118 HRES 697 IH: Expressing the sense of the House of Representatives relating to the Communist Party of China’s “Made In China 2025” Plan and publicly-known malign Communist Party of China’s actions supporting the goals of its “Made in China 2025” plan.
U.S. House of Representatives
2023-09-18
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
IV
118th CONGRESS
1st Session
H. RES. 697
IN THE HOUSE OF REPRESENTATIVES
September 18, 2023
Ms. Sherrill (for herself, Mr. Gallagher, and Mr. Krishnamoorthi) submitted the following resolution; which was referred to the Committee on Foreign Affairs
RESOLUTION
Expressing the sense of the House of Representatives relating to the Communist Party of China’s “Made In China 2025” Plan and publicly-known malign Communist Party of China’s actions supporting the goals of its “Made in China 2025” plan.
1.

The Communist Party of China’s “Made In China 2025” Plan
The House of Representatives finds the following:
(1)
In 2006, the Communist Party of China (in this resolution referred to as “CCP”) intensified its focus on science and technology innovation as a national goal under the “Medium- and Long-Term Plan for Science and Technology Development” and its 13th and 14th Five-Year Plans.
(2)
The “Made in China 2025” plan (in this resolution referred to as “MIC2025”), issued in 2015, under the 13th Five Year Plan is the CCP’s 10-year national science and technology industrial policy that seeks to vault China into global leadership in the research and manufacturing of advanced science and technology tools, applications, and products, while using a whole-of-society approach, deep government intervention, and market protections for the People’s Republic of China (in this resolution referred to as “PRC”) businesses in the select sectors.
(3)
MIC2025 prioritizes raising high bars to foreign market access, while increasing PRC investments in and government and business focus on proactively acquiring technology and knowledge abroad on these advanced science and technology areas:
(A)
Advanced information technology and telecommunications services.
(B)
Advanced machining and robotics.
(C)
Aerospace engineering and equipment.
(D)
Maritime infrastructure, equipment, and next generation vessels.
(E)
Advanced railway infrastructure.
(F)
Renewable energy products, batteries, and electric vehicles.
(G)
Advanced materials.
(H)
Innovative farming equipment, technology, and agriculture.
(I)
Biotechnology, pharmaceuticals, and advanced medical equipment.
(J)
Next generation electrical equipment.
(4)
MIC2025 sector development will further integrate emerging technologies, such as advance semiconductors, 3D printing, cloud computing, big-data analytics, quantum computing, artificial intelligence (AI), and new forms of energy.
(5)
The PRC’s leader Xi Jinping, who currently holds the role of State Chairman of the PRC, General Secretary of the Chinese Communist Party, and Chairman of the Central Military Commission, states that CCP plans to lessen the PRC’s reliance on foreign markets for goods and services by 2025 and a goal for at least seventy-percent self-sufficiency in MIC2025 areas by using foreign technology acquisitions and joint ventures to acquire, domestically produce, and then sell these goods abroad.
(6)
The PRC’s stated goal in its MIC2025 policy is to advance production in the PRC from products that are “Made in China” to those that are “Created in China”, using the underpinnings of MIC2025 to transform foreign innovations into a homegrown industrial base to promote scientific, technological, and manufacturing independence.
(7)
In 2021, the CCP’s Central Committee published a resolution on its self-made achievements over the course of the past century, stating that PRC “self-reliance in science and technology” and its “bolstered … creation, protection, and application of intellectual property rights” are key tenets of boosting the CCP’s position, while not including references to foreign trade or economic and commercial partnerships as a part of its advancement.
(8)
In November 2022, during the CCP’s Party Congress, the CCP noted again that science and technological innovation are core tenets of the PRC’s development and according to the PRC’s Ministry of Science and Technology, international collaborative science and technology efforts are ultimately focused on boosting the PRC’s security.
(9)
Importantly, that along with the MIC2025 plan, there is a policy of “dual-circulation”, both policies which are overseen by General Secretary Xi Jinping, that seek to transfer into the PRC the globe’s innovative technical ideas and products, produce them domestically for their own large population, and then sell them abroad to obtain growing shares of foreign markets, all the while protecting those domestic businesses from foreign competition.
(10)
To further support “dual-circulation” and speed its MIC2025 developments, the PRC uses officially sanctioned tools such as unfair government subsidies, state-sponsored talent acquisition programs, lax labor and environmental regulations, coerced foreign investments and acquisitions, direct state investments and policy direction, burdensome paperwork requirements for foreign firms, and forced transfers of intellectual property.
(11)
The CCP broadly uses a national concept of military-civil fusion to adapt and adopt civilian technologies—either domestically produced or taken from abroad—to boost its military capabilities.
