§2.Countering the military-civil fusion strategy of the Chinese Communist Party
This section defines "Chinese entity of concern" (e.g., specified Chinese universities involved in military-civil fusion such as the "Seven Sons of National Defense," government-owned enterprises, private companies with military licenses or ties, and certain listed military companies), "covered entity" (e.g., federal research agencies such as the National Science Foundation and National Institutes of Health, federally funded higher education or private research institutions, and U.S.-headquartered private companies receiving federal financial assistance), "federal financial assistance," and "military-civil fusion strategy" (i.e., the Chinese Communist Party's strategy to leverage civilian resources for People's Liberation Army technology development, logistics, and other military uses).
The section prohibits covered entities from engaging in scientific research or technical exchanges with a Chinese entity of concern that have a direct bearing on, or dual-use potential for, priority technology areas listed on a Department of Defense website (initially including quantum computing, photonics and lasers, robotics, big data analytics, semiconductors, new and advanced materials, biotechnology including synthetic biology and genetic engineering, 5G and future telecommunications, advanced nuclear technology including power and energy storage, aerospace technology, and artificial intelligence). It further prohibits U.S.-headquartered private companies receiving federal assistance from forming partnerships or joint ventures to conduct such research or exchanges.
The section directs the Secretary of Defense, in consultation with the Secretaries of State, Energy, Education, and Commerce, the Director of National Intelligence, the Director of the Federal Bureau of Investigation, and the Secretary of the Treasury, to establish and update the website at least twice annually with the list of prohibited research areas and, to the extent practicable, Chinese entities of concern. (Thus, the prohibitions restrict U.S. research collaborations in sensitive dual-use technologies with entities supporting China's military-civil fusion.)