Arlington, Va. – During a hearing held on June 7, 2019, nine experts and researchers from academia, research institutes, and US. trade associations, including the American Composites Manufacturers Association’s (ACMA) VP of Composites Market Development, Daniel Coughlin, testified during a hearing held by the U.S.-China Economic and Security Review Commission. The focus of the hearing was on “Technology, Trade and Military-Civil Fusion: China’s Pursuit of Artificial Intelligence, New Materials and New Energy.” At the hearing, the experts detailed the implications and impact of the Chinese’s government’s policies and strategy in three key fields:  artificial intelligence, new and advanced materials, and new energy, particularly energy storage and nuclear power.

ACMA, the world’s largest trade association representing an industry of more than 3000 companies in the domestic US composites industry, views the growing Chinese economy as a key export market, but also has concerns about Chinese subsidies for Chinese producers which can creative incentives for increased exports to the U.S. Also, U.S. educated talent is being utilized in the Chinese workforce to support growth in key areas, including AI and material sciences.

ACMA’s Coughlin testified on a panel focused on maintaining commercial and technical leadership in materials. His testimony highlighted the challenges that composites manufacturers face in competition with China, including eroding U.S. leadership in the development of composite materials, which are critical in the manufacturing of new and resilient products, applications, and technologies, such as autonomous vehicles, lightweight aircraft and drones, and strong and corrosion-proof bridges, water systems, utility structures, and more. He called for commercialization of technologies and research that are currently confined within government, military, and defense research facilities and can benefit a variety of domestic markets to better compete in an expanding global marketplace.

Chinese manufacturers also face less regulatory oversight from their government. When asked how the U.S. can better address regulatory challenges that U.S. manufacturers face, Coughlin called for more collaboration between federal, state, and local regulators to build solutions that promote commerce and competition. He added, “It’s vitally important that we accelerate the regulatory process, not deteriorate it… that’s through collaboration between industry and government.” The panel agreed that tax credits for research and development through deployment would benefit U.S. businesses and industries.

Additionally, Coughlin detailed the concerns of U.S. manufacturers about Chinese policies and subsidies that favor Chinese producers and foster an imbalanced trade environment. He stated, “China has an import duty of 15% to 17.5% on carbon fiber products, however the United States has no duty on carbon fiber products coming from China. This imbalance provides China greater access to the American carbon fiber and carbon fiber composites market than is equally afforded to American firms in China.”

Commissioner Thea Lee highlighted the risks of inaction by the U.S. government in her opening statement, “As opposed to more mature sectors, commercialization of technological advances in these fields could be highly disruptive to our current economy, creating many new jobs but also displacing other jobs and commerce. Many of these advances have military as well as commercial applications, and could provide U.S. adversaries with asymmetric advantages… In short, the stakes are high, and continued U.S. technological leadership is not guaranteed.”

To view the hearing and read written testimony from all of the panelists and commissioners, visit https://www.uscc.gov/Hearings/technology-trade-and-military-civil-fusion-china%E2%80%99s-pursuit-artificial-intelligence-new.

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