Amazon.com’s Chinese business operations have entangled the company with China’s ruling Communist Party in ways that compromise U.S. national security, according to a new report.
The analysis from the strategic consulting group Horizon Advisory found Amazon’s links to the CCP risk America’s economic prosperity while aiding China’s development of an oppressive surveillance state.
Amazon operates Amazon Web Services (AWS) innovation centers in the country and bases the production of nearly half of its Amazon Basics brand merchandise there, according to the report, released Wednesday.
“In 2019, Amazon decided to close its e-commerce operation in China after losing a nontrivial share of market penetration in China, not an uncommon occurrence for U.S. technology and commerce companies operating in the Chinese market,” Horizon Advisory co-founder Nicholas Picarsic said. That closure was “reported on in Western press as an occurrence of Amazon leaving China, which we found in looking at primary source Chinese language materials, that was not quite the case, that Amazon’s operations in China have continued apace despite the fact that they’ve closed their ecommerce operations.”
Amazon Web Services operates at least five joint operation centers in China, and through those the company has exposure to the Chinese military, Picarsic said.
“These operate as Amazon-supported but locally managed technology incubators on the ground in key Chinese technologies,” Picarsic said, “and among participants and programing and residents in the technology incubation programs in these innovation centers include actors that actively contribute to the Chinese military-civil fusion program.’
He cited an example from November 2020 in which technology company Renwei Electronics was given an innovation award at an Amazon AWS joint innovation center. Renwei Electronics products are used to monitor prisoners throughout China, including those in XinJiang, the Western province where China is committing U.S.-documented genocide against Uyghur Muslims, Picarsic said.
China’s government uses the innovation centers to develop advanced technologies that help it compete in the global market.
“The fundamental goal of all of these programs, as stated at their establishment and continued in their management documents, Is to provide a technological foundation for the Chinese system and Chinese entities to develop and then go out internationally,” Emily de la Bruyère, Horizon Advisory’s other co-founder, said.
Concerns have heightened over China’s ability to use its commercial power to impact American institutions as entertainment companies, pro sports leagues, and private businesses have been willing to accommodate the Communist nation in ways that run counter to their domestic actions. Movie studios, and NBA and Major League Baseball, for example, have denounced Georgia’s new election reform laws, but are silent about allegations of genocide committed by China — a nation that doesn’t allow any elections and has undermined Hong Kong’s democracy.
Amazon’s business operations in China are just one part of a broader problem of Big Tech companies becoming entangled with the Chinese government in ways that ultimately undermine U.S. interests, according to Picarsic.
“These constitute significant risks that have not been documented in any market or corporate social responsibility analysis of Amazon,” he said. “And these risks we think are reflective of broader exposure of U.S. Big Tech actors to the Chinese market and to the threats posed by the Chinese Communist Party to the interests of U.S. national security and economic vitality.”
The report concluded that Western tech companies are aiding the Chinese government’s effort to become a globally dominant superpower.
“Enticed by the Chinese market, low-cost sources of supply, and regulatory arbitrage, global technological and corporate giants risk fueling the CCP’s capture of next-generation infrastructure and standards,” the report concludes.