The U.S.-China Competition and Corporate Responsibility

The United States is in a crucial competition with the Chinese Communist Party (CCP) that will impact the nation’s economic future and security for many years. Decisions made in areas like tariffs, export controls, immigration, and counter-drug efforts will significantly influence the outcome of this rivalry. From my experience in public service, I believe that achieving success in this race requires not just effective policies in Washington but also accountability from American corporate boards.

Often, the conversation around U.S.-China competition focuses mainly on government actions, as if it’s solely in the hands of federal policymakers. However, American businesses, especially those at the forefront of technology, play a vital role. Companies should have the ability to compete globally, but this freedom shouldn’t come at the expense of America’s long-term economic and security interests.

Prominent companies like Nvidia and TikTok have faced scrutiny due to their connections that could empower the CCP. However, some major U.S. firms have escaped public attention, even though their actions significantly bolster China’s industrial, military, and surveillance goals. A good example is Qualcomm.

Based in San Diego, Qualcomm depends heavily on China for revenue. In fact, approximately 46% of its sales—around $17.8 billion—come from customers in China. This dependence creates strong motives to align with Chinese interests, even if it undermines U.S. priorities.

It seems clear that these incentives have influenced Qualcomm’s actions. Reports note the company has invested in Chinese firms involved in mass surveillance and repression, such as SenseTime, which has been implicated in monitoring Uyghurs in Xinjiang. The U.S. government blacklisted SenseTime due to its human rights violations, emphasizing the importance of taking action against groups that cause suffering. Nevertheless, Qualcomm continued to fund the company and even promoted its surveillance technologies to investors.

This trend doesn’t stop there. Qualcomm has also supported Chinese companies linked to the People’s Liberation Army and others attempting to bypass U.S. semiconductor export controls. Essentially, American tech leaders have helped enhance China’s military and surveillance capabilities while undermining regulations meant to protect U.S. interests.

Qualcomm’s relationship with Chinese regulators is also noteworthy. When an antitrust investigation was launched in 2015 against the company by the Chinese government, the subsequent settlement was considered a “relative victory” by analysts, even leading to a rise in its stock price. The settlement involved a commitment of $150 million to invest in Chinese startups and a significant discount on patent fees for devices sold in China. Meanwhile, Qualcomm tends to aggressively challenge regulators in the U.S. and Europe.

Some argue that Qualcomm’s licensing structure gives an advantage to lower-priced Chinese smartphones over those made in the U.S. This effectively means that American consumers might be subsidizing China’s mobile industry with every purchase, putting U.S. manufacturers at a disadvantage.

Different from other tech giants, Qualcomm doesn’t face as much scrutiny from policymakers and the public. This needs to change. At the very least, publicly traded companies should reveal the extent of their revenue dependence on China and whether they offer preferential pricing or conditions there. Transparency is essential for investors and consumers to understand how American resources and expertise may be aiding Chinese military and surveillance efforts.

Businesses have clear choices ahead. They can either alter licensing practices that favor Chinese manufacturers or divest from activities linked to blacklisted groups. Competing globally is crucial, but not at the cost of U.S. security.

Companies in critical sectors like 5G, artificial intelligence, and semiconductors have a significant role in determining the outcome of this century-defining competition. The decision is straightforward: either trade strategically for short-term access to the Chinese market or compete on America’s terms and ensure that the free world, rather than Beijing, shapes future standards.