Sec. 2. Findings
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Congress finds the following: The 21st century will increasingly be defined by economic competition rooted in technological advances. Leaders in adopting emerging technologies, such as artificial intelligence, quantum computing, biotechnology, and next-generation telecommunications, and those who shape the use of such technologies, will garner economic, military, and political strength for decades. These technologies offer opportunities for the empowerment of citizens, but also and challenges to basic norms of democratic governance and internationally recognized human rights.
The collection and analysis of data from individuals allows governments to know more about their residents’ behaviors, preferences, interests, and activities than was possible years ago. The concentration of this data in key technologies, such as smart phones, search databases, and facial recognition databases, along with the sharing of data among governments, creates pressing concerns about individuals’ scope to exercise their fundamental political and social rights. This challenge arises as the integrity and efficacy of post-World War II international institutions are increasingly challenged.
New approaches to multilateral cooperation and arrangements are needed to tackle the challenges ahead to ensure that the United States continues to lead in critical technologies. As information and communications technologies have matured and increasingly mediate large swathes of social, political and economic activity, it is incumbent on democratic governments to address the ways in which these technologies have undermined democratic values, consumer protections, and social cohesion.
Moreover, as authoritarian regimes increasingly shape and deploy technologies to bolster repression, stifle free expression, and interfere with free and fair elections in other countries, the world’s advanced democracies will need to shape technology standards so that emerging and critical technologies reflect democratic values, including freedom of expression and privacy. Technological leadership by the world’s major liberal-democratic nations collectively will be essential to safeguarding democratic institutions, norms, and values, and contributing to global peace and prosperity, especially as authoritarian governments seek to promote closed information systems and technology that is not interoperable, often through trade and investment practices that are incompatible with global norms.
A unified approach by like-minded nations is needed to counteract growing investments in, and deployments of, emerging technologies by authoritarian powers. In addition to the development of emerging technologies, democratic nations must lead in shaping expectations for the responsible use of such technologies and push back against laissez faire approaches and authoritarian interests on internet governance advanced in multilateral forums by— advocating against efforts to criminalize or limit political dissent and freedom of speech online, such as those spearheaded by the Russian Federation, which seek to undermine the Council of Europe’s Convention on Cybercrime, done at Budapest November 23, 2001, in favor of a statist alternative; and prioritizing protections for elections, and other processes essential for healthy democracies, from cyber-attack.
The world’s leading democracies must also confront new challenges to their market-driven economic systems to ensure their continued leadership in technology and innovation. The People’s Republic of China (referred to in this Act as the PRC ) is pursuing an industrial policy to achieve dominance in key technologies, including 5G, artificial intelligence (referred to in this section as AI ), quantum computing, hypersonics, biotechnology, space capabilities, and autonomous vehicles.
The PRC seeks to use technological superiority for national security, military-civil fusion, and economic gains, according to its strategic plans, including— the Made in China 2025 strategy; the Five-Year Plan for Standardization and China Standards 2035; the 2006 Medium-to-Long Term S&T Plan; the 2010 State Council Decision on Accelerating the Development of Strategic Emerging Industries; and the 13th Five-Year Plan for the Development of Strategic Emerging Industries. The PRC seeks to advance in areas in which democratic countries currently have a technological advantage and move ahead in emerging technologies where China seeks a unique opportunity to overtake such countries.
For many years, the PRC has pursued industrial policies and discriminatory trade practices that include— heavily subsidizing Chinese companies, restricting foreign competition, conducting forced technology transfers, and using both licit and illicit means to access research and development around technologies in order to advantage Chinese companies in specific technology fields; providing significant government funding for research and development in the PRC in specific technologies to build future competitiveness; seeking to ensure global adoption of Chinese technologies, and the success of Chinese firms, especially in emerging and strategic markets, through significant foreign direct investment, low-cost financing and comprehensive services for foreign development projects, through initiatives such as the Belt and Road Initiative, which includes the Digital Silk Road and the Health Silk Road, as well as the Smart City Initiative, efforts centered on promoting the use of Chinese exports by offering far cheaper rates and bundling these deals into larger development and aid packages; aiding the adoption of Chinese-led standards for digital technologies and products through compensating Chinese firms that submit standards and flooding forums with technical experts; and leveraging the international standard setting bodies to advance the vision of the PRC regarding standards and technologies.
