Quantum Computing Export Controls: How New Restrictions Are Reshaping Global Tech Competition

The U.S. Department of Commerce's implementation of new export controls on quantum computing technologies has created immediate strategic implications for global tech competition and national security as nations race to develop quantum capabilities. These restrictions, which took effect in September 2024 with a 60-day delay for some items, represent a significant escalation in the technology cold war between the United States and China, targeting quantum computers, related equipment, components, materials, software, and technology used in quantum computer development and maintenance.

What Are Quantum Computing Export Controls?

Quantum computing export controls are regulatory measures implemented by the U.S. Bureau of Industry and Security (BIS) to restrict the transfer of advanced quantum technologies to foreign entities, particularly those considered national security risks. These controls specifically target quantum computers, quantum sensors, and related components that could be used for cryptanalysis, materials science, or other advanced applications. The regulations aim to prevent sensitive quantum computing capabilities from falling into the hands of foreign adversaries who could use them for military or intelligence purposes, while maintaining U.S. technological leadership in this critical emerging field.

The National Security Rationale Behind Quantum Controls

The national security concerns driving these export controls center on quantum computing's potential to break current encryption standards that protect everything from financial transactions to military communications. According to a BCG report, experts predict that by around 2035, quantum computers will likely be powerful enough to break widely used cryptographic standards like RSA-2048 and elliptic curve cryptography. This vulnerability has created what experts call a "store now, decrypt later" threat, where adversaries could collect encrypted data today and decrypt it once quantum computers become sufficiently powerful.

The U.S.-China Economic and Security Review Commission warns that quantum supremacy will be a critical national asset, with the first country to achieve it gaining disproportionate advantages in encryption, materials science, energy production, medical research, and intelligence capabilities. This strategic importance has prompted the U.S. to implement controls similar to those used for other sensitive technologies like semiconductors and artificial intelligence, creating what some analysts call a new front in the technology cold war between superpowers.

China's Accelerated Domestic Quantum Response

Building Parallel Quantum Ecosystems

Contrary to expectations that export controls would significantly slow Chinese quantum progress, evidence suggests they are accelerating the development of China's domestic quantum supply chain. According to a RUSI analysis, while these controls temporarily slow Chinese quantum progress, they force Chinese laboratories and startups to rapidly iterate with domestic suppliers, bringing demand-side support to localization efforts. China had already laid groundwork for self-reliance through years of government support, and now a parallel quantum ecosystem is emerging.

China leads the world in quantum communications and is making rapid progress in quantum computing and sensing through a state-directed approach that closely aligns with national security goals. The country's centralized model contrasts with the U.S.'s varied pathways, but China's secrecy about its quantum research makes comparative assessments difficult. This accelerated domestic development represents a significant shift in global quantum competition dynamics, similar to patterns seen during the semiconductor export control battles of recent years.

Impact on Global Quantum Research Collaboration

The export controls are creating significant challenges for international quantum research collaboration, particularly in sectors like healthcare where quantum computing holds significant potential for applications including drug discovery, precision medicine, and computational biology. According to a Harvard analysis, while these controls aim to maintain strategic advantages and national security, they risk hindering international collaboration in quantum research and creating compliance burdens for multinational companies and research institutions.

The quantum research community faces a difficult balancing act: maintaining the open scientific collaboration that has traditionally driven innovation while complying with national security restrictions. This tension is particularly acute in academic settings where researchers from different countries have historically worked together on fundamental quantum science, creating what some experts call a "collaboration paradox" in the emerging technology sector.

Economic Consequences for U.S. Quantum Companies

U.S. quantum companies face significant economic challenges as they lose access to global markets, particularly the massive Chinese market. The export controls create a licensing regime for quantum computers and related hardware, software, materials, and technology, with particular scrutiny on transfers to China. This creates compliance burdens and market access limitations that could hinder the growth of the U.S. quantum industry at a critical juncture in its development.

