House lawmaker presses DOD to exclude Chinese display companies from military contracts

The chairman of a House committee focused on national security and economic competition between the U.S. and China is urging the Pentagon to add two Chinese electronics display companies to a restriction list that bars them from doing business with U.S. military and intelligence agencies, according to a letter first seen by Nextgov/FCW.

Rep. John Moolenaar, R-Mich., who chairs the lower chamber’s Select Committee on the Chinese Communist Party, asked Defense Secretary Lloyd Austin to add China-based display firms BOE Technology Group and Tianma Microelectronics to the 1260H list, which inventories Chinese civilian entities deemed dangerous to national security because they are suspected of contributing to Beijing’s military research and development.

Electronic displays are integral to many everyday products like televisions or smartphones, but they are also becoming central to advanced U.S. weapon systems, including Javelin missiles and drones, the letter says, adding that any trade disruption with China would bring production of many of these systems to a standstill.

Therefore, the Department of Defense must develop a strategy to lessen its dependence on Chinese-owned display technology, the lawmaker argues.

Nextgov/FCW has reached out to BOE and Tianma for comment. A DOD spokesperson did not immediately return a request for comment.

BOE is one of the world’s largest device interface providers, and has become a prime supplier on newer versions of Apple’s iPhone product line. Tianma advertises itself as a major researcher and manufacturer of touchscreen modules used in automobiles and consumer electronics.

“The PRC engages in aggressive state-sponsored subsidization of the two primary display technologies: liquid crystal display (LCD) and organic light-emitting diode (OLED) display. By doing so, it drives non-PRC companies from the market and bolsters PRC dominance of the Industry,” Moolenaar wrote in the Sept. 24 letter.

Besides predominating market share in the display space, the letter argues that the companies are based in a major military-civil fusion zone — known as the Chengdu Hi-Tech Industrial Development Zone — that helps China’s People’s Liberation Army integrate cutting-edge commercial technologies into its defense capabilities.

Beijing’s military-civil fusion strategy has been a longtime concern for China hawks in the U.S. The State Department has deemed the dynamic an “aggressive” approach that involves “acquiring and diverting the world’s cutting-edge technologies — including through theft — in order to achieve military dominance.”

China has denied claims that it’s exploiting domestic companies for espionage, sabotage or gains in market dominance. A Chinese embassy spokesperson earlier this month fired back against claims that Chinese-owned seaport equipment enabled operatives to covertly burrow into the networks of strategic U.S. port systems.

The House panel and other committees have been working to taper back China-tied electronics from entering American markets. It backed a bill that would bar the Transportation Department from procuring equipment that contains light sensing and ranging — or LiDAR — technologies made by China and other foreign adversaries, Nextgov/FCW first reported.