Tuesday, January 1, 2008

National security interests meet economic interests

Some China firms avoid U.S. technology

transfer licenses

WASHINGTON: Six months ago, the U.S. government quietly eased some restrictions on the export of sensitive technologies to China. The new approach was intended to help U.S. companies increase sales of high-technology equipment to China despite tight curbs on sharing technology that might have military applications.

But now the administration is facing questions from weapons experts about whether some equipment - newly authorized for export to Chinese companies deemed trustworthy by Washington - could instead end up helping 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.

The questions raised about the new policy are in a report to be released soon, possibly this week, by the Wisconsin Project on Nuclear Arms Control, an independent research foundation that opposes the spread of arms technologies.

The government'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 these technologies, the administration is also validating certain Chinese companies so that they can 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.

Mario Mancuso, the under secretary of commerce for security and industry, said the new system was resulting in more effective protections.

"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," he said during an interview. "We have adopted a consistent, broad-based approach to hedging against helping China's military modernization."

But the Wisconsin Project report, made available to The New York Times, asserts that two nonmilitary Chinese companies designated as trustworthy are in fact high risk because of links to the Chinese government, the Peoples Liberation Army and other Chinese entities accused in the past of ties to Syria and Iran.

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