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Title page 1

Contents 2

KEY TAKEAWAYS 1

INTRODUCTION 4

PRINCIPLES FOR LIMITING THE PRC'S NATIONAL POWER INDUSTRY ADVANCE 5

THE PRISONER'S DILEMMA 6

LIMITS OF EXPORT CONTROLS 8

LIMITING CHINESE KNOWLEDGE ACQUISITION 11

University and Government Research Policies 11

Limit Chinese Nationals Receiving Postdocs at Universities and FFRDCs 12

Ban Chinese Funding of U.S. Research Universities 12

Require Disclosure of U.S. Faculty Research With Chinese Researchers Related to National Power Industries 12

Institute Better Screening of Chinese STEM Students 14

Restrict the U.S.-China Science and Technology Agreement 15

Business Knowledge Acquisition 15

Restore the White House IP Enforcement Coordinator 16

Limit Chinese "False Flagging" 16

Limit Assets Going to Chinese Firms in U.S. Bankruptcy Proceedings 18

Pass a New FIRRMA That Is Tougher on China 18

Limit Chinese Companies Doing Business in the United States 19

Expand the FBI's Commercial Counterintelligence Budget and Capabilities 19

Expand the DHS Cybersecurity and Infrastructure Security Agency and Homeland Security Investigations Group 20

Limit Chinese Firms From Using the Courts to Gain Access to U.S. IP 20

Increase Criminal Penalties for IP Theft 20

Assist Nations in Modernizing Their Export Control Regimes 21

LIMITING CHINESE IMPORTS 22

Stop Imports From Chinese Companies on the Entity List 22

Reform Section 337 of the Tariff Act 22

Rely More on BIS Bans Based on Cyberrisks 23

Strengthen Government Procurement Restrictions 24

Require Products Made by Chinese Companies to Be Labeled As Such 26

Build an "Inspection Wall" Against Counterfeit and Pirated Chinese Goods 28

Expand Section 5949 Purchases From Entity List to More Products 28

LIMITING FINANCING TO CHINESE FIRMS 29

Penalize States and Localities That Provide Incentives to Chinese Companies 29

Stop Public Pension Funds From Investing in China 29

Better Identify Chinese Interests in U.S. Research Funding to Business 30

REDUCING THE NEGATIVE IMPACT OF CHINESE MERCANTILIST POLICIES 32

Bring a WTO Case on Subsidies 32

Limit Chinese Funding of Third-Party Litigation 33

Use Antitrust Law to Combat China's Anticompetitive Practices 34

Push Back Against SEP Abuse 36

REDUCING ALLIED PRODUCTION IN CHINA 37

Create a North American Integrated Market 37

Allies Should Agree on Several Non-Chinese Production Hubs 38

Establish a Reshoring Incentive Fund 41

Establish a Tax Incentive for Firms to Move Chinese Production to Labor Surplus Areas 41

Have Companies List Their Reduction of Production in China as Part of ESG Reporting 41

Establish Escalating Long-Term Tariffs on Final Goods Imports From China 42

CONTESTING CHINESE FIRMS IN NON-ALLIED MARKETS 45

Expand and Reform EX-IM Bank 46

Expand the International Development Finance Corporation 47

Foster a National Export Promotion System 48

Promote National Power Exports to the Global South 48

Make It Easier to Export Weapons to All Nations in the Foreign Military Sales Program 49

Reform the Foreign Corrupt Practices Act to Allow Bribes When Competing With China 52

Allow U.S. Intelligence Services to Give Insights Into Chinese Company Bids 53

Expand Training and Other Outreach to Government Officials in Contested Nations 56

CONCLUSION 57

ENDNOTES 59

Tables 41

Table 1. Current and potential manufacturing hubs 41

Figures 46

Figure 1. Hypothetical firm with fixed costs 40 times greater than marginal costs 46

Boxes 10

Box 1. The Effect of Export Controls on Huawei 10

Box 2. The Myth That Chinese Racism Is the Cause of U.S. Toughness Toward the PRC 42

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