China’s rampant theft of intellectual property is real

We need to think bigger, perhaps, and better as well. Because I am convinced that we can cooperate with China, as this administration has shown with what I hope will be in the next several hours the signing of a phase one trade deal. That’s a fantastic thing, I believe, for the United States. We’d welcome more of it.

But we also have to honestly confront tough questions about the national security consequences of doing business in a country controlled by the Chinese Communist Party. That especially goes for companies that develop some of our most sensitive technology, as many do here in this region.

It’s astonishing to think of the earth-shaking innovations like Twitter. You should all know that freedom underpins every bit of this great work: the freedom to think and communicate what each of us wants; the freedom to innovate and protect your own property, your inventions; the freedom to compete; the freedom from cross-border sales taxes — until just a few years ago.

Even if you fail, as many of us have, our system is geared to help you to get up and get after it again.

And this system, our idea of capitalism with free markets, has produced the greatest wealth and prosperity that the world has ever seen, and technology has played a huge role in that, and we all know it will continue to do so.

It is, when I travel the world, very clear that only in America could the titans of tech have risen from the garages and dorms of Palo Alto and Mountain View, and made and continue to make American freedoms possible.

Yet our companies do business in many parts of the world that don’t enjoy these very freedoms. China presents unique challenges, especially to your industry.

China’s rampant theft of intellectual property is real, and that it’s not just a problem for the particular company affected.

Under Xi Jinping, the CCP has prioritised something called ‘military-civil fusion’. It’s a technical term but a very simple idea. Under the Chinese law, Chinese companies and researchers must — I repeat, must — under penalty of law, share technology with the Chinese military.

The goal is to ensure that the People’s Liberation Army has military dominance. And the PLA’s core mission is to sustain the Chinese Communist Party’s grip on power — that same Chinese Communist Party that has led China in an increasingly authoritarian direction and one that is increasingly repressive as well. It runs completely at odds with the tolerant views that are held here in this area and all across America.

So, so even if the Chinese Communist Party gives assurances about your technology being confined to peaceful uses, you should know there is enormous risk, risk to America’s national security as well.

This is a real problem, given that many of our most innovative companies have formed partnerships with the Chinese Government and companies that are linked to it.

Last year, a friend, the former Chairman of the Joint Chiefs of Staff, General Dunford, said as following in testimony before the United States Senate. He said, “The work that Google is doing in China is indirectly benefitting the Chinese military.”

I’m not here to demand that you get out of China. In fact, it’s just the opposite. We want American companies to get rich doing business there. We want you to grow jobs here in America and build your companies successfully. We want to create conditions so that you can do so on a level playing field, in the spirit of respect between our two nations. Indeed, that’s the whole point of President Donald Trump’s trade talks.

At the same time, we need to make sure that our companies don’t do deals that strengthen a competitor’s military or tighten the regime’s grip of repression in parts of that country. We need to make sure American technology doesn’t power a truly Orwellian surveillance state. We need to make sure American principles aren’t sacrificed for prosperity.

President Trump has taken action to confront China’s theft and predatory economic practices. He’s demanding respect and reciprocity. It’s happening this very week when we sign the first part of a trade deal. He knows that economic security is, in fact, at the core of my mission set: to provide national security, to protect each and every one of you.

And we’ve put export controls on parts that go into the CCP’s nationwide surveillance machine. We’ve applied much greater scrutiny to technology exports that could have military use. We’ve dramatically reduced the nuclear technology we share with China, even for nominally peaceful purposes.

Our government agencies are cooperating in new ways to stop the Chinese military from using our own innovation against us. And we’re putting our allies and partners on notice about the massive security and privacy risks connected to letting Huawei construct their 5G networks inside of their countries.

And too, protecting America’s innovating – innovative capacity is at the center of what we’re trying to do in these talks. We’ll do our part in the government and we’ll keep ramping up our enforcement. You should know that we’re on your side. But defending freedom and national security isn’t just the government’s job; it’s one for each and every and citizen.

There’s hardly a community in the world that prioritises environmental, social, and governance principles more than does Silicon Valley.

Every company is different. I know you all will figure it out. I know that because you are visionaries who have transformed the world. Your companies are built on the ethos of bringing good things to your fellow man, and I know you’ll get it right. As America’s Secretary of State, I’m hoping you’ll do that soon. America is facing a challenge from China that demands every fibre of your innovative skill and your innovative spirit.

Our government agencies are cooperating in new ways to stop the Chinese military from using our own innovation against us.