China Power | Security | East Asia

US Targets China’s Quest for ‘Military-Civil Fusion’

A report indicates the U.S. government will seek to deny sales to 89 major Chinese companies with military links.

Bonnie Girard
US Targets China’s Quest for ‘Military-Civil Fusion’
Credit: Flickr/ August

It is a fundamental mistake to believe that Beijing is concerned with living up to agreements to use technology it buys from the United States in civilian applications only, a condition of its purchases from American companies. The fallacy is underscored by China’s perspective on the role of its citizens and their relationship to the Chinese state.

In 2017, China enacted an Orwellian National Intelligence Law. Article 7 mandates that ordinary citizens must “support, assist, and cooperate with state intelligence work.” The same goes for organizations.

A country that erases the line between the role of a person as a citizen and the role of a person as an agent of the state is not going to quibble over erasing the line between the role of a product for civilian use or the role of that same product for military use – even if a sale is predicated on commercial, civilian use only.

In the case of China and the United States, Washington has attempted for decades to walk the tightrope between allowing exports to China that are purely for commercial use, without crossing over into allowing exports that can be used by China’s military. Dual-use technologies are particularly tricky, however, and rely heavily on trust. But trust is obviously not part of an equation in which the U.S. has banned China outright from military-related purchases in the first place.

China’s thirst for new technologies to fuel not only economic growth but military supremacy as well has played out for years in a cat-and-mouse game between the United States and China, in which China tries to convince the U.S. that its purchases are for mundane commercial use only rather than for menacing military missions. But there is no doubt that many Chinese companies over the years have absorbed commercial-use technologies benignly initially, only to have them reappear in military-use applications later.

Enjoying this article? Click here to subscribe for full access. Just $5 a month.

The Trump administration is now rushing to spoil the party for at least 89 Chinese aerospace and other companies. Reuters reported last week that it had seen a list of companies, both Chinese and Russian, that are being added to the U.S. Department of Commerce’s roster for which U.S. companies must obtain export approval.

The likelihood that those approvals will be given is, by definition, low. Companies are not on the list unless they are known or suspected to be tied to advancing China’s military capabilities.

Some of the Chinese companies on the list have subsidiaries and joint ventures in the United States. Aviation Industry Corporation of China (AVIC), “China’s Boeing Wannabe,” as Bloomberg aptly put it, is “one of the biggest military contractors in the world,” with revenues of over $68 billion last year.

“That’s more than Lockheed Martin Corp., General Dynamics Corp. or Northrop Grumman Corp.,” according to Bloomberg.

But it has a civilian-side business, as well, and cooperates with American and other companies in that sphere. Thus, AVIC has joint ventures in the U.S. with the likes of Honeywell, General Electric, and Textron, which makes Cessna business jets. AVIC also has several U.S.-based subsidiaries that make a range of products from aviation engine parts to steering systems.

Is it far-fetched to consider that some of the proprietary technology that AVIC incorporates into civilian-use planes made in the U.S. might slip under the door of one of its more than 100 sister business units that make, for example, the Chinese military’s surveillance planes?

It is more far-fetched to believe the contrary. China does not willingly make a distinction between civilian and military resources as tools of the overall state, and therefore the Chinese Communist Party. Quite the opposite, in fact – it is in a major policy initiative of Chinese President Xi Jinping that brings these resources together.

In 2017, Xi rolled out the Central Commission for Integrated Military and Civilian Development and established himself as chairman. According to the U.S.-China Economic and Security Review Commission (USCC), Xi’s personal leadership of the commission “signals military-civil fusion’s intended centrality in defense industrial planning, but also underscores the need for strong authority to overcome bureaucratic hurdles in implementation.”

The first strategic objective of the new commission is to “facilitate transfers between the defense and civilian sectors to improve the sophistication of China’s military technology, particularly in sectors critical to informationized warfare,” the USCC writes.

The commission’s goals don’t end there. The USCC report defines the second of the commission’s three objectives as the creation of “cohesion in Chinese industry and academia working with and in support of military objectives, so that the entire system can be effectively mobilized to support the military in the future.”

Enjoying this article? Click here to subscribe for full access. Just $5 a month.

Third, and almost as an afterthought, Xi’s commission is tasked with driving “technological innovation and economic growth.”

To achieve the overall objective of military-civil fusion, the USCC points out that China has taken practical steps to encourage “hybrid state-backed and private funds to guide military-civil fusion implementation,” while designating “specific industries or types of technology for cooperative development between the civilian and defense sectors.”

In other words, China has given the world a road map. It has laid out in no uncertain terms what it is attempting to do, and what, indeed, it has been succeeding in doing, as evidenced by Beijing’s increasingly capable military hardware.

The U.S. government looks set to take heed, albeit late in the game. And the net is now cast wider. According to Reuters, the Commerce Department “expanded the definition of ‘military end user’ in April 2020.” The new rule “includes not only armed service and national police, but any person or entity that supports or contributes to the maintenance or production of military items – even if their business is primarily non-military.”

China’s directives to turn individuals and companies into harvesting tools for both national intelligence and enhanced military capability is an unfortunate exploitation of the great talent that lies in within the Chinese nation. It behooves the United States and its friends and partners to make that exploitation harder to do, by not participating in it in the first place.