US official defends sale of hi-tech goods to mainland

PUBLISHED : Friday, 22 February, 2008, 12:00am
UPDATED : Friday, 22 February, 2008, 12:00am

Chinese purchases of US hi-tech goods with potential military uses are good for US national security because they help American companies maintain their technological edge, a top US Commerce Department official has said.

Changes in the international marketplace made it unrealistic to block exports of all dual-use goods to China, undersecretary of commerce for industry and security Mario Mancuso said in response to criticism of alterations to US export controls on China.

'We can no longer rely exclusively on export controls - in effect, a denial strategy - to maintain our strategic technology leadership,' Mr Mancuso said in a speech on Wednesday to The Heritage Foundation, because China could buy many dual-use goods from other suppliers.

'Instead, we need to complement smart and effective export controls with an affirmative strategy to 'outdistance' our competitors, to remain the most innovative and competitive economy in the world.

'We would significantly hamper our ability to do this if we did not have healthy export markets worldwide, including in China.'

The department imposed new export controls last year on a targeted list of hi-tech goods sought by China's military, such as lasers, high-performance computers, extreme temperature telecoms equipment, and airborne communication and inertial navigation systems.

At the same time, it established a new 'validated end user' (VEU) programme that allows pre-screened civilian companies in China to import certain controlled items without having to obtain an individual Commerce Department licence.

Last month, Edward Markey, a Democrat who co-chairs the House of Representatives' Bipartisan Task Force on Non-Proliferation, said the programme should be scrapped if it helped the People's Liberation Army.

The Wisconsin Project of Nuclear Arms Control reported on January 2 that the programme should be suspended as it increased the risk that US goods could be illicitly sold to Syria or Iran or help China improve its armed forces.

Only five companies have been granted such status so far and each was 'unanimously approved ... by the government agencies with dual-use export control responsibilities, including the departments of defence, state, energy and commerce', Mr Mancuso said. They faced a rigorous review and were found to have 'demonstrable history of using controlled US technology responsibly, especially by not diverting US controlled technology to other parties'.

Big deal
The imports of hi-tech goods could help ease the Sino-US trade imbalance

According to Yao Wenping, vice-president of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, with 'no obstacles', the value of clean-energy technology co-operation could amount to an annual (in US dollars)