Technology Controls to Contain China’s Quantum Ambitions Are Here

In a recently announced rule effective May 9, the U.S. Department of Commerce added 37 Chinese entities to the Entity List, restricting them from acquiring items listed under the Export Administration Regulations (EAR) with license review policy “Presumption of denial.” Twenty-two of the entities listed were added “for their participation in the People’s Republic of China’s (PRC) quantum technology advancements.” These include leading Chinese institutes, such as the University of Science and Technology of China (USTC) or the Chinese Academy of Sciences Institute of Physics, whose education and research activities go far beyond quantum technology—marking a significant escalation of prior controls.

The U.S. government regards quantum technologies, encompassing applications in computing, sensing and communication leveraging the laws of quantum mechanics, as a potentially disruptive emerging technology. In terms of technical readiness, established supply chains, and the range of known applications, quantum technologies are in a far earlier stage than semiconductors and artificial intelligence (AI), which have also been targets of significant export controls in recent years.

While quantum technology controls aimed at China are a reality today, broad export controls aimed at retaining U.S. technological leadership in quantum will likely not be effective beyond a decade. This is due to the early stage of the technology, the international spread of talent and hardware developments, as well as the limits of U.S. technological leadership today. Other more effective forms of technology control such as limiting interactions and the movement of (human) capital may be undesirable: They cut both ways, limiting access to a growing Chinese research environment already frequently described as opaque, and pose risks to responsible multilateral governance.

Beyond restrictions, Western policymakers should explore other means of reducing “access asymmetries,” referring to an unequal flow of knowledge to China. Historically, China has learned much from the West about “best practices” for developing modern science and technology. However, this learning process has been increasingly disrupted by the restrictions described above at a time when—in areas such as quantum technologies—it could finally go both ways. Despite the challenge of growing geopolitical rifts between China and the West, formats to retain access and allow some participation in China’s technological development could alternatively serve to reduce access asymmetries.  Similar thinking can also inform import screening, outbound investment controls, hiring guidelines, or policies on student exchanges. 

Quantum Technology Controls Aimed at China

Following the Export Control Reform Act of 2018, implemented by the Export Administration Regulations (EAR), media reports speculated about U.S. export controls on quantum technology amid increasing technological competition between the U.S. and China. But deliberations in the U.S. about these export controls have been ongoing for multiple years. However, despite a proposed Export Control Classification Number “to control quantum computers and related electronic assemblies” in 2021, the Department of Commerce’s Bureau of Industry and Security has not announced comprehensive additions to the Commerce Control List (CCL) related to quantum technologies. Such additions have reportedly been held back by complications with interagency coordination as well as difficult trade-offs such as derailing progress and international competitiveness by unilateral restrictions.

The United States trails other Western nations in this regard, as European countries such as France and the United Kingdom have enacted export controls explicitly targeting quantum computing. These European controls include defining performance characteristics that make a quantum computer subject to export controls and list other controlled components such as parametric amplifiers or cryogenic refrigerators. While the U.S. has yet to enact export controls specifically targeting quantum computing hardware, the list of items covered by the EAR is extensive and includes scientific instruments and components—such as lasers and sensors—that are relevant to quantum science and include applications of quantum sensing. The EAR also explicitly include quantum cryptography, which is the primary application of quantum science to telecommunications. Despite not being explicitly listed under the EAR, quantum computing too is already affected by controls. For example, IBM’s Quantum cloud service—which offers access to the company’s experimental quantum computers—blocks Chinese IP addresses.

The addition of China’s top quantum institutes and companies to the entity list, effectively restricting them from acquiring any item listed under the EAR, indicates an approach that targets quantum end users rather than restricting specific quantum components. In the near term, this will significantly disrupt leading quantum practitioners in China, but—as I explain below—it might backfire in the long run.