The Council on Foreign Relations Task Force report on U.S. Economic Security highlights strategic competition over foundational technologies like quantum computing, identifying critical vulnerabilities including China's massive investments ($900 billion over the past decade) and U.S. supply chain dependencies. The report recommends accelerating quantum computer development through DoD procurement and creating an Economic Security Center at the Commerce Department, recognizing that economic security tools are essential for addressing market failures and supply chain overconcentration while maintaining U.S. technological leadership.

Cybersecurity Implications and Post-Quantum Transition

The cybersecurity implications of quantum computing represent one of the most urgent concerns driving export controls. A GAO report highlights critical gaps in the U.S. strategy for addressing quantum computing threats to cybersecurity, noting that while quantum computers could revolutionize computing, they also pose significant risks to cryptographic systems that protect sensitive data across federal agencies and critical infrastructure.

The National Institute of Standards and Technology (NIST) has already selected four quantum-resistant algorithms, including CRYSTALS-Kyber and CRYSTALS-Dilithium, though adoption remains low at around 9% of websites. The transition to post-quantum cryptography will be expensive but far less costly than the potential damage from inaction, creating what experts describe as a "cryptographic arms race" in the cybersecurity landscape.

Expert Perspectives on the Quantum Control Landscape

"The export controls on quantum technologies represent a necessary but challenging balancing act between national security and scientific progress," says Kevin Wolf, a leading expert on export control regulations. "While they aim to protect sensitive capabilities, they also create compliance burdens that could slow innovation if not carefully implemented."

Industry analysts note that the quantum supply chain is more shallow and dispersed than semiconductors, making it easier to innovate around restrictions. This characteristic may limit the long-term effectiveness of export controls while still serving immediate national security objectives, creating what some call a "strategic pause" rather than a permanent barrier in the global technology race.

Frequently Asked Questions

What specific quantum technologies are covered by the export controls?

The controls cover quantum computers, related equipment, components, materials, software, and technology used in quantum computer development and maintenance, with particular focus on systems that could be used for cryptanalysis or advanced simulations.

How is China responding to these export controls?

China is accelerating its domestic quantum supply chain development, forcing laboratories and startups to work with domestic suppliers and creating a parallel quantum ecosystem through state-directed investment and centralized coordination.

What are the cybersecurity risks of quantum computing?

Quantum computers could break current encryption standards that protect sensitive data, financial transactions, and national security communications, creating what experts call a "store now, decrypt later" threat that requires immediate transition to post-quantum cryptography.

How do these controls affect international research collaboration?

The controls create compliance burdens and restrictions that could hinder international quantum research collaboration, particularly in academic settings and sectors like healthcare where global cooperation has traditionally driven innovation.

What is the timeline for quantum computing to become a practical threat?

Experts predict that by around 2035, quantum computers will likely be powerful enough to break widely used cryptographic standards, though current hardware implementations remain largely experimental and suitable only for specialized tasks.

Future Outlook and Strategic Implications

The quantum computing export control landscape represents a critical inflection point in global technology competition. As nations race to develop quantum capabilities, the balance between national security concerns and scientific collaboration will continue to evolve. The effectiveness of these controls in the long term remains uncertain, given the relatively shallow and dispersed nature of the quantum supply chain compared to semiconductors.

The coming years will likely see increased investment in domestic quantum capabilities by both the U.S. and China, accelerated development of post-quantum cryptography standards, and ongoing tension between open scientific collaboration and national security restrictions. The ultimate impact of these export controls may be less about preventing technology transfer and more about buying strategic time for the U.S. to develop its quantum capabilities while managing the transition to quantum-resistant security systems.

Sources

U.S. Department of Commerce Export Controls, Bureau of Industry and Security (BIS) regulations, U.S.-China Economic and Security Review Commission report, RUSI analysis on China's quantum supply chain, BCG quantum cybersecurity report, GAO report on quantum computing threats, Harvard analysis on healthcare implications, Council on Foreign Relations Economic Security Task Force report.