From 0a7d749859ae5a22d216ab8352a1baf1d63bceab Mon Sep 17 00:00:00 2001 From: hokoi Date: Wed, 10 Jan 2024 01:14:57 +0000 Subject: [PATCH] C2: Add HKers articles, 0x24 Jan.10 --- .../2024-01-03-us-china-relations-in-2024.md | 88 ++++++++++++++ .../2024-01-05-lidar-trade-and-security.md | 114 ++++++++++++++++++ 2 files changed, 202 insertions(+) create mode 100644 _collections/_hkers/2024-01-03-us-china-relations-in-2024.md create mode 100644 _collections/_hkers/2024-01-05-lidar-trade-and-security.md diff --git a/_collections/_hkers/2024-01-03-us-china-relations-in-2024.md b/_collections/_hkers/2024-01-03-us-china-relations-in-2024.md new file mode 100644 index 00000000..29ecaf73 --- /dev/null +++ b/_collections/_hkers/2024-01-03-us-china-relations-in-2024.md @@ -0,0 +1,88 @@ +--- +layout: post +title : U.S.-China Relations In 2024 +author: Scott Kennedy +date : 2024-01-03 12:00:00 +0800 +image : https://i.imgur.com/184aWZv.png +#image_caption: "" +description: "Managing Competition without Conflict" +excerpt_separator: +--- + +_From 2018 to 2023, U.S.-China relations were in a linear downward spiral. The trade war, the pandemic, growing technology competition, rising tensions in the South China Sea and the Taiwan Strait, and contrasting approaches to the Russia-Ukraine conflict have collectively fed a sense of fatalism that they were heading toward the outright economic decoupling and military conflict._ + + + +The summit meeting between Presidents Joe Biden and Xi Jinping held in November near San Francisco, just in advance of the APEC Economic Leaders’ Week, was the culmination of a year-long process that calmed the waters. The two sides announced a range of deliverables on economic and security issues and tried to convey a sense that they could effectively manage their differences. Although the United States and China are still engaged in a comprehensive contest for power and over setting the global rules of the game, guardrails are gradually being created, and as a result, the likelihood of the most disastrous outcomes has receded. Moreover, even though the chances of a genuine thaw that resolves fundamental differences and leads to greater cooperation are low, there also are underappreciated sources of structural stability that could keep relations from further deteriorating in the coming years. Nevertheless, it will take active diplomacy and some good luck to keep ties from fraying in 2024. + + +### Surpassing Low Expectations + +During their four-hour meeting on the Filoli Estate in Woodside, California, both Biden and Xi appeared to stick to their original positions on technology and economic security, Taiwan, Ukraine, human rights, and several other issues. At the same time, they were able to produce a series of deliverables exceeding the expectations of most analysts. + +Based on the readouts from the White House and People’s Republic of China (PRC) media (Xinhua, Caixin), it appears that, at a minimum, the two sides agreed to several actions: + +1. Resume military-to-military dialogue through a variety of channels and on a number of specific topics. + +2. Commit to accelerate efforts to expand renewable energy and reduce carbon emissions, including from methane and other greenhouse gases, in accordance with the joint statement issued at Sunnylands just before the bilateral meeting. + +3. Restore and expand cooperation on countering the production and trafficking of fentanyl and other narcotics. + +4. Step up discussions to minimize risks related to artificial intelligence. + +5. Push for more direct flights between the two countries and expand people-to-people exchanges. + +6. Begin consultations aimed at renewing the U.S.-China Science and Technology Cooperation Agreement, which is set to expire in late February 2024. + +Beyond specific actions, the two sides adjusted the tone of how they frame the relationship. The Biden administration’s readout said the two sides “are in competition,” dropping the previously ubiquitous adjective “strategic” from the characterization of ties. U.S. officials have continued to avoid using the “s” word in public statements. In place of the highly critical language about the United States and the Biden administration that have been dominant in the past few years, Chinese state media coverage has consistently highlighted the friendly and respectful nature of the meeting and has presented a hopeful vision for future ties. Chinese ambassador Xie Feng’s speech to the U.S.