The China Commission's Report
Christmas for U.S.-China Policy Nerds
The U.S.-China Economic and Security Review Commission late last year released its annual report to Congress. ChinaTalk welcomes two commissioners to the pod to discuss.
Before joining the Hoover Institution, Mike Kuiken spent two decades on the Hill with Senators Schumer and Durbin. He was appointed to the commission by Leader Schumer. Leland Miller, the co-founder and CEO of China Beige Book, was appointed by Speaker Mike Johnson.
We get into…
What the U.S.-China Commission does, and why “alligators closest to the boat” explains Congress’s blind spots,
The case for an economic statecraft agency, and reorganization lessons from post-9/11 sanctions reform,
The year supply chains became sexy — and the best-case scenario for responding to chokepoints like rare earths and pharmaceuticals,
Xi’s unresponsiveness to consumer spending concerns, and the military-tech developments he’s targeting instead,
The quantum software gap, synthetic biology in space, and Congress’s role in competing with China.
Listen now on your favorite podcast app.
Fishbowl Politics
Jordan Schneider: The U.S.-China Economic and Security Review Commission is out! Christmas has come early for U.S.-China policy nerds. Mike, what is the U.S.-China Commission?
Mike Kuiken: Next year marks the 25th anniversary of the U.S.-China Economic and Security Review Commission. Congress created it around the same time it was debating China’s accession to the World Trade Organization and the establishment of Permanent Normal Trade Relations. Congress approved these measures, but wanted to closely monitor China. The commission was created to keep tabs on both China and the executive branch as events unfolded. That’s our origin story.
Every year, we conduct a series of hearings — usually six — always co-chaired by a Republican and a Democrat in a bipartisan fashion. Then we publish an annual report with recommendations. We also engage regularly with the executive branch, including conversations with figures like Jamison Greer, Undersecretary of Commerce for Industry and Security Jeffrey Kessler, and military leaders. Earlier this year, we met with General Stephen D. Sklenka, among others.
Everyone on the commission brings experience from the Hill, the security space, or the economic policy, like Leland. It’s a fascinating mix of backgrounds, and we have a great team. We produce an 800-page report every year, which dives into a variety of issues. It is the definitive geek-out-on-China document. Our staff does an incredible job. Leland, what did I miss?
Leland Miller: You didn’t do your “alligators closest to the boat” riff. That one’s always good.
Mike Kuiken: Don’t worry, I’ll get to the alligator closest to the boat.
Leland Miller: A million people in D.C. are working on today’s issues. The China Commission focuses on more distant concerns — the ones on the horizon. What should we be paying attention to now? What should Congress be monitoring closely in economics, military affairs, and technology? How do we create smarter policy? We try to look further ahead and recommend ideas that Congress should be considering.
Mike Kuiken: Since Leland decided to trigger me, let me give you the “alligator closest to the boat” analogy. Folks on the Hill deal firsthand every day with the most immediate, pressing issues — the alligators closest to the boat. We’re looking at the horizon or beyond it, focusing on issues that aren’t making headlines yet. We raise awareness and call attention to them. Another part of our work is increasing literacy on these topics.
Jordan Schneider: As someone who’s been reading this document for a decade now, it’s refreshing. The level of discourse in the American political ecosystem around these topics is often heated and not grounded in evidence. Having this report come out every year offers a different approach — something substantive and measured.
I get a similar feeling listening to nuanced Supreme Court discussions — “Oh, wow, here are people engaging with the world, engaging with facts, and trying to understand things.” You don’t write a 60-page report about China’s ambitions in space without doing research and putting in the work.
We have two commissioners here, and you guys get all the glory, but there’s a large team of staffers putting in the work. From my interactions with them, they take their jobs incredibly seriously. They examine issues in depth. Unlike the intelligence community, where only certain people see the analysis, this is a product for the American people. Thanks, guys, for all your work.
Leland Miller: The staff are the backbone of this operation. The commissioners drive the agenda — we all have our different, overlapping priorities. It’s common for staff to push back and say, “No, I don’t think you can base that on evidence.” We have a discussion, and they do the research — extensive research, constantly. By the time we publish something, it’s not just passing through us. It reflects our perspective, but it’s evidence-based. The report is fundamentally a research document that focuses on policy grounded in real data. The research component is critical.
