Can Strategic Trade Nominee Lead Crucial Agency to Compete with China?

President Joe Biden’s appointment of Alan Estevez to lead the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) is a critical and timely move as U.S.-China tensions escalate. Once confirmed by the Senate, Mr. Estevez will inherit the tall order of managing strategic trade controls, a critical policy lever to preserve the United States’ position as a global technology leader. His effectiveness will depend on how he balances industry interests in profits from selling to Chinese companies against national security implications. 

Furthermore, President Biden's appointment indicates that strategic security is his preeminent concern and, accordingly, he will direct the BIS Under Secretary to take bold actions when prudent – including the use of export controls and the Entity List.

However, Mr. Estevez has little public record discussing the threat of China’s military-civil fusion (MCF) strategy, which blurs the line between the country’s private sector, government and military, and requires civilians and businesses to support the state’s intelligence operations. The Senate Banking Committee – responsible for his confirmation – must use his confirmation hearing to draw out and better understand his point of view. 

Why are these actions relevant to BIS? 

BIS is charged with identifying technologies that could pose an economic or national security threat to the United States and implementing restrictions to ensure they do not reach adversaries. When computer code and components of a smartphone can be weaponized against U.S. interests, that order becomes especially important. 

Once a relatively unknown government agency, BIS’ responsibility of enforcing strategic export controls on sensitive technologies has elevated the office to a more prominent role, especially as U.S.-China relations have grown increasingly tense. China has made clear its intentions to dominate global technology markets, and it has sought to bolster its capabilities by stealing U.S.-born technology, both illicitly and by acquiring “dual-use technologies,” which have both civilian and military applications.  

These dual-use products pose a particular challenge to U.S. policymakers. With industry seeing significant profits from Chinese companies, this economic success has come into conflict with our national security. China's MCF strategy only compounds the BIS' job of controlling sensitive technologies. 

It is well established that the PRC uses state-operated entities to acquire sensitive technology, which is then siphoned off for military end use. In recent years, more than 350 Chinese corporations have been added to the U.S. Entity List—a federal blacklist that prevents U.S. companies from selling items to designees without a hard-to-get license. Most are included on the list because of known ties to China’s government and military.

Mr. Estevez's nomination follows an executive order issued in February, which calls for an immediate and year-long review of supply chain security. The directive responds to mounting concerns that China's growing production capabilities could create vulnerabilities for disruptions against key U.S. industries, like semiconductors.

“We need to stop playing catch up after the supply chain crisis hits,” President Biden said upon signing the order. “We need to prevent the supply chain crisis from hitting in the first place.” 

This nomination comes at a pivotal time as U.S.-China relations continue to escalate. The United States must take definitive action to bolster competition at home, build strategic partnerships with our allies and create a reliable framework for stopping the flow of sensitive information to our adversaries. Mr. Estevez's appointment to head the BIS is a signal the administration is up to the job.

Dr. Roslyn Layton is co-founder of ChinaTechThreat.com and an international technology policy researcher at Aalborg University.