“Thank you for the honour of inviting me to your committee. I hope I can live up to it. Much of what I say will concentrate on cellular modules, and I echo in detail what the Chairman has already stressed. First of all, the Chinese Communist Party sees itself in a war with you and with us. That war is not so much a trade war, it’s actually a war between economic systems and, above all, a science and technology war. And I would put four elements of that science and technology war to the front. Three are obvious, we know about semiconductors, quantum, and AI, but cellular modules is the fourth, and I would argue that it’s the most immediate danger.

Let me explain why. A cellular module is about the size of a thick credit card. It contains processors, memory, antennae, and it links up through an eSIM to the internet. It’s vital for the transmitting of data. Cellular modules control, monitor, and send data in and out of whatever system they’re in. And as you rightly said, modern vehicles are basically laptops on wheels. So you should look at the cellular module as the gateway to those systems – if you like, the conductor of the orchestra.

And this applies not just to vehicles, but actually to all aspects of your modern economy, whether that’s your energy grid, logistics, manufacturing systems, agricultural machinery, telecommunications. There are over 6 billion connections now through cellular modules globally, and China, as you said, supplies about 70% of those, and is aiming for a monopoly.

If it achieves that monopoly, you’re absolutely right, one should take very seriously the three threats that you outlined. Dependency. If you think rare earths is a bad dependency to have on China, wait until you’re dependent on cellular modules. It’s much, much worse. It’s broader.

You’re exactly right also about the ability of China to disrupt or degrade or destroy your systems. Cellular modules, like any form of IT, have to be updated, their firmware and software have to be updated. If China has a hand in that, it can send in malware, turn off your vehicles in the example that you gave. But quite easily, it can turn off your cranes, or your financial payment terminals, or your pipelines, or your routers – whatever it is. So why would China fight with America? Why not just turn you off?

And thirdly, as you rightly suggest, vast amounts of data, including, if you are unwise enough to plug your smartphone into your car, much of the data on your smartphone. Cars are surveillance platforms.

And I want to emphasise that the threat of cellular modules is not just in Chinese-manufactured vehicles. If a European or American or Japanese car contains a Chinese cellular module, the vulnerabilities that you stressed still exist. And they even apply to cellular modules which might be made in America or Europe if they are using Chinese technology in a way that makes them untrustworthy.

And this is a concept that I think is particularly important. Chinese companies are like a cancer metastasizing. They understand that you’re taking measures and will take measures to prevent them. So they’re forming American companies, European companies, other companies to get around those. But the basic problem remains if it is Chinese technology that is behind those cellular modules.

So the idea of a trusted supplier is vital. I put to the committee a series of –  in the written testimony that I put – some recommendations. But in the idea of a trusted supplier, you certainly have to include the concept that the core technology, the source code, is not Chinese; that the updates are not Chinese; that the servers and the backup servers are not accessible – are not in China, are not accessible by China; and that you have a certification authority that you can really trust.

I have two final points to make, I think. I highly commend the Department of Commerce’s Bureau of Industry and Security (BIS) vehicle connectivity rule. It’s an excellent rule, and it’s important because it is an example that can be used in all the other areas of industrial policy, industrial sectors, where cellular modules, as I keep emphasising, are absolutely vital.

Legislation, rules, et cetera, are only ever as good as the implementation thereof. And finally, time is of the essence. China has succeeded already in throttling a number of cellular module companies, and investors are losing money. They’re not going to do that forever. We probably have, I don’t know, one, two, three years in which to defeat this.

The good news is that unlike AI, quantum, or semiconductors, the technology involved in cellular modules is not complicated. And therefore, I think it is relatively simple for the US and its allies to plug this yawning gap in their national and economic security.

Thank you.”