Mike Kuiken: Before I joined the commission, I spent years with Leader Schumer accessing some of the most sophisticated intelligence in the world. My first year on the commission, as I read through the initial draft our staff put together, I highlighted at least five or ten sections to ask, “Where on earth did you get this?” I was amazed at the amount of information available in open sources and their ability to find and extract it.
Jordan Schneider: We’re not complaining about the seven citations to ChinaTalk this year. That’s how you know it’s good stuff.
Mike Kuiken: Is that too many or too few?
Jordan Schneider: We’ll chart it over time. We’ll have ChatGPT track how we’re doing. Now, make the case for Congress’s influence on U.S.-China issues.
Leland Miller: Start with the guy who’s been on the Hill longer.
Mike Kuiken: If you look at the big moves in U.S.-China policy over the last decade, many have come out of Congress. That includes sanctions bills, the CHIPS and Science Act, and the Foreign Investment Risk Review Modernization Act (FIRRMA), which reformed the Committee on Foreign Investment in the U.S. (CFIUS). The BIOSECURE Act hasn’t passed yet, but the idea for it came from the commission, a legislative branch entity. Outbound investment screening — many of these are ideas that either originated from the commission or from members of Congress.
The CHIPS and Science Act has an interesting origin story. Leader Schumer and Senator Young got together and created the legislation for one of the most significant pieces of industrial policy we’ve seen in a generation. If you look at the last 10 years, Congress has passed incredible, agenda-shaping legislation. The executive branch has broad authority in foreign policy, but many of the guardrails and tools the executive branch uses have been provided by Congress or have been driven by congressional agenda-setting. Leland, what do you think?
Leland Miller: Administrations are fleeting, but Congress is forever. If you want durable, lasting policy, you need Congress involved. Mike gave examples of topics Congress has been essential to. Look at outbound investment — it’s not a success story, at least not yet. It’s something the Biden and Trump administrations handled, but Congress hasn’t cemented the foundation for it in legislation. Right now, you don’t have a durable outbound investment mechanism. This is a call for Congress to constantly be on the tip of the spear, not just reacting to whatever one administration does as Republicans and Democrats alternate in the presidency.
Mike Kuiken: Congress passes a National Defense Authorization Act every year, and that is full of China policy, both on the economic and security side. Pieces of that legislation drive the agenda for both the Department of Defense and the broader executive branch.
Keep in mind that we updated the Taiwan Relations Act three or four years ago, which was also carried by the National Defense Authorization Act. That was driven by Congress, not the executive branch. It was done with a lot of push and pull from the administration, which was saying, “Oh my God, we can’t possibly do this or that.” Ultimately, it was Congress that said, “Yes, we can.”
Jordan Schneider: “Yes, we can.” What a throwback.
There’s this weird dynamic where the executive branch sometimes — perhaps increasingly — doesn’t do what legislation says they have to do. One of your recommendations is to more closely follow the Taiwan Relations Act update. We have the ongoing TikTok saga where both the Biden and Trump administrations have punted, and did not reflect the intent of the votes in the House and Senate. What happens when the executive branch doesn’t follow through on legislation on China-related issues?
Mike Kuiken: I was on the Armed Services Committee in the early days of the wars in Iraq and Afghanistan. Looking back now, I think it was like holding up a fishbowl. If I tilt it this way, the water sloshes one way — if I tilt it that way, it sloshes another. I use that analogy because it’s never perfectly in balance — maybe for brief periods, but not for a sustained time. There’s this historic push-pull relationship between the executive and legislative branches. It’s different with divided government versus one party in power, but there’s always some sloshing around.
Over the years, Congress has provided broad authority to the executive branch. When the executive doesn’t listen, Congress finds ways to put up guardrails, constraints, or funding prohibitions. That’s the tradition of our country. We’re seeing some of that sloshing now. I obviously worked for Democrats, so I see things a particular way, but the fishbowl is never going to sit perfectly settled on the counter. There’s always some rumbling in the water.
Leland Miller: Speaking of rumbling in the water — when administrations come to power, they have a million priorities. Most of the time, they’re not planning to make structural changes to the system. One of our recommendations this year was creating an economic statecraft agency or similar entity to improve coordination and integration among the various entities in government that handle sanctions, export controls, and other tools.
I’m not sure anybody on the Republican or Democrat side would look at that and say it’s a terrible idea. But if for the administration — whatever that administration might be — the last thing they want is to structurally change a bunch of things. What we’re saying is, “We have to focus on the mission, and if the mission is best conducted by restructuring or reintegrating things, then let’s do it.” That’s something an administration focused on getting a million things done in the next 24 hours often can’t do.