-China Business Council’s annual gala in mid-December is perhaps the best example of this major shift in tone. + + +### Different Roads to San Francisco + +The United States and China both wanted the meeting to be successful, but their leaders arrived in San Francisco on very different trajectories. + +President Biden came in with the wind at his back. The U.S. economy has recovered; growth has regained momentum, while inflation has slowed. Although Congress seems locked in eternal battles internally and with the executive branch, it did adopt, in consultation with the administration, major pieces of legislation — the bipartisan Infrastructure Investment and Jobs Act and the CHIPS and Science Act — that will provide a stronger foundation for the U.S. economy in the coming years. + +Moreover, the United States’ relations with allies in Asia and Europe have improved dramatically in general and with respect to their approach toward China in particular. Analysis of the challenge China poses on economic and national security issues sounds increasingly similar whether one is in Tokyo, Berlin, Brussels, Washington, or other advanced market democracies. Closer alignment has been generated by China’s increasingly ambitious and distortionary industrial policies, the human rights situation in Xinjiang and Hong Kong, China’s close ties with Russia and its approach to Ukraine, instances of economic coercion by Beijing, and the worsening security situation in the South China Sea, the Taiwan Strait, and along the China-India border. + +The narrowing of differences reflects a greater willingness by the Biden administration, relative to its predecessor, to develop a foreign policy framework rooted in longtime alignments with allies, as well as a willingness to shift its own language and approach in a way that is more comfortable to friends in Europe and Asia. This certainly applies to the administration’s emphasis since the spring of 2023 that it is pursuing “de-risking,” not decoupling. At the same time, likeminded countries have become more willing to be openly critical of China and develop a range of policy responses, individually and together with others. This is most visible in the area of economic security, for example, with Japan’s Economic Security Promotion Act and the European Commission’s investigation into subsidies for China’s electric vehicle (EV) sector. Although there are still significant frictions — U.S. tariffs on European steel and aluminum, different approaches to data security and privacy, and disagreement over how to reform the World Trade Organization (WTO) — the dramatic reduction in differences between Washington and its allies is the more important trend. + +President Xi, by contrast, came in facing substantial domestic and international headwinds as a result of his changing policies at home and abroad. China’s zero-Covid policies, which initially were successful in 2020 and 2021, proved to be a failure in 2022 in the face of the Omicron variant. Lockdowns in Shanghai and elsewhere generated widespread anger, and the sudden removal of restrictions in late 2022 in the face of protests left many Chinese people feeling abandoned. + +The economic front has brought a long string of bad news: the extended crackdown on the private tech sector, the imposition of a range of national security–oriented laws, the shrinking of the workforce and graying of the population, the property market’s woes, and growing restrictions on access to Western markets and technology. China’s economy may meet its official economic growth target for 2023 of around five percent, but the recovery has been far slower than expected, and the sense of inevitable continued economic success has disappeared. + +Xi’s record abroad has been equally problematic. Tensions with the United States, growing frictions in the Taiwan Strait, and alignment with Russia have brought the United States and its allies together. Access to Western technology and markets has been constrained, and global supply chains are gradually reducing their disproportionate reliance on China. The Belt and Road Initiative (BRI) has attracted criticism for failed projects that have added to the debt load of developing countries. + +The combination of problems at home and abroad has led to a crisis of confidence among Chinese citizens, who have become far less certain about their individual and collective futures than at any time in the last three decades. Xi Jinping himself may exude self-confidence and believe that the “East is rising and the West is declining,” but he has not persuaded his populace of this prediction. Hence, Xi needs to stabilize relations with the United States and the West more generally, not only for foreign policy reasons but to rebuild confidence at home, which is central to generating growth and maintaining social stability. + +That is why China’s bark has been bigger than its bite. Xi attended the APEC summit and held the bilateral meeting with Biden despite the fact that Washington made essentially no concessions to get Xi to California. In the months leading up to APEC, the administration issued an executive order on outbound investment, stepped up export controls on the semiconductor industry, and held firm in not inviting Hong Kong chief executive John Lee to the APEC leaders’ meeting. Beijing has sent signals of potential penalties through its investigation into a few consulting firms and by placing several minerals on its export control list, but it has not pulled the trigger on any of these yet, fearful that doing so would accelerate the decoupling it still hopes to avoid. + + +### Sources of Stability + +Xi’s problems at home and abroad have left the impression that his conciliatory moves are tactical gestures that will be only temporary and fade away once China’s economy rebounds