Category: Business

Aided by U.S. government programs, for years, U.S. firms have sold or enabled technology that feeds China’s surveillance state.

An investigation by the Associated Press (AP) revealed that across Republican and Democratic administrations, U.S. policy and commercial promotion have jointly facilitated American exports of servers, cloud services, analytics, biometrics and other systems that Chinese public-security agencies deploy to monitor their own citizens.

In the early days, U.S. export restrictions applied narrowly. Following the 1989 massacre at Tiananmen Square, U.S. controls on exports to China restricted “crime control and detection” equipment such as restraints and helmets.

However, the regulations scarcely touched the kinds of computing hardware, networking equipment and software that today power facial-recognition algorithms, video analytics and biometrics collection.

Over time, advanced surveillance technologies slipped largely outside the regulatory perimeter, even as China’s internal controls over dissent and ethnic minorities grew more severe.

U.S. regulations have allowed the export of routers, servers, mass-storage systems and general-purpose analytics software to Chinese integrators or public-security bureaus, despite clear human-rights concerns.

The AP investigation uncovered that U.S. equipment and software from companies such as Dell Technologies, Oracle, Microsoft and VMware, among others, ended up in deployments in regions such as Xinjiang and Tibet where Chinese authorities target minority populations.

The equipment might not have been facial recognition systems per se, yet it enabled storage, processing and analytics of large video and biometric datasets that are critical building-blocks of a surveillance ecosystem.

Even more troubling is how U.S. trade promotion agencies helped pave the way. For more than a decade, the U.S. Commercial Service, part of the Department of Commerce, included “safety and security” opportunities in China, explicitly helping to match American firms to Chinese law-enforcement and security buyers.

Archived brochures and service offers show U.S. agencies inviting American vendors to show their security technologies in Chinese trade expositions. In effect, the government was simultaneously pursuing export-control policy and export-promotion policy, with the latter at times neutralizing the former.

In recent years the U.S. has moved to tighten controls. On October 7, 2022, the Bureau of Industry and Security under the Department of Commerce announced new export restrictions aimed at advanced semiconductors, supercomputer end-uses and AI systems destined for China.

But while these controls addressed the hardware and design side of the technology stack, they left significant gaps. Cloud access, software platforms, and service models were largely unaddressed.

Additionally, Chinese entities may rent access to U.S.-based hyperscale cloud infrastructure, or access U.S. chips indirectly via service companies, thereby evading traditional shipment bans.

Regulations historically required a license only if the end-use is military or the item is very clearly designated. Licensing data show that in 2020 around $112 billion in software and technology exports from the U.S. to China were reviewed, yet only 2.2 percent were denied.

Equally important is the strategic tension inherent in U.S. policy. U.S. officials repeatedly emphasize the importance of a U.S.-led technology stack, economic dominance and the export of American innovation abroad.

In a July speech, Michael Kratsios, director of the White House Office of Science and Technology Policy, said that while the highest-end semiconductors should remain under export control, the administration wants “the world using U.S. technology.” That commercial orientation puts economic incentives in conflict with strategic restraint.

Lobbying pressure has played a major role. Industry groups and major firms have actively resisted tighter restrictions on export of surveillance-relevant technologies. Lawmakers on both sides of the aisle have pointed to the influence of tech industry lobbying as a blocker to regulatory reform.

Senator Ron Wyden commented that the reason lawmakers “haven’t made as much progress” is because of the “big wallet” of technology companies. The result is a regulatory regime that seeks to curtail misuse, yet leaves wide pathways open for commercial flows.

The AP investigation found that up until at least 2022, U.S. servers and cloud-software tools were marketed in China for “military-grade” AI-enabled policing applications. In one case, Dell’s Chinese-language marketing for a surveillance-laptop-class product claimed “all-race recognition” in cooperation with a Chinese AI firm and Chinese public-security buyers.

Even while prevented from receiving U.S. hardware directly, firms under U.S. sanction can still rent U.S. cloud capacity or use U.S. software indirectly. That means U.S. export controls on hardware alone cannot fully prevent American tech from powering surveillance systems.

Critics argue that this is not merely a regulatory failure, but rather structural complicity. The very tools that underpin authoritarian surveillance are built on a foundation of American innovation, supply chains, and commercial logic.

That complicity raises questions about whether U.S. policy is truly aligned with its stated values of promoting democracy and human rights.

The October 2022 restrictions were a meaningful step, but the fact remains that enforcement and coverage still lag behind the technological reality. Cloud-based services, software platforms, and integrator chains remain largely unmanaged.

The tension between technology’s promise and its peril is front and center. On one hand, the U.S. exports the products, platforms and services that empower global commerce and innovation. But on the other hand, many of those same exports can be leveraged by adversarial states to surveil, detain and repress.

The question for U.S. policymakers is whether the commercial logic of export promotion must yield to a stricter logic of strategic restraint, and whether moral imperatives must override profit motives.

Reform advocates suggest closing the service-based loopholes, making cloud access and AI models subject to export licensing when the end-user is a high-risk security agency. Absent that, the hardware bans lose potency.

Policymakers also propose requiring human-rights due-diligence for tech companies exporting surveillance or analytics systems, so they cannot plead ignorance when their products are deployed against minority populations.

Finally, transparency around licensing decisions and exports would help shed light on just how much U.S. technology is flowing into authoritarian surveillance systems.