Prior to these recent additions, the first Chinese institutions linked to quantum technology were added to the entity list in 2021—including a large research institute at the University of Science and Technology of China (USTC) and one of China’s earliest quantum startups, QuantumCTek. Beyond the EAR and entity lists, U.S. controls on quantum include import, investment, and visa restrictions. For example, President Trump’s May 2019 Executive Order 13873—which aimed to secure the information and communications technology supply chain—required acquisitions of quantum computing and quantum communications components to undergo review by the Bureau of Industry and Security’s Office of Information and Communications Technology and Services. President Biden’s August 2023 Executive Order 14105, accompanied by a notice by the Treasury Department (with a proposed rule issued in June), called for the establishment of outbound investment controls on and notification requirements for China, which includes quantum technologies among the “covered national security technologies and products.”

Restrictions on inbound investment have likewise been tightening. President Biden’s September 2022 Executive Order 14083 explicitly mentioned quantum computing as a “technolog[y] that [is] fundamental to national security,” that the Committee on Foreign Investment in the United States should consider when reviewing transactions. The United States has also increased visa restrictions for Chinese citizens looking to live and work in the United States. For example, the United States has sanctioned individuals connected to China’s talent plans—which are recruitment programs implicated in stealing foreign technologies—and denied students’ visa applications on the basis of their prior associations with or intention to study sensitive technologies. Furthermore, not all restrictions on visas are clearly codified in U.S. laws and policy. For example, the Justice Department’s now-defunct China Initiative, as well as the inclusion of Chinese organizations on the entity list, have likely stoked fears among risk-averse Chinese citizens, leading to a decrease in Chinese students’ and workers’ interest in coming to the United States. Likewise in the U.S., hiring, investment, and collaboration decisions of American institutes, businesses, and researchers are affected by changing perceptions. 

Broad Export Controls on Quantum Are Ineffective in the Medium Term

Discussing the efficacy of broad export controls requires knowing what policymakers’ goals are. Most often, export controls aim to limit the ability of a targeted actor to weaponize dual-use items and technologies. By employing control lists, the export to specified end users or of specified items is subjected to an approval process. The political objectives for controlling quantum technologies today arguably take a broader view of national security than those of the past, such as dual-use goods under the Wassenaar Agreement. The policy purpose of the Export Control Reform Act notes, “The national security of the United States requires that the United States maintain its leadership in the science, technology, engineering, and manufacturing sectors, including foundational technology that is essential to innovation.” This is in line with the “Sullivan Doctrine”—in reference to National Security Adviser Jake Sullivan, which shifts the goal of export controls from maintaining a “relative advantage” to the “largest possible lead” in foundational technologies, including quantum. This shift from limited control lists to broader ambitions of retaining leadership is connected to China’s civil-military fusion policies, which eliminate “barriers of China’s civilian research and commercial sectors, and its military and defense industrial sectors” in an effort to “develop the most technologically advanced military in the world,” according to the State Department. Emerging technologies, believed to have significant implications for national security and power, also face intrinsic limitations in discerning civilian from military end-use due to their foundational role from which other, not always foreseen, applications arise. For example, besides civilian use, a sufficiently powerful quantum computer can break currently widely deployed cryptography, making their separation nearly impossible. To take things one step further, many technological paradigms are currently competing to develop a fault-tolerant quantum computer, demanding a further broadening of controls if all pathways to military application are to be cut.

The broader shift of U.S. export control policy aligns with the recent additions to the entity list: While earlier Chinese additions in the area of quantum technology directly referenced military ties, a large fraction of the 22 entities included in the latest addition are widely engaged in open science (with results published in international journals). Indeed, the rule itself merely refers to “advancing China’s quantum technology capabilities” and the latter’s national security implications given quantum technologies’ military applications, without alleging direct military ties.

So, do broad export controls on quantum contribute to this retention of the largest possible lead vis-a-vis China? This is questionable due to three factors: (a) the early stage of development of most quantum technologies, (b) the globalized supply chain and human resources, and (c) limited U.S. leadership.

