Arms Control and International Security Papers 

Volume 11 Number 8 

May 22, 2020 

U.S. National Security 

Export Controls and 

Huawei: The Strategic 

Context in Three Framings 

by Christopher A. Ford 

The Arms Control and International Security Papers are produced by the Office of the Under Secretary of State for Arms Control 

and International Security in order to make U.S. State Department policy analysis available in an electronically-accessible 

format compatible with "social distancing" during the COVID-19 crisis. 
 

Arms Control and International Security Papers Volume I, Number 8 I May 22, 2020 

U.S. National Security Export Controls and Huawei: The Strategic Context in 

Three Framings 

U.S. National Security Export Controls and 

Huawei: The Strategic Context in Three Framings 

by Christopher A. Ford1 

In this latest addition to the AC/5 Papers, Assistant Secretary Ford discusses 

recent U.S. moves to restrict transfers of cutting-edge U.S. technology to the 

Chinese technology company Huawei, explaining these steps and placing them 

in the strategic context of a great power competition with the People's Republic 

of China (PRC) brought on by Beijing's geopolitical revisionism, exploitation of 

such firms to steal and divert foreign technology to support the Chinese 

military, abuses of human rights in China itself, and employment of companies 

such as Huawei as tools of strategic influence. 

The United States, along with its Allies and partners, 

are today in the midst of an extremely important shift of 

approach when it comes to national security export control 

policy vis-a-vis the People's Republic of China (PRC)-

including with respect to the Chinese technology company 

Huawei, the world's largest telecommunications 

equipment manufacturer. Under the Trump 

Administration, the United States has made some very 

significant changes to our export control policies and 

regulations, but it is important not merely for the policy 

community to understand these changes in themselves, 

but also for everyone to understand the reasons for them 

and the strategic context in which these adjustments are 

embedded. 

Accordingly, this latest in the State Department's AC/5 

Papers series attempts to provide the background for three 

major tranches of Huawei-related changes: (a) the 

placement of Huawei on the Commerce Department's 

"Entity List" in August 2019; (b) the adjustments the United 

States announced in April 2020 to the "military enduse/user" (MEU) regulations and the "CIV" and "APR" 

license exception categories; and, most recently, (c) 

changes to the Foreign Direct Product Rule (FDPR) with 

regard to the export or use of high-technology 

semiconductor equipment and design tools. This AC/5 

Paper will thus situate these adjustments in the full context 

in which they need to be understood - specifically, as part 

of an ongoing U.S. effort to respond to the challenges that 

have unfortunately been created by the PRC's 

manipulation and exploitation of China-based entities (and 

Chinese citizens) in support of the Chinese Communist 

Party's (CCP's) efforts to remain in power in the PRC and to 

seize for itself the commanding heights of military and 

technological power in the mid-21st-Century geopolitical 

arena. 

I. Three Perspectives on the Huawei Policy 

\\Landscape" 

To help elucidate the context in which the "Huawei 

problem" is embedded, and which has necessitated these 

1 Dr. Ford serves as U.S. Assistant Secretary of State for International Security and Non proliferation, and is additionally performing the Duties of 

the Under Secretary for Arms Control and International Security. He previously served as Special Assistant to the President and Senior Director 

for Weapons of Mass Destruction and Counterproliferation on the U.S. National Security Council staff 
 

Arms Control and International Security Papers Volume I, Number 8 I May 22, 2020 

U.S. National Security Export Controls and Huawei: The Strategic Context in 

Three Framings 

export control changes, this paper will look at that problem 

from multiple angles. Huawei is a PRC-state-supported 

information and communications technology firm that 

serves as a tool of manipulation and influence for the CCP, 

both at home and abroad, and of course the company is 

therefore nothing whatsoever like a beautiful ancient 

Chinese painting. Nevertheless, I hope the reader will 

forgive a loose analogy to Chinese art as we look at the 

challenges Huawei presents to the United States and to 

many other countries around the world. 