“Pulling Thread Through a Needle” 穿针引线
Jordan Schneider: Leland, you jumped the gun here. This is a theme I’ve been writing about and doing shows on for four or five years now — a new reorganization to bring disparate pieces of government that touch the China challenge together. You identify the Bureau of Industry and Security (BIS), the Office of Foreign Assets Control (OFAC), the export control part of the State Department, and the Defense Technology Security Administration (DTSA) — which does export controls for the Defense Department — as pieces that should work together.
During the Biden administration, there was internal disagreement among key officials overseeing economic policy. Each principal controlled different pieces — investment controls, export controls, and so on — and they disagreed about how aggressively to pursue these tools. If cabinet members are already at odds with each other, how would creating a unified economic statecraft entity solve that problem? Would this centralize decision-making in the White House, effectively removing authority from these cabinet-level officials? How exactly would this structure work?
Mike Kuiken: This is something Leland and I worked on together. Beloved Commissioner Randy Shriver and I wrote a piece earlier this year, arguing for reinvigorating the Department of Commerce’s export controls. We argued that similar sanction reforms to the ones at the Treasury Department post-9/11 are needed.
This year, as we held a series of hearings and meetings, I became so frustrated that I almost put my hand on my forehead and said, “Oh my God, we didn’t go big enough.” I’m frustrated that export controls — and also sanctions — happen at a mid-level layer in departments and sometimes don’t reach senior officials. As a result, they often languish — decisions languish — everything languishes. There’s no natural forcing function.
Rather than having these functions sitting at the Assistant Secretary level or below in multiple agencies and departments, you consolidate them. This creates a forcing function not within multiple silos, but in one. Hopefully, you have a senior leader — whether in the Department of Commerce, Treasury, or a standalone entity — that propels the issues to the top. You don’t need to go to the National Security Council every single time to get a resolution.
We’re silent on where this entity should go. The issue of export controls and sanctions is controversial in Congress. The Senate Banking Committee has jurisdiction over export controls and sanctions, while the House Foreign Affairs Committee has jurisdiction in the House. Other committees have significant equities, including the Foreign Relations, Foreign Affairs, and Armed Services Committees, among others. We’re silent on that piece, but we are clear-eyed that we’re in a period of economic statecraft. It’s going to be a cycle of measures and countermeasures between us and China. We need to be thoughtful and strategic in a consolidated way. That was the motivation behind this recommendation. Leland, what did I mess up?
Leland Miller: I’ll offer a pessimistic take. The current structure sets up export controls and sanctions to fail. At the Commerce Department, the undersecretary is in charge of export controls, but the secretary is in charge of promoting U.S. businesses abroad. He is structurally disincentivized from enacting tough policy.
Staffers at the secretary level are patriots and want good policy, but there’s an inherent tension in the system that prevents them from pushing policy if it interferes with their major mandate. The same thing happens at Treasury and, to a degree, at the State Department.
This proposal frees important national security policies from the structural disincentives built into the current system. This is a neglected element of policy we are trying to bring attention to. As long as the top policy is promoting business, it will be hard for a mid-level official to promote a conflicting policy.
Jordan Schneider: Regardless of where you put this entity, there will be counter-forces — parts of the government that want to promote exports, retain global financial stability, keep oil prices low, or other reasonable arguments against coercive actions against Iran, Iraq, Russia, China — pick your country. There is a cost to sharper economic measures the U.S. is considering. Are you arguing for a cabinet position whose job is to push for these tools?
Leland Miller: That would structurally set up the policies to succeed. None of this can succeed without a broader national economic security policy overlaying it. The one thing that administrations — plural — are missing right now is a national economic security strategy that integrates all these different pillars.
There are different reasons why people don’t want to have that — there are many issues in economic foreign policy — trade, investment restrictions, technology controls, supply chain resilience measures, and domestic re-industrialization, whether it’s the defense industrial base or advanced manufacturing. All these pillars are advocated for by people who want their policy to succeed.
Without a broader policy that weaves the pieces together as part of a broader mission, everybody is fighting in parallel for their own piece of the pie and their own resources. The focus on trade and tariffs might siphon focus from export controls and divert all attention from investment restrictions.
