On August 16, The Wall Street Journal published an article saying the U.S. Department of Commerce in 2020 cleared 94% of export license requests for technology exports to China, with a clearance rate of 88% in 2021 (though the statistics are not directly comparable because of a change in data reporting).  Explanations for the high clearance rates include:

• the competing internal mandates of Commerce to support U.S. exports while also implementing the U.S. government's dual-use (military/civilian) export control regime; and
• the risk that if U.S. businesses do not transfer the technology to China, some other country will in the absence of harmonized multilateral export controls.

Commerce has slowly implemented the Export Control Reform Act of 2018 and expanded export controls referred to in the act as "emerging and foundational technologies" (now called "Section 1758 technologies" by Commerce).  Most recently, Commerce issued new rules governing--as Section 1758 technologies--the exports of technologies relating to the design and production of certain semiconductors and gas turbine engines.  The rules took effect on August 15, but in light of the subsequent WSJ report, one can question whether the new controls will actually limit Chinese access to the covered technologies.

Technology transfer often occurs in the context of foreign investment transactions.  If the transferred technology falls within certain "critical technology" categories defined by the Committee on Foreign Investment in the United States (CFIUS), as is the case with the technologies covered by the new export controls that took effect this week, CFIUS may have jurisdiction over the investment, and in some cases, a pre-closing CFIUS filing may be required.  When CFIUS reviews a transaction, it can clear the transaction unconditionally; seek conditions aimed at mitigating the transaction's risk to U.S. national security; or in cases when acceptable mitigation conditions are not available, start a process that generally results in the parties abandoning a pending transaction, divesting a previous acquisition, or being forced to take those actions by an extremely rare Presidential order.  

Under section 7(a) of Executive Order 11858 (as amended in January 2008 by EO 11356), which was issued after the enactment and implementation of the Foreign Investment and National Security Act of 2007, but remains in effect today, CFIUS mitigation conditions are only supposed to be applied if the national security risks posed by a transaction "are not adequately addressed by other provisions of law."  In light of the data and criticisms presented in the WSJ article, will CFIUS be less inclined to view U.S. export controls on dual-use technologies as "adequately addressing" risks to U.S. national security?  If so, we should expect to see CFIUS require more aggressive conditions on technology transfer that stray into lanes traditionally governed by Commerce.