Quantum Technology Development Is Still in Early Stages

Scientists are still exploring various physical modalities for quantum technology. Look back to the early development of classical computing hardware: so-called vacuum tubes  competed with transistors to become the main building block of computers in the mid-20th century. While early designs were based on vacuum tubes, they became largely obsolete soon after the invention of transistors. In the age of quantum computers, superconducting circuits, photons, neutral atoms, trapped ions, and quantum dots are all among potential information carriers. Some of these will never transpire as the dominant technology, making their export control a wasteful shot in the dark. Such restrictions are indeed wasteful, as they can reduce revenue and slow development among technology companies. Unlike established companies such as ASML or Taiwan Semiconductor Manufacturing Company—which control choke points in the semiconductor industry—much smaller start-ups developing quantum technologies do not often have legal expertise in navigating difficult regulations, and their financial health is much more prone to disruptions. Critical technologies are also easier to replicate and circumvent at this early stage. As one China-based researcher told me: “This is not EUV lithography [an important technology in the fabrication of semiconductors], for most components, you can come up with a competitive substitute given a couple of smart PhDs and a few years.” This touches on a broader idea that for the ability of technological catch-up, context beyond the relative technological capability matters: A technical paradigm that is highly dynamic and uncertain is more amenable to disruption by latecomers. 

International Supply Chains and Human Resources

The early development and commercialization of semiconductors were for a long time dominated by a few companies in Silicon Valley, establishing the U.S. as integral to global supply chains and intellectual property. At quantum technology’s current early stage of development, open academic research still plays an important role in the field. Even commercial companies frequently publish their advances in scientific journals and engage the scientific community. This academic research is highly international, with approximately half of the publications associated with institutes in the United States also involving international collaborators.

Private capital and commercial research and development are becoming increasingly important. While the U.S. currently leads on this front, companies in other countries play an important role in the quantum supply chain and are at the cutting edge in some areas. For instance, of over 400 quantum start-ups compiled in a 2022 research article, around half were founded in the United States, followed by Canada, the United Kingdom, Germany, and France. Leading producers of components critical to the development of quantum technologies, such as lasers, dilution refrigerators, or amplifiers, are located in Europe. Therefore, the quantum technology sector is not just at a much earlier stage than semiconductors at the time of recent export controls; it is also less concentrated than the semiconductor industry was early on.

Multilateral coordination is hence crucial. Unilateral restrictions might merely reroute research and development efforts to less controlled countries, ultimately harming the country that imposed the regulations without meaningfully restricting the targeted entities. Again, this differs from the case of semiconductors, where the United States has significant extraterritorial leverage through its Foreign Direct Product Rule. 

The Limits of U.S. Leadership

While many regard the U.S to be leading the development of quantum technologies overall—by metrics such as scientific publications and patents—Chinese capabilities in many modalities are competitive and in some cases, such as that of quantum communications, even superior. This does not merely blunt the effectiveness of export controls; it calls the original premise of retaining technological leadership into question.

Unsurprisingly, the localization of export-controlled components and enabling technologies in the quantum supply chain is already evident in China today. Take as an example the city of Hefei, host to many of the recent additions to the entity list. Hefei contains what may be the world’s highest concentration of researchers working on developing quantum technologies and is home to USTC and one of China’s four national science centers, which includes 100 billion RMB earmarked for a National Quantum Lab with a now-completed campus. In 2020, the predecessor of the National Quantum Lab in Hefei had more than 1,800 researchers. Today, Hefei reportedly hosts 60 upstream and downstream companies in the quantum supply chain—although this is likely based on a broad definition of “quantum supply chain.” While many researchers in Hefei face difficulties obtaining components integral to the development of quantum technologies from abroad, possibly requiring costly localization efforts, these issues are often viewed as more of a short-term hindrance rather than a long-term hurdle. In fact, some Hefei locals told me that they regard the restrictions as a boon to the city’s ecosystem. For example, a domestic producer pivots to amplifiers and provides discounted samples to research groups, which, lacking access to foreign alternatives, are happy to use an untested product and provide feedback.