It is not uncommon in Chinese landscape painting - as 

seen, for instance, in the early 11th-Century masterpiece 

Travelers among Mountains and Streams by Fan Kuan, a 

classic of Northern Song landscape painting that is 

currently in the permanent collection of the National 

Palace Museum in Taiwan -for an artist to employ multiple 

different perspectives in the same painting. This ancient 

approach made no use of the "laws" of one-point linear 

perspective later articulated in the Italian Renaissance 

during the 14th and 15th Centuries. Instead, works such as 

Fan's Travelers often painted the foreground, middle 

ground, and distance as if each were being seen from a 

slightly different angle, yet at the same time. This was not 

so much a technical failing, one presumes, than it was 

simply a way to help the viewer appreciate a landscape 

more fully- albeit less "realistically" -than is arguably 

possible with merely a single, quasi-photographic 

perspective. Such overlapping perspectival framing 

permitted immediate visual access to more facets of a 

scene than could be directly apprehended from a single 

vantage point. 

Taking that artistic insight as inspiration, therefore, 

this paper will offer three overlapping and complementary 

perspectives upon the Huawei challenge that the Western 

world faces today, and upon what we in the U.S. 

Government are doing to meet it. Each of these framings is 

valid, significant, and compelling in its own right, but the 

reader will benefit most - and be able more fully to 

appreciate the U.S. position - by having all three of these 

overlapping and complementary perspectives spelled out 

distinctly. 

A. TechnologyTheft 

The first of these perspectives has to do with theft -

specifically, the theft of cutting-edge U.S. technology by 

the PRC acting through its instrumentality Huawei. In this 

respect, the Huawei export control saga began in January 

2019, with the indictment of Huawei and one of its affiliates 

by the U.S. Department of Justice for a range of crimes 

specifically, bank fraud and conspiracy to commit bank 

fraud, wire fraud and conspiracy to commit wire fraud, 

violations of the International Emergency Economic 

Powers Act (IEEPA) and conspiracy to violate IEEPA, and 

conspiracy to commit money laundering. In short, as one 

U.S. Attorney described the situation, the indictment 

charged that "[f]or over a decade, Huawei employed a 

strategy of lies and deceit to conduct and grow its 

business." 

Thus surfaced the first wave of concerns over Huawei's 

alleged role in stealing U.S. technology for its CCP 

masters.2 In the wake of this indictment, the State 

Department's Bureau of International Security and 

Non proliferation nominated Huawei to be added to the 

Commerce Department's "Entity List" of foreign actors 

that are understood to be involved in potential diversion of 

items to weapons of mass destruction programs or in 

"activities contrary to U.S. national security and/or foreign 

policy interests." In May 2019, the company and 68 of its 

non-U.S. affiliates were added to the Entity List. An 

additional 46 foreign affiliates of Huawei were added in 

August 2019. 

Since then, this problem of outright theft and illegality 

has only become worse. In February 2020, the Department 

of Justice - after having investigated further-filed a 

superseding indictment, further charging Huawei and 

several of its subsidiaries with conspiracy to violate the 

Racketeer Influenced and Corrupt Organizations Act 

(RICO), through "decades-long efforts," in the United 

States and in the PRC, involving 

"[the] misappropriat[ion] [of] intellectual property, 

including from six U.S. technology companies, in an 

effort to grow and operate Huawei's business. The 

misappropriated intellectual property included trade 

2 For present purposes, I shall leave aside the aspect of the Huawei case that related to Iran policy, but readers should remember that the 

IEEPA violations with which Huawei was first charged related to the company's alleged role in assisting Iran in evading U.S. sanctions. This 

was: there~ore, _yet another layer of our concerns about Huawei, for we obviously could not stand by while a PRC company helped the 

clerical regime in Tehran earn more of the revenue it needs to expand its nuclear capabilities, develop and proliferate missiles undertake 

expeditionary warfare against its neighbors using Gods Force subversives, and support terrorist networks in the Middle East ;nd farther 

afield. 

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Arms Control and International Security Papers Volume I, Number 8 I May 22, 2020 

U.S. National Security Export Controls and Huawei: The Strategic Context in 

Three Framings 

secret information and copyrighted works, such as 

source code and user manuals for internet routers, 

antenna technology[,] and robot testing technology." 