and domestic confidence in his leadership is restored or will disappear suddenly if Lai Ching-te, Taiwan’s current vice president and the Democratic Progressive Party (DPP) candidate, wins Taiwan’s presidential election in mid-January and China is compelled to react with dramatic moves. Such concerns are entirely reasonable, but observers should appreciate that the sources of recent tempering of stresses are rooted in three structural characteristics of the relationship. + +The credible military deterrents that the United States and China both maintain against the other form the first source of stability. China’s relative power has risen dramatically in recent years, and the United States and others take as credible Chinese threats to use force in the Taiwan Strait if Taiwan were to cross any of Beijing’s red lines. Conversely, the U.S. credibility to provide defensive support to Taiwan and its allies has been strengthened through the development of the Quad and AUKUS, improved bilateral relations with countries around China’s periphery, and its support to Ukraine. Equally important, although there are “green” and “blue” wings in Taiwan’s political spectrum regarding their ideal preferences for cross-strait outcomes, in the context of realistic constraints, the vast majority of the population — and the political parties — are one or another shade of turquoise. In sum, the astronomical costs of an outbreak of hostilities have created a widely shared preference in favor of maintaining the status quo. + +Second, although U.S.-China bilateral trade and investment ties have stagnated, the two countries are still embedded in an extensive web of complex interdependence across all aspects of their economies and broader societies, which extends to countries around the world. Interconnectivity has created certain vulnerabilities, such as overdependence for critical goods and the potential transfer of dual-use technologies, but it also has created extensive economic and national security benefits that raise the costs of conflict and the value of continued interaction to both sides. Understandably, neither side is keen to abandon such ties. The fact that other countries are deeply connected to the United States and China further raises the costs to Washington and Beijing from taking precipitous actions. Interdependence is no panacea, but it is a structural feature shaping the choices of all parties. + +Finally, the resumption of regular people-to-people ties, track 2 dialogues, and official consultations, in the wake of their collapse due to the Covid-19 pandemic, provides another set of stabilizers. Washington and Beijing have established roughly a dozen working groups on a wide range of topics, and the two governments now have normal interactions at the cabinet and working levels. So far there has been one recent congressional delegation, in October 2023, and there likely will be more in 2024. Communication does not necessarily generate momentum for extensive cooperation, but it provides pathways for reducing misunderstanding about policies and broader developments in both countries and elsewhere. + + +### Looking Ahead to 2024 + +The new normal of what could be called “competition without conflict” does not presage a return to the era of engagement, but the United States and China deserve credit for reducing the chances of the worst negative tail risks, including outright decoupling and military conflict. That said, the short-term incentives and long-term structural features of relations guarantee absolutely nothing. Maintaining momentum in 2024 will require a series of steps on the domestic, bilateral, and multilateral fronts. + +Most urgently, every effort must be taken to avoid an escalation of tensions and outright conflict in the Taiwan Strait and South China Sea. The outcome of the Taiwan election is in doubt, but there should be no doubt that all sides need to act with prudence once the results are announced, and that extraordinary vigilance will be needed through the inauguration of Taiwan’s next leader in May and their first few months in office. Equally complex will be finding a way to defuse tensions involving China and the Philippines around Second Thomas Shoal in the face of Beijing’s increasingly aggressive moves. + +Next, with the creation of new channels for dialogue, the United States and China need to move forward with consultations on all fronts, including on trade, technology, artificial intelligence, climate, and security issues. Given the previous dearth of communication, discussion itself will be valuable, but before long it will be reasonable to expect the two sides to refine their agenda in each working group and gradually shift from consultations to negotiations that deliver substantive results. + +It will be equally important for the Biden administration to expand and deepen consultations and coordination with allies in Europe and Asia on China policy. General agreement about de-risking needs to be accompanied by more concrete alignment or harmonization with regard to the implementation of economic security in a range of sectors (semiconductors, EVs, and critical