By Bob Davis

WASHINGTON -- As the Biden administration charts its course on China policy, a coming political appointment to a key Commerce Department post could offer clues to how the White House will address security risks posed by Chinese tech companies.

At issue is who should lead the Commerce Department's Bureau of Industry and Security, an agency that reaches back to the Cold War and is now at the forefront of dealing with heightened U.S.-China tensions over advanced technology.

The 450-person bureau oversees the nation's export-control rules, giving it a big role in deciding which technologies are exported to China, which are blocked, and which Chinese companies wind up on a Commerce Department blacklist.

Two of the leading candidates for the post of undersecretary for industry and security represent a clear contrast in direction, according to trade groups and policy analysts following the situation.

One is Kevin Wolf, 54 years old, an export-control lawyer and former Obama administration official who is highly regarded for his encyclopedic knowledge of export regulations, but who has come under criticism while in private practice for assisting American companies seeking exemptions to the U.S. blacklist on technology exports.

The other is James Mulvenon, 50, an expert on the Chinese military and technology at SOS International LLC, a defense contractor. Mr. Mulvenon contends that the U.S. and China are locked in a war for technological dominance, and he advocates a hard line on technology exports, even if that hurts the profitability of U.S. companies.

The appointment, which requires Senate confirmation, isn't expected to be made for weeks -- and not until after commerce secretary-designate Gina Raimondo is confirmed for the post.

Top administration officials, including national security adviser Jake Sullivan, are expected to weigh in on the decision eventually, reflecting an unusual level of attention for the post, said people familiar with the decision making.

Selecting Mr. Wolf, or another candidate from the ranks of export-control lawyers, would suggest that the White House wants a technical expert who can implement policy.

Appointing a China policy specialist such as Mr. Mulvenon could be an indication that much of the policy direction on exports would be left to the Commerce Department.

"This job has transcended the world of narrow export-control policy-making and is now squarely at the center of U.S.-China security and technology competition," said Evan Medeiros, a former Obama administration China expert who is now at Georgetown University.

Business groups are expected to support Mr. Wolf, whose clients include the Semiconductor Industry Association and companies in aerospace and chemicals.

But he risks being seen as too close to big business when the administration wants to take a tough stance on human rights in China and other issues that could further strain U.S.-China business ties.

For years, the prevailing view was that American security was best protected by blocking exports of only the most advanced technology. That would keep China several generations behind the U.S. while helping American companies fund research and development with sales of less-advanced technology to customers in China.

The Trump administration argued that the technology trade made American companies more dependent on Beijing and helped spur the growth of companies including Huawei Technologies Co., which rely on U.S. technology for their products.

Mr. Wolf has the kind of résumé that in most years would make him the favorite for the undersecretary position.

Now an attorney at Akin Gump Strauss Hauer & Feld LLP, he ran the Bureau of Industry and Security from the less senior post of assistant secretary during the Obama administration and pursued the Chinese telecommunications company ZTE Corp. for violating U.S. sanctions law by trading with Iran.

The Commerce Department put ZTE on its so-called entity list, which required the company to obtain licenses to import the U.S. semiconductor or other technology it needed to survive and only released ZTE after it pleaded guilty, pledged to reform and paid an $892 million fine.

As part of the ZTE investigation, the Commerce Department identified Huawei as a sanctions buster. The federal government accuses Huawei of stealing American technology and being a tool of the Chinese military, allegations that the company denies.

After leaving the government, Mr. Wolf said he campaigned for Joe Biden in Iowa, Nevada and Virginia and with his wife contributed $11,200 -- the maximum allowed -- to the Biden campaign.

In addition to representing companies looking to obtain Bureau of Industry and Security licenses to trade with China, Mr. Wolf publicly pointed out loopholes in the Trump administration's efforts to tighten restrictions on Huawei. It took the Commerce Department three rounds of regulations to succeed in blocking the Chinese company from continuing to get access to some advanced U.S. technology.

But his critique prompted a rebuke by a spokesman for President Donald Trump's National Security Council, who scolded him for assisting companies on the entity list "to circumvent those very enforcement mechanisms."

Mr. Wolf said that he was advising U.S. companies, not Chinese ones, and that attorneys have a legitimate role to play in interpreting export regulations and advising clients on what is permitted.

Some former Trump administration officials critical of Mr. Wolf are seeking to recruit Republican lawmakers to thwart his nomination and are quietly pushing for Mr. Mulvenon.

"The question that any nominee will have to answer is, 'Where do you stand on Huawei?'" said a former Trump official.

Mr. Mulvenon believes the U.S. must restrict advanced technology exports even at the expense of America's companies. He has launched an unorthodox campaign for the appointment with a posting on War on the Rocks, a platform for commentary on defense and national security issues.

"What's good for Silicon Valley or Wall Street's quarterly numbers is no longer necessarily what is good for America's long-term technological or industrial interests," he wrote.

Mr. Mulvenon, a Mandarin speaker, puts together detailed analyses of Chinese companies and their links to the Chinese military. A report he did on Semiconductor Manufacturing International Corp., China's largest semiconductor maker, helped influence the Commerce Department under Mr. Trump to put the firm on the entity list, said people familiar with the decision.

But his other reports have hit U.S. companies. A 2015 report from Mr. Mulvenon criticized International Business Machines Corp. for providing technology to Chinese companies "with deep and troubling ties to the Chinese military, defense industry, and state security apparatus."

IBM disputed the claim, calling it "misleading, sensational and erroneous."

Write to Bob Davis at bob.davis@wsj.com

Corrections and Amplifications

This article was corrected on Feb. 11, 2021 because it misquoted IBM. A 2015 report from James Mulvenon criticized International Business Machines Corp. for providing technology to Chinese companies "with deep and troubling ties to the Chinese military, defense industry, and state security apparatus." IBM disputed the claim, calling it "misleading, sensational and erroneous." An earlier version stated misquoted the company stating that it said the claim was "misleading, sensation and erroneous."

(END) Dow Jones Newswires

02-11-21 0714ET