The extent of China’s support for Russia remains both a concern and a question for the United States. Last week, Secretary of State Antony Blinken warned Beijing against providing weapons to Moscow, but he suggested that China “almost certainly” has already been supplying Russia with “some non-lethal, dual-use type support”—ostensibly commercial products with military applications. The State Department subsequently declined to provide evidence or details, though the U.S. had recently sanctioned a Chinese satellite firm for providing imagery of Ukrainian territory including troop positions to a Kremlin-aligned militia.
Whether that’s what Blinken was referring to is unclear. He could, after all, just as easily be talking about shipments of aluminum oxide—a material used for both artificial hips and body armor—that have soared from China to Russia by more than 25 times from 2021 to 2022, according to the online data platform Observatory of Economic Complexity. Russian imports of Chinese semiconductor chips—crucial for both washing machines and tanks—have also risen over the past year.
In the new era of Great Power competition, what counts as “dual use” is complex—rendered even murkier by China’s policy of military-civil fusion, a distinct but related concept. Today, dual-use items can include chemicals, software, materials, lasers, thermal imaging devices, computer chips, drones, and CNC (computer numerical control) manufacturing machines, which are equally adept at churning out tea flasks or gun barrels.
Of course, the commercial companies of many countries have both civilian and military contracts and develop new technologies for both sectors. The Wassenaar Arrangement, a voluntary pact of 42 nations formally established in July 1996, attempts to lay out export controls for dual-use goods. (China is not a signatory.) Historically, there has been significant spillover. The Internet and GPS are two of the most famous examples of pervasive technology today spawned by the U.S. military.
In China, the state increasingly works hand-in-hand with its top firms to develop technologies with civil and military applications in concert. Those same firms producing dual-use technology have a global commercial reach, injecting significant complications for stemming the flow of military tech to U.S. adversaries like Vladimir Putin, as well as maintaining competitive and military advantage more broadly.
The enormous Chinese balloon—either a nefarious spying tool or innocent meteorological device, depending on whether you ask Washington or Beijing—shot down over the Atlantic just off the East Coast last month is a “quintessential example” of military-civil fusion, says Emily de La Bruyère, a senior visiting fellow at the Krach Institute for Tech Diplomacy at Purdue University. “It’s a non-traditional military tool that’s clearly being used for security purposes.”
China has had a policy of “military-civil integration” since the days of “Great Helmsman” Mao Zedong, though current strongman President Xi Jinping upgraded it to “fusion.” According to the State Department, China’s Military-Civil Fusion directive issued by Xi in 2017 aims “to enable the PRC to develop the most technologically advanced military in the world” through “the elimination of barriers between China’s civilian research and commercial sectors, and its military and defense industrial sectors.”
But the concept of “dual use” actually has roots in the U.S. In 1995, the Department of Defense unveiled its Defense Strategy for Affordable, Leading Edge Technology. The idea was to harness the best and brightest commercial innovators when and where the defense industry needed them, speeding up development cycles while keeping costs low during a time of squeezed budgets. This is because, while the government is a fantastic client for any company, the many years it takes to navigate compliance issues and other red tape can kill a start-up. By encouraging firms to develop commercial applications first, the intention was to widen the innovation pool for the Defense Department to work with. Today, the Pentagon’s top commercial partners include Boeing, Microsoft and Rolls-Royce.
However, tensions in the Defense Department’s relationship with tech firms eventually began to emerge. In 2018, more than 3,000 Google employees signed a petition to protest the company’s involvement in the Pentagon’s Project Maven, an artificial intelligence program to enhance the processing of drone imagery, which critics worried could eventually be used to improve strikes in the battlefield. “We believe that Google should not be in the business of war,” the letter said.
According to Skip Sanzeri, founder and COO of QuSecure, a post-quantum cybersecurity firm that works with the U.S. military and federal government, Silicon Valley investors began to cool on Defense contracts around this time. “A lot of them just said, ‘if you’re working on dual-use stuff, or you’re working on paramilitary stuff, we’re just not going to fund you.’” However, David Spirk, former chief data officer at the Pentagon who was involved in Project Maven, tells TIME that any chill was overblown. “I’ve honestly never had one company say, ‘I’m not going to work with the Department of Defense,’” he says.