As a result of these practices in support of Chinese companies, the PRC is increasing its influence in AI, 5G, and a wide range of other science and technology disciplines that constitute long-term economic and security threats to the United States, its allies, and like-minded partners. According to market research firm Dell’Oro Group, Huawei’s share of worldwide telecommunications revenue equipment grew from 20 percent in 2014 to 31 percent in 2020. While the United States semiconductor industry is the worldwide industry leader with approximately 50 percent of global market share and sales of $193,000,000,000 in 2019, the situation may be changing.
In 2019, all 6 of the new semiconductor fabrication plants that opened worldwide were located outside of the United States, with 4 of these plants built in China. The Government of the PRC plans to spend $150,000,000,000 on its computer chip industry during the next 10 years. The PRC uses technologies, such as AI, facial recognition, and biometrics, to increase control over its population, facilitating mass surveillance, scalable censorship, and technology-enabled social control, including against ethnic and religious minorities including Tibetans, Uyghurs, ethnic Kazakhs, Kyrgyz, and members of other Muslim minority groups.
The PRC uses its economic power to coerce and censor companies, individuals, and countries. In the past decade, the Government of the PRC— blocked exports of rare earth elements to Japan; threatened to curtail domestic sales of German cars; cut off tourism to South Korea; restricted banana imports from the Philippines; and imposed large tariffs on Australian barley exports. The Government of the PRC— has banned United States technology companies, including Facebook, Google, and Twitter; has pressured movie studios based in the United States to alter content in movies that it deemed objectionable; and has retaliated against a range of American companies for actual or perceived support for a range of political positions, including recognizing territorial claims of countries in border disputes with China, recognizing Tibet, and more.
Third countries have become particular targets of Chinese investments in technology. These third-country investments provide access to innovation, data that allows Chinese companies to refine their own systems, and influence over the policies of these governments. The terms on which Chinese investments are made often are attractive in the short-term but create conditions for Chinese ownership of, or influence over, major industries in those countries. After decades of being the world leader in key technologies, the United States is at risk of falling behind the PRC in key technologies of the future.
While private-sector research and development investments have steadily increased in the United States, Federal Government spending has declined as a percentage of Gross Domestic Product from approximately 1.2 percent in 1976 to approximately 0.7 percent in 2018. The decline has been even steeper in the physical sciences. The Federal Government plays a unique and critical role in America’s innovation ecosystem. Government research and development spending spurs private-sector investments, and the United States Government remains the largest source of basic research funding, which is foundational to game-changing technological achievements.
During the past several years, the PRC has quadrupled its research and development spending and is on the brink of surpassing the United States in total investments in key technologies, with its growth in research and development spending doubling the United States Government’s spending increase in this area. Chinese patent publications have surged in the fields of artificial intelligence, machine learning, and deep learning. The United States is highly dependent on China for key components of critical technologies in its supply chains, such as rare earths.
The United States remains a leader in the science and technology areas of engineering and biology as well as key components, including telecommunications equipment and semiconductors. The United States does not have a domestic manufacturer of radio access network equipment for 5G networks, but is well-positioned to lead in 6G telecommunications, which depend on software and semiconductors, areas of United States strength. Other countries have unique knowledge, expertise, and capabilities in numerous cutting edge technologies, including semiconductor manufacturing equipment, such as extreme ultraviolet lithography machines for semiconductor fabrication and machine tools for fabrication of custom components.
In order to successfully compete against the PRC, the United States must partner with such countries. The private sector in the United States and partner countries, including Japan, Korea, Australia, New Zealand, the United Kingdom, and the European Union has considerable expertise in both technology and in standard setting, given the role of the private sector in international standard setting bodies, but this expertise can be better leveraged in shaping United States technology policy.