With an overarching strategy and structural reform, we could divide economic security issues into those with a national security dimension and those without. For issues with national security implications — supply chain resilience, investment screening, technology controls, trade policy — we need coordination, not competition, between departments. These tools should work in tandem, not against each other. The right policy framework, combined with a structure that doesn’t create conflicting incentives, would make coordination possible.
Jordan Schneider: The catch is that this costs money. Mike made the point earlier that politicians are focused on the alligator closest to the boat.
Mike Kuiken: He’s put it in your mind now. A former colleague of mine on the Armed Services Committee, Tom Goffus, used to talk about the alligator closest to the boat when we were on trips.
Jordan Schneider: The commission is focused on challenges two to five years out. China’s rare earth export controls this year should have been a massive wake-up call. For years, everyone worried China might use rare earths as leverage — and they finally did.
You’d think that would galvanize action — more funding, serious attention, bureaucratic reorganization, even Congress ceding some turf to address the sharp Sword of Damocles held by the Chinese government. You’d think it would accelerate exactly the kind of supply chain security and resilience measures Leland is pushing for. But I’m not seeing it. The moment that should have changed everything has changed little.
Leland Miller: I’m going to push back on your pessimism. Nobody was talking about supply chains until a few months ago — and now everyone is — because they weren’t seen as a tier-one national security priority. Supply chains are boring. If you had brought us on ChinaTalk a year ago and said, “Let’s talk supply chains,” it would have been a different conversation. Fewer people would have tuned in for a podcast on supply chains. They would think, “Oh, gosh, this is boring.”
The way to elevate supply chain resilience — a top-tier priority — is to make it a core pillar of a national economic security strategy. This strategy would define the five critical things we need to do regarding China and other competitors. Supply chains can’t be left to corporate decision-making — they’re a fundamental element of the U.S.-China relationship and require government attention.
Our sixth hearing this year examined Beijing’s choke points on critical U.S. supply chains. We’d been planning it for months, but by the time we held it, rare earths had finally captured everyone’s attention.
Other vulnerabilities will worsen over time, such as pharmaceuticals. China doesn’t ship many finished drugs to the U.S., but it dominates the active pharmaceutical ingredients (APIs) behind medications and the key starting materials (KSMs) behind those APIs. When you see statistics about U.S. pharmaceutical imports from India, most of those drugs trace back to Chinese source materials. How much exactly? We don’t know — even after months of research with full access to government data, we could only produce ranges. The FDA hasn’t been required to collect this information.
The same pattern repeats across printed circuit boards and legacy semiconductors — these are potential choke points that Beijing has over the U.S. economy. APIs and KSMs sound technical and boring — until you realize China may control U.S. access to insulin, heparin, and antibiotics for both civilians and troops. That’s an enormous vulnerability. This needs to be part of our national security strategy. This perspective barely existed a year ago, but has finally entered the discussion in DC.
Supply chain resilience needs to be a core pillar of national security strategy, not just a talking point. Frame it that way, and the logic becomes clear — reducing Beijing’s leverage over critical supplies expands U.S. policy options. The goal is to identify five or six tier-one priorities and integrate them into a unified policy framework. You can debate which issues make the list, but they need to be recognized and addressed together to have a coherent China policy.
Mike Kuiken: When we worked on the CHIPS and Science Act in 2018-2019 — long before it was cool — we pushed supply chain issues. This was in the early days of the Endless Frontier Act debate. Industry pushed back hard — supply chains were their domain, and they didn’t want to share information. That resistance shaped Leland’s thinking.
The second formative experience was the post-9/11 integration of sanctions and intelligence. We embedded the sanctions community into the intelligence apparatus, so intelligence actively fueled Treasury’s work. That integration was crucial.
The Bureau of Industry and Security had access to the intelligence community but wasn’t integrated into it. The difference matters — with access, you get information when you ask. With integration, intelligence proactively dedicates resources to meet your needs. Right now, that industrial-scale effort doesn’t exist for export controls. A core part of our recommendation is to deeply integrate this entity into the intelligence community so it can leverage what we know about supply chains.
The U.S. government hasn’t been strategic about supply chains. We might track sensitive materials for specific defense systems, but we’ve never taken a coherent, comprehensive approach. That gap drove both our hearing and the commission’s recommendation.
Strategies for a Two-Speed China
Jordan Schneider: Leland, in 2024, you said, “supply chains weren’t sexy,” but they were in 2020 and 2021. I’m sure Mike can riff about how the chip crunch during COVID helped get the CHIPS Act across the finish line.
