In a move that could further strain China-U.S. relations and potentially hamper technological advancement, the United States government is expected to impose new restrictions on the use of Chinese-made software in autonomous vehicles.
The latest development is part of a broader trend of increasing scrutiny and limitations placed on Chinese tech companies operating in the U.S., raising concerns about their impact on economic ties and consumer interests.
According to sources cited by Reuters, the U.S. Department of Commerce is set to propose regulations that would ban the use of Chinese-made software in autonomous and connected vehicles in the coming weeks.
The move, which is expected to target vehicles with Level 3 automation and above, will effectively prevent Chinese companies from testing their autonomous vehicles on U.S. roads.
Additionally, the proposal might seek to prohibit vehicles equipped with Chinese-developed advanced wireless communication modules from operating in the U.S..
A U.S. Commerce Department spokesperson said the department "is concerned about the national security risks associated with connected technologies in connected vehicles".
The anticipated move of the administration of U.S. President Joe Biden has drawn criticism from experts who argue that it prioritizes "national security" concerns over consumer interests and technological progress.
"This is unfortunate. It's another case of 'national security' concerns trumping consumer interests, while further harming economic ties between the two countries," Zhu Zhiqun, a professor of political science and international relations at Bucknell University in Lewisburg, Pennsylvania, told China Daily.
The anticipated ban could have a huge negative impact on the global autonomous vehicle industry, given China's dominance in key technologies such as light detection and ranging, or lidar, experts said.
Hesai Technology, a Shanghai-based lidar enterprise with an office in Palo Alto, California, has faced increasing scrutiny in recent months. It was added to the U.S. Defense Department's list of "Chinese military companies" earlier this year.
Hesai sued the Pentagon, arguing that there was no evidence of its connection to the Chinese military. Although the company was subsequently removed from the list, the incident highlights the precarious position of Chinese tech enterprises operating in the U.S..
Regarding the anticipated software ban, a Hesai spokesperson told China Daily that the company is not likely to bear the brunt, as it is essentially a hardware company and doesn't make software or handle data storage and transmission.
While the U.S. is considering banning vehicles with Chinese-made systems, some Chinese companies are making progress in the U.S. market.
WeRide, a Chinese autonomous tech company, recently received approval from the California Public Utilities Commission to test its self-driving vehicles with passengers in San Jose and nearby areas. This three-year permit allows the company to operate test vehicles both with and without a driver.
WeRide said it is aware of the anticipated regulations to ban the use of Chinese-made software in autonomous vehicles, but declined to comment because "it is not a rule yet".
The Biden administration's anticipated move is just one example of the challenges facing Chinese tech companies that are seeking to expand their operations in the U.S.. Several other Chinese companies, particularly in the electric vehicle industry, have encountered rising suspicion of and obstacles to their U.S. expansion plans.
One notable case involved Gotion, a Chinese EV battery manufacturer, whose planned $2.4 billion factory in Michigan has faced significant setbacks.
Despite promising to create 2,350 jobs with competitive wages, the Gotion project has been mired in controversy and legal disputes. Local opposition and concerns raised by U.S. lawmakers have stalled the development plan.
Zhu, the professor, argued that restrictions on Chinese investments in the U.S. would result in a lose-lose situation for both countries.
"Many Chinese companies would like to expand their businesses abroad to enhance their profiles, create new markets and become more competitive globally," he said. "If they invest in the U.S., they will not only create new jobs for local communities here, but also offer American consumers more options of the goods and services available."
Experienced Chinese construction companies could potentially help U.S. cities and towns address outdated infrastructure, but they are being shut out due to so-called national security concerns, he said.
As China-U.S. tension continues to escalate in the technology sector, there are growing calls for a more balanced approach.
"The two governments need to establish some protocol on 'national security', in order to avoid political intervention in normal business dealings," Zhu said, adding that high-tech competition is good for businesses and consumers on both sides.
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