U.S. Panel Warns China Tech Prowess Threatens U.S. Security

By Kate O’Keeffe

Updated Nov. 14, 2018 12:05 a.m. ET

Report finds China’s dominance of networking-equipment manufacturing threatens 5G wireless infrastructure

WASHINGTON—A commission of security and economic experts convened by Congress warned that China’s technology-manufacturing strength threatens U.S. national security and advised U.S. government agencies to be mindful of Chinese attempts to compromise government systems.

In a new report, the U.S.-China Economic and Security Review Commission found Chinese dominance of networking-equipment manufacturing threatens the security of U.S. fifth-generation, or 5G, wireless infrastructure. The panel cited Chinese telecommunications giants Huawei Technologies Co. and ZTE Corp. in particular.

In addition, China’s position as the world’s largest manufacturer of internet-connected household devices creates “numerous points of vulnerability for intelligence collection, cyberattacks, industrial control, or censorship,” said the panel, which includes appointees by Senate and House leaders of both parties.

Beijing has denied interfering in U.S. affairs and says much of U.S. policy toward China is an inappropriate attempt to contain its rise.

While many policy makers historically considered the commission’s recommendations to be aggressive, they are increasingly being viewed as mainstream as U.S. officials’ attitudes toward Beijing harden.

Among the commission’s other recommendations:

· Congress should require the White House Office of Management and Budget to ensure all government agencies address supply-chain vulnerabilities stemming from China, including potential cyber, operations, physical, information and data-security issues.

· Congress should direct the National Telecommunications and Information Administration and Federal Communications Commission to ensure 5G technology is rapidly and securely deployed in the U.S. “with a particular focus on the threat posed by equipment and services designed or manufactured in China.”

· Congress should direct the Commerce Department to reassess whether U.S. export control policy for dual-use technology should continue to consider Hong Kong—where controls are more relaxed—and mainland China as separate customs areas, given Beijing’s continued erosion of Hong Kong’s autonomy. The report cites Beijing’s aggressive crackdown on free speech in Hong Kong as well as its “direct involvement” in the Hong Kong government’s rejection of a U.S. fugitive-surrender request, among other issues.

· Congress should have the U.S. Departments of Defense and Homeland Security study the implications of China’s Central Military Commission’s 2018 assumption of direct control over the China Coast Guard. The departments should analyze China’s use of the coast guard as a “coercive tool” in disputed waters, and determine how the change could affect interactions with the U.S. Navy and Coast Guard.

· Congress should ask the Justice Department to look into utilizing the little-known U.S. “Conspiracy Against Rights” law to prosecute Chinese Communist Party affiliates who “threaten, coerce, or otherwise intimidate U.S. residents.”

The report also contains a section of recommendations on countering potential security and economic issues posed by Beijing’s Belt and Road Initiative, a global development plan that seeks to expand Chinese influence across Asia, the Middle East, Africa, and Europe.

Write to Kate O’Keeffe at kathryn.okeeffe@wsj.com

Appeared in the November 14, 2018, print edition as 'China’s Tech Drive Draws New Criticism.'