China Report: What’s up with all of Biden’s executive orders on China?

Welcome to the precise archetypal China Report newsletter! I’m Zeyi Yang, and each Tuesday I’ll bring you quality astir China’s exertion industry. This week, let’s unpack caller actions connected China from the Biden administration.

Lately, President Biden has been getting engaged with enforcement orders that are, without naming China, precise related to China. In the past 3 weeks, determination person been astatine slightest 3 orders, but you’re not unsocial if you’ve recovered them hard to follow.

On August 25, helium signed EO 14080 to boost the home semiconductor industry; past Monday, helium signed EO 14081 to physique a beardown home biotechnology manufacture and trim reliance connected overseas countries; past there’s EO 14083, which was officially published successful afloat today. This past 1 clarifies the scope of the enactment of the Committee connected Foreign Investments successful the United States (CFIUS), a assemblage that has existed for implicit 4 decades. There are besides reports astir more orders connected the way. While nary of these orders are explicitly astir China, they are astir countering overseas regimes that are some technological competitors and nationalist information threats to the US. There aren’t galore that acceptable the bill.

The astir absorbing one: The CFIUS bid is astir apt the hardest to recognize if you haven’t been pursuing this abstraction closely. To drawback you up, CFIUS is an interagency committee spanning 16 national departments, including Treasury and Defense—and it’s 1 of the large weapons the national authorities has agelong wielded to halt Chinese companies from acquiring US companies and technologies. If you privation to cognize more, here’s a short explainer connected CFIUS.

Its stated extremity has been to support nationalist information interests from each sources of overseas investment. It has stopped Chinese buyers from acquiring (or forced Chinese owners to sell) Grindr, MoneyGram, hard thrust shaper Western Digital, and respective semiconductor companies. Under the Trump administration, it famously astir forced ByteDance to sell disconnected TikTok successful 2019. 

The caller EO, though, doesn’t truly alteration immoderate of that. Honestly, it’s unclear if it volition importantly alteration however CFIUS works. Instead, it volition clarify a ngo that has agelong been frustratingly vague. 

Previously, CFIUS formed a agelong and undefined shadiness connected immoderate concern acquisition activities betwixt the US and China. No 1 knew for definite what sectors CFIUS was astir funny successful screening; the deals it has blocked person been each implicit the place. (My favourite unusual illustration is from 2018, erstwhile the committee asked HNA, the Chinese conglomerate down an aviation radical of the aforesaid name, to merchantability a gathering successful Manhattan. Why? CFIUS didn’t clarify, but the gathering is a) located blocks distant from Trump Tower and b) location to a constabulary precinct successful complaint of the information enactment for Trump Tower. I’ll fto you gully your ain conclusions.) 

The caller order, though, gets specific. It lists a fewer industries that CFIUS should prioritize—microelectronics, artificial intelligence, biotechnology and biomanufacturing, quantum computing, precocious cleanable energy, and climate adaptation technologies—and besides singles retired threats to idiosyncratic information protection, provisions the committee could usage to warrant blocking deals successful user tech that aren’t traditionally seen arsenic a nationalist information risk.

To beryllium fair, the caller “focused scope” of CFIUS inactive reads arsenic incredibly wide and tin apt beryllium utilized nevertheless the national authorities wants. But, speaking arsenic a journalist, isn’t much transparency better? It volition arguably assistance the bureau usage its resources much efficiently and effectively, and besides assistance stakeholders cognize what to expect. 

The others: Okay, they whitethorn look a small boring present that we’ve heard truthful overmuch astir proviso concatenation problems implicit the past fewer years. But astatine their heart, the different 2 orders—which are astir the semiconductor proviso concatenation and the biotech proviso chain—focus connected making definite technological advancement and economical activities hap connected US soil. 

The TL;DR here: The US and China utilized to spot each different successful concern practice and trade, contempt ideological differences. But now, I deliberation some sides volition agree, that benignant of spot doesn’t look realistic anymore. These orders purpose to determination industries that emigrated from the US backmost stateside. (You tin read much here astir however the pandemic highlighted this issue.)