Here, export controls can benefit domestic innovation by removing competitors and foreign options, encouraging local collaboration and building communication networks between lead users and suppliers. Just recently, quantum company QuantumCTek claimed that the performance of its dilution refrigerator was internationally competitive, with its scientists calling the product a “major breakthrough amid foreign technological blockades.” What’s more, Origin Quantum, which recently joined QuantumCTek on the U.S. entity list, already offers cloud access to its quantum computers with a claimed localization rate of 80 percent. In short, demand and support inside China for the new verticals of these Hefei-based start-ups benefit from international export controls. If what matters are not laboratory achievements today, but broadly diffusible applications 10 years down the line, then short-term pain inflicted by controls over the next few years will matter much less than what the controls enable by reshaping incentives.

Broad export controls to retain technological leadership over China may inflict significant short-term costs to Chinese companies and institutes but are largely ineffective—or even counterproductive to policymakers’ goals—in the long run. Beyond export controls, U.S. policymakers must contemplate whether other forms of technology control are more effective and what their respective costs are.

Moving Beyond Export Controls

Export controls restrict the transfer of physical and codifiable technologies. Other forms of technology control can instead restrict the transfer of tacit knowledge by limiting interactions and the movement of (human) capital.

Take, again, USTC as an example, where the German University of Heidelberg reportedly played an integral role in the development of cold atoms expertise. Many Chinese researchers took positions under Professor Jianwei Pan in Heidelberg, before transferring to USTC with the support of the national “Thousand Talents Program” or the “Hundred Talents Program” of the Chinese Academy of Sciences, taking their laboratory equipment with them. Export controls may have prevented the transfer of equipment to Chinese laboratories but, as explained above, are ineffective in the long run. The talent required to develop and use this equipment is largely unaffected by any export controls. However, restricting visas for Chinese researchers in sensitive areas, sanctioning recipients of Chinese talent programs, and scrutinizing grant applications could have prevented this knowledge diffusion in the first place. In fact, the United States is inching closer to this reality of increased scrutiny each day. For example, in 2023, the Department of Defense announced that it would screen research grant applicants for ties to “countries of concern,” and a recent law in Florida restricted the recruitment of Chinese researchers. Conversely, many Chinese universities continue to struggle with their internationalization. Despite efforts to welcome international talent, even leading research groups at USTC are often exclusively Chinese in both their members and collaborations.

Interactions and diverse international experiences cannot be substituted or localized, which could suggest to policymakers that controlling them—through the methods discussed above—is more effective to the end of technological leadership. However, past exchanges cannot be undone retroactively, and such measures come with significant risks and costs. After all, the benefits of collaborations go both ways, especially in the field of quantum technologies, where the work of Chinese researchers is increasingly competitive. Beyond the two-way restriction of the transfer of knowledge, restricting exchange destroys relationships between individuals. These individuals were able to play an important role in China’s development of quantum technologies and often had all the reasons to have a positive view of the West—many, after all, spent much of their early careers there.

I have already heard remarks from Western quantum researchers that the quantum ecosystem inside China is a black box. While this is likely partly a by-product of the field’s rapid development and language barriers, it will undoubtedly be exacerbated by export controls. Restricting exchanges among practitioners will only add to the problem. This could be dangerous. Take, for comparison, AI—a technology with immense positive potential but also possibly existential risks. Consultation between China and the U.S. is necessary to manage these sorts of risks responsibly. If quantum technologies hold up to their promise, they will shape future information infrastructure and have disruptive, in some cases dangerous, implications for the power of sensors and computers. For example, quantum computers, once realized at sufficient scale and quality, allow attacks on the protocols securing current communications and significantly speed up drug discovery, with consequences for biosecurity. Responsibly regulating the use of quantum computers should be a shared goal among the future technological front-runners. Setting out toward technological bifurcation therefore has consequences beyond economic inefficiencies and slowing the advancement of science. A lack of adequate information channels between the most relevant actors, or even mutual understanding of who those actors are and how they operate, poses significant risks to the responsible governance of quantum technologies in the future. 