The proceeds from this racketeering activity, the 

indictment alleged, were reinvested in Huawei's worldwide 

business, including in the United States.3 

To be sure, Huawei's involvement in such theft hardly 

makes it a unique case in the Chinese high-technology 

sector. Unfortunately, just this sort of intellectual property 

theft by PRC entities is routine and rampant. But these 

indictments did make a compelling case that we needed to 

approach such thieves differently from an export control 

perspective. Just as with the PRC's China General Nuclear 

Power Company (CGNPC)-which was indicted in April 

20161 along with one of its employees in the United States, 

for illegally trying to obtain U.S. technology for Chinese 

nuclear reactor programs. and whose activities in not just 

stealing U.S. nuclear reactor technology but also in 

diverting it to the PRC's armed forces led us to revise our 

civil-nuclear export control rules for the PRC - Huawei's 

indictment for similar thievery made clear that we could 

not continue export control "business as usual" with it. 

This, then, is one important perspectival framing of the 

Huawei problem. The PRC, of course, is notorious for not 

respecting the rule of law, as well as for its opaque, closed, 

corrupt, and unaccountable system of governance. Indeed, 

the PRC weaponizes Western legal scrupulousness and 

commitment to a free and open international order to gain 

competitive advantage. Its leaders have been effectively 

immune from law enforcement scrutiny and action, and at 

arms length from the ordinary consequences that should 

flow from impartial audits and the accountability of 

democratic governance. In the CCP's playbook, rules are 

things to which others should be held accountable when 

this proves useful to the success of the PRC's domestic 

industry champions and the accretion of the PRC's power 

globally. When it comes to restrictions against Beijing, 

however, the CCP regime seems ever less interested in 

accountability as the PRC's power grows. 

Does the PRC respect the Universal Declaration of 

Human Rights? Not when the CCP wishes to undertake a 

campaign of repression against its own citizens, including 

against members of ethnic and religious minority groups in 

Xinjiang, where more than one million individuals have 

been detained in internment camps since April 2017. Does 

Beijing respect the findings of the international tribunals 

adjudicating maritime claims in the South China Sea? Not 

so long as it wants to seize that area for itself and violate Xi 

Jin ping's own prior promises by building a constellation of 

military bases on tiny man-made islands. We in the United 

States take very seriously the obligation under Article VI of 

the Nuclear Nonproliferation Treaty (NPT) to pursue 

negotiations in good faith on effective measures to end the 

arms race, but what does Beijing think? In December 2019, 

we formally invited the PRC in good faith to begin a 

strategic security dialogue on nuclear risk reduction, arms 

control, and their future - but at the time of writing, many 

months later, we still await Beijing's response. 

Does the PRC even respect the CCP regime's own 

longstanding arguments about the importance of "noninterference" in the "internal affairs" of other states? Not 

when it wants to bully other countries about how they 

describe the PRC in their own domestic media or when it 

objects on political grounds even to street art thousands of 

miles away in another sovereign state. or when the CCP 

wants to threaten a foreign government in order to stifle 

international calls to investigate how the terrible COVID-19 

virus was able to spread so far so quickly while PRC 

authorities suppressed warnings by doctors in Wuhan. 

In such cases, where the PRC sees a chance to seize 

advantage over others, transparency, accountability, and 

the rule of law are of little interest to the CCP regime, and 

indeed may even be considered threatening to it. 

Fundamentally, the PRC's system of governance is 

grounded not in the rule of law but rather in the Communist 

Party's rule by and through law, for the Chinese Communist 

Party itself is conceptually and structurally antecedent to 

the PRC's legal system, the purpose of which is to serve the 

party. (With apologies to Voltaire, who once made a 

similar point about the relationship between 18th Century 

Prussia and its army, it might be said that while many 

states have political parties, in the PRC the Communist 

Party has its own state.) 

This attitude toward law goes back a long way. In their 

propaganda narratives, PRC officials like to emphasize 

themes deriving from China's Confucian heritage, with its 

emphasis upon benevolence and virtue in leadership. In 

3 The second U.S. indictment also included new allegations about the involvement of Huawei and its subsidiaries in business and technology 

projects in countries subject to U.S., European Union, or United Nations sanctions, such as Iran and North Korea, as well as about its efforts 

to conceal these efforts to help such rogue regimes. 

