US Money Boosted Chinese Military Buildup: Report | China In Focus

welcome to China in Focus I'm Tiffany Meyer our top story at least $3 billion dollar in US capital allegedly funneled to advance China's military buildup where did the money go announcing of Chinese batteries under pressure from lawmakers a US Energy firm is withdrawing products made by tech company catl this has concern mounts over the company's ties to the Chinese regime a group of lawmakers take aim at Tik tok's Chinese parent company pushing added to the US export control list and Safeguard American data and millions of dollars in false eyelashes from North Korea pouring into Western markets but the beauty products are labeled made in China an investigation delves [Music] in over three billion dollar of American Funds allegedly poured into advancing China's military capabilities that $3 billion all from just five American Venture Capital firms lawmakers say the actual money flow is likely to be billions more the house select China committee is pushing to cut off the investment flow to the tech sector its chairman Congressman Mike Gallagher said quote we can't afford to keep funding our own destruction the committee published a new report Thursday it said five us Venture Capital firms invested at least $3 billion into certain Chinese Ai and semiconductor companies and that some of those companies have contracts with the Chinese military and help the regime commit human rights abuses the American firms include Sequoia Capital Qualcomm Walden International ggv capital and GSR Ventures Ai and semiconductors hold critical military use for the globe's top top superpowers America now leads that race but Beijing is trying to take the top spot the report noted the American Investments were made years ago but proved critical to their early success some of them went on to become China's largest Ai and semiconductor companies and many are now sitting on Washington's Black List American Venture Capital investments into China have seen a sharp decline in recent years the total hit a little over1 billion in 2010 then shot up to a peak of over 19 billion in 2018 then plummeted to 1.3 billion in 2022 last year President Biden issued an executive order limiting us investment in some Chinese semiconductor and AI companies fast forward to today the house China committee is calling for even more restrictions on us investments into China of the company's highlighted in the report sequa Capital told the Wall Street Journal that its China arm managed most of the company's investments in the country the top investment firm separated its businesses in China and America last year admid Rising tensions qualcom said it only invested a small amount into China joining us now to discuss more on Why Us firms are investing heavily in China is Michael sakur founder and director of the Socrates project from the Reagan White House Michael sakur thank you so much for joining us great to have you back on the show uh well thank you very much it's great to be here now a house panel recently investigated five us Venture Capital firms as case studies and the lawmakers found that these firms had invested $3 billion dollar into blacklisted Chinese companies that are supporting beijing's human rights abuses technology and Military what's driving these us investments into China well returns and it's more than just a quick return Xi Jinping has repeatedly said that techn technology is the driver and the strength of a country he knows it they're pushing that that means that their drive to be dominate in technology is not a campaign promise it's not going to be overridden any moment by another change Administration so if we look at Financial aspect that's just a very small piece of the overall Chinese National technology strategy money is where the power comes from which is false it is technology ology which ping and China knows but what we will end up doing is giving a financial response to this which means just trying to block it the problem is that amounts to a very fragmented defensive point solution which is going up against a unified National technology strategy on that note what is the type of response that the US needs to take how would that look like in practice it is not industrial policy like people would think but rather it is how does the country work as a team to exploit technology more effective than the competition which means decisions are made at the individual organization State and National level that's what the soc project which I directed was designed to accomplish and which President Reagan blessed off on and was supposed to be implemented to say to solve this exact problem now this does come as there is a lot of talks of either decoupling or drisking from China and other adversaries with the findings of this type of a rapport how do you see that impacting us companies is this a cautionary tale to them is this going to help decoupling or maybe not well this idea of decoupling is just naive okay and the classic I mean it's a black and white it's a black and white argument we're either going to decouple or we're going to get in bed with them so strongly they can't they don't want to hurt us both of them are very naive first of all we can't decouple from China China is integrated throughout the world and even if we say we're not going to directly work with them they just work through other paths so what we must do is understand their National technology strategy what technologies they need how they're exploiting them and outmaneuver them it's a massive game of Technology exploitation chess played out worldwide quite fascinating Michael S thank you so much for your time thank you us utility firm Duke Energy is planning to oust products made by Chinese battery company satl the dinking process is set to start with a green energy project at a US Marine Corps Base the move has been in the works for some time according to a Reuters report Duke Energy temporarily disconnected catl batteries from its solar panels at the same military base in December the decision comes as lawmakers and Security Experts warned that Chinese state-backed hackers are targeting critical us infrastructure including power grids and using those batteries could make America V more vulnerable lawmakers also sounded the alarm about the Chinese company's ties to the Chinese Communist Party aside from military uses Duke Energy confirmed with NTD that it's also looking to remove catl products from its civilian projects by 2027 adding it will sour from domestic suppliers instead in the past year lawmakers have been pushing the us to stay away from Chinese batteries this year's annual defense spending Bill bans the defense department from buying catl products starting in 2027 an effort to protect American data 15 lawmakers urging the Commerce Department to take action on Tik Tok Thursday they're asking the department to add Tik tok's Chinese parent company bite dance to the government's export control list and restrict its