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Rules to stop China buying sophisticated U.S. tech should move faster - lawmaker

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Rules to stop China buying sophisticated U.S. tech should move faster - lawmaker
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By Alexandra Alper

WASHINGTON (Reuters) – A leading Republican lawmaker has called for swifter action on the U.S. government’s plans to stop American companies from selling their most sophisticated technology to China, expressing “deep concern” at the pace of the roll-out of new regulations.

“While our regulatory process moves slowly, China is sprinting ahead to acquire critical technology by any means necessary,” U.S. Representative Michael McCaul, ranking member of the House Foreign Affairs committee, said in a letter to Secretary of Commerce Wilbur Ross, seen by Reuters and dated Oct. 18.

The letter seeks an update and timeline on rules, mandated by a law passed last year, to beef up oversight of exports of critical U.S. technologies. The regulations are meant to quell purported risks to national security amid a rising threat from China.

“How does the U.S. government ensure engagement by the U.S. private sector with China’s high-tech sector does not lead to a U.S. company supporting Chinese efforts to acquire cutting edge technology for China’s armed forces?” he asked.

The law mandating the rules, known as ECRA, sought to make it harder to export key technologies to adversaries like China as part of a bid to maintain an American innovation edge for economic and security reasons.

It mandated that the Commerce department draft new rules to tighten controls of sales of emerging or cutting edge technologies and so-called foundational technologies, those seen as essential to making key items like semiconductors.

While the agency sought public comment in November on how to draft its emerging technology rules, it has yet to issue any proposed or finalized measures. Commerce has not yet sought industry input on how to design its foundational rulemaking.

A Commerce Department spokesman said the Agency had received the letter and was reviewing it. On Tuesday, Commerce official Eileen Albanese said the agency would propose emerging technology rules “shortly” and that it hoped to seek comment before proposing a rule for foundational technology before the end of the year.

She also cautioned against being “shortsighted” and writing rules that were so tough they cut off revenue flows from foreign customers.

(Reporting by Alexandra Alper; Editing by David Gregorio and Rosalba O’Brien)

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