US State Department, China presents a particular challenge for the U.S. policy of export controls on sensitive technologies and commodities with potential military uses, says Peter Lichtenbaum, acting under secretary of commerce for industry and security.
Lichtenbaum testified at a June 23 hearing on “U.S.-China Trade Impacts on the U.S. Defense Industrial Base.” The hearing was convened by the U.S.-China Economic and Security Review Commission (USCC), a congressionally mandated body that assesses the national security implications of trade and economic ties between the United States and China.
“[I]t serves our common security, foreign policy, and economic interests for the United States and China to expand our economic relationship,” Lichtenbaum told the commission. “At the same time, we continue to have significant differences with China on security and foreign policy issues that dictate a cautious way forward in our overall political, economic, and strategic relationship.”
Lichtenbaum has oversight responsibility for the Commerce Department's Bureau of Industry and Security (BIS), which regulates the export of so-called “dual-use” technologies and goods — items that are designed for legitimate commercial use, but can also be used as weapons or for terrorist purposes. Such items are identified on the Commerce Control List, which tracks U.S. commitments under multilateral export control regimes.
“The ultimate goal is to prevent U.S.-origin items from falling into the hands of those nations, terrorists, and individuals who would use the goods and technologies against [the United States] and [its] allies,” Lichtenbaum said.
Lichtenbaum noted that U.S. exports to China have been increasing rapidly, rising over 22 percent in 2004. That increase has included some dual-use items, such as semiconductor manufacturing equipment, chemicals, chemical manufacturing equipment and high-performance computers.
“From a security standpoint, the U.S. government remains concerned about China's modernization of its conventional military forces and the risk of diversion of sensitive dual-use items and technology to Chinese military programs,” he cautioned.
In addition, according to Lichtenbaum, China has not done as well as it should in developing and enforcing an export-control system of its own and meeting U.S. nonproliferation objectives.
As a result, he said, the U.S. government “has imposed sanctions on a number of Chinese entities that have exported sensitive items to countries of concern.”
Lichtenbaum denied that export controls are a significant factor in the U.S. trade deficit with China.
“Export controls are not impeding overall U.S.-China bilateral trade,” he said, pointing out that the total value of denied license applications for China in 2004 was only $10.8 million, compared to total U.S. exports to China of $34.7 billion and a total bilateral U.S. trade deficit of $162 billion.
According to Lichtenbaum, the United States has reduced export restrictions on many high-technology items in recent years, including computer hardware, general-purpose microprocessors and some semiconductor manufacturing equipment.
“[T]he great majority of U.S. exports to China do not require a license, and the great majority of licenses are approved,” he said. “Expanding civil exports to China benefits U.S. firms and workers, and fosters peaceful ties between our countries.”
Lichtenbaum also said the United States has not used export controls to assist American corporations. “U.S. export controls have never been intended as instruments of trade policy,” he said. “Rather, they serve to protect U.S. national security.”
Export controls should be applied only in cases where a U.S. industry is critical to national defense or specifically threatened by Chinese competition, Lichtenbaum said.
“We seek to implement a policy that ensures that U.S. exports are not diverted to end-uses within China that we do not support, and are not re-exported to other foreign government or terrorist weapon programs that are adverse to our interests,” he said. “We will continue to support legitimate exports that contribute to U.S. economic growth and facilitate China 's peaceful economic development.”
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