This is the third case study in our series titled Case Studies in PRC Foreign Tech Transfers that we launched on 18 December 2020. These case studies are based on foundational research we conducted a few years ago. We invite you to follow us on Twitter and on LinkedIn to stay up to date on our latest publications.

Kuang-Chi Group  [深圳光启集团] was founded in 2010 by Liu Ruopeng [刘若鹏] and focuses on leveraging metamaterials to improve critical technologies. Its products have been extensively used by the People’s Liberation Army (PLA) and state security forces. The company was founded on U.S. Air Force-funded metamaterials research conducted by Liu when he was a doctorate student at Duke University. Liu also passed critical technological data and provided access to Duke’s lab to researchers at Southeast University in Nanjing. Since its founding, Kuang-Chi has remained heavily involved in People’s Republic of China (PRC) military production; as one reporter at The Economic Observer [经济观察报]—a weekly PRC economic newspaper that was founded by Shandong Sanlian Group Co., Ltd., a company tied to the Shandong government—in December 2018 noted while at the 12th Annual China International Aviation & Aerospace Exhibition, stating that among the aircraft featured—including the Chengdu J-10 and J-20 fighter jets and the K-8 light attack aircraft—“there is no shortage of military projects Kuang-Chi has participated or is participating in.”

Kuang-Chi was founded in 2010 by Liu and other Duke alumni a year after receiving PhD’s from Duke University. Liu worked at a lab at Duke that made significant advances in metamaterials research with funding from the U.S. Air Force, leading to the development of an “invisibility cloak” that could mask microwaves from cell phones and antennae.

• At the lab, Liu facilitated the transfer of critical information on metamaterials research to researchers at Southeast University in Nanjing. Liu suggested that the lab collaborate with Cui Tiejun, a professor at Southeast University and program manager associated with “Plan 111,” a PRC talent program organized by the PRC Ministry of Education and State Administration of Foreign Expert Affairs that seeks to establish innovation centers and attract global talent. The PRC government funded trips to China for researchers at the Duke lab, as well as research papers and other ventures.
• After Duke, Liu returned to China under the “Thousand Talents Program” [千人计划]. He is often referred to as “China’s Elon Musk,” having become a billionaire and household name in China. Liu in December 2012 led Communist Party of China (CPC) General Secretary Xi Jinping on a personal tour of Kuang-Chi’s Shenzhen facility; Xi praised Liu and his team for their “young entrepreneurial passion and enthusiasm” and for “returning to China to realize the China dream.”
• Technology acquired by Liu while at Duke underpinned the formation of Kuang-Chi and has been used to develop technologies applied throughout the PRC’s military and public security apparatus. Kuang-Chi has since grown from a startup into a multibillion-dollar conglomerate receiving substantial contracting and cooperation opportunities from the PRC government and PLA.

Kuang-Chi within a year of its founding began working with the PLA, and its technology has been linked to several PRC government departments and initiatives as a tool to transfer critical uses of metamaterial technology. The company has helped identify a diversity of applications for metamaterials, including stealth technology and surveillance platforms, and it has substantially expanded its production capacity to mass produce metamaterials for weaponry.

• Kuang-Chi as early as 2011 was cooperating with the Aviation Industry Corporation of China (AVIC), the key central state-owned enterprise monopoly for the PRC’s civil and defense aviation industry, on “preliminary research on weapons topics.” In 2018, Liu boasted that “for the last eight years, Kuang-Chi has been using metamaterials products in cutting-edge weapons” for the PLA; the next step, he stated, was “mass production [of these products] for multiple types of weaponry.”
• Subsequently, Kuang-Chi circa early 2019 opened a dedicated metamaterials factory in Shenzhen capable of producing 40,000 tons of product annually. The company claims the facility is the world’s first metamaterials mass production site. Metamaterials have since become the company’s primary revenue generator and driven record profits for the company.
• Liu runs the State Key Laboratory of Metamaterial Electromagnetic Modulation Technology, China’s first state laboratory of metamaterial technology and one of the PRC’s 177 company-run state-owned laboratories. The laboratory was approved by the Ministry of Science and Technology and created in 2011. The lab focuses on three research areas: metamaterials with special electromagnetic properties, core technologies of metamaterial electromagnetic modulation, and devices that use metamaterial space modulation technology.
• The stealth applications of Kuang-Chi-produced metamaterials are being tested on non-stealth military jets to evade radar detection, according to a South China Morning Post article. The technology, which involves the use of metamaterials, was developed by a research team at the State Key Laboratory of Millimeter Waves [毫米波国家重点实验室] at Southeast University in Nanjing, where Liu was formerly employed, according to the same article.