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U.S. National Security Export Controls and Huawei: The Strategic Context in 

Three Framings 

reality, however, the governing philosophy of the CCP 

owes more to ancient Chinese Legalism, a philosophy that 

aimed at achieving and consolidating absolute power, and 

which saw the purpose of law as being to support the 

power of the ruler rather than to make power in any way 

accountable. Such Legalist advice from the scholar Shan 

Yang in the 4th Century B.C.E., it is recorded, helped Duke 

Xiao begin positioning the state of Qin for its long march of 

conquest over all the other polities of China's ancient 

Warring States period, which eventually unified the country 

and created the notoriously tyrannical (if short-lived) Qin 

Dynasty in 221 B.C.E. from which "China" gets its name. In 

some respects, unfortunately, it would appear that not too 

much has changed today. 

In the modern technology-transfer context, the 

results of the PRC's self-aggrandizing and selectively 

scofflaw attitude have been all but catastrophic for the rest 

of the world. Illegal, often cyber-facilitated intellectual 

property theft by PRC entities has helped lead to what 

former U.S. National Security Agency director Keith 

Alexander has described as "the greatest transfer of wealth 

in history." 

The crimes for which Huawei has been indicted, 

therefore, may only be one piece of a broader PRC 

technology-theft problem, but they are an important partin connection with which it was necessary for the United 

States to take a principled stand. I'm proud of the role my 

Bureau played in nominating Huawei for the Entity List, for 

U.S. exporters indeed should think twice before engaging 

with foreign companies that steal U.S. technologyespecially when they are doing so as part of a broader 

pattern of state-organized theft. 

B. Strategic Competition Perspective 

But mere technology theft, per se, is only one part of 

the Huawei problem. The challenge - indeed the threatpresented by the PRC and its de facto instrumentalities 

such as Huawei is much greater than that. The relevant 

context here is the PRC's drive to seize a dominant share of 

global high technology markets as quickly as possible, such 

as under its infamous "Made in China 2025" strategy. 

Crucially, these efforts are not being made simply for profit 

and to drive foreign competitors out of business, but also in 

support of the PRC's geopolitical ambitions of a so-called 

national "return" to the dominant center of the geopolitical 

system. 

This PRC strategy represents, almost by definition, a 

mortal threat to non-Chinese technology sectors, even if 

not all of them yet realize it, with some Western firms still 

transfixed even today by the short-term profits available 

from selling to PRC entities even while their Chinese 

competitors gather strength from non-competitive and 

illegal actions and PRC state subsidies, intending eventually 

to supplant such Western suppliers everywhere. That 

certainly is, in itself, a huge problem. But all of this - as we 

have emphasized repeatedly- is also a global security 

threat, as a result of the embeddedness of the PRC's 

technology-transfer strategy in the CCP's aggressively 

competitive geopolitics of hegemony in East Asia and more 

broadly. 

PRC theorists believe that technology and economic 

weight contribute, along with military muscle, to 

something called "comprehensive national power" (CNP), 

which is in effect a modernized and Sinicized version of 

what Soviet geopolitical theorists used to refer to as the 

"correlation of forces" that they felt would eventually allow 

their Marxist empire to overcome the capitalist West in that 

era's geopolitical competition. The ultimate purpose of 

Beijing's strategy thus isn't simply economic advantage, 

market share, and corporate profits -though in contrast to 

the USSR, today's state-capitalist PRC both seeks and 

enjoys those things - but also geopolitical and strategic 

advantage. Building superlative CNP is viewed as the key 

to acquiring dominant global power, something that others 

enjoyed vis-a-vis Beijing in the past, and which the CCP 

now intends to acquire for the PRC. This is Xi Jinping's 

"China Dream," and acquiring controlling positions across a 

critical range of cutting-edge technologies is a critical part 

of the PRC's revisionist geopolitics. 