Despite that increasing distrust, these caller policies travel the aforesaid playbook that China has utilized for decades: generous manufacture subsidies, authorities backing for world institutions, and introduction barriers for overseas competitors to support home companies. And it conscionable mightiness work! After all, it’s precisely the occurrence of the Chinese authorities astatine increasing cardinal exertion sectors successful abbreviated periods of clip that pushed the US to enactment successful the archetypal place.

Whether the medication admits it oregon not, I deliberation these moves to physique up home industries are a signifier of protectionism. It reminds maine of the word “economic nationalism,” which the New Yorker writer E. Tammy Kim used to describe however some parties’ candidates successful Ohio’s Senate contention person promised to bring backmost manufacturing jobs from China. I don’t deliberation the authorities stepping successful to assistance a home manufacture is itself bad. But economical nationalism comes with problems, too: unfair competition, corruption, xenophobia, turning distant commercialized allies, etc. Biden volition surely beryllium challenged from some sides connected these issues.

I find it ironic that aft years of criticizing the Chinese attack of processing home tech industries, the US—under some Trump and Biden—is besides learning from China. But to beryllium fair, the champion mode to nutrient tech advancement is apt halfway betwixt overreaching authorities interventions and an unregulated escaped market. It volition beryllium absorbing to spot however the US handles that equilibrium arsenic compared with its rival.

Do you person a antithetic thought connected the Biden admin’s enforcement orders connected China? I’d emotion to perceive from you astatine zeyi@technologyreview.com.

Catch up with China

1. A car clang successful Guizhou killed 27 radical being transported to a covid quarantine facility. It sparked wide outrage online astir China’s ongoing zero-covid policy. (CNN)

2. Even though idiosyncratic Chinese users person been blocked from Twitter, section governments are paying for tourism ads there—and they person go a fast-growing root of gross for the platform. (Reuters $)

3. Brick-and-mortar store owners successful Mexico are reselling the Shein apparel they bought online and making a fortune. (Rest of World)

4. 3,470 Chinese spot companies unopen down successful 2021, much than successful immoderate different year. (South China Morning Post $)

• Callback to my communicative from August: The epoch of unlimited semiconductor subsidies, which gave emergence to corruption and unprofitable businesses, could soon extremity successful China. (MIT Technology Review)

5. There’s an incredibly detailed, eye-popping communicative astir a Chinese spy who tried to bargain commercialized secrets from GE. The details travel partially from the spy’s ain diary that helium backed up successful iCloud. 🤦‍♂️ (Bloomberg $)

6. China is revising its 2017 cybersecurity law; changes see a tenfold summation to immoderate fiscal penalties for work providers that neglect to instrumentality capable information measures. (Reuters $) 

7. Chinese constabulary successful the Tibet Autonomous Region person collected millions of DNA samples implicit the past six years. (Citizen Lab)

• The constabulary section bought DNA sequencer instrumentality from the Massachusetts-based institution Thermo Fisher. (The Intercept)

Lost successful Translation

There are large works of journalism successful Chinese-language media that often don’t scope readers extracurricular China. Each week, I’ll bring you 1 specified story. 

Recently 八点健闻, a Chinese-language wellness quality publication, reported connected the crunch successful getting a 9-valent HPV vaccine successful China. The lone specified vaccine presently successful usage astir the satellite is Gardasil 9, which was approved successful 2014 successful the US but not until 2018 successful China. There’s been a proviso bottleneck since. In bid to unafraid a Gardasil 9 shot, patients person been traveling to Hong Kong, wherever it’s much accessible, oregon looking for alternate options similar local-government-run vaccine lotteries oregon costly backstage wellness services. Still, there’s a wide feeling of anxiousness astir getting the astir almighty HPV vaccine earlier it’s excessively late. The unreserved was exacerbated past month, erstwhile Gardasil 9 expanded its eligibility property scope successful China from 16–26 to 9–45.

One More Thing

Have you ever wanted a enactment crippled that tests your cognition of Chinese authorities and the ruling party? Just me? Well, there’s present a committee crippled for that. You triumph by earning scores—“幸福指数/Happiness points”—by paying the in-game currency “正能量/positive energy” and answering trivia questions astir China’s enactment and authorities history. There goes my Friday night.