In addition to metamaterials work, Kuang-Chi also makes other products intended for extensive adoption by state security forces, particularly using AI. Kuang-Chi aligns itself to the PRC’s Military-Civil Fusion strategy and pursues overseas acquisitions to bring technology back to the PRC.

• Kuang-Chi in 2020 sold 16 million specialized thermal imaging helmets to police forces, and in its 2018 annual report notes that it is focused on expanding the use of its city-scale “AI Overlay Network,” a “super digital system composed of photoelectric sensor overlay and Matrix Intelligent Engine that can holographically map real-time moving targets in cities” that the company hails as a “breakthrough achievement of the Company in military-civilian integrated innovation.”
• Kuang-Chi in February 2020 signed an agreement with the People’s Liberation Army’s 3302 Factory [中国人民解放军第三三零二工厂] to use Kuang-Chi’s knowledge of new materials and artificial intelligence towards addressing the PLA factory’s difficulties in maintaining PLA ground force equipment, including for emergency contingency logistics and equipment support. The agreement makes use of the “strategic opportunity [presented]… by the promotion of Military-Civil Fusion” to “accelerate and expand the development of key technologies for metamaterials and advanced composite materials” as it relates to PLA equipment repair and upgrades.
• Kuang-Chi established the Xiong’an Kuang-Chi Military-Civil Fusion Innovation Center [光启军民融合创新中心] in Xiong’an, Hebei with the government of Hebei province. Then-Politburo Standing Committee Member Zhang Gaoli toured the Center, among other national leaders.
• Kuang-Chi’s “Cloud,” a blimp-like aerostat (airship), has been used in China’s Xinjiang Province to address communication difficulties in mountainous regions and areas at higher altitude. The company is working to expand Cloud applications in state security operations, and in addition to Cloud, Kuang-Chi’s H1 Tethered UAV participated in an alleged anti-terrorism drill project organized by the PRC’s Ministry of Public Security.
• Kuang-Chi in 2015 signed a collaboration agreement with the Hunan Space Bureau (068 Base, 068基地) and the China Aerospace Science and Industry Corporation 7801 Research Institute [中国湖南航天科工集团7801研究所]—a center for R&D and production of reconnaissance platforms operating in near space, near-space vehicles, and advanced materials—on aerostat R&D and production. The Hunan Space Bureau that same year established the Yueyang Aerostat Industrial City [岳阳浮空器工业城], an industrial project within the Yueyang Economic and Technological Development Zone [岳阳经济技术开发区], and provided research and production support for near-space aerostats to Kuang-Chi.
• Kuang-Chi’s acquisition “of high-tech companies are more to complement its own research foundation” in the PRC rather than capture overseas markets, according to an article published in The Economic Observer. This is reflected in some of its overseas acquisitions: Kuang-Chi purchased a majority stake in Canadian technology firm SkyX, integrating its drone technology before relinquishing control of the company’s board in 2018, according to Kuang-Chi’s 2018 annual report. Kuang-Chi similarly invested in 2016 in New Zealand-based Martin Jetpack, becoming its controlling shareholder; it integrated the jetpack technology into its product line before allowing the company to go bankrupt in 2018.