The United States is facing an increasingly sophisticated campaign by China to obtain advanced technologies, influence institutions and expand its strategic reach, lawmakers and security experts told a Congressional hearing on Friday.
Appearing before the House Select Committee on the Chinese Communist Party, witnesses warned that Beijing was using a combination of cyber espionage, commercial investments, academic partnerships and intelligence operations to gain access to American innovation. They argued that artificial intelligence has emerged as one of the most critical fronts in the strategic rivalry between the two countries.
Congressional panel raises concerns over AI and technology theft
Former Acting Director of the Defence Intelligence Agency David Shedd told lawmakers that China had spent years building an extensive network to acquire sensitive commercial and technological information.
“The campaign, which blends cyber espionage, human intelligence, academic collaboration, and commercial investments, has been instrumental in propelling China’s rapid economic and military rise,” Shedd said.
According to him, Chinese intelligence agencies target companies, universities and researchers involved in artificial intelligence, telecommunications, biotechnology, quantum computing and advanced weapons systems.
“Corporate America, professors, academic researchers, are all fair targets,” he said, adding that China’s intelligence services had expanded significantly in both scale and capability.
The hearing also examined concerns surrounding artificial intelligence after lawmakers referred to reports that Chinese technology company Alibaba had targeted US AI firm Anthropic through what was described as a “distillation” attack intended to extract knowledge from advanced AI models.
Shedd explained that the technique allows developers to simplify outputs from expensive AI models and recreate similar capabilities at a much lower cost.
“They’re able to bypass the investment that these large AI companies in the United States have put into it,” he said. He argued that such methods could allow Chinese firms to “leapfrog” years of research and development.
He urged stronger protection of what he described as America’s technological “crown jewels” and called for closer cooperation between government and industry to safeguard intellectual property.
When asked what Congress could do immediately, Shedd pointed to TikTok and said enforcing existing legislation affecting the platform would increase the cost of Chinese influence operations while limiting access to user data.
Lawmakers cite broader influence operations across the US
Committee Chairman John Moolenaar said the Chinese Communist Party was carrying out what he described as “an epic campaign to undermine the United States here at home” through economic espionage, cyber intrusions, covert lobbying, influence operations and transnational repression.
“The CCP does not distinguish between national and subnational targets,” Moolenaar said. “State legislatures, municipal governments, school boards, public universities, local businesses and community associations are all soft targets.”
He said Beijing increasingly relied on trade partnerships, academic exchanges, investment initiatives and community organisations to gain access to information and influence decision-making. Moolenaar called for stronger coordination between federal, state and local authorities to counter such efforts while preserving legitimate cultural and commercial ties.
Bipartisan panel cautions against discrimination
The committee’s ranking Democrat, Congressman Ro Khanna, agreed that China’s theft of American intellectual property required a firm response. At the same time, he urged lawmakers not to conflate the actions of the Chinese government with Chinese Americans.
“It is undisputed that they have stolen intellectual property from American manufacturers,” Khanna said. “We need to stop that.”
He added: “I am very, very passionate… that as we look at the legitimate threats that Chinese government poses to America’s economic independence, we do not in any way conflate it with the harassment of Chinese immigrants, of Chinese Americans, of Chinese students, and we recognise the incredible value and role that they play in the United States.”
Michael Lucci, founder and chief executive of State Armor, described US states as the “front lines” of strategic competition with China. He cited concerns over land purchases near military installations, influence operations targeting state legislatures, university research partnerships and cyber threats against local governments.
John C Yang, president and executive director of Asian Americans Advancing Justice, also acknowledged national security concerns but urged lawmakers to pursue evidence-based enforcement instead of policies linked to ethnicity.
“A targeted approach is not necessarily a softer approach,” Yang said. “Rather, it is a more effective one.”
The hearing reflected growing bipartisan concern in Washington over China’s efforts to acquire advanced technologies, expand its political influence and strengthen its strategic position in areas such as artificial intelligence, semiconductors, biotechnology and quantum computing.