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A Department of Defense report found that China is exploiting federal programs to steal technology, with the report stating that “China, not the U.S., is the ultimate beneficiary of DoD and other [U. S. Government] research investments,” according to a U.S. senator.
Sen. Joni Ernst (R-IA), who reviewed the report but said she was not permitted to share it, said Wednesday that American companies receiving taxpayer funding from the Department of Defense and other agencies to develop technology “are recruited by China to continue their work at institutions associated with People’s Liberation Army. The U.S. company is then dissolved and the research and intellectual property paid for U.S. tax dollars is transferred to a subsidiary in China.”
“Just like that, American-made ingenuity is shipped overseas to our leading global adversary … and we, the America taxpayers, are funding it! This isn’t just another case of intellectual property theft. This ongoing scheme has national and economic security implications according to the Pentagon,” Ernst — who sits on the Senate committees on armed services and small business — said in a statement shared with The Daily Wire.
In one case, a researcher and co-founders of an American company received four grants to develop space and drone technology. Then they were recruited by the Chinese government, dissolved their American company, and now work for institutions tied to the Communist power’s defense agency, Ernst said.
Tens of millions of tax dollars in similar grants funded research that ultimately wound up in China’s hands thanks to “double-crossing companies,” she said.
The report said the grantees were exploiting the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, according to Ernst. The senator introduced a bill to modify the programs that passed the Senate unanimously, and is slated to be taken up by the House this week.
The bill ties a reauthorization of finding for the two programs to a requirement that agencies involved conduct a risk assessment of grant applicants to detect ties to China, North Korea, Russia, Iran, “or any other country determined to be a country of concern by the Secretary of State.” It also requires funding applicants to disclose “individuals of the small business concern who are a party to any foreign talent recruitment program of any foreign country of concern, including the People’s Republic of China.”
“This has to stop right now,” Ernst said.
China has taken numerous steps to infiltrate the U.S. brain trust, at times with unwitting assistance from Americans. More than 100 U.S. universities failed to disclose donations from China, despite requirements. In 2019, Senate Republicans published a detailed investigation of how China used so-called Confucius Institutes within U.S. colleges to cultivate relationships and push government propaganda, while denying the U.S. the ability to do similar on Chinese campuses.
In October 2019, Linda Thomas-Greenfield, who would later be nominated by President Joe Biden as ambassador to the United Nations, was paid to speak an event in honor of Savannah State University’s Confucius Institute, and praised China in her speech. Soon after taking office, President Biden reportedly cancelled a plan to more closely track Confucius Institutes.