Over-optimism about US export reforms unjustified
- Source: Global Times
- [20:54 April 26 2010]
- Comments
Illustration: Liu Rui
By Yu Donghui
US Secretary of Defense Robert Gates recently announced a plan to overhaul the country's export control system. Export restrictions on most top-grade products and technologies for both military and civil use will be loosened, and supervision will be focused on the most sensitive technologies and items.
This marks the official launch of the export control reform. For the Chinese, who have been complaining about US high-tech export restrictions, it seems to be a first glimpse of dawn. However, China should not have too high expectations from these export reforms.
Over the past decades, US high-tech export controls have drawn intense attention from China. Except for the 1980s, when it loosened controls for political reasons, the US has maintained strict technological export restrictions on China.
In the US, the exposure of alleged Chinese agents and illegal exports, especially the Wen Ho Lee case, has made many Chinese working in US high-tech industries nervous.
China complains that US controls on high-tech export stem from its Cold War mentality, which is an important reason for the Sino-US trade imbalance. In the wake of US pressure on the appreciation of the yuan, China responded by requiring the US to loosen its high-tech export controls, which were somewhat loosened in the Bush administration.
However, China holds that US control technology export to China are still too strict. In fact, even some US allies complain that the nation's export control system is so outdated and labyrin-thine that it hinders their cooperation in the high-tech and military fields. It is ludicrous that some products, which can be easily bought online, are still on the control list.
The Obama administration admits that the current export control system is useless for national security but instead undermines the country's international competitive strength due to its complicated and confusing procedures.
Since August 2009, US President Barack Obama has required the Department of State, Department of Defense and Department of Commerce to review the US export control system and discuss solutions with the US Congress. Some congressmen have been strongly opposed, holding that the reforms would harm national security.
The plan announced by Gates this time relies on creating a single export control list, licensing agency, primary enforcement coordination agency and information technology system. The aim is to simplify procedures, enhance transparency, concentrate on controlling critical technologies and items and, as Gates put it, "build high walls around a smaller yard."
According to Gates, the new control system will leave alone 95 percent of the cases and concentrate resources on the management of the remaining 5 percent. He stressed the significance of the reform in strengthening national security and underplayed the consideration of business interests.
Estimates by the US National Association of Manufacturers show that the new system will probably increase output by $60 billion and create as many as 160,000 jobs. This is undoubtedly appealing to an Obama administration eager to see the doubling of US exports.
The details of the reform are still under discussion, and it is hard to say how much China will benefit.
However, US Secretary of Commerce Gary Locke has talked of US export reform in several occasions concerning China. This demonstrates that the Obama administration purposely seeks to facilitate the transfer of some technologies and items that are already open to China and thus promote the exports of these technologies and items through the reform.
Besides, the process of importing high-end products from the US is likely to be streamlined. Chinese companies currently have to go through two sets of clearance procedures, one from the Pentagon, the other from the Department of Commerce. The upcoming reforms will probably be good for these Chinese companies.
But China should not expect to import high-end products and technologies from the US after the reform. The lack of strategic mutual trust between the US and China and the US strategy of both engaging and hedging China determines that the US will not open up the export of advanced technologies and products to China within a short period.
The US and EU still ban the sale of weapons to China. Many dual-use high-tech products will definitely remain on the control list.
After the reform, the US will still have an export control "blacklist" which involves terrorist groups, hostile countries and others.
It remains unknown what "others" refers to and whether China will be blacklisted, but the prospects of China coming off the list are hardly optimistic.
The author is a Washington DC-based Chinese journalist. forum@globaltimes. com.cn
