By Tetsuro Kosaka, Nikkei senior staff writer
The U.S. government is toughening export and investment controls over the country’s cutting-edge technology in a bid to take a pre-emptive step in defending its future technological dominance in military and other fields. It is implementing steps to protect the outflow of technologies, including those that have yet to be commercialized, on the suspicion that Beijing is undertaking a high-profile initiative to steal American technology. But the introduction of tougher controls can become a double-edged sword for the U.S. as this may derail technological innovation.
China enforced the National Intelligence Law in 2017. To wrest global military dominance from the U.S., it has been rolling out a multi-faceted intelligence initiative to gain access to information through agents as well as telecommunication equipment. To combat this move, the U.S. enacted the National Defense Authorization Act for fiscal 2019 in August 2018.
The U.S. ban on Chinese telecommunication equipment is just one example. The latest version of the National Defense Authorization Act authorizes spending massive amounts of money to develop advanced hypersonic missiles, AI-driven weapons and other cutting-edge weapons. It also includes layers of measures to protect those advanced American technologies from being stolen by rival nations.
The introduction of tougher export and investment controls is designed to seal an “entrance as well as exit,” which China has used to access American technologies in the form of investment and then take them away in the form of exports. In addition to existing technologies that are critical to national security and already subject to export controls, the U.S. has included emerging technologies that are still in the development stage but are expected to come into use as well.
Emerging technologies had been exempt from the “list of export controls,” which U.S. authorities, such as the Department of Commerce, oversee, as technological innovation is taking shape at an accelerated pace. Areas that will be subject to export restrictions are still being considered, but once they are included in the list, those who plan to take these technologies out of the U.S. will be required to get a permit from the Department of Commerce. In addition, investments involving the purchase and lease of land adjacent to facilities owned by the U.S. government, including the military, are subject to control.
The National Defense Authorization Act also includes provisions that protect U.S. start-ups from falling prey to cyberattacks or from having their technology data stolen.
With the U.S. introducing a range of measures to stem the outflow of technology, the Japanese government is facing the need to take a similar legislative step. While the National Defense Authorization Act casts a careful eye on the purchase and lease of land near U.S. military facilities, it appears that foreign entities and individuals are ramping up the acquisition of land and buildings that can be used for monitoring activities in areas near the locations of the U.S. military’s and Japan’s Self-Defense Forces’ facilities.