U.S. may limit China trade
BEIJING – The Bush administration is considering whether to impose new restrictions on the export of sophisticated technologies to China in response to apparent concern about the nation’s military buildup.
The pending controls are likely to spark complaints from U.S. companies that say export regulations exacerbate the yawning U.S. trade deficit with China, a charge the Commerce Department denies.
The department’s undersecretary for industry and security, David H. McCormick, declined to specify what products may be added to a list of banned goods for export to military-linked entities in China.
“For the most part, the list of technologies is very narrow,” McCormick told reporters, saying he couldn’t recall if it was “46, 48 or 43” types of products.
China has repeatedly accused the U.S. of shooting itself in the foot with the export controls, saying that U.S. companies are losing business to firms from other countries. For their part, U.S. officials say that the People’s Liberation Army aggressively seeks “leap ahead” technologies that will give it a measure of parity with the United States and has a mixed track record in providing military equipment to nations such as Iran.
McCormick said the list of technologies under consideration for new controls is a reduction from a previous proposal and is only “a small tweak to existing policy.” He said the expanded list would be presented in a few weeks for public comment over a 120-day period.
At the same time, he said, Washington is easing controls on some items, including certain categories of supercomputers. It also may set up a list of “validated” companies in China with no links to the military that can receive export licenses more quickly than in the past.
“We’re looking for ways to reduce the administrative burden on legitimate civilian trade,” he said.
China is the fourth largest export market for the U.S., behind Canada, Mexico and Japan, but ahead of Britain and Germany. It’s also the fastest growing U.S. export market. U.S. companies exported $41 billion worth of goods to China last year.
Yet China’s tidal wave of exports to U.S. shores, produced by an abundance of laborers willing to work for less than $100 a month, created a $201 billion trade surplus with the United States last year.
McCormick said that 6 percent of U.S. exports to China last year required special licenses and only $12.5 million in proposed exports were denied because of the high-tech controls.
Current export restrictions limit the sale of goods such as composite materials, centrifugal separators for pathogenic organisms, high-end computer software, rotor fabrication equipment, radar, avionics and other goods that could have a military purpose.