https://crsreports.congress.gov
Updated March 24, 2022
U.S. Export Controls and China
Since 2018, Congress and the executive branch have
revised—through legislation, regulation, and licensing
practices—the U.S. export control system that regulates
dual-use exports (goods and technology that may have both
civilian and military uses). Much of the legislative reform
has focused on controlling emerging and foundational
technologies, strengthening other technology controls and
licensing practices, engaging multilaterally to ensure U.S.
controls are effective, and considering the impact of
controls on the U.S. economy, including the foreign
availability of U.S. products subject to control. Many of
these changes were efforts to address concerns about the
People’s Republic of China’s (PRC or China) pursuit of
civilian and military leadership in advanced technologies
through U.S. commercial ties. Congress plays a key role in
overseeing the reforms it enacted and shaping the U.S.
export control regime to address U.S. national security and
foreign policy concerns, including those posed by China.
China’s Industrial Policies
China’s state-led industrial policies, such as Made in China
2025 (MIC 2025), seek to create competitive advantages for
China in strategic industries, in part by obtaining
technology from U.S. and foreign firms. MIC 2025 aims to
establish China’s leadership in emerging technologies
critical to future commercial, government, and military
capabilities. Priority areas include advanced manufacturing,
aerospace, artificial intelligence, information technology,
new materials, robotics, and semiconductors. China’s
military-civil fusion (MCF) program also seeks to leverage
MIC 2025 technological advancements for military
development. Some experts say that China’s approach blurs
commercial and military distinctions and may challenge the
U.S. export control regime’s ability to distinguish between
military and civilian end use and end users. China’s policies
in strategic sectors often require a PRC partner, frequently
state-tied, to own or otherwise control U.S. technology that
is transferred to China, potentially increasing risks that U.S.
technology could support China’s military.
U.S. Dual-Use Export Controls
The Export Control Reform Act of 2018 (ECRA) (P.L. 115-
232) reestablished nonemergency authority for the
President to control dual-use exports for national security
and foreign policy reasons and to coordinate with
multilateral export control regimes, and provided policy
requirements for setting controls. The Bureau of Industry
and Security (BIS) of the Department of Commerce
administers dual-use export controls and chairs an
interagency process that includes the Departments of
Defense (DOD), State, and Energy. BIS administers these
controls through the Export Administration Regulations
(EAR, 15 C.F.R. 730 et seq.), which includes the
Commerce Control List (CCL) of dual-use technologies
subject to controls. The EAR sets licensing policy for
specific destinations, end use, and end user controls. On the
CCL, national security (NS) controlled items are on the
Wassenaar Arrangement’s multilateral control list. The
EAR presumes denial for license applications of NS items
that would make a direct and significant contribution to
China’s military. Separate statutes and regulations control
nuclear materials and technology and defense articles and
services. U.S. law has prohibited arms sales to China since
1989. Congress has also mandated a policy of denial for
exports of satellite and space equipment to China.
Figure 1. 2020 U.S. Exports to China and BIS Actions
Source: CRS with reporting data from BIS.
Note: EAR99 items are subject to the EAR, but are not controlled.
Percentages are based on the value of U.S. exports.
U.S. Licensing Approach
The U.S. government only controls or restricts a small
percentage of U.S. technology exports to China in practice.
BIS has removed from the CCL or waived licensing
requirements for much of U.S. technology trade to China
since the 1990s as certain technologies have become more
widely available globally and in response to U.S. business
interests in the China market. Before new rules in May
2020, BIS waived license requirements for NS items
destined for civilian end use in China in sectors such as
aerospace, computing, and semiconductors. An estimated
18.1% of $124.6 billion in U.S. exports to China in 2020
($22.6 billion) involved dual-use technologies on the CCL
and subject to controls. BIS required licenses for 2.1%, or
$478 million of these CCL technology exports. Most CCL
technology exports—97.9% or $22.1 billion—went to
China without a license. (Figure 1).
Separately, BIS reported that it reviewed $112 billion in
licenses for U.S. software and technology exports to China
in 2020 and denied 2.2% ($471 million). The $112 billion
in licenses in 2020 increased from $6.9 billion in 2019; the
increase might reflect licenses, including for EAR 99 items,
required for PRC firms added to the EL since 2019. EAR
99 includes nonsensitive products and potentially sensitive
technologies in light of China’s dual-use programs. ECRA
called for a review of the CCL and EAR99 to determine
whether some EAR99 technologies should be added to the
CCL. In 2020, BIS denied three of 482 licenses to release
U.S.-controlled technology and knowhow to PRC nationals.