(12)
The CCP has over the past few years and especially in 2023, broadened and deepened the scope of its counterintelligence and data security laws, along with the use of these laws against businesses from other countries.
(13)
MIC2025 is rapidly coming to a close, and the next steps include a CCP desire to dominate international standard setting by 2035 and be the global leader in technological innovation, manufacturing, industrial production, and military capabilities by 2049, supported by its 14th Five Year Plan and its National Medium- to Long-Term Science and Technology Development Plan. These plans’ intentions focus on basic science, domestication of critical commercial areas and getting the PRC to the forefront of “this century's critical technologies”.
2.

Publicly-known malign CCP actions supporting its MIC2025 goals
The House of Representatives finds the following:
(1)
In March 2023, the PRC Commerce Minister stated that 2023 would be a year of “Invest[ing] in China”, in front of global business executives, stating the PRC sought to boost investments in its manufacturing and high-tech sectors and that the PRC would reduce restrictions on foreign firms. However, the government took immediate actions to the contrary.
(2)
In April 2023, the National People’s Congress passed an updated and newly expanded counterespionage law stating that any, “attempts to illegally obtain or share state secrets or other data, materials, or items related to national security or national interests, which are carried out by or for foreign elements other than an espionage organization …” is punishable, without defining “national security”, “national interests”, or organizations of concern, while reiterating the policy that all aspects of society are to collect, report, and defend against any transgressions against the government.
(3)
In 2023, PRC authorities raided global consulting firms Bain & Company, Capvision, and Mintz Group on the grounds of collecting and assessing PRC business data, which have been a routine part of these companies’ business operations.
(4)
General Secretary Xi Jinping has overseen an expansive growth in national security laws that are loosely defined and nebulously enforced with no legal recourse and requiring mandatory cooperation. These laws include the new Counterespionage Law, the National Security Law, the Foreign NGO Management Law, the National Intelligence Law, the Hong Kong National Security Law, and the Data Security Law.
(5)
In 2023, PRC regulators put on notice United States semiconductor company Micron Technologies by embarking on a surprise investigation without claiming any vulnerabilities in Micron's products and without concrete evidence that PRC regulators needed to “secur[e] the information of infrastructure of [China’s] supply chain”, ostensibly for national security reasons.
(6)
In 2023, the PRC's State Administration for Market Regulation reportedly slowed and denied its review process slowed its review process of United States global acquisitions and mergers, while requiring United States firms make available all of their products in the PRC that are available to other countries in a likely effort to dull United States export controls.
(7)
In 2022, the Department of Justice indicted the PRC firm Hytera Communications Corp for retro-engineering and stealing proprietary Motorola technology, which Hytera then sold abroad.
(8)
In 2021, a PRC front company named “LinkOcean” falsified its business information to steal and transfer to a PRC military university on the Department of Commerce’s Entity List over $100,000 in special underwater marine technologies.
(9)
In 2020, the PRC software technology firm Baidu used fake ad-clicking software to boost its ad revenues, while stealing user information and transmitting it back to the PRC.
(10)
Since 2020, the CCP has not fulfilled its obligations under the Phase One Trade Agreement between the United States and the PRC and continues to require the transfer of sensitive United States agricultural company knowledge to PRC firms.
(11)
In 2019, United States firm Akhan Semiconductor’s proprietary glass was stolen by PRC telecommunications firm Huawei, who attempted to retro-engineer it in violation of United States export control law.
(12)
In 2018, United States wind energy firm ASMC, after signing a sales deal with the PRC firm Sinovel Wind Group Co., Ltd., had its proprietary intellectual property stolen by Sinovel, who then manufactured ASMC’s products and sold the products in the United States.
(13)
In 2017, PRC cyber actors were caught widely illicitly collecting private business information on sectors across the MIC2025 portfolio.
(14)
In 2016, a PRC seed company illicitly acquired and intended to smuggle proprietary seeds from Iowa to the PRC, while to this day the PRC agricultural seed market remains blocked from foreign competition.
(15)
Throughout the 2020s, PRC state-sanctioned cyber actor “APT 41” conducted operations in line with MIC2025, stealing at least hundreds of billions of dollars worth of intellectual property from multinational corporations, much of which was emerging technology or not yet invented products.
(16)
According to a Center for Strategic and International Studies analysis of publicly known PRC espionage cases, which vastly outnumber any other foreign state, almost half of the perpetrators were military affiliates, almost half used cyber means to steal data, and over half sought to collect commercial information.
(17)
The PRC’s Tax Bureau previously ordered United States companies doing business in the PRC to use software purposefully loaded with malicious malware.
(18)
PRC “Talent Programs” have been used to select certain well-placed individuals to target certain United States research sectors to compromise intellectual property, tarnishing the sanctity of open and transparent norms of international research, international academic collaboration, and America's vibrant and vital foreign student researcher population.