It is for this reason that we have tirelessly warned 

about the dangers presented by the PRC's strategy of 

"military-civil fusion" (MCF). With CNP seen as the key to 

acquiring global power, implementation of MCF is, in 

Beijing's view, the key to the PRC developing the most 

advanced military in the world by 2049-which is expected 

to provide the CCP regime with a commanding position in 

global "hard power." In pursuit of such next-generation 

military dominance, MCF aims, to break down all barriers 

between the civilian sector and the military sector in the 

PRC, and to marshal the resources and know-how of both 

spheres -through coercion if necessary- in support of the 

CCP's revisionist agenda. I have been publicly warning 

about the dangers of MCF since July 2018. and buoyed by 

Secretary Pompeo's powerful articulation of these 

challenges in a pathbreaking recent speech in Silicon 

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U.S. National Security Export Controls and Huawei: The Strategic Context in 

Three Framings 

Valley. we have been gradually reorienting the U.S. foreign 

policy and national security apparatus around the 

challenges of meeting this threat. 

Make no mistake: Huawei is a major player in this PRC 

strategy. The company, for instance, sells its "Unified 

Communications and Collaboration" technology to several 

elements of the People's Liberation Army (PLA) and the 

PRC security services, including the PLA's General Staff 

Department, the Beijing Military Region, the 2nd Artillery 

Corps (now the PLA Rocket Forces). and the Ministry of 

State Security (MSS). Huawei also has strategic 

cooperation relationships with state-owned enterprises 

involved with military production, including the China 

Shipbuilding Industry Corporation's 719 Research Institute, 

which has been involved in the design of nuclear 

submarines and sea-based nuclear power plants. Huawei 

employees have, moreover, worked closely with PLA 

institutions. and in some cases appear actually to be "dualhatted" as employees of state-owned defense enterprises. 

And Huawei's 5G telecommunications capabilities make it a 

key player in supporting the PLA's drive for dominance in 

what PRC strategists term "6th Generation" or "intelligent 

warfare," which they expect will depend upon Artificial 

Intelligence (Al) capabilities riding on a 5G backbone. 

So this. then, is the context for my second 

"perspective" on the Huawei problem. The PRC's MCF 

strategy has required a rethinking of how to approach 

national security export controls, because the CCP's 

approach to acquiring foreign technology and diverting it 

to the PRC's military and security services makes rather a 

hash of traditional approaches to export controls. which 

tend to presume a meaningful distinction between 

"civilian" and "military" that is becoming increasingly 

opaque. or even meaningless, in the PRC. Driven by such 

concerns, we have begun making adjustments to U.S. 

export control regulations, such as - as will be outlined 

hereinafter- in the definition of what can count as a 

"military end-user" and in the elimination of the so-called 

"CIV" category of export license exception vis-a-vis the 

PRC. 

C. Human Rights Perspective 

In my view, each of the first two perspectives I have 

offered here upon the Huawei problem are on their own 

enormously compelling. Nevertheless, there is a third way 

to frame the policy problem presented by Huawei - along 

with many of its siblings in the state-supported Chinese 

high-technology sector - that provides further reasons for 

any democratic government to shun such companies. 

As I pointed out in September 20191 across the 

malignant ecosystem of the PRC's technologized 

authoritarianism, there is constant and continual 

cooperation between companies such as Huawei and the 

state security bureaucracy. Nor is such cooperation 

optional for these companies if. when. and to the degree 

that the CCP commands such cooperation. And it is here 

that Huawei's various partnerships with the PLA. the MSS. 

and various military research institutes within PRC stateowned enterprises become even more sinister. 

The Wujiang Public Security police, for instance, use 

Huawei technology to impose CCP controls upon the PRC's 

citizenry, and Huawei's own documents brag about 

providing the security police with high-technology "social 

stability" solutions in Pingan. If you have any familiarity at 

all with the police state that the CCP has built, of course. 

you'll know that this is nothing at all to brag about, but the 

role of PRC technology giants such as Huawei in enforcing 

and supporting CCP tyranny is well established on the 

public record. 

Despite its pretensions to philosophical depth and 

world-historical themes of pseudo-Marxist dialectical 

progression and benevolent quasi-Confucian meritocracy, 

the Chinese Communist Party's most original and 

significant contribution to human governance lies in its 

pioneering of a technologically-facilitated form of 

totalitarianism the likes of which humanity has never seen 

before. Tragically, Huawei and its siblings have 

distinguished themselves as enablers for and handmaidens 

of this new form of oppression. What's more, they are 

making their technology- and thus the CCP's repressive 

model - available for export, by offering surveillance tools 

and methodologies, in the name of "smart cities" and "safe 

cities" technologies, among other more readily obvious 

tools of suppression, to foreign governments, some of 

which are eager to replicate for themselves the iron grip 

that the CCP exercises upon the Chinese people. 

