Mike Pompeo speaking with arms raised (© Jeff Chiu/AP Images)
Secretary of State Michael R. Pompeo during a January 13 speech in San Francisco (© Jeff Chiu/AP Images)

U.S. Secretary of State Michael R. Pompeo outlined the rewards and the risks for companies doing business in a country controlled by the Chinese Communist Party.

“We want to create conditions so that you can do so on a level playing field, in the spirit of respect between our two nations,” Pompeo told a group of high-tech companies in Silicon Valley on January 13. “But defending freedom and national security isn’t just the government’s job; it’s one for each and every citizen.”

U.S. government agencies are taking steps to prevent the Chinese military from turning American innovation against the U.S. and its allies, Pompeo said, adding that any new trade deal with China will include protections against intellectual property theft.

Private companies in the U.S. and abroad should take similar steps.

“[W]e need to make sure that our companies don’t do deals that strengthen a competitor’s military or tighten the regime’s grip of repression in parts of that country,” the secretary said in his speech to the Silicon Valley Leadership Group in San Francisco. “We need to make sure American principles aren’t sacrificed for prosperity.”

Through a policy called “military-civil fusion,” the Chinese Communist Party is taking advantage of the freedoms that drive innovation and stealing others’ technology, Pompeo said. Nearly all of the FBI’s 1,000 open investigations into intellectual property theft are linked to China, he added.

Pompeo said President Trump has taken action to confront China’s theft and predatory economic practices, and is demanding respect and reciprocity. The U.S., for example, has applied greater scrutiny to technology exports that could have military use.

The U.S. has also notified other nations of the security and privacy risks from letting Chinese companies, such as Huawei, construct 5G telecommunication networks in their countries.

Companies should know the businesses they partner with, and educate executives and staff on the risks of collaborating with Chinese businesses. But Pompeo said companies’ business ventures in China can succeed under the right circumstances.

“Your companies are built on the ethos of bringing good things to your fellow man, and I know you’ll get it right,” he told the high-tech business leaders.