This stuff takes money, or does it? Do you need a double-digit-billion-dollar bill to address printed circuit boards (PCBs), active pharmaceutical ingredients (APIs), and rare earths? The executive branch has been creative with loan guarantees and buying small stakes in companies, but Congress has been inactive. Where’s the bill for this? What should it look like?
Mike Kuiken: None of these things run on fairy dust. They all run on money. Ensuring that we are appropriating the necessary funds to the defense side, but also to the non-defense side — which includes the Bureau of Industry and Security (BIS) — is an important piece.
As Congress evaluates our economic statecraft recommendation, it’ll decide whether to provide more resources to implement it, along with a variety of other decisions.
Jordan Schneider: Congress has been vocal in its displeasure with the lack of semiconductor export controls to China, through bipartisan letters and momentum behind the GAIN Act. Integrating intelligence into BIS sounds good in theory, but if the administration has effectively paused new export controls for a year, what’s the point?
A weaponized API crisis would have triggered more public alarm than temporary car factory shutdowns. What’s your read on congressional appetite for these measures more broadly? How are they thinking about economic security tools right now?
Leland Miller: Those in Congress and the administration who support export controls have to make a better case for why they’re important. Industry is arguing that we need to stop provoking China — “don’t poke the bear.” They argue we want better relations, so why are we acting in ways that could bring us closer to war?
This perspective forgets the 30,000-foot view of China’s economy. China has a two-speed economy. The broader macroeconomy is slowing down significantly due to slowing domestic demand, weak consumption, and a deflating property bubble. But the national security side of the economy is running at a different pace. Xi Jinping has made it clear in the “Made in China 2025” sectors.
For our policy, we don’t care if China’s middle class gets richer — that might be a good thing if they import more U.S. goods. We should focus on the economic areas with a national security nexus that Xi Jinping is targeting. That requires smart trade policy, smart outbound investment policy, and smart export controls that target the critical inputs for China’s technological and military machine.
A potential nightmare scenario is China breaking quantum cryptography, achieving AGI, or making some other enormous breakthrough in AI first. Imagine they cure cancer. A shock would go through the system as we’ve never seen — our approach would have failed.
Jordan Schneider: I don’t know, if they cure cancer, hats off to them.
Leland Miller: We want someone to cure cancer, but we don’t want China to control the pipeline for that cure. If China has enormous success in AI, quantum, and biotech, it shows we are failing on the national security side.
Xi Jinping largely ignores the broader consumer economy, letting it generate enough growth to fund the technology and manufacturing sectors he cares about. If China achieves a major technological breakthrough using that model, the U.S. reaction would be severe — probably triggering broader decoupling and a more dangerous, confrontational relationship.
Jordan Schneider: The cancer example illustrates the challenge of deciding what counts as national security. In Washington, every issue becomes a “national security problem” when someone wants attention. You could theoretically connect cancer research to bioweapons or enhanced soldiers, but you need to draw a line somewhere.
Where is that line? Are we only restricting China’s access to advanced technology, or is there no space for cooperation on medical breakthroughs that benefit humanity?
Leland Miller: I’m not against cooperation, and obviously, everyone wants cancer cured. But if there’s going to be a winner in that race, U.S. industry — which funds enormous R&D — should be it. The alternative is China controlling those supply chains and the leverage that comes with them. We need a strategic approach, not a scattershot of policies. Identify what’s providing capital or technology to the Party or military, then shut those channels down. The problem isn’t only weak policies — it’s that we refuse to even track these flows.
Take supply chains. The issue isn’t that our policies are bad — it’s that we’ve refused to collect the basic data needed to understand our vulnerabilities. Why? We’re too concerned about encroaching on industry’s turf and potentially hurting companies.
That concern has merit, but national security priorities have to take precedence. The government needs to require the FDA to collect supply chain data from companies so we can see the problem. First get the data, then develop policies. Right now, we’re nowhere close to good policy because we don’t have good data — not only on supply chains, but on investment and technology flows as well.
Mike Kuiken: Let me approach the innovation cycle from a different angle. We can’t have meaningful conversations about supply chains unless we’re actively innovating. Our report makes several recommendations — on quantum computing, biotech, and other areas — that all stress the importance of protecting and nurturing our innovation ecosystem.
