from Chinese students in American universities. These students are usually the largest foreign group on campus. Funding these students with tuition and other expenses ends up contributing a significant portion of university budgets.

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One big problem is the difficulty of quantifying the extent of this influence. Universities must disclose to the Education Department any foreign gift or contract exceeding $250,000. Despite this requirement, enforcement has historically been lax, leading to allegations that billions remain unreported. Thus, legislators on Capitol Hill are demanding that Chinese contracts be scrutinized for national security threats.

Some disclosures about these contracts reveal that the research is carried out in medicine, agriculture, manufacturing and the arts. All major companies in China must have party members in their management structures, and thus, there is little doubt as to the influence of the Chinese Communist Party.

One company involved in these contracts is the Shanghai-based pharmaceutical company WuXi AppTec. Despite AppTec’s global recognition for medical innovations, questions linger in Washington about Beijing’s use of this company’s discoveries for military purposes.

Because of the potential misuse of Western research, Congress aims to label AppTec as an “adversary biotech company of concern,” hindering partnerships with U.S. organizations receiving federal funding.

Another company under scrutiny is Huawei Device Co. The charges against this huge electronic device maker are much more serious.

A ten-count indictment has been unsealed in the Western District of Washington State, charging the company and its American subsidiary with conspiracy to steal trade secrets, attempted theft of trade secrets, one count of obstruction of justice and seven counts of wire fraud. Charges also include aiding North Korea and assisting Iran’s government in domestic surveillance.

The University of Washington once established a pioneering academic center for virtual reality funded by Facebook, Google and Huawei. However, the university cut ties with the Reality Lab after U.S. restrictions on dealings with Huawei.

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Both AppTec and Huawei have partnered with U.S. universities, utilizing their status as “private” entities. All the while, they deny any influence from the Chinese government or that they pose any risks to U.S. national security.

The U.S.-China Economic and Security Review Commission (CFIUS) now recommends that Congress push for legislation that will treat Chinese contracts as foreign acquisitions under CFIUS for national security reasons.

Another Chinese use of these contracts is to secure specialized training that is unavailable in its universities and R&D centers. For example, China’s lack of small planes and public airstrips led its major airlines, including Air China, to pay millions to the University of North Dakota to provide pilot training and licenses. From 2018 to 2022, the University of North Dakota reportedly signed over $37 million in deals with Chinese carriers. Those concerned with security point out that the student pilots clock training hours near the Grand Forks Air Force Base, a hub for military drones.

Another noteworthy collaboration with China includes franchise-like agreements for satellite campuses abroad. For instance, New York University received substantial Chinese funding, with reported contracts exceeding $46.5 million solely for its Shanghai branch in 2021. The Juilliard School has disclosed over $133 million in financing for its Tianjin Juilliard School near Beijing.

China takes advantage of research institutions. The University of Minnesota revealed that small Chinese equipment manufacturers pay $50,000 annually for membership in the Center for Filtration Research, standing alongside industry giants like 3M and Boeing to benefit from cutting-edge American R&D.

China, Guangxi Watyuan Filtration Systems, one of the Chinese members, highlighted how its association with the University of Minnesota allowed it to acquire otherwise unavailable technology to state-of-the-art achievements in the filter industry during its initial public offering (IPO).

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The citrus industry now feels the harmful effects of providing easy access to American research. Florida Oranges, based in Orlando, Florida, faces heavy competition from Chinese growers undercutting the market.

Chinese orange production suffered from citrus greening, a bacterial infection that affected the taste of the fruit. Chinese scientists sought expertise from the University of Florida, renowned for its century-long research on citrus diseases. Contracts with China’s Institute of Navel Orange at Gannan Normal University helped resolve the infection, which paved the way for China to flood the American market with orange products.

The problem of Chinese exploitation of U.S. research to advance its interests will not go away. Law enforcement agencies have warned about China’s stealing of technological secrets, spreading propaganda, suppressing free speech and intimidating students on university grounds. Such a history should serve as a basis for curtailing this cheap source of research for the communist power.

To counter this threat, America must ban such arrangements, especially with those companies with military connections or ownership.

There is no other solution to the problem of Communist China pilfering valuable information from American universities, which they flood with easy money. There cannot be a beneficial contract between two parties when one does not recognize moral law.

Photo Credit:  © MAYA – stock.adobe.com

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