Recent years have seen the emergence of ‘Strategic Competition’ between key states including the United States, the People’s Republic of China and the Russian Federation (hereafter PRC or China and Russia for shorthand). This strategic competition has far-reaching consequences including in relation to Strategic Trade. In recent decades, export controls have largely focused on weapons of mass destruction proliferation. This has been complemented by the widescale use of targeted sanctions by the UN, EU, US and other individual states. In the context of strategic competition, the focus of controls is evolving to be more focused on the potential use and misuse of technology to support military and strategic programs in what is described as resurgent great powers.
In this context, CNS undertook to identify what new needs governments and the private sector must meet to manage the risks associated with strategic trade. CNS specifically sought to examine these topics through the lens of certain key sectors – often called emerging and critical technology sectors, including those listed below. CNS undertook a global sectoral mapping exercise in relation to the supply chains for these sectors. This sectoral mapping work sought in particular to understand the role of China and, where relevant, Russia in relation to the sectors. As part of this work, CNS also sought to understand the indigenization efforts of those countries in relation to each sector. CNS thus also examined both licit and illicit procurement and acquisition methods associated with each country and each sector.
In addition to this, CNS held a series of industry roundtables with the purpose of gaining insight from the private sector about the trade control challenges and considerations that go along with strategic competition. CNS held three roundtables on 18 May 2021, 20 October 2021, and 25 March 2022. CNS also presented and received feedback on aspects of this work for governmental, private sector, and non-governmental audiences on more than a dozen occasions.
Russia’s invasion of Ukraine in February 2022 came partway through development of this guidance. Overnight, the export control and sanctions landscape related to Russia evolved. More than 30 countries agreed to coordinated action to cut Russia off from global strategic supply chains. As a result, to the extent possible, this guidance accounts for the evolution of controls – and Russian efforts to evade these controls.
In addition to this work, the research team identified, collated, and analyzed large volumes of data on Russian and Chinese procurement approaches and supply chains. The research team decided against directly drawing on this data for this report as many of the data sources are expected to provide ongoing insight into the technology acquisition approaches of both countries. The research team ensured that the insights from this data centric analysis are in line with the case study-based analysis presented in this sectoral guidance. The research team intend to publish additional case studies drawing from this data in the future. China Aerospace Science and Technology Corporation
This guidance is presented in a number of different versions: as a report; as a collection of interlinked web pages; as presentations, and as a series of videos. Common to all of these formats are the central elements of the guidance which includes this introduction, an introduction to strategic competition, a section on technology acquisition trends, a section containing sectoral analysis, a list of red flags, due diligence guidance, a section on managing distributors, and a brief conclusion.