China’s planned technology security management system could strengthen control on exports including high-end intellectual property, according to state media commentary.
The mechanism will be designed to “more effectively forestall and defuse national security risks”, the state-run Xinhua News Agency reported over the weekend. China’s top economic planner, the National Development and Reform Commission, has been tasked with drawing up the list and details of the plan, of which no details have been released.
The development comes after the US slapped a ban on Huawei, barring the Chinese giant from buying American technology and prompting the Shenzhen-based company to re-engineer US components from its products. In response, China said it will establish a list of so-called “unreliable” entities it says damage the interests of domestic companies, a sweeping order that could potentially affect thousands of foreign firms.
“China is capable of impacting the US supply chain through certain technical controls,” the Global Times, a tabloid published by the official People’s Daily, wrote in an op-ed published on Sunday. People’s Daily hinted in a separate editorial that aerospace technologies, high-speed railway equipment, mobile payment and 5G mobile communications could be the sectors subjected to restrictions.
Neither newspaper identified specific products China may decide to withhold. While an American ban on software and component exports to Huawei threatens the company’s very survival, it’s unclear how the US supply chain might be similarly disrupted.
“This management mechanism will provide China more legal leverage to protect national security,” said Charlie Dai, a principal analyst at Forrester Research. “Technologies like rare-earth processing, high-speed rail equipment and 5G can be potential technologies on the list.”
Beijing has repeatedly threatened to restrict exports of rare earths to the US, and people familiar have said the government has readied a plan to do so. China “leads the global field in its mastery of rare-earth refining technology”, the Global Times editorial said. — (c) 2019 Bloomberg LP
