In its annual report to Congress released this week, the U.S.-China Economic and Security Review Commission also found "close collaboration" between Chinese research institutions like the Chinese Academy of Sciences and China's military in areas such as remote sensing, semiconductors, and laser technology. "There is close collaboration with the military in 'applied research,' with products funded or developed for use by the military," the commission stated in its report.
The commission also flagged China's efforts to develop domestic standards for wireless encryption software, "exclusive technology formats" for cell phones and DVD players, or Enhanced Versatile Disc, and draft standards for radio-frequency identification technology
The report also draws attention to the growing financial and technology ties between the Chinese and Taiwanese semiconductor industries. It cited a recent study by the U.S.-Taiwan Business Council that found a growing number of Taiwan's IC designers are having their chips fabricated on the mainland to avoid a Chinese value-added tax on chip imports. The tax is the focus of a U.S. trade complaint against China pending before the World Trade Organization.
"Taiwan government policies to curb the relocation of high-tech manufacturing to China have failed," the Commission concluded in its report.
"The extent to which [technology] advances allow China to challenge U.S. competitiveness in technology development is a vital matter for U.S. economic security," commission chairman Roger Robinson told a House Armed Services Committee hearing on Wednesday. "The extent to which China uses its enhanced technology capabilities to accelerate its military modernization programs is of direct national security concern to the United States."
Despite major strides in areas like semiconductor manufacturing, some observers note that China's industry remains several generations behind the United States in chip technology available to its military.
Technology export controls have also been with the U.S. government. Critics of U.S. policy towards China claim the Bush and previous administrations have sent mixed messages to China in areas like technology export controls. An ongoing debate within the U.S. government over export controls to China pits the Pentagon and State Department against agencies within the Commerce Department which favor less-restrictive controls on widely available technologies.