In the context of our relationship with Huawei. 

therefore. this is yet another reason why export control 

"business as usual" is impossible, and why it is a moral 

imperative for the democracies of the world to avoid 

entanglements with the CCP's high-technology 

authoritarianism. In the United States, we want our 

companies and citizens to avoid making such abuses 

profitable. and to avoid helping reward such egregious 

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U.S. National Security Export Controls and Huawei: The Strategic Context in 

Three Framings 

conduct through commercial profits. To my eye, no one 

who takes human rights seriously would want to do 

anything other than shun PRC companies such as Huawei. 

Together, therefore, these three perspectives on the 

"landscape" of Huawei-related policy issues4 should help 

explain the United States' new approach to export controls 

vis-a-vis that company- and why such a new path has 

turned out to be so necessary. The next section of this 

paper will briefly describe our responses to these threats to 

date, in putting Huawei on the "Entity List," adjusting 

certain U.S. export control rules in light of the PRC's MCF 

strategy, and making Huawei-related changes to the 

Foreign Direct Product Rule (FDPR). 

II. Our Responses 

A. The Entity List 

As noted earlier, we put Huawei on the Commerce 

Department's "Entity List" in May 2019; we also added 

additional Huawei affiliates to the list in August 2019. This 

was an essential predicate for properly evaluating and 

responding to the Huawei problem, inasmuch as most U.S. 

exports to Huawei did not previously require an export 

license. By placing the company on the Entity List, we 

required licenses (with a few minor carveouts related, inter 

alia, to keeping telecommunications infrastructures and 

personal communications devices operational) for all 

transfers to Huawei, giving us visibility-for the first time -

into the items and technologies it was acquiring from U.S. 

industry. 

Although that listing came with a presumption of 

denial, this did not necessarily mean that we necessarily 

intend to deny all such transfers. Being placed on the 

Entity List triggers a licensing requirement, but it does not 

in itself decide the outcome that results from evaluating 

such licenses. Naturally, in light of what we now know 

about Huawei - and what we unfortunately continue to 

learn as time goes by-we are looking at such licenses with 

an increasingly skeptical eye that generally presumes 

rejection, 5 but "listing," per se, does not equate to "denial." 

It merely means that the U.S. Government deems it 

important to evaluate such questions, and this represents 

an important step forward for transparency and 

accountability in technology transfers. With regard to 

Huawei, this was our first step. 

B. Export Regulation Adjustments 

The second major adjustment in U.S. rules vis-a-vis 

Huawei became clear in late April 2020, when the 

Department of Commerce announced an expansion of 

controls to "military end-users" (MEUs) in China, which 

include commercial entities when theirfunctions are 

intended to support defined "military-end uses." 

Commerce also expanded the list of Export Control 

Classification Numbers (ECCNs) subject to MEU licensing 

requirements in light, inter alia, of past diversions of 

controlled items for military purposes and end-users that 

did not require a license for export. These changes were 

necessary in response to the PRC's MCF strategy- which, 

as noted above, has been systematically eroding prior 

distinctions between what is "civilian" and what is 

"military" in China. 

These changes were hardly what we really wished to 

do, and we would have preferred to continue prior policies 

of exporting more liberally to "civilian" applications in the 

PRC. MCF, however, has made that idea incoherent, for in 

effect, there is no longer any such thing as a purely "civilian" 

export to the PRC. This certainly doesn't mean that we 

intend to deny all covered exports to the PRC, but the CCP 

regime's work to "fuse" the PRC's civilian and defense 

4 In truth, there is yet another potential perspective upon the Huawei problem that is worth mentioning here, related to the ways in which -

under well-established PRC law and the extraordinary tools available to the CCP in coercing whatever behavior it wishes from Chinese 

citizens and companies operating either at home or abroad -the CCP is able to compel companies such as Huawei to do its bidding 

whenever it wishes. In this context, and in sharp contrast with Western firms' relationships with their own governments, it is important to 

remember that, at least in particular instances in which the CCP cares to make its will known, there is. functionally speaking. no distinction 

between "private" PRC companies and the government. Accordingly, Huawei must be regarded as a tool of strategic influence by the CCP 

regime in Beijing, and permitting oneself to become dependent upon a company such as Huawei for such things as one's 5G 

telecommunications infrastructure is the same thing as giving the CCP the option of exerting direct control over that infrastructure -to 

manipulate it, or to deprive you of its functionality for purposes of political extortion, howsoever the CCP desires. Nevertheless, since such 

potential strategic manipulation is not directly relevant from the perspective of U.S. export controls, I will not dwell upon it further here. 