(19)
The China Scholarship Council, which facilitates high performing PRC students studying abroad and foreign students to study in the PRC, has been found to require students sign Council contracts that require reporting on their work to PRC officials and limitations on students’ academic freedom while abroad.
(20)
The CCP allows forced labor, low environmental standards, mandated overproduction of products, and minimal worker safeguards, all of which act as non-monetary subsidies to cheapen products from the PRC.
(21)
Since General Secretary Xi Jinping assumed power, he re-asserted the role of state-owned enterprises in the economy and increased the purchases of shares in private PRC businesses.
(22)
The Department of Commerce, because of continued PRC government intervention into important sectors of the PRC economy, continues to certify that the PRC remains a non-market economy, alongside the Republic of Armenia, the Republic of Azerbaijan, the Republic of Belarus, Georgia, the Kyrgyz Republic, the Republic of Moldova, the Russian Federation, the Republic of Tajikistan, Turkmenistan, the Republic of Uzbekistan, and the Socialist Republic of Vietnam.
(23)
Upon widespread public acknowledgment and initial United States action to confront MIC2025, the CCP still abides by, but no longer publicly acknowledges MIC2025 or the detailed plans, intentions, and activities to accomplish its 14th Five Year Plan or long-term science and technology goals.
3.

Sense of the House of Representatives
It is the sense of the House of Representatives that—
(1)
the United States finds itself in not only a security and diplomatic competition, but one heavily based upon economic and commercial competition;
(2)
the CCP seeks to dominate the sectors in MIC2025 through unfair trade practices, such as forced labor, low environmental standards, illegal subsidies, and stolen foreign research and intellectual property, and then create and recreate the products in the PRC often to be sold abroad at cheaper-than-market rates, with the ultimate goal being to undercut, if not bankrupt, United States businesses and stifle United States manufacturing and investments in critical future technologies;
(3)
all United States businesses, research institutions, and United States Federal entities involved in cutting edge research and design—no matter their size, funding, or where they are located—are MIC2025 targets for CCP disruption, intelligence collection, intellectual property theft, unfair competitive practices, and commercial coercion;
(4)
United States science and technology firms should prepare themselves for growing unfair trade practices and continued theft of intellectual property, particularly as Xi Jinping’s tenure continues;
(5)
United States public, private, and non-profit collaboration will drive United States innovation and must do so with speed and purpose, as this era of strategic competition will be won by close, coordinated, and collaborative work between the United States public, private, and non-profit sectors and strategic partners abroad;
(6)
United States businesses, non-profits, academia, and Federal entities should review their security practices to protect their buildings, technology, products, proprietary knowledge, and personnel from all undue foreign interference and espionage, including instituting thorough screenings and reviews for business or research collaborations with countries and entities that are named in sanctions or export control documents or are known to use illicit third party entities, such as “shell companies”, to subvert import restrictions or obfuscate dual-use military interests in seemingly benign civilian research efforts;
(7)
United States businesses, non-profits, academia, and Federal entities involved in MIC2025 areas should review and invest in Federal and State guidelines on cybersecurity practices and tools, research security standards, and counterintelligence risk postures;
(8)
every United States Government agency and department should orient their internal resources and postures to prepare for an era of strategic competition with the CCP, which will affect security, diplomatic, economic, and commercial factors;
(9)
Federal entities should also seek to boost outreach to the private, academic, and non-profits sectors to find new ways to partner in science and technical efforts, alongside new ways to protect United States innovation;
(10)
United States Government agencies and departments should review their regulations and processes to ensure that internal rulemaking does not unnecessarily slow the United States ability to compete with the CCP and that it protects United States ingenuity and commercial products, while keeping pace with the rate of scientific, technological, manufacturing, and commercial advancements;
(11)
the Department of Commerce finds itself at the frontline of global strategic competition;
(12)
Congress should support the Department of Commerce's efforts at home and abroad while conducting rigorous oversight to ensure the Department is prioritizing the long-term interest of the national security, economic security, and well-being of the United States;
(13)
Federal entities should support United States private and research institutions organizations that seek to diversify their supply chains, increase their understanding of the level of PRC-produced content in their supply chains, or extend trade relationships with new Pacific partners;
(14)
United States treaty allies and non-treaty partners have a tremendous part to play in strategic competition and the United States Government should seek to bolster diplomatic and commercial relationships with these partners;
(15)
the United States desires a stable and fair playing field in its commercial relationships abroad, with reciprocal access and mutual benefits, and the United States values international research and development relationships based upon trust and goodwill; and
(16)
opposes the above-mentioned unfair, aggressive actions and policies of the CCP and supports the people of the PRC in creating an economy that is open to honest global partnership, free from malign intent, and aligns with the norms of modern global trade.