access to American software this comes after efforts to ban Tik Tok stalled in Congress Tik Tok has gained massive popularity in the US over 170 million Americans use the app but lawmakers are concerned that bite Dan could access data on its American users through Tik Tok under Chinese law Chinese companies must hand over user data if officials ask for it Tik Tok denies giving us data to the Chinese regime over 30 us states have banned Tik Tok from government issued devices largely due to security and data collection concerns some also accuse the app of pushing dangerous content toward children more from the Indo Pacific the United States and the Philippines are holding joint Naval drills in the South China Sea starting Friday the exercise marks the third round of South China Sea drills between the two countries in the past four months alongside growing Chinese aggression the US and Philippines are strengthening their ties both to counter China and protect peace in the region China claims almost the entire body of water as its own a 2016 International arbitration ruled that invalid vessels owned by the Philippines and neighboring countries face frequent harassment from Chinese Coast Guard ships there on top of that the Philippines recently ordered infrastructure and defense improvements in the Baton Province the area sits just over 120 mi from Taiwan the island nation's defense Ministry announced a decision on Tuesday two days later Beijing sent out a warning that the Philippines is quote playing with fire China sees Taiwan as a core interest and part of its territory the ruling Chinese Communist party has never governed the island a message from China to the West any country that stands in the way of beijing's actions to take control of Taiwan will face a heavy price the warning comes from the Chinese Embassy in Tokyo after the US concluded Maritime drills with allies Japan and Australia on Thursday the 8-day drills are known as the Keen Edge exercise held at Hawaiian and Japanese bases as for what sparked beijing's anger Japanese media reported that the three militaries set Beijing as the hypothetical enemy and that the operations mainly simulated protecting Taiwan from a potential Chinese Invasion Japanese media cited Anonymous government sources Beijing said Tokyo deny the report's accuracy nevertheless tensions around Taiwan are at a historical High Grant Nim is a retired US Marine Colonel and Senior researcher on Japan strategic operations shedding light on the purpose of the drill he said it's almost by definition directed at China in an email to American news source Stars and Stripes he underlined the drill as an expanded effort to protect Taiwan from potential Chinese attacks and pointed to the drills increased cyber and space space defense Powers as evidence of that goal millions of dollars in sales of North Korean false eyelashes marketed in beauty stores around the world as made in China these products helped drive a recovery in the secretive States exports last year take a look where are your false eyelashes really coming from despite the made in China label they may be coming from neighboring North Korea Reuters spoke to people working in the eyelash industry trade lawyer and experts on North Korea's economy who described a system in which china-based firms import semi-finish products from North Korea which are then completed and repackaged as Chinese the lashes are then exported from China and make their way to the West Japan and South Korea this system gives Kim JN own's regime a way to skirt International sanctions providing a vital source of foreign currency this is pingu China also known as the eyelash capital of the world Wang Tang Tang's family owns maniri a Pingo based eyelash Factory about 80% of eyelash factories here purchase or process false eyelash raw materials and semi-finish products from North Korea according to a 2023 estimate published by c a Chinese manufacturer of eyelash boxes maniri is one of them the quality of the North Korean products is much better than that of our domestic ones but the Del is just too slow North Korea has long been a major exporter of hair products like wigs and false lashes but exports tumbled during the covid-19 pandemic initially it was about the ships either they were detained or couldn't dock after being detained when they finally arrived in China they get held up again after pongyang reopened its borders in 2023 Chinese Customs data shows North Korea's exports to China more than doubled with wigs eyelashes and beards compromising nearly 60% of it in total these exports were worth around $167 million in 2023 up from $31 million in 2019 since 2006 the UN Security Council has tried to stall pyongyang's nuclear weapons program through sanctions that's restricted North Korea's ability to trade products like coals textiles and oil but there's no direct ban on hair products SO trading false eyelashes from North Korea doesn't necessarily violate international law according to three sanctions experts who spoke to Reuters the United States has separately expanded measures against North Korea which include sanctions on any company stocking or selling products who sales fund the Kim regime a restriction that also applies to non-american firms terms using the US dollar here's Shing Tong Chan a South Korean lawyer specializing in economic sanctions if you ignore the widely known fact and say it is all right to import the products and use them as they were labeled as made in China this can be a very risky attitude that can violate us sanctions soul-based businessman Johnny Lee Imports lashes which he says are made in North Korea and packaged in China when asked about the legal risks he said he wasn't selling sophisticated technology the North Korean workers are just trying to make a living there the money they make might go into developing missiles but only if the business is happening in a big scale the US state department and international experts estimate that North Korea seizes up to 90% of foreign income generated by its citizens many of whom live in poverty that's all for today's China in focus on YouTube we're now sharing a shortened version of our program here after being demonetized for 3 years if you'd like to support us consider donating find us at donorbox.org chin in- Focus or subscribe to our partner platform epic TV where you can watch our full episodes here's what to look out for in our second half Republican presidential candidate Nikki Haley says India is playing it smart swinging its position between Moscow and Washington while giving the White House a warning us lawmaker Mike Gallagher calls the competition with communist China a struggle of souls he explains why in a recent speech and zooming in on Chinese back websites disguised as local news websites Our Guest as the Chinese regime is leveraging openness in US Society on his analysis after the break here on China in Focus thanks for watching China in Focus I'm Tiffany Meyer see you [Music] soon [Music]