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Illustration: Sarah Grillo/Axios

American companies eager to enter China’s massive market brace themselves for potential intellectual property theft or forced technology transfers. But there’s another threat at play: their technology is being used for surveillance.

The big picture: China has sophisticated systems of state surveillance, and elements of these systems have long been powered by technologies developed by American companies. Beijing has used U.S. tech to surveil its citizens, violate human rights and even modernize its military.

The entanglement

Companies doing business in China often get caught in a web: Beijing uses its economic leverage to draw them in and then uses their technology for police-state tactics. As a result, "there are American companies enabling or complicit in major human rights abuses," says Elsa Kania, a technology and national security expert at the Center for a New American Security.

Another concern is American universities and research institutions partnering with Chinese companies that work with state security, she says.

  • Thermo Fisher Scientific, a Massachusetts company, has supplied the Chinese government with DNA sequencers that it is now using to collect the DNA of ethnic minorities in Xinjiang, Human Rights Watch reports. At a Thursday hearing, Sen. Marco Rubio called Thermo Fisher's operations in Xinjiang "sick."
  • iFlyTek is a Chinese company that recently launched a 5-year partnership with the Massachusetts Institute of Technology. Beijing has used iFlytek’s voice recognition technology "to develop a pilot surveillance system that can automatically identify targeted voices in phone conversations," according to Human Rights Watch.
  • Cisco, in 2011, participated in a Chinese public safety project that set up 500,000 cameras in Chongqing, according to the Wall Street Journal.
  • Yahoo, in 2005, gave the personal information of a Chinese journalist to China's government. That information was used to put the man in jail.

Tech giants, like Facebook, Apple and LinkedIn, have faced scrutiny in the past for censoring or reportedly offering to censor content in China.

"Not all of these companies realize the extent to which their activities could be exploited," Kania says.

Companies often take on projects for the Chinese government in the name of curbing crime, according to Scott Kennedy of the Center for Strategic and International Studies, but "the boundary between promoting public safety and protecting the state is increasingly blurred with these types of technologies."

The other side: Axios reached out to all of the companies listed above. The responses we received by deadline:

  • Thermo Fisher Scientific: "We design our products with great care and work with governments to contribute to good global policy. We are proud to be a part of the many positive ways in which DNA identification has been applied — from reducing human trafficking to exonerating the unjustly accused."
  • Cisco said it "has never custom-tailored our products for any market, and the products that we sell in China are the same products we sell everywhere else ... We do not and will not supply video surveillance cameras or video surveillance monitoring software in our public infrastructure projects."
  • Oath, which now owns Yahoo: “We’re deeply committed to protecting and advocating for the rights to free expression and privacy of our users around the world."
  • LinkedIn: "[A]s we said at the time of our launch in February 2014, it’s clear to us that in order to create value for our members in China and around the world, we will need to implement the Chinese government’s restrictions on content, when and to the extent required."
The stakes

"A lot of people wanted very much to believe that once China had exposure to the outside world, political liberalization would come with economic liberalization," Sophie Richardson, China director at Human Rights Watch, tells Axios. "They're getting a lot richer and a lot more powerful and no more politically liberal."

What's next:

  • Some companies have pulled out of China of their own accord in the past. Google refused to censor its search engine in China in 2010, leading to its ouster from the country. Other companies may follow suit if they realize their technology is being misused, says Kania.
  • If companies cannot be held accountable by internal ethics guidelines, shareholders or users, the government may need to step in through export controls or limits on funding to researchers that collaborate with China, she says.
  • Worth noting: There's already a U.S. law that prohibits the export of crime-control products to China, but the sale of cameras and other dual use technologies that could be used for surveillance are not banned, reports the Wall Street Journal.

Go deeper: The rise of AI-powered surveillance

Go deeper

Oct 14, 2020 - Technology

COVID is worsening global internet freedom, report finds

Singapore's TraceTogether contact-tracing app. Photo: Catherine Lai/AFP via Getty Images

Governments around the world have seized on the coronavirus crisis as an opportunity to expand digital surveillance and harvest more data on their citizens, according to a report out Wednesday from Freedom House, a democracy and human rights research group.

Why it matters: Privacy advocates have warned since early in the pandemic that the tech behind efforts to conduct contact tracing and enforce quarantines and other public safety protocols could be abused and made permanent, particularly in authoritarian countries like China.

Oct 13, 2020 - World

As Taiwan's profile rises, so does risk of conflict with China

Illustration: Sarah Grillo/Axios

Taiwan's success in fighting the coronavirus, along with high-profile U.S. support in recent months, has raised the nation's profile on the international stage. But Beijing views this new prominence as a serious provocation.

Why it matters: Military conflict between China and Taiwan could embroil not just Asia but also the U.S. and other outside players in a larger conflagration.

The hard math behind America's labor shortage

Data: Bureau of Labor Statistics, Congressional Budget Office; Chart: Axios Visuals

Yes, the pandemic has created unusual temporary labor market dynamics. But in the bigger picture, the 2010s were a golden age for companies seeking cheap labor. The 2020s are not.

The big picture: In the 2010s, the massive millennial generation was entering the workforce, the massive baby bo0m generation was still hard at work, and there was a multi-year hangover from the deep recession caused by the global financial crisis.