Why a senator says the US should do more spying on Chinese companies

If you go back 10 years, most Americans had never heard of Huawei. Today, China’s telecommunications giants symbolize how quickly China can dominate strategic technology areas and create new national security and market threats for the U.S. government and industry in the process.

Democratic Sen. Mark Warner of Virginia, the top Democrat on the Senate Select Committee on Intelligence, is now concerned about another Chinese company, BGI, which he predicts will surpass Huawei in both size and results. We are not building mobile phone base stations or smartphones for the 5G era. They are collecting DNA.

“If Huawei was big, BGI would be even bigger,” Warner said Wednesday at the CNBC CFO Council Summit in Washington, D.C.

BGI is one of the world’s largest genomics companies. The company operates DNA sequencing laboratories in China and abroad. The company processes genetic data for hospitals, pharmaceutical companies and researchers in dozens of countries, according to a recent National Security Council report on emerging biotechnologies.

The company started out as the Beijing Institute of Genomics, a Beijing-based research institute closely tied to China’s national genome project. The company has since grown into a global commercial powerhouse selling DNA sequencing, prenatal testing, cancer screening, and large-scale population genetic analysis, NBC News reported.

BGI operates through subsidiaries in the United States, Europe, and Japan. In several countries, he helped build national genetic databases and pandemic testing systems.

U.S. intelligence officials believe that its global footprint gives BGI access to one of the largest collections of genetic data on the planet. Lawmakers warn that genetic data is more than just medical information. At scale, it becomes a strategic asset that fuels a “DNA arms race,” the Washington Post reports. The Washington Post reports that DNA profiles can reveal ancestry, physical characteristics, disease risk, and familial relationships, and when coupled with artificial intelligence, the data can also be used for long-term biological research related to surveillance, tracking, and national security.

At a CNBC event this week, Warner continued to call for more focus on BGI. “They’re looking at DNA data,” Warner said. “This level of human experimentation and theft of intellectual property should concern us all.”

Congressional investigators have previously warned that BGI maintains close ties to the Chinese Communist Party and the Chinese military, according to a report by the House Select Committee on the Chinese Communist Party. They argue that China makes little distinction between commercial data and national security needs.

The horror of “super soldiers”

One of the biggest concerns related to BGI and China’s broader biotechnology push is the possibility of genetically enhanced soldiers. U.S. officials have publicly claimed that China is researching human enhancement and military biotechnology. According to a Wall Street Journal op-ed written in 2020 by John Ratcliffe, director of the US Central Intelligence Agency, while director of national intelligence during Trump’s first term, US defense analysts say China’s research extends to population DNA collection, military databases, and AI-driven human performance modeling.

Warner addressed those concerns directly this week.

“It’s scary,” Warner said.

Warner described China as a great country and a great competitor, and as a former telecom executive (he was also one of the founders of Nextel), he said what Huawei was able to do – produce better products at lower prices before the US and Western competitors were ready – was a lesson.

BGI’s story is uncomfortably familiar to Warner.

“If you go back eight or nine years, most people had never even heard of Huawei,” he said.

Huawei has grown through a combination of massive state support, access to global markets, and aggressive pricing, not only beating Western companies in scale and cost, but also positioning itself within the world’s communications infrastructure before governments understood the security implications. Huawei was first placed on a U.S. trade blacklist in 2019, which barred U.S. companies from selling some technology to the Chinese tech giant, citing national security concerns. Since then, chip regulations for Huawei have become even stricter.

But Warner said that by the time the U.S. moved to regulate Huawei, “(we) started losing little by little.”

Much of the 5G backbone was already formed by Chinese technology.

In a separate interview with Javers at the CNBC CFO Council Summit, Michigan Congressman John Moolener, Republican chairman of the House Committee on the Chinese Communist Party, said, “We’ve seen how they’ve used overcapacity and price manipulation and put people out of business in a variety of sectors. They’ll continue to do that.” “We want to build friendly relations with China, but China is not our friend. China is our biggest enemy,” he added.

While the Soviet Union was a military and ideological competitor, Warner said China is a different kind of competitor in every technology field, from telecommunications and 5G to AI, quantum computing and biotechnology.

Warner now believes BGI will follow a similar model in biotechnology. Like Huawei, BGI quickly scaled up with state support. The Foundation for Defense of Democracies, a Washington, D.C.-based think tank, called on lawmakers of both parties earlier this year to limit BGI’s access to U.S. institutions.

Congress is seeking to pass various versions of the BIOSECURE Act, which would limit the ability of Chinese biotech companies to operate in the United States. Some U.S. hospitals and research institutions with ties to Chinese genomics companies are under pressure from the federal government, according to the Associated Press, while some medical professionals in the U.S. argue they risk losing critical research support for core medical goals. BGI told The Associated Press that the bill is “a false flag targeting companies with a national security premise. We strictly abide by the rules and laws, and our business does not have access to any personal information of Americans.”

U.S. intelligence moved too slowly, confusing major spy alliances

Warner said the U.S. intelligence community is moving too slowly to recognize the biotech threat. He said intelligence agencies focus too much on foreign governments and militaries and less on the commercial technology sector. But in a world where technological superiority is national security, Warner says our intelligence efforts need to reflect this change.

He said the U.S. only really expanded its espionage efforts in AI, semiconductors and biotech in the last few years. Warner said a more “sophisticated approach” was needed in this area, citing a recent example when SMIC, China’s largest chipmaker, surprised U.S. authorities by producing 6-nanometer chips despite strict U.S. export controls. This breakthrough showed that the US government had underestimated both China’s technological capabilities and its ability to circumvent restrictions. “SMIC’s 6-nanometer chip caught us off guard,” Warner said.

Warner also worries that tracking China’s rise in high-tech will require the kind of close cooperation with U.S. allies that the Trump administration has squandered, such as the global intelligence-sharing network known as the “Five Eyes” alliance.

Those relationships are currently under strain, Warner said, with key partners such as Britain, the Netherlands and France publicly saying they are reluctant to share information with the United States. “They feel that we are politicizing information products, and that is not good news for the United States,” Warner said.

At the root of his concerns about technological competition with China in areas such as AI and biotechnology is the United States ceding global leadership in standard setting. The United States has shaped the rules for wireless networks, satellites, and internet infrastructure for decades. Warner said that while its advantages have helped the United States lead the global market, China is now actively positioning itself as an international standard setter.

Warner said the U.S. role in international organizations was one of the “secret sauces” from an era when the U.S. dominated the global economy and technology, allowing the U.S. to take advantage of innovation happening around the world “even if it didn’t originate here.”

Influencing standards and protocols across technology domains is important not only to maintain a competitive edge but also to establish ethical boundaries. “Is it us or the Chinese?” Warner said. “The Chinese are coming in with a decidedly less humanistic approach, and it’s working in many areas, and you can see it in the standard-setting bodies. They’re trying to flood the zone with a bunch of engineers and buy votes. We have to re-engage with American business and government,” he said.