Foreign Affairs

Intel Community Has No ‘Understanding’ Of China’s Efforts To Pilfer US Military Tech, GOP Rep Says

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• The U.S. intelligence community, responsible for analyzing foreign adversaries, does not fully comprehend how the Chinese military has used private companies to obtain advanced defense technology, Wisconsin Republican Rep. Mike Gallagher told the Daily Caller News Foundation.
  
• U.S. companies have engaged in at least 300 sales of sensitive and advanced technology to companies that support China’s hypersonic and regular missile programs, the Washington Post reported Monday.
• “There is a lack of understanding, both in the intelligence community but more broadly, about the opaque connections between a Chinese shipbuilder and the PLA, Navy and certain financial entities,” Gallagher said.

U.S. intelligence officials fail to appreciate the way China leverages the private sector to pilfer advanced U.S. military technology for its own forces, Rep. Mike Gallagher warned to the Daily Caller News Foundation on Tuesday.

The Wisconsin Republican’s stark comments followed revelations that Pentagon grant money, taken from the pockets of American taxpayers, went to companies that support the People’s Liberation Army (PLA), the Washington Post reported Monday. Research groups for China’s hypersonic weapons program have bypassed export controls intended to prevent the Chinese military from obtaining sensitive U.S. technology, buying products from U.S. companies through third-party firms.

“There is a lack of understanding, both in the intelligence community but more broadly, about the opaque connections between a Chinese shipbuilder and the PLA, Navy and certain financial entities,” Gallagher told the Daily Caller News Foundation.

The U.S. companies developing advanced aerospace and defense technology have received millions in federal funding designed to promote onshore innovation and enhance the competitive edge of the U.S. over its adversaries, the Washington Post reported, citing a federal program database. However, they may have inadvertently facilitated China’s rival programs through foreign sales.

“We had military retirement money being invested in Chinese companies building things to kill U.S. military members in a future war, to illustrate the absurdity,” said Gallagher.

The Post identified at least 300 transactions between nearly 50 U.S. technology companies and entities connected to the Chinese military’s hypersonic and missile programs since 2019.

Federal export controls prevent U.S. firms from selling to companies known to support Chinese missile programs, regardless of the product being sold, according to the Post. However, Chinese defense research groups often purchase U.S.-made products through intermediary companies that do not have immediate connections to the PLA.

U.S. intelligence agencies should “do a better job of leveraging open source intelligence,” or information available to the public, “to understand the connections between the [Chinese Communist Party], the PLA and quasi-private sector entities,” Gallagher added.

For example, some of the companies the Post identified that contract with the Department of Defense also openly advertise weapons and software services to Chinese customers.

Hypersonic missiles can travel at least five times greater than the speed of sound and represent a range of emerging offensive technologies that do not have a clear defensive counterpart, according to the Post. The process of developing and testing hypersonic missiles involves huge financial investments and complex computations.

Commercially-available U.S. software, which has applications in both aviation and defense industries, can expedite the research and development phase, Chinese scientists, who requested anonymity to discuss sensitive topics, told the Post.

China surprised the U.S. in 2021 with a hypersonic missile test demonstrating capabilities beyond those of the U.S. at the time. Joint Chiefs of Staff Chairman Gen. Mark Milley called the incident a “near-Sputnik moment.”

Yesterday afternoon, President Donald J. Trump signed an Executive Order to protect American investors from funding Communist Chinese military companies, including those designated by the Department of Defense in June and August of 2020. https://t.co/W3F8oj4KWu

— NSC 45 Archived (@WHNSC45) November 13, 2020

China’s policy of “military-civil fusion,” wherein it exploits the efforts of private companies, supports the PLA’s goal “develop the most technologically advanced military in the world,” according to the State Department.

The Trump administration created the Chinese Communist Military Company designation list, a modified version of which has carried through the Biden administration.

“We have the foundation of a blacklist for companies that no hedge fund, no university endowment, no whatever in America should invest in,” said Gallagher.

The DNI, CIA and DOD did not immediately respond to the DCNF’s requests for comment.