Daily Management Review

Pentagon Warns That Flying Under The Radar Are Chinese Tech Investment In US


04/08/2017




A Pentagon report says that the United States government needs tougher controls to stem the transfer of some of America's most promising technologies because China is investing in Silicon Valley start-ups with military applications at a very rapid rate.
 
The report contends that China has taken advantage of the few restrictions on investing in American start-ups that focus on artificial intelligence, self-driving vehicles and robotics. For the purpose of pushing the country ahead in its strategic competition with the United States Beijing is encouraging its companies to invest, the report says.
 
Intended to dodge the oversight of a government agency, the Committee on Foreign Investment in the United States, known as Cfius, Chinese companies have made under-the-radar investments in some instances.
 
"If we allow China access to these same technologies concurrently, then not only may we lose our technological superiority, but we may even be facilitating China's technological superiority," the report says.
 
After a decades-long campaign by Beijing to close the technological gap between the two countries, China is looming in America's rearview mirror, such concerns show. The Pentagon report underlines the national security threat although the race is often cast in an economic light.
 
To build its own technological know-how, China has combined domestic subsidies with aggressive investment overseas in recent years.
 
Concerns from American and European business groups have bene raised by a government plan, "Made in China 2025," that proposes lavishing state funds on 10 important industries. Meanwhile, Beijing-backed investment aimed at acquiring new microchip knowledge has shaken the global semiconductor industry.
 
While it is unclear whether the topic has come up in meetings with President Xi Jinping of China that began on Thursday and continue Friday, U.S. President Trump has said he would resist Chinese trade tactics that put American companies at a disadvantage.
 
The lines between what was available to military consumers and civilian ones have been blurred by increasingly sophisticated commercial technology, the report found. Often working on products as sophisticated as anything the military has at its disposal are start-ups and leading internet companies like Facebook and Google.
 
 
"For example, V.R. for gaming is at a similar level of sophistication as the V.R. used in simulators for our armed forces," the report said, referring to virtual reality. "Facial recognition and image detection for social networking and online shopping has real application in tracking terrorists or other threats to national security," the report continued, which added that much of the autonomous vehicle and drone technology of today was developed using grants from the Pentagon.
 
Ford and the Chinese internet giant Baidu invested a $150 million jointly last summer in Velodyne.  The round represented its first outside investment, a Velodyne spokeswoman said.
 
"The company obtained all necessary government clearances relating to the investment as part of the funding process," the spokeswoman wrote in an email. "Notably, the investments were designed to make advanced LiDAR sensors more accessible to the broader industry, resulting in the development of safer, less expensive autonomous vehicles."
 
(Source:www.cnbc.com) 






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