In any case, after Google completed its Project Maven contract it chose not to renew. Had the Menlo Park behemoth been a Chinese firm, quitting wouldn’t have been an option.
“The difference in China’s approach is that it compels its commercial and civilian companies to also serve its strategic agenda,” says de La Bruyère. Article VII of China’s 2017 National Intelligence Law stipulates that “any organization or citizen shall support, assist and cooperate with state intelligence work.” Every Chinese company is also legally obliged to host internal Communist Party cells. “In a state-run economy like [China’s], there is not a clear delineation between the public sector and the private sector,” State Department spokesman Ned Price said Feb. 23.
A delicate balance
Military-civil fusion has myriad concerns beyond the development of dual-use technology. First, any Chinese company that partners with or invests in an American firm—or opens research laboratories in the U.S.—is potentially funneling acquired intellectual property to the Chinese military. Moreover, Chinese students who study sensitive technology at U.S. universities may on gaining employment at commercial enterprises back in their homeland be required to aid the nation’s armed forces.
Combating that is tricky. The U.S. has already restricted trade with Chinese companies that are involved in some way in the Chinese defense industrial complex and could expand current export controls against China, potentially in other areas of dual-use emerging technologies like quantum computing. In October, the Defense Department published a list of “Chinese military companies” that ranged from telecoms giant Huawei to drone maker DJI and security camera firm Hikvision. The U.S. has taken action against some of these companies, but persuading allies to impose bans too would entail significant costs while putting them at a high risk of coercive economic retaliation. Ultimately, many companies pivotal to Chinese military development are deeply intertwined with international supply chains.
When the balloon hullabaloo broke, for instance, U.S. intelligence sources immediately pointed the finger at Zhuzhou Rubber Research and Design Institute, a subsidiary of conglomerate ChemChina that makes 75% of high-altitude balloons deployed by the China Meteorological Administration, according to the nation’s state regulator. On Feb. 24, ChemChina—which was also named in the Defense Department’s October list—issued a statement that denied “any connection with the so-called and reported U.S. balloon incident.” Whether believable or not, it permitted a collective sigh of relief: afterall, ChemChina also owns biotech firm Syngenta—one of the world’s top suppliers of seeds, pesticides, and biofuel—and sanctioning it would have far-reaching consequences.
There is still some debate as to whether export restrictions are ultimately helpful, given the ease with which semiconductors have been rerouted to Russia via Hong Kong, Dubai and Central Asia. The aim of U.S. export controls related to semiconductors, for example, is to freeze the technology gap between China and the U.S. (and ensure that it only grows in America’s favor). Yet, some argue that such measures hurt the interests of American companies and those of its allies. Plus, given that in many cases there aren’t alternatives for many of these goods, getting buy-in from third party nations is extremely difficult.
“Critics also argue that these measures have been counter-productive,” says Meia Nouwens, a senior fellow for Chinese security and defense policy at the International Institute for Security Studies, “as they have led China to double down on its own domestic innovation by spurring a flurry of initiatives and funding.”
The best way to compete against China’s military-civil fusion may ultimately be to keep investing in emerging technologies, while fostering a society where the world’s brightest minds are keen to do their best work. According to a new report published Thursday by the Australian Strategic Policy Institute, China leads in 37 of 44 technologies including electric batteries, hypersonics, and advanced communications such as 5G and 6G. The U.S., meanwhile, was the leader in just the remaining seven technologies, including vaccines, quantum computing, and space launch systems.
As such, the priority must be to “incentivize, inspire, and support the innovation that exists in free and open markets,” U.S. National Cyber Director Chris Inglis tells TIME. “But, at the same time, not let those market forces be abused by those who would use different systems to put this open and free system at risk. It’s a delicate balance.”
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