US tech sales to China questioned

Six months ago, the Bush administration eased some restrictions on the export of politically delicate technologies...

Six months ago, the Bush administration eased some restrictions on the export of politically delicate technologies to China. The new approach was designed to help American companies increase sales of high-tech equipment to China despite tight curbs on sharing technology that might have military applications.

On Wednesday, the administration faced questions from weapons experts about whether some equipment—- newly authorised for export to Chinese companies deemed trustworthy by Washington could help China modernize its military. Equally worrisome, the weapons experts say, is the possibility that China could share the technology with Iran or Syria.

The technologies include advanced aircraft engine parts, navigation systems, telecommunications equipment and sophisticated composite materials.

Story continues below this ad

The questions regarding the policy are in a report to be released shortly by Wisconsin Project on Nuclear Arms Control, an independent research foundation that opposes the spread of arms technologies.

The administration’s new approach is part of an overall drive to require licenses for the export of an expanded list of technologies in aircraft engines, lasers, telecommunications, aircraft materials and other fields of interest to China’s military.

But while imposing license requirements for the transfer of technologies, the administration is also validating certain Chinese companies that may import these technologies without licenses.

Five such companies were designated in October, but as many as a dozen others are in the pipeline for possible future designation.

Story continues below this ad

Mario Mancuso, under secretary of Commerce for Industry and Security, said,”We believe that the system we have set up ensures that we are protecting our national security consistent with our goal of promoting legitimate exports for civilian use”. “We have adopted a consistent, broad-based approach to hedging against helping China’s military modernization.”

The report, made available to The New York Times, asserts that two nonmilitary Chinese companies pose high risk because of links to the Chinese Government, the People’s Liberation Army and other Chinese entities accused in the past of ties to Syria and Iran.

A Chinese company, BHA Aero Composites Company, is partly owned by American company Boeing which has been cited for lapses in licenses for exports.

In general there has been a particular emphasis on selling to China. The United States is expected to show a trade deficit with China of nearly $300 billion in 2007.

Story continues below this ad

At the same time, at least since the 1990s, Democratic and Republican Congressional leaders have called on the Bush administratio.

William A Reinsch, heading National Foreign Trade Council, said the administration over all had tightened controls on China and called the lifting of license requirements on only five firms “a spoonful of sugar to make the medicine go down.”

A House Republican staff member had a similar view. “We were told by Commerce that they were going to make some very safe choices,” he said, speaking anonymously because of the delicacy of the subject.

The Commerce Department said out of $55 billion in American exports to China in 2006, only $308 million were items requiring licenses to make sure the Chinese military could not use them. The five companies named as “validated” accounted for $54 million of those goods.