Silicon Valley Fights Restrictions on Chinese Tech
By Tom Gara
- Reuters
By Amy Schatz
Business groups raised alarms Thursday about a provision in the recently enacted government spending bill, making it harder for some federal agencies to buy technology made in China.
The U.S. Chamber of Commerce and ten technology trade groups representing some of the large U.S. tech companies, including Hewlett-Packard Co. HPQ -1.48% andIntel Corp. INTC -0.92%, fired off a letter Thursday asking congressional leaders to ensure future spending bills don’t include the language.
The provision prohibits four federal agencies from purchasing certain tech equipment from China unless they obtain prior approval from the Federal Bureau of Investigation or other law enforcement agency after a cyber-security risk analysis. The affected agencies are NASA, the Justice Department, Commerce Department and National Science Foundation, and it applies to “information technology systems” produced or assembled in China.
The measure was included in last month’s bill funding government operations through September. Tech companies don’t want the language to be included in future spending bills or be expanded to cover other federal agencies. They’re worried an FBI review of tech products would hurt sales to government agencies.
“The requirement to assess every IT product purchase, absent any triggering threshold, will likely slow the federal acquisition process,” the business groups wrote in the letter. The Semiconductor Industry Association and Technology CEO Council were among the groups that signed the letter.
The White House did not immediately respond to a request for comment.
The last-minute addition of the language to the spending bill represents broader unease in Washington that Chinese telecommunications manufacturers increasingly supply vital network equipment here and U.S. computer systems are vulnerable to Chinese hackers.
Although the spending bill’s language appears targeted at purchases from Chinese manufacturers, U.S. tech companies worry it could also cover their subcontractors in China and routine purchases of laptops or other technology.
The bill directs the FBI to conduct a review of the purchase of an “information technology system” that is either “produced, manufactured, or assembles by one or more entities that are owned, directed or subsidized by the People’s Republic of China.” However it doesn’t define what an information technology system is or what technologies might be excluded from review.
Chinese officials have objected to the language. U.S. business groups worry China or other foreign countries could respond by requiring security reviews of their governments’ purchases of U.S.-made tech equipment.
The language, “creates a troubling precedent for others around the world,” said John Neuffer, senior vice president of global policy at the Information Technology Industry Council, which represents IBM Corp. IBM -0.90%, Lenovo and other hardware and software makers.
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