minerals being the most urgent), rules related to the digital economy, carrying out commitments from the latest UN Climate Change Conference (COP28), and how to resuscitate the WTO and keep the global trading system from collapsing. + +Finally, the Biden administration needs to further develop the architecture of its China policy. The administration deserves credit for putting meat on the bones of its three-pronged strategy of “invest, align and compete,” enunciating the goal of de-risking while maintaining extensive economic ties, and resuming extensive dialogue. It can build on this progress by clarifying the goals of its China policy. This begins by further articulating how the United States aims to strengthen and reform the rules-based international order and then, on that basis, how relations with China should be managed in light of those broader goals. Equally important is to begin an evaluation of the effectiveness of its approach across a range of areas. For example, what are the right metrics to measure progress with regard to advancement of American technology innovation, reduced overdependence on China, and the imposition of security-based restrictions on Chinese industry? That will then offer a foundation for judging whether U.S. policy is making progress, having unintended consequences, or both. + +In short, in 2024 the Biden administration needs to take steps to institutionalize the various elements of its China policy. Doing so could mean making measurable progress and having a less volatile year than many foresee, which would make its approach less vulnerable to criticism from Beijing, other countries, and other domestic perspectives. The last source of disagreement is particularly important given that China policy undoubtedly will be a central topic of discussion in the lead-up to the United States’ congressional and presidential elections in November. + +--- + +__Scott Kennedy__ is senior adviser and Trustee Chair in Chinese Business and Economics at the Center for Strategic and International Studies (CSIS). diff --git a/_collections/_hkers/2024-01-05-lidar-trade-and-security.md b/_collections/_hkers/2024-01-05-lidar-trade-and-security.md new file mode 100644 index 00000000..2cb02aa7 --- /dev/null +++ b/_collections/_hkers/2024-01-05-lidar-trade-and-security.md @@ -0,0 +1,114 @@ +--- +layout: post +title : Lidar Trade And Security +author: Catharine Mouradian, et al. +date : 2024-01-05 12:00:00 +0800 +image : https://i.imgur.com/Cyx1m1H.jpg +#image_caption: "" +description: "Mapping a Trade Tool Kit for National and Economic Security: A Lidar Case Study" +excerpt_separator: +--- + +_Lidar is the newest piece in the ever-evolving competition between the United States and China to control the future of technology._ + + + +### Introduction + +Strategic trade tools, advanced technologies, and de-risking continue to feature prominently in evolving economic and national security agendas. The nexus of trade policy and national security has been particularly dynamic in the United States, which maintains one of the world’s most advanced trade tool kits for national security. Questions have emerged, however, about whether the use of these trade tools serves primarily as a national security instrument or whether their use is motivated primarily by a bid to protect domestic industry. As technology grows in foreign policy importance, the line between what is critical to national security versus what is critical to economic security is increasingly blurred. One technology increasingly under the security spotlight is lidar. + + +### Defining Lidar + +Light detection and ranging, or lidar technology, is a dual-use technology, which means it has both civilian and military uses. Lidar uses laser pulses to hit objects and reflect back, calculating the position, size, and velocity of surrounding objects. These laser pulses occur at rates of millions of beams per second, creating a highly accurate and real-time 3D image of the environment. + +Lidar is widely used in commercial and scientific applications. In 2018, archeologists used lidar to scan the jungle along the border of Guatemala and Mexico, digitally removing the dense tree layer to reveal swaths of Mayan ruins. In “smart city” infrastructure programs, lidar collects data to improve road safety and support traffic management. Lidar is also critical in driverless cars. All major autonomous vehicle producers (with the exception of Tesla) use lidar as “3D eyes.” + + +### Lidar and U.S. National Security + +Lidar also has myriad military applications. The integration of lidar into aerial vehicles like drones can enhance their autonomous capabilities, such as navigation and collision avoidance, improving their ability to navigate complex environments. Lidar can also map battlefields and gather reconnaissance, scouting for potential danger without risking soldiers’ lives to map the places satellites cannot see. Lidar can also assess buildings for structural damage, locate sea mines using bathymetric lidar (which passes through water), and estimate the effectiveness of weapons by evaluating atmospheric conditions. The U.S. Army is currently developing its own autonomous vehicles through a $49.9 million project with autonomous truck company Kodiak Robotics, which uses only U.S.