5 By way of full disclosure, while the Commerce Department administers the broader U.S. export control system, the Bureau of International 

Security and Non proliferation screens U.S. export control licenses for non proliferation and other technology-transfer implications. 

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U.S. National Security Export Controls and Huawei: The Strategic Context in 

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industrial bases in support of regional hegemony and 

global revisionism has made it impossible for us to continue 

to permit exports without a greater degree of scrutiny. 

Irrespective of what licenses we deny, therefore, it is vital 

for U.S. authorities to be able to see, and to assess, what 

items and technologies are being transferred into the CCP's 

MCF apparatus. 

This is also the rationale behind the United States' 

accompanying elimination of the "Civil End User" - or "CIV" 

- category of license exception vis-a-vis the PRC. It is also 

the basis for our proposal to eliminate certain "Additional 

Permissive Reexport" (APR) license exception permissions 

that previously allowed partner countries the ability to reexport U.S.-origin controlled items to countries such as the 

PRC without an export license from the Department of 

Commerce. As that Department outlined its public 

explanation of the proposed APR change, it is considering 

this move because other countries might take differing 

views of what it is appropriate to send to the PRC. Not 

surprisingly, we do not wish our own technology protection 

policies to be undermined through incautious re-export 

transfers to the PRC by those who do not yet share our 

perspective on the importance of principled resistance to 

Beijing's theft of technology and its diversion to military 

purposes, its human rights abuses, and its geopolitical 

revisionism. Our hope is that this proposed rule will give 

partners an opportunity to join our efforts. Either way, 

however, only the CCP itself is to blame for these actions. 

C. The Foreign Direct Product Rule 

The most recent of our export control changes vis-a-vis 

Huawei is the announcement of revisions to the FDPR in 

order to restrict Huawei's ability to circumvent U.S. export 

controls by designing semiconductors and having them 

produced abroad using U.S. software-based design tools or 

equipment. With these FDPR adjustments, the United 

States is imposing licensing requirements on these foreignproduced items when there is knowledge that they are 

destined for Huawei (or for affiliates appearing on the 

Entity List). As a result, foreign items - including chipsets -

that are produced anywhere from the designs of Huawei 

using U.S. Department of Commerce-controlled 

semiconductor manufacturing equipment or software will 

be subject to U.S. export licensing restrictions when there 

is knowledge they are destined for Huawei or one of its 

listed affiliates. 

This is a very significant move, since while many sorts 

of semiconductor technology are by now widely available 

on global commercial markets from many suppliers, U.S. 

firms still enjoy a significant competitive advantage on 

many of the very best tools for designing and producing 

high-end semiconductors (e.g., chips with "nodes" of 

extremely small size, which permit enormous amounts of 

computing power to be crammed into a tiny physical 

space). The PRC also targets advanced technology from a 

small number of like-minded countries such as Japan, the 

UK, the Netherlands, and Germany, but the United States 

maintains the lion's share of technological advantage. The 

PRC has hitherto procured top-notch chips from the United 

States and a few like-minded countries, and it is of course 

seeking to acquire such high-end manufacturing 

capabilities for itself, but at present this represents an 

arena in which the United States and our partners maintain 

a huge competitive advantage. The new rule will constrain 

Huawei's ability to design the very best chips, as well as its 

ability to access to the superlative manufacturing tools still 

provided by U.S. suppliers, to produce them. 