The Endless Frontier Act was designed as a $100 billion investment in innovation. For 80 years, America has reaped the benefits of investments we made during World War II. Those investments launched our innovation flywheel and kept it spinning. Now it’s time to fuel that flywheel again, especially given China’s manufacturing capabilities. They’ve built an impressive manufacturing machine. Our innovation machine is remarkably strong — I genuinely believe that — but it needs sustained investment.
Everything runs on money. If we want to plan for supply chains 10, 20, or 30 years down the road, we must invest in the innovation machine today. That means funding foundational science and early-stage development. These investments tell us what will go into future supply chains and what we’ll need to build tomorrow’s technologies. Without them, we’re guessing.
Jordan Schneider: That dynamic reminds me of Mike Kratsios giving speeches about Vannevar Bush while the government cut science funding.
Let’s shift to the parallel between Treasury sanctions and Commerce export controls. One recommendation that caught my eye was creating a whistleblower program for export control violations. That playbook has been incredibly successful for financial sanctions enforcement, but it doesn’t exist for export controls. Why is there a gap? Is it because export controls are harder to enforce — you’re dealing with physical goods across thousands of small companies rather than dollar flows through banks?
Leland Miller: We have extensive recommendations for bolstering the Bureau of Industry and Security’s export control work. However, BIS is catastrophically under-resourced for the job it’s being asked to do. As export controls expand — especially to the Middle East — the workload grows while staffing remains skeletal. Some countries have one person doing inspections. More funding is coming, but nowhere near enough.
Our recommendations go beyond asking for more money. We focused on force multipliers — how can technology help? What about a whistleblower hotline, like the one that works for sanctions enforcement? Can we shift from a “sale” model to a “rent” model — where U.S. companies and the government maintain ongoing control over how chip technology is used abroad, instead of losing visibility after the initial transaction?
The goal is to make BIS’s job more effective and manageable, in addition to being better funded.
Jordan Schneider: Let’s do a history lesson on financial sanctions. What breakthroughs gave financial sanctions their teeth?
Mike Kuiken: The biggest breakthrough was after 9/11— we began to see how non-state actors were leveraging the financial system, and that invigorated the process. There was also a reorganization in the intelligence community. I don’t remember the exact year, but that allowed for more resources and thoughtfulness in that ecosystem. Those are the big parallels. The current debate isn’t about non-state actors, but a lot of the lessons learned from the post-9/11 sanctions reforms can be applied here.
Finally, the Foreign Investment Risk Review Modernization Act (FIRRMA) did a lot of important work — we need a FIRRMA 2.0 to hit a refresh key. This is a cycle of measure and countermeasure. We need to make sure that the entities involved in the economic statecraft elements of our government are resilient and flexible enough to respond to Chinese actions.
Jordan Schneider: We’ve all been doing this work for a long time. I appreciate Mike’s optimism and Leland’s urgency, but I’m skeptical. This reminds me of defense acquisition reform — everyone thought Ukraine would force fundamental change. Years later, some legislation has been passed, but no paradigm shift.
China’s rare earth controls should have been that catalyst. It wasn’t a surprise threat — it was a threat we’d discussed for years. Yet it hasn’t created a 9/11-style moment — no “enough is enough, we’re spending the money, getting new authorities, and building the government capacity to handle this mission.”
Instead, we have an executive branch divided on what to do. I like these recommendations, but this is the most pessimistic I’ve been in years about whether any of it will happen.
Mike Kuiken: I’ve worked in both the majority and minority in Congress, and I’ve always seen my job the same way — keep pushing. I’ve never been called sunny before, so I’ll take it. Don’t stop when the situation looks bleak.
Someone needs to feed ideas that look beyond the daily crisis — ideas focused on the horizon and beyond. Yes, we can be pessimistic about rare earths and critical minerals. We can also have a strategic conversation — this is happening now, the executive branch has the wheel, so what should we be considering to make ourselves more resilient long-term?
The rare earths problem is serious, but it’s also not going away. We can talk about building mining and processing facilities. We should also ask — what’s the innovation strategy? What alternatives are we investing in to work around this dependency? Are we being thoughtful about diversification, or reactive?
Leland Miller: We are doing that. I’ll be the cheery guy for a change. Let’s enjoy it while it happens. Big things are happening on critical minerals and rare earths. A year ago, nobody was focused on this. Sourcing isn’t the problem — processing is. We’ve all come around to that idea. The rare earth issue has received attention over recent months, partly because it disrupted the President’s trade and tariff agenda. It caught the White House’s attention.
