The net around China’s tech sector tightens further

A steady stream of reports indicates the US and its allies are continuing to ramp up their efforts to exclude China from the global technology market.

The newly-launched US ‘Disruptive Technology Strike Force’, created ‘to counter efforts by hostile nation-states to illicitly acquire sensitive U.S. technology’, proudly announced its first prosecutions this week. Of the five cases, two involved the alleged theft of US software with the intent do give it to Chinese companies. Another involved ‘a Chinese procurement network established to provide Iran with materials used in weapons of mass destruction’.

“These charges demonstrate the Justice Department’s commitment to preventing sensitive technology from falling into the hands of foreign adversaries, including Russia, China, and Iran,” said Assistant Attorney General Matthew Olsen of the Justice Department’s National Security Division. “We will not tolerate those who would violate U.S. laws to allow authoritarian regimes and other hostile nations to use advanced technology to threaten U.S. national security and undermine democratic values around the world.”

Leaving aside the selective use of terms like ‘authoritarian’ and ‘democratic values’, the creation of this paramilitary-sounding strike force seems like a clear further escalation of the US war on the Chinese tech sector, throwing in a few other baddies for good measure. It’s already clear that a significant amount of friendly fire is considered an acceptable price of this war, with US operators continuing to lament the collateral damage being inflicted on them.

This extends to any country that wants to stay on the right side of the US. Earlier this month the EU joined the US in pressuring Malaysia over the possible inclusion of Huawei in its 5G networks. South Korea is also under pressure to prevent its world-leading memory chip makers from selling into China, with the FT reporting today the country is doing its best to placate the US by trying to prevent its tech workers joining Chinese companies. The same paper reflects on the tricky balancing act faced by Volkswagen in trying to sell into China without getting in trouble.

As the US knows only too well, attempts at prohibition come with a wide range of largely negative unintended consequences. The creation of the Disruptive Technology Strike Force confirms the US is committed to bid to prohibit China’s tech sector from operating in its sphere of influence. So this mutually costly game of whack-a-mole will continue, with every new circumvention of its arbitrary rules met by yet another authoritarian initiative from the ever-expanding US state.


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