Manufacture This

The blog of the Alliance for American Manufacturing

Closer relationships between U.S. and Chinese tech companies may have unintended consequences

Last September, China’s President Xi Jinping visited Washington where he and President Obama enjoyed a nice meal. That was the only substantive accomplishment of his time at the White House.

Prior to visiting Washington, Xi visited major tech companies on the west coast. That portion of his visit was far more productive. China has been reaching out to American tech firms using the carrot of its large and untapped domestic market. The stick is mandatory domestic production, as well as shared access to user information and intellectual property.

While these developments may create concern that China is making unfair demands of our tech companies, there is a far greater threat posed by this collaboration between U.S. and Chinese technology industries: The increased technological capabilities, which China gains as a result of Chinese partnerships with U.S. firms, are being utilized for military purposes.

In October, IBM sold a Chinese computer company the same servers used in U.S. Naval vessels like the Aegis, Guided Missile Cruisers, and vessels in our destroyer fleet. As a result, the American Navy is requesting upgrades to stay ahead of its Chinese rivals. The concern is that technological transfers like these are becoming increasingly commonplace and putting American national security at risk.

Defense experts at Defense Group Inc. sounded the alarm when they first wrote about the risky collaborations between IBM and the Chinese government. IBM, for its part, states it is following U.S. laws to the letter, and therefore hasn’t done anything wrong. If this is correct, a reevaluation of U.S. laws and restrictions pertaining to the proliferation of technology with military applications is needed.

The Alliance for American Manufacturing has been advocating for a more proactive approach to safeguarding America’s military technology and industrial base. The Remaking American Security report, published in 2013 with the help of Brigadier General John Adams (U.S. Army, Retired), details the numerous ways in which America’s defenses are put in jeopardy by an increasing reliance on foreign nations to source military equipment, especially for advanced technology. The increasing collusion between China – whose tech companies have direct ties to the People’s Liberation Army – and U.S. tech firms represent the latest manifestations of this vulnerability.

America’s defense industrial base and our intellectual property must be effectively safeguarded. Visit to learn more.