The Pentagon’s response signals a new model — taking equity stakes in companies and establishing price floors. This addresses the fundamental supply chain problem — China has cheaper labor, and massively subsidizes anything it deems a national security priority. That’s why we’ve outsourced so much and become dependent on Chinese imports.
We’re shifting the paradigm. For designated national security priorities, we’re no longer relying on market economics alone. Price floors and equity stakes — like the Mountain Pass rare earths facility or coordination with Australia on processing plants — make sense for these specific cases.
Yes, the U.S. government only reacts to crises. But this mini-crisis has done more than trigger action — it’s prompted genuinely new thinking about economic models for critical supply chains. That’s meaningful progress.
Mike Kuiken: The Chinese are incredibly effective at boiling of the frog or salami-slicing the status quo, right underneath everyone’s nose. I wrote for RealClear about how America’s biotech future is now made in China. China has been steadily acquiring biotech manufacturing and research capabilities, and also the entire infrastructure layer underneath the biotech economy.
When policymakers hear “biotech,” they typically think pharmaceuticals. But it’s much broader — advanced materials, bio-cement from North Carolina companies, even purses made from mushrooms and sawdust in South Carolina.
China has acquired this infrastructure slowly over decades, as it did with rare earths. The spy balloon was unusual — a dramatic moment that broke through the noise. The typical pattern is gradual erosion. They chip away steadily, in Taiwan and across strategic technology sectors, building dependencies before anyone notices the shift.
Leland Miller: Our biggest challenge isn’t convincing Congress to take supply chains or even biotech seriously — those threats are visible. The harder sell is future technologies like quantum computing. Quantum will determine whether we control our own cryptography and digital infrastructure, but the payoff isn’t immediate.
That’s the spectrum we’re dealing with — urgent crises Congress can see versus medium and long-term threats. Quantum sits at the far end. We’ve recommended Congress develop a quantum strategy now, but can we get policymakers focused on tomorrow’s vulnerabilities when today’s are so pressing?
Mike Kuiken: Jordan, I don’t know if you geeked out on quantum, but Leland and I led an incredible commission trip to the West Coast on quantum, and a few things became clear. First, the U.S. is pursuing multiple technological pathways to quantum computing — more diversity than we expected. Second, chemistry and materials science are critical. There’s a physical infrastructure layer to quantum that is often overlooked.
Third, surprisingly, quantum software doesn’t exist yet — not in a meaningful way. People hear “software” and assume Silicon Valley has it. They don’t. None of the major software companies are building software for quantum computers. Both the private and public sectors need to be strategic about these investments now, which is why quantum software made our top 10 recommendations.
Jordan Schneider: The second recommendation says, “See the commission’s classified recommendation annex for a recommendation and discussion related to U.S.-China Advanced Technology Competition.” Mike, blink twice if that’s a Manhattan Project for Unobtainium. Is this how we’re going to solve all our rare earth issues?
Mike Kuiken: I’ve worked in the classified space long enough to know my answer — look at the classified annex. I will note that the commission’s number one recommendation last year — which Cliff Sims and Jacob Helberg worked with me on — was a Manhattan-style project for AGI. We were way ahead of the curve on that conversation.
Jordan Schneider: You called it. Though you didn’t need government action — a few trillion dollars of global capitalism handled it for you.
Space Race 2.0
Jordan Schneider: Let’s close on space, which I know you love. What’s the space recommendation about?
Mike Kuiken: Working with Leader Schumer gave me visibility across all three space communities — civilian (NASA), military, and intelligence. At our hearing, General Salzman spoke more candidly about military space capabilities than I’ve heard from any military leader. We also heard from industry and think tanks on civilian space. You see the enormous public investment over 80 years and what the U.S. government can accomplish.
The problem is that much of that infrastructure, built during the shuttle program and moon race, is aging. Meanwhile, China is accelerating — pouring resources into launch capabilities, infrastructure, and deployable space technology. We’re cruising at 60 miles per hour, but they’re coming up behind us at 100.
Two weeks ago at the iGEM synthetic biology conference, I had a realization. Sustaining life in space — whether in orbit, on the moon, or on Mars — requires synthetic biology. The biotech ecosystem isn’t only about Earth — it’s foundational for any future space presence, whether sustaining humans, plants, or other life support systems. That’s why we need to be strategic about who’s investing in and controlling these technologies now.
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