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Huawei's secret ally in the US-China tech war: A science nonprofit based in DC

Kate O'Keeffe, Bloomberg News on

Published in Business News

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For Optica, a century-old organization that publishes influential scientific journals, the tie-up with a Chinese industrial champion helped it maintain a foothold in a crucial region even as China’s rivalry with the U.S. intensified. The society has been increasing its focus on China, its second-largest market after the U.S. and one where it sees untapped potential.

Yet it’s a delicate dance, as research by Optica’s 24,000 individual members applies to sensitive areas such as semiconductors — a key battleground in the U.S.-China tech competition, and one where Huawei is a major player.

Rogan’s visit to Huawei headquarters came just months after the company’s release in August of a new smartphone featuring a 7-nanometer chip whose development U.S. export controls were supposed to foil. In a provocative move, Huawei unveiled the breakthrough while the U.S. official in charge of those controls, Commerce Secretary Gina Raimondo, was visiting China.

The Optica spokesman said the group didn’t publicize Rogan’s visit because it was “an informal courtesy stop at the end of a two-week trip.” He added that Rogan had “already sent two internal communications about trip highlights and a third felt excessive at the time.”

Rogan, an accountant who has been the group’s CEO since 2002 after previously serving as assistant controller of the John F. Kennedy Center for the Performing Arts, has repeatedly said there was nothing wrong with Optica allowing Huawei to fund the competition. She initially told Bloomberg that some donors preferred to remain anonymous and that there was nothing unusual about the practice.

 

But, in a June 6 letter to Optica’s board, Rogan said that Huawei’s funding had “diverted attention from the program’s mission to support early career professionals” and that the society would return the company’s money.

The funding arrangement likely didn’t violate Commerce Department regulations blocking technology sharing with Huawei because such rules don’t apply to science that’s meant to be published, which is what the competition solicits, according to export control experts.

But research security specialists said the arrangement undermines university and U.S. government policies meant to ensure scientists’ sources of funds are transparent in order to protect both national security and taxpayer dollars.

Huawei’s undisclosed sponsorship caused some competition winners to unknowingly violate bans at their schools on accepting money from the company. It also left some who applied for separate federal funding, such as Pentagon grants, unable to accurately disclose to the U.S. government all of their sources of financial support, which can impact the government’s funding decisions.

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