Kevin Kiley Accuses China Of Trying To 'Evade' U.S. Export Controls On Semiconductors

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During a House Judiciary Committee hearing earlier this month, Rep. Kevin Kiley (R-CA) spoke about the United States's export controls on semiconductors.

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00:00We now go to the gentleman from California, Mr. Kiley, for his questions.

00:04Thank you, Mr. Chair, and thank you to our witnesses for this important discussion,

00:07which I think really covers two main areas, one being the CCP's evasion of policy and law

00:15and international rules in order to press its own advantage, and the second being its manipulation

00:23of our legal system in conjunction with its political control over its own to likewise

00:28has benefited itself at the expense of the United States.

00:32I wanted to ask, first of all, Ms. De La Brea, did I get it right?

00:38Close? All right.

00:40If you could comment on how this discussion relates to what's probably the most important issue

00:48when it comes to our competition with China, and that is the CCP's efforts to evade expert

00:54controls when it comes to leading-edge semiconductors, slash, you know, how they're trying to steal

01:01technology in order to advance their own foundry.

01:06Absolutely, and generally this falls within the category, this first category I think

01:12you listed of China abusing the U.S. legal system in order to evade and to neuter our defenses.

01:17There are offensive things, though, China also does to this end, including, for instance,

01:21using litigation to obtain tech through discovery.

01:26But the other important thing is that as the U.S. has become increasingly serious about imposing

01:31restrictions on China from tech to trade, Beijing has also become increasingly serious and adept

01:36at first at the point of framing, making sure that there are loopholes or weaknesses within

01:43those restrictions, and then at the point of enforcement, evading them. So across export

01:49controls and other means to restrict tech access, Beijing consistently lobbies and influences in

01:55order to make sure that it will continue to maintain tech access. And then, of course, there's the

02:01network of shell companies, of localization efforts, of backdoor activity that China engages in

02:07in order to directly evade U.S. restrictions that have already been levied.

02:13Thank you. And Professor Koo, there's this issue we've also discussed where, you know,

02:18U.S. court system recognizes judgments in Chinese courts, but the opposite is not always true,

02:26even though judgments in our courts follow from a legal system that's developed over centuries to

02:31assure fairness through things like due process and discovery, access to counsel, whereas that's far from

02:36the case in the Chinese legal system. So why is it that we continue to allow that lack of

02:43reciprocity, and how might we go about changing? Well, this is a big issue. The United States courts

02:49have always been more deferential to foreign courts than foreign courts have been to the United States

02:54court judgments. And so it's not just Chinese courts. I think that the United States courts tend to

03:01enforce foreign judgments of. We just generally, U.S. courts generally do this. The other

03:06complication is that it's often left to state law. So different states might enforce some slightly

03:10different standards, and it often is in state courts, not federal courts. And so state court

03:14judges might not be as attuned or worried about or concerned about the issues that we're discussing

03:19here, which I think might have happened in the case I mentioned in Long Island. So I do think that's

03:24part of the problem. But there have been efforts, and the American Law Institute years ago did propose

03:30that Congress adopt federal legislation to require reciprocity for U.S. courts before we enforce

03:36foreign court judgments, and that would apply to China as well. China itself does have a reciprocity

03:40requirement before they will enforce a U.S. court judgment. So there are proposals, there have been

03:45proposals, but it's been complicated. It creates a lot of effort. And so, but I think that would be the way that

03:50I think Congress could get involved here to create a fairer system for, especially now that I think we see

03:56Chinese companies taking advantage of the way U.S. courts give deference to Chinese courts.

04:01How do you think China would respond if we passed a law along those lines?

04:06Yeah, I don't know that this is the top of their agenda for the, I think they'd actually

04:10wouldn't worry too much about because we would adopt essentially their role, reciprocity, right?

04:14So I don't think there would have any basis to object to that.

04:18Thanks very much. I yield back.

04:20Would the gentleman yield?

04:21Happy to.

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