This new FDPR is designed to minimize its adverse 

impact upon U.S. (and other Western) suppliers. Indeed, 

this move may serve to help U.S. firms maintain their 

dominant market position in the very upper reaches of the 

semiconductor design and manufacturing business, by 

restricting Huawei's access to the "secret sauce" 

ingredients that produce the world-class chips and highend design tools that are today still available exclusively 

from U.S. industry. More fundamentally, these 

adjustments should help impede the progress of Beijing's 

MCF apparatus as it seeks to appropriate and redirect 

cutting-edge Western technology to support the CCP's 

dreams of geopolitical revisionism. 

Ill. Conclusion 

These are not challenges that we sought. Quite to the 

contrary: none of these changes in U.S. export control 

policy in response to PRC technology-transfer, human 

rights, and geopolitical challenges are ones that we wished 

to make. Confronted with the realities of Beijing's 

ambitions and the PRC's "military-civil fusion" strategy, 

however, we had little choice but to act decisively. 

The United States has long been committed to open 

and free trade for mutual benefit with the PRC, and it must 

always be remembered that- as my colleague, Assistant 

Secretary David Stilwell. powerfully recounted last year- it 

was actually the United States' embrace of the PRC over 

most of the last generation that has been perhaps the 

critical component in the PRC's modern rise to geopolitical 

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U.S. National Security Export Controls and Huawei: The Strategic Context in 

Three Framings 

prominence. Nevertheless, the Chinese Communist Party's 

flagrant abuse of all this American and global goodwill for 

its own hegemonic self-aggrandizement has been nothing 

less than shocking, and the world is now awakening to that 

fact. And we must respond accordingly. 

Today, U.S. policy seeks to navigate between 

unpalatable extremes. When it comes to the PRC, we are 

not nearly as na'ive as we used to be about the potential for 

unrestricted foreign economic and technological 

engagement to feed the CCP's military ambitions and 

geopolitical self-aggrandizement at the expense of our 

interests, and at a grave cost to the freedom and autonomy 

of the PRC's own neighbors. Our hope is to bring our close 

partners to this realization as well, and we are pleased by 

the progress we are making so far. 

We are today not, for instance, open-heartedly foolish 

in the ways suggested in Thucydides' rendering of Pericles' 

famous funeral oration for Athens' early casualties in 

Peloponnesian War: 

"We throw open our city to the world, and never by 

alien acts exclude foreigners from any opportunity of 

learning or observing, although the eyes of an enemy 

may occasionally profit by our liberality .... " 

Nor, however, are we needlessly paranoid and 

restrictive about engaging with foreigners in the high-end 

technologies of our day- as were, for example, the 

Venetian officials who in 1745 actually dispatched an 

assassination team to pursue two local glass-blowers who 

had taken the lucrative secrets of their trade abroad.6 In 

truth, the right answer surely lies between such 

asymptotes, and - as in so many other arenas -we will all 

suffer if we cannot navigate a prudent middle way between 

such extremes. In the arena of national security export 

controls, it is just such an Aristotelian Mean of a response 

that we have been trying to implement. 

The United States' new export control rules are 

intended to be effective answers to the challenges so far 

presented by PRC firms such as Huawei, but yet responses 

that still preserve the possibility of beneficial engagement 

with the PRC. It continues to be our view that the SinoAmerican relationship needs to be cooperative where it can 

be, even as we are now demonstrably committed to 

ensuring that this relationship is appropriately competitive 

where the CCP regime leaves us no choice but to be so. 

The most recent adjustments to the FDPR, for instance, 

must be seen in this light, and in the broader context of the 

challenges that PRC revisionism and disrespect for 

international norms and the rule of law have forced upon 

the world. We look forward to the day when it is no longer 

necessary to respond to such threats from the Chinese 

Communist Party. 

* * * 

6 See, e.g., Christopher Andrew, The Secret World: A History of Intelligence (New Haven: Yale University Press, 2018), at 33 & 131 footnote. 

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Arms Control and International Security Papers 

U.S. National Security Export Controls and Huawei: The Strategic Context in 

Three Framings 

Arms Control and International Security Papers 

Volume I, Number 8 I May 22, 2020 

The Arms Control and International Security Papers are produced by the Office of the Under Secretary of State for Arms Control 

and International Security in order to make U.S. State Department policy analysis available in an electronically-accessible 

format compatible with "social distancing" during the COVID-19 crisis.