Early last week, the academic community awoke to the startling news that the head of Harvard’s prestigious chemistry department – Charles M. Lieber – was in handcuffs, charged with lying to the FBI.

The case is part of a growing crackdown by the US Department of Justice on American scientists and researchers involved in Beijing’s Thousand Talents Program – a decade-long effort to attract foreign experts to China – and is one part of the Trump administration’s reorientation towards strategic competition with China.

It also shows how this competition is spreading beyond the military and economic realms to scientific knowledge, technological capability and university campuses. This all has significant implications for Australia’s universities.

Reports indicate that between the FBI and the National Institute of Health – a major government grant agency – over 200 active investigations are under way across the country.

Both Canberra and Washington are attempting to tackle the same challenge: how do they maintain the open and global foundations of their R&D and innovation systems that have ensured technological competitiveness in the past, while deterring efforts that seek to abuse their accessible and integrated nature?

While the arrest of the Harvard scientist was a recent high-profile case, it was only one part of a broader Trump administration effort targeting intellectual property theft and failures to disclose foreign funding at research centres, university companies and private companies. Reports indicate that between the FBI and the National Institute of Health – a major government grant agency – over 200 active investigations are under way across the country.

While Canberra has not taken the same prosecutorial approach – yet – the Australian Department of Education did convene a taskforce made up of representatives from universities, national security agencies and other government departments mid-last year. The voluntary guidelines for universities produced by the taskforce were largely lauded as a measured and reasonable approach.

But in the United States, a number of laws and policies are slowly rolling out that signal a deeper restructuring of the US-China scientific and technological relationship. As the producer, partner and location of much of Australia’s scientific knowledge and technological and commercial intellectual property, Australian research universities are the most exposed to systemic changes between the two of the world’s most significant high-tech powers.

This is because China and the United States are Australia’s two most prolific scientific collaborators. The fracturing of their scientific and technological relationship will ultimately impact Australia’s R&D activity. It also reveals our higher education sector's growing reliance on international students to cross-subsidise domestic research.

The first sign the Trump administration was expanding its competition with China to new areas like university systems was its drastic expansion of what it considers the fundamental inputs and actors critical to maintaining America’s military-technological edge.

The first sign the Trump administration was expanding its competition with China to new areas like university systems was its drastic expansion of what it considers the fundamental inputs and actors critical to maintaining America’s military-technological edge.

In the 2017 US National Security Strategy, the Trump administration created the “National Security Innovation Base”. This extended the federal government's understanding of the defence industrial base from traditional defence companies like Lockheed and Raytheon to both the capabilities and people within universities, the US national laboratory system and the start-up sector.

This is due to the fact that the future of warfare may just as likely involve innovations developed in Silicon Valley as anything developed by a top-tier defence company. Also for some key technologies – like artificial intelligence – the gap between basic and fundamental research conducted in universities and real-world application has narrowed.

This paved the way for more far-reaching reforms.

Foreign investment, export reforms

The first was Congress’ reform of the Committee on Foreign Investment in the United States, a government body similar to Australia’s Foreign Investment Review Board. The Committee’s power was expanded to review non-controlling foreign investment in technologies, companies and real estate that may have national security implications – specifically bids that related to critical technologies, infrastructure and sensitive personal data.

A second set of new – and potentially transformational – policies relate to export controls. In 2018, Congress passed an amendment that modified existing US export regulations to now include “foundational” and “emerging technologies”.

The list of technologies considered “emerging” is broad, including fields like robotics, 3D printing, quantum computing, advanced materials, surveillance technologies, synthetic biology and machine-learning algorithms, among others.

While the US Commerce Department is still working out how these new rules will work, and how they will exactly define what technologies will be included, the export controls will still be extraterritorial. This means this controlled knowledge will be subject to US law, whether it is used by a US-based company or one based in Australia seeking to re-export it or incorporate it in their own research or products.

The level of control and regulation on specific technological fields may vary. It can range from having to apply for a license for the export or retransfer of a technology, to requiring authorisation for employees originating from outside NATO to work on projects involving controlled knowledge. Some firms are reportedly already working on plans to segregate their workforces.

This could have significant consequences for US-Australia research collaborations, industry partnerships and transnational firms.

This could have significant consequences for US-Australia research collaborations, industry partnerships and transnational firms.

There are fears within the United States that these new regulations could impact the way universities conduct basic research, file for patents and even transfer technology to industry. A list of what Commerce will consider ‘foundational’ technologies – a potentially far broader list as it is understood as 'existing technology already integrated into commercial products', like semi-conductors – is still being formulated. China has also threatened its own version of these export controls in retaliation.

A number of other bills have been introduced in Congress that would – if passed in their present from – go much further. They propose new powers for the US Commerce Department to regulate the collaborations between US government funding agencies and third parties – such as many of Australia’s universities – involved in research on critical technologies with China-based partners.

These bills are unlikely to progress on the Hill in their current form, but they are indications of additional legislative action Congress may take in protecting the newly expanded National Security Innovation Base.

While the first round of the US-China trade war has ended in a truce, strategic competition will likely continue and present increasingly difficult and sharp choices for Australia.