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Economic Statecraft: How China Legally Accesses Foreign Technologies to Build Military Capabilities

Rose TenyotkinApril HerleviAlison KaufmanAnthony Miller
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This report provides an overview of the legal economic tools that the People’s Republic of China (PRC) uses to obtain foreign technology and build capabilities in support of China’s national security objectives. The report is intended to help readers recognize the means by which China’s government, affiliated firms, and/or individuals attempt to access sensitive technologies and knowledge in ways that undermine the security and commercial interests of target nations.

Key findings

China uses a multifaceted approach to develop defense capabilities that fuses both legal and illegal acquisition of foreign technologies, reverse engineering, and indigenous production. Some key aspects of this approach include:

  • Acquiring technology from foreign countries to provide China with a model to study, test, learn from, and then replicate.
  • Reverse engineering foreign weapons or technology in order to build China’s own indigenous capability.
  • Integrating civilian and military sectors, allowing China to repurpose civilian technologies into military capabilities.

Many of China’s tools for acquiring foreign technology are legal. Although China has engaged in illegal activities to support its military modernization, the PRC uses a wide range of legal economic tools at its disposal.

China’s targets for technology acquisition are tied directly to PRC national strategic objectives. Publicly available PRC government planning documents, such as Five-Year Plans and Made in China 2025, identify priority industries and capabilities for development, including advanced technologies such as aerospace, biotechnology, and maritime equipment. China’s state-driven effort to fuse civilian and military resources to achieve PRC national security goals complicates US responses.

The stakes are high for the United States and its partners and allies. China’s legal economic statecraft activities are directly connected to the PRC’s growing military power—and to other countries’ loss of technology and intellectual property (IP).

  • China’s ability to access critical technology could erode the technological superiority of the US military and the defense industrial base of the US and its partners and allies.
  • Countries at the leading edge of scientific and defense research are vulnerable to having their IP accessed through a wide range of PRC economic activities.
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DISTRIBUTION STATEMENT A. Approved for public release: distribution unlimited.

This work was performed under Federal Government Contract No. N00014-16-D-5003.

Details

  • Pages: 68
  • Document Number: DRM-2020-U-027240-1Rev
  • Publication Date: 6/1/2020
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