It’s beyond comprehension that, while U.S. policymakers warn of Chinese military aggression, American tax dollars and investments are funding the very technology Beijing is using to modernize its armed forces. Recent investigations have uncovered a grim reality: research funded by U.S. taxpayers and private investments is actively bolstering China’s military-industrial complex, turning our innovations into tools that could one day be used against us.
The House Select Committee on the Chinese Communist Party documented that nearly 9,000 research papers involving U.S. federal funds were co-authored with Chinese researchers over the past decade, many of whom are affiliated with the People’s Liberation Army (PLA) or other Chinese defense institutions. These projects covered sensitive technologies like high-performance explosives, artificial intelligence, hypersonics, and even fourth-generation nuclear weapons technology—areas critical for military dominance. For instance, partnerships between top American universities like UC Berkeley and UCLA and Chinese institutions such as Tsinghua University have enabled Beijing to acquire cutting-edge research on advanced lasers, graphene semiconductors, and nuclear technology, accelerating its military advancements (https://selectcommitteeontheccp.house.gov/media/investigations/investigation-report-ccp-quad-how-american-taxpayers-and-universities-fund).
One particularly troubling example is the Tsinghua-Berkeley Shenzhen Institute (TBSI), a joint research institute established in 2014. While ostensibly created to promote “technology and innovation,” TBSI became a channel for transferring sensitive U.S. technologies to Chinese defense contractors, making American taxpayer dollars complicit in advancing Beijing’s military might. This is not about benign academic exchange; it’s a national security failure that must be addressed.
The issue extends well beyond academia. A recent Department of Defense (DoD) report highlights how China is leveraging American financial markets to support its military buildup. BlackRock and MSCI have invested hundreds of millions in Chinese companies under U.S. sanctions, including China’s largest chipmaker, Semiconductor Manufacturing International Corporation (SMIC), and military drone manufacturer AVIC. These investments directly support the PLA’s precision-strike capabilities and battlefield surveillance systems (https://www.defense.gov/News/News-Stories/Article/Article/3562442/dod-report-details-chinese-efforts-to-build-military-power/). By allowing U.S. capital to flow into these enterprises, American firms are enabling the development of weapon systems that the PLA could one day deploy against U.S. forces in the Pacific.
The strategic implications of such funding are alarming. The DoD’s 2023 China Military Power Report outlines Beijing’s objective to eclipse U.S. military dominance in the Indo-Pacific by 2035 and to become a global military power by 2049. China is rapidly expanding its nuclear arsenal, constructing new intercontinental ballistic missiles capable of striking the United States, and advancing hypersonic weapons that could bypass existing missile defenses. Each dollar invested in these sectors strengthens China’s ability to deter, and possibly defeat, U.S. forces.
Financial entanglement is equally problematic. U.S. firms have substantial stakes in Chinese state-owned enterprises implicated in human rights abuses, such as Zhejiang Dahua Technology, a company that produces surveillance systems used to monitor and detain Uyghur populations in Xinjiang. Continuing these investments is not just morally untenable—it’s strategically shortsighted. These companies are the backbone of the same authoritarian regime that seeks to undermine American influence and leadership globally.
Critics argue that cutting off academic and financial collaboration with China could harm U.S. competitiveness, stifling innovation and isolating U.S. researchers from global networks. But this argument ignores the reality of how these engagements are structured. Collaboration with China isn’t enhancing U.S. competitiveness—it’s systematically eroding it. American innovations are being siphoned off to strengthen a rival superpower that aims to displace the United States on the world stage. If we continue down this path, we’re not just risking our leadership—we’re enabling our own strategic decline.
Congress must act decisively. First, pass the DETERRENT Act (H.R.5933), which bans U.S. researchers from collaborating with any Chinese entities linked to the military or state security apparatus and imposes strict penalties on universities that fail to disclose foreign funding ties. This legislation would cut off federal research dollars from institutions still partnered with Chinese military-linked entities and require full transparency for any foreign collaboration.
Second, the Treasury Department should implement financial sanctions on American firms found to be investing in Chinese military-linked companies, including cutting off access to federal contracts. If a company chooses to profit off aiding an adversary, it should forfeit any opportunity to benefit from U.S. taxpayer dollars. Third, the Commerce Department must expand export controls to block the transfer of any dual-use technology with military applications, even if only tangentially related, and implement a thorough review of all licenses issued for such technologies.
Finally, Congress should expand the mandate of the Committee on Foreign Investment in the United States (CFIUS) to scrutinize outbound investments, not just inbound ones. This will ensure that no American capital flows into sectors that could advance China’s military capabilities or bolster its authoritarian surveillance state. America cannot afford to be complacent. Every dollar we send to Beijing—whether in research funding, financial investments, or technological transfers—strengthens a regime intent on challenging U.S. leadership and undermining our security.
It’s time to draw a hard line. U.S. taxpayer dollars and private capital should be used to protect American interests, not subsidize our adversary’s ambitions. Without immediate action, we may soon find ourselves outmaneuvered by a military we helped build.
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