Chinese export rules make collaboration riskier, researchers warned

As European universities weigh China collaborations in a darkening geopolitical environment, they also need to worry about whether Beijing’s increasingly tough export control rules could deny Europeans access to jointly developed technology, a think tank has warned in a new analysis.

The Berlin-based Mercator Institute for China Studies (Merics) has raised the alarm that China has an increasingly sprawling set of tools to stop technology flowing out of its borders, as the country moves from a follower to a global innovation leader.

Although not yet extensively deployed, these measures – including export controls on civilian, not just military, technology – could be used by Beijing to prevent strategic knowhow leaving the country, including the results of joint research collaborations.

For any technology seen as strategic, or where China has a competitive edge, “you're at risk of being impaired in your ability to access your research and to actually get the research you've done with or in China out of that country,” said Francois Chimits, a senior economist at Merics.

“Even if it's outside China, [Beijing] might have the legal instrument to actually restrain your ability to freely use and share that information and those innovations,” said.

The Merics analysis, Keeping value chains at home: How China controls foreign access to technology and what it means for Europe, tracks a proliferation of Chinese measures, ranging from civilian technology export controls to restrictions on university leaders travelling abroad.

Not all of these are new, by any means. Many have been enshrined in law for decades, albeit some were recently updated. And so far, they haven’t been widely deployed. “There hasn't been so much disruption as you might have expected,” acknowledges Chimits.

But with China’s president Xi Jinping increasingly defining technological edge as a core part of national security and interest, this could change, and could leave researchers collaborating with China in a vulnerable position.

One flashpoint came last year, when China’s Ministry of Commerce drafted a ban on the export of technology needed to create solar panel ingots and wafers, a move widely seen as an attempt to shore up the country’s global dominance of photovoltaic manufacturing.

Beijing ultimately never went through with the ban. But, as Merics argues, China retains the power to stop even civilian technology flowing abroad with a “unique” system of civilian export controls. “This regime is increasingly deployed to establish and defend China’s supply chain dominance,” the think tank says.

China has also invoked these export controls in a bid to stop the US gaining access to TikTok’s recommendation algorithm, potentially stymying efforts to split the social media app off from its Chinese parent company ByteDance.

There are several other examples of export bans listed by the think tank. From 2020-2023, the Swedish battery maker Northvolt had its supply of artificial graphite from China stopped, yet Chinese battery manufacturers based in Hungary enjoyed a continuous supply, Merics reports.

While it’s impossible to know for sure China’s true intent, the fear is that these kind of export bans are design to hinder European competitors, and could ensnare jointly developed technologies.

Tit for tat?

Of course, China might well argue that it is merely responding to the west’s own technological blockades.

The Dutch company ASML, for example, which makes world-leading semiconductor manufacturing machines, has blocked the export of some of its leading kit to China following US pressure.

Since 2022, Washington has explicitly tried to halt leading chip exports to China, and throttle Beijing’s domestic industry from filling the void by denying it leading technology, such as that of ASML.

However, US and European export controls are still rooted in concerns over military use, Chimits argues – advanced chips are essential for defence.

With China’s mooted ban on the export of solar technologies, and its broader civilian export controls, “this intention sometimes just does not exist” making its potential to stop technology leaving the country much broader.

But for researchers this “doesn't mean you shouldn't be doing technology or innovation with China,” Chimits said. “Probably, if you're in a completely civilian, non-strategic technology, from the Chinese perspective, [you have] zero worries.”

But the closer to a “strategic technology” as defined by Beijing, “you have to be careful, and you have to know the environment you're delving into.”

Europe responds

Merics isn’t advocating that the EU respond in kind, creating its own civilian export control regime. After all, this defence-related power still lies largely with member states.

Instead, the EU should collect better information about where China is at the cutting edge of certain technologies, so the bloc can better understand its vulnerabilities – and seek to develop supply chains that don’t rely on China.

As tensions with China have increased, the European Commission has indeed stepped up monitoring of its weaknesses, tracking trade dependencies in areas like rare earth elements, solar panels, chemicals and IT software.

However, this analysis tends to focus on imports and exports, rather than drilling down into which countries actually lead in particular technologies, argued Chimits.

You can’t see who leads the world in quantum computing by tracking trade data, he pointed out, not least because there are no trade statistics for quantum computers.

“When you only track the value chain […] you do not necessarily have a strong capacity to understand who's at the leading edge in some technology that might be a bit less commercial,” he said.

Instead, you need analysts who really understand the technologies in question to probe European strengths and weaknesses.

“We are still, as Europeans, quite, quite far away from understanding exactly or having the capacity to understand, which is a bit contrary to the Americans,” he said.

“The Americans have really invested in the Biden administration in their ability to understand technology innovation and who's at the leading age.”