-produced lidar for military purposes. + +#### Data Concerns + +One national security element of lidar that has garnered attention among U.S. policymakers is its potential to generate large swaths of data about urban environments and critical infrastructure. A 2016 Intel study revealed that autonomous vehicles could produce 4,000 gigabytes of data each day, underscoring the tremendous amounts of data they hoover up from surrounding environments. Lidar is used in almost all commercial autonomous vehicles currently tested and sold in the United States. Transmitting data to China could also lead to its access to perfect renderings of critical U.S. infrastructure. + +Fears about data generation and gathering are likely exaggerated. Hesai, a major Chinese producer of lidar, has publicly stated that their products are closed systems, do not connect to the internet, and therefore cannot physically transfer data. Hesai has also stated that their lidar is not suitable for military use and is not sold to U.S. military end-users. A recent House Select Committee report on the need to “reset” U.S.-China economic relations has asked the Department of Commerce to investigate whether lidar produced by a foreign adversary poses a national security risk. + + +### Chinese Lidar + +In 2020, several Chinese ministries, including the Ministry of Science and Technology (MOST), identified lidar as a “strategic emerging industry.” This designation jumpstarted growth in state investment in the industry and was accompanied by additional support for sectors that use lidar, such as autonomous vehicles and smart city programs. Chinese companies have also been accused of stealing foreign intellectual property, resulting in patent infringement lawsuits from several U.S. companies. China also pursued “leapfrogging,” an effort to ensure that Chinese companies could jump to produce the most advanced technology and avoid having to fight for space in which foreign countries already dominate. A Chinese expert on intelligent vehicles suggested applying this agenda to lidar by focusing on solid-state lidar instead of the typical 360-degree lidar produced by U.S. companies. + +#### Possible Military Connections + +Hesai is the largest Chinese lidar company by sales, capturing over 47 percent of global market share and 67 percent of the autonomous vehicle market. Hesai is reportedly tied to the Chinese military through the China Electronics Technology Group Corporation (CETC), a state-owned dual-use electronics manufacturer that produces technology for the People’s Liberation Army (PLA). Hesai has denied these allegations. The House Select Committee letter to the executive branch also accuses Robosense, another major Chinese lidar manufacturer, of ties to the Harbin Institute of Technology, a military university. Huawei, long accused of having ties to the Chinese government, has also recently entered the lidar market. However, linkages between private companies and the Chinese government can be murky, and unsubstantiated conjecture can increase tensions without bolstering U.S. national security. + +#### Economic Security Considerations + +Lidar technology was originally developed in the United States, but the growth of Chinese firms has imperiled the long-term viability of the U.S. lidar sector. The United States maintains robust and well-utilized national security instruments to combat nonmarket economic practices that result in injury of U.S. firms. These include Section 301 of the Trade Act of 1974; Section 232 of the Trade Expansion Act of 1962; and antidumping, countervailing, and Section 337 investigations under the Tariff Act of 1930. + +The application of these statutes to specific cases is contingent upon a lengthy litigation and investigation process, in which identifying injury by a foreign government can be difficult. While lidar was originally developed and dominated by U.S. firms, the proliferation of lidar in domestic Chinese markets has brought costs down and created a more competitive market overall. There are obvious parallels to the electric vehicle market, in which China’s electric vehicle market has shrunk from 300 companies in 2021 to 50 firms today, far outpacing the number of U.S. peer competitors. The potentially bleak consequences of Chinese electric vehicles on European and U.S. firms are likely to result in enhanced protective measures and have already resulted in a European Commission anti-subsidy investigation. A similar dynamic is playing out in the lidar sector. + +The growth of foreign lidar companies, even if driven by good faith competition, could potentially imperil the longevity of U.S. firms. Foreign domination of a U.S. sector potentially creates a “weaponized interdependence” scenario in which a foreign government can exercise chokepoints and cut off supplies. This risk is not theoretical. Lidar was added to a draft Chinese government export control list in December 2022, with an official announcement that certain types of lidar — specifically laser range finders — would be restricted on July 31, 2023, as part of a larger swath of controls on drones and drone equipment. + + +### U.S. Trade and Investment Instruments + +The United States maintains what is arguably the world’s most advanced trade and investment tool kit at the nexus of national security. Exercising some of these instruments to a fuller extent could better protect the U.S. lidar sector. + +#### Commerce Department Instruments + +The Bureau of Industry and Security’s (BIS) Entity List identifies and lists organizations believed to be acting against the national security or foreign policy interests of the United States. The entities listed face presumptions of denial for export licenses for all items subject to export regulations, restricting access to sensitive U.S. technologies for national security and foreign policy reasons. Huawei, which now produces lidar products, is listed, as are CETC and the Harbin Institute, which are reported to have ties to Hesai and Robosense. No other Chinese lidar firms are included on the Entity List. + +Members of Congress have recently accused BIS of underutilizing its full authorities by permitting the outflow of certain technologies to China. Representative Michael McCaul (R-TX), who chairs the House Foreign Affairs Committee, has accused the agency in a major 90-day review report of enabling “a virtually unrestricted flow of American technology to CCP-controlled companies, facilitating China’s rapid rise as a technological, economic, and military superpower.” BIS, on the other hand, maintains that permitting the outflow of technologies to China provides badly needed export revenue for U.S. firms, allowing them to redouble research and development efforts, thus enabling them to retain a competitive edge. + +In November 2023, the House Select Committee addressed a letter to Secretaries Raimondo, Yellen, and Austin calling for additional scrutiny over foreign lidar. The letter urged BIS to implement narrow controls on Field Programmable Gate Array chips, which are necessary for lidar and overwhelmingly produced by Xilinx Inc. and Altera Corporation in the United States. Current controls cover some of these chips but not those used in lidar. + +#### Treasury Department Instruments + +The Department of the Treasury’s Non-SDN Chinese-Military Industrial Complex (NS-CMIC) List identifies entities that the U.S. government has determined are involved in the development or production of military equipment or materials for the PLA. The list is designed to prevent U.S. persons and entities from investing in or supporting companies that could contribute to advancing PLA military capabilities. The NS-CMIC List undergoes regular updates to reflect changes in China’s military industry. The overarching goal of the NS-CMIC is to impede China’s military-civil fusion strategy and overall modernization of the PLA. The list has also identified Chinese companies involved in the development of other advanced technologies, such as artificial intelligence, advanced semiconductors, and hypersonic weapons. Huawei and CETC are included on this list. + +#### Defense Department Instruments + +The Department of Defense’s (DOD) Chinese Military Companies List, also known as the Section 1260H list, is a list of Chinese military companies that are “operating directly or indirectly in the United States.” The DOD began publishing this list in 2021 as required by an amendment to the 2021 National Defense Authorization Act (NDAA). It was intended to replace a previous list published by the DOD that identified communist Chinese military companies as instructed by Section 1237 of the 1999 NDAA. A major difference between the two lists is that 1260H list redefined what constituted military ties to capture companies that were a part of civil-military fusion, reflect the modern Chinese military chain of command, and narrow the scope of companies to identify risks more effectively. Under Executive Orders (EO) 13959 and 13974, then president Trump blocked U.S. persons from owning securities from companies on the Section 1237 list, a decision that was continued through President Biden’s own EO. Huawei and CETC were included in the earliest tranche of the 1260H list published in 2021. + +#### Investment Instruments + +In August 2023, the Biden administration issued an EO establishing an outbound investment notification regime covering chips, artificial intelligence, and quantum investments. The EO directs the Department of Treasury to require notification of certain transactions, while prohibiting certain higher-risk transactions. Senators John Cornyn (R-TX) and Bob Casey (D-PA) had included networked lasered scanning systems, a type of lidar, in the amendment to the 2024 NDAA via the Outbound Investment Transparency Act, although lidar was not included in the EO. + +The Committee on Foreign Investment in the United States (CFIUS) examines national security risks of foreign investment. A September 2022 EO expanded CFIUS’ ability to protect U.S. technology and more directly tied CFIUS objectives to preserving U.S. technological leadership and enhancing