A Potential Solution

Consider an alternative to a perpetual increase in export controls, as improbable as it might be: Expand the toolbox to reduce historical asymmetries in the flow of and access to technology through limited participation.

As in other fields of science and technology, Chinese quantum technology development benefited from two asymmetries: the flow of students from China to the West and the flow of some (but by far not all) highly educated graduates, researchers, and industry professionals back to China, such as in the aforementioned example of Heidelberg. These flows of students and professionals present asymmetries, as they are largely unidirectional, with far fewer American students coming to China, for example. Undoubtedly, both the U.S. and China have drawn benefits from these asymmetries. Regarding strategic technologies, however, the resulting access asymmetries play into a narrative of China “stealing” from the West. In a situation where China is technologically behind, such an asymmetry is natural, with little self-serving returns for the U.S. to train some of its smartest students at Chinese universities.

This, however, is not true of quantum technologies today. In addition to the United States, leading quantum science is realized in places like Hefei, China. China’s vibrant quantum technology industrial ecosystem, significantly supported by the local and central governments, has in recent years rapidly improved its standing relative to advanced international economies. Still, foreign science and technology participation is championed in China. For example, the Chinese government has encouraged foreign companies to establish research and development centers, undertake major scientific research projects, and invest in local sci-tech firms in mainland China. What’s more, subject to less conditions than the talent attraction programs mentioned above, the China Scholarship Council sponsors approximately 12 percent of foreign students in China (65,000 students in 2020). Further, Chinese President Xi Jinping announced that the PRC was “ready” to invite 50,000 American students to the country over the next five years. (This, however, is an unlikely goal, given that only 900 American students are currently studying in China.)

However, despite its expressed interest in foreign participation, China has also deployed measures that counteract these trends, by broadening definitions of state secrets and restricting the travel of state employees working in sensitive areas. Furthermore, techno-nationalist tendencies such as “indigenous innovation” and “technological self-sufficiency” play an important role in China’s industrial policy, with “Made in China 2025” as a prominent example that led to concerns about discrimination against foreign entities. Given increasing U.S. restrictions and China’s advances to become more self-sufficient or even a leader in some fields, the Chinese government’s welcoming of foreign participation in the country’s science and technology sector has limits and is by no means guaranteed to endure. China enacted its own first Export Control Law in 2020, which analysts viewed as a policy counterweight to the U.S. government’s use of export controls. However, China’s dual-use items lists as well as a separate list of controlled technologies explicitly mention quantum cryptography but have limited coverage of quantum technologies beyond that. In contrast to the U.S., no explicit referrals to quantum technology can be found in the PRC’s sensitive industries for outbound investment or market access negative list. Amid the maturing of quantum technologies and evolving competition with the United States, which of the opposing trends—openness or control—will go on to dominate in China will be interesting to watch. As China’s export control law shows, the balance between control and openness does not happen in a vacuum, and China’s policies are at least partially a function of the controls the U.S. chooses to enact.

Reducing the access asymmetry through participation with China’s quantum development, be it through foreign students and researchers in China, investment, talent attraction, or other means of participation, can bring benefits and preclude future blindness to important developments. Restrictions can reduce the access asymmetry by reducing access to and for China itself, but they invariably also squander the aforementioned upsides of retaining exchange. This too has security implications and should be kept in mind when formulating import, export, and investment controls. Whether goodwill from past exchanges and de jure openness to international participation in China’s development of quantum technologies would prove true in the face of growing foreign participation, especially in areas where it pulls ahead, is another question. Given the current state of geopolitics, it unfortunately might never be put to an actual test.

Editor's note: The paragraph "Quantum Technology Controls Aimed at China" mentions the absence of quantum computing controls in the Export Administration Regulations (EAR) of the United States, trailing countries such as France and the UK. This is no longer the case. On September 5, 2024, the Bureau of Industry and Security (BIS) published new export controls on quantum computing, which resulted in additions to the Commerce Control List "consistent with controls implemented by international partners."