U.S. supply chain resilience in line with overall security objectives. Prior to the EO, CFIUS had approved Chinese acquisitions, reverse mergers, and investments in U.S. lidar companies but will likely face growing pressure to approach those transactions more critically. CFIUS is simultaneously facing calls to maintain openness where possible, particularly since it has reviewed a record number of filings, despite slowing foreign direct investment. + +#### Tariff Remedies + +Section 301 of the 1974 Trade Act grants the Office of the U.S. Trade Representative (USTR) the power to conduct investigations and measures to uphold U.S. rights under trade agreements, as well as to address specific foreign trade practices, including intellectual property violations, discriminatory taxation, unfair subsidies, currency manipulation, and illegal sourcing. Under presidential guidance, Section 301 authorizes the USTR to investigate and effectively counteract unfair trade practices. + +On August 14, 2017, then president Trump called on the USTR to investigate China’s technology transfer, intellectual property, and innovation practices under Section 301. This investigation identified four Chinese practices related to technology as unreasonable or discriminatory, specifically their technology transfer requirements, licensing restrictions, outbound investment regime, and theft of intellectual property. In March 2018, the USTR announced tariffs of 10 or 25 percent on a variety of Chinese products. One of the covered products was lidar, under HTS code 9015.80.20, which was then subject to a 25 percent tariff. + + +### Policy Recommendations + +Even if certain hard security aspects of lidar remain murky, it is critical that the U.S. government bolster efforts to support the domestic lidar industry and pursue preventive measures where possible. Policymakers should consider the following measures to support the U.S. lidar sector: + +1. __Ensure that the United States maintains a domestic supply of lidar.__ Ensuring domestic supplies reduces the likelihood of a foreign actor weaponizing dependance on lidar. It also “de-risks” lidar use in military applications by ensuring that the provider is not an entity with foreign military ties. + +2. __Initiate additional investigations into foreign lidar to determine data leakage risks.__ Questions abound about the hard security risks of lidar, spanning data flows and 3D mapping of critical infrastructure. The Department of Commerce, in partnership with the End-User Review Committee, should conduct a review that would provide resources to more definitively identify data flow risks. + +3. __Use export restrictions lightly.__ Unlike other critical technologies, it is difficult to claim that the United States maintains chokepoints over lidar since some Chinese products are superior in both quality and price. U.S. export controls could thus have a limited effect on certain Chinese lidar capabilities, while narrowing the market for U.S. companies. + +4. __Invest in talent strategies and technology capabilities.__ It is critical that the U.S. government pursue “promote” policies in addition to “protect” policies. Relaxing immigration requirements to encourage more advanced STEM professionals to work in the United States should be a key priority, particularly as workforce woes become increasingly acute. Moreover, future talent gaps could ultimately decide the winners of the tech race. + +5. __Consider the application of emerging instruments to the lidar sector.__ The U.S. Congress demonstrated some enthusiasm for covering lidar under an outbound investment regime. Upon concluding an investigation, if it is determined that lidar does pose a national security threat, the United States should consider expanding the scope of an outbound investment regime to include lidar technologies. + + +### Conclusion + +Advanced technologies are driving a new era of economic security in which national security and domestic economic interests are increasingly intertwined. The U.S. government should explore the full toolkit at its disposal to evaluate the possible risks of an overdependence on foreign lidar. Lidar will enable significant leaps forward in both civilian and military applications, underscoring the necessity of maintaining a U.S. supply that cannot be weaponized by a foreign actor, but protective trade measures are only part of the equation. Efforts to “run faster” will better enable the United States to map the geostrategic future. + +--- + +__Catharine Mouradian__ is a program manager and research associate with the Project on Trade and Technology at the Center for Strategic and International Studies (CSIS). Her work has focused on the European Union and technology ecosystem in the transatlantic context, including the geopolitics of semiconductor supply chains. + +__Emily Benson__ is director of Project on Trade and Technology, and senior fellow of Scholl Chair in International Business at CSIS, where she focuses on trade, investment, and technology issues primarily in the transatlantic context. + +__Gloria Sicilia__ is an intern with the Project on Trade and Technology at CSIS.