18 January 2002
Text: Pentagon Official Discusses Export Policy Toward China
(Bronson stresses balance of security, trade concerns) (2690)
U.S. export policy toward China must strike a balance between
protecting national security and ensuring the ability of U.S.
companies to compete internationally, according to Lisa Bronson,
deputy under secretary of defense for technology security policy and
proliferation.
During a January 17 hearing of the U.S.-China Commission, Bronson said
China's military modernization and "poor record" on proliferation are
areas of concern for the United States in its relations with that
country.
The Beijing regime remains "one of [the] world's key sources" for
missile and weapons of mass destruction-related technology, "including
to some terrorist sponsoring states," Bronson said, noting that
Chinese firms "have provided some important missile related items and
assistance to countries like Iran, Libya, and North Korea."
In addition, Bronson said, "Chinese entities have provided extensive
support in the past to Pakistan's nuclear and ballistic missile
programs and have supported some nuclear and chemical programs in
rogue states."
Bronson called the communist state "both a problematic proliferator
and the largest potential future market" for the United States.
"The challenge of China is striking the balance between the desire to
successfully compete in a vast untapped commercial market and the need
to protect national security, including through effective
nonproliferation," the Defense Department official said.
"Our policies and practices must strive to minimize transfers of
technologies that could contribute to potentially threatening
modernization efforts," Bronson said. "Our focus is already on the
areas Beijing has identified as its 'pockets of excellence,' but we
need to continually be vigilant in the licensing process for new areas
where our high technology might be exploited to our detriment."
At the same time, she continued, "our policies and practices must
ensure that U.S. companies can compete for legitimate commercial sales
on equal footing with their foreign competitors."
"We are ready and willing to hear an exporter's case that a commodity
is already widely available in the international market," Bronson
said. "If a commodity is widely available, and not amenable to
multilateral controls, then export controls may not be the best tool
for addressing a national security or proliferation concern."
Policy toward China must fit into the "the larger national security
and foreign policy agenda set by the President, who has said that
'America's next priority to prevent mass terror is to protect against
the proliferation of weapons of mass destruction and the means to
deliver them,'" the Defense Department official said.
Bronson noted that the People's Republic of China has a "growing
inventory of nuclear, biological and chemical weapons and associated
delivery systems."
Using a year-old Department of Defense study, "Proliferation: Threat
and Response," Bronson said the Beijing regime has more than 100
nuclear warheads and is increasing "the size, accuracy and
survivability of its nuclear missile force."
With 20 CSS-4 ICBMs that have a range of more than 13,000 kilometers,
Bronson emphasized, China is "one of the few countries that can
threaten the continental United States."
The Pentagon official added that the United States expects that China
"will continue to modernize its strategic missile force over the next
generation, improving the survivability, reliability and accuracy of
this force."
Technology security, Bronson said, is an important part of U.S.
security both overseas and at home.
"The pursuit of a necessary balance between free markets and national
security is affected by many factors," she noted. "Striking the right
balance with respect to China is especially difficult, and questions
of Chinese intentions, capabilities, and conduct weigh very heavily."
Following is the text of Bronson's remarks, as prepared for delivery:
(begin text)
United States - China Commission
U.S. Export Control Policy Toward China
Prepared Statement January 17, 2002
Lisa Bronson
Deputy Under Secretary of Defense
for Technology Security Policy and Counterproliferation
The Challenge of China
Mr. Chairman and Commissioners, I am honored to join you today with
colleagues from the Departments of Commerce and State to discuss
United States export controls and China.
The President has said that we seek a candid, constructive, and
cooperative relationship with China. China is a partner on some issues
and a competitor on others. American interests could be served by a
China that is developing economically and politically. Still, we do
not ignore the fact that China has embarked on an ambitious program of
military modernization, including nuclear modernization. This
modernization, combined with China's poor record on proliferation
leaves us with many questions about the future direction of China's
foreign and security policies.
One of the challenges China presents is its current and growing
inventory of nuclear, biological and chemical weapons and associated
delivery systems. A review of DoD's recent publication "Proliferation:
Threat and Response" (January 2001) is instructive. China currently
has over 100 nuclear warheads and is increasing the size, accuracy and
survivability of its nuclear missile force. Given some 20 CSS-4 ICBMs
of over a 13,000 km range, China is already one of the few countries
that can threaten the continental United States. We expect China will
continue to modernize its strategic missile force over the next
generation, improving the survivability, reliability and accuracy of
this force.
China continues to maintain elements of an offensive biological
warfare program. Technology for production and weaponization of
biological agents developed prior to Beijing's accession to the
Biological Weapons Convention (BWC) in 1984 is believed to provide the
basis for current capabilities. In addition, China is believed to have
made incomplete and inaccurate declarations under BWC protocols.
Beijing is believed to have an advanced chemical warfare program,
including research and development, production and weaponization
capabilities. Chinese industry produces the necessary precursors for
traditional agents, and its forces have a variety of delivery options.
In the past, Beijing has not acknowledged the full extent of its
chemical weapons program despite its ratification of the Chemical
Weapons Convention.
A vital aspect of China's overall military modernization includes
pursuit of a viable indigenous space force. China is paying particular
attention to the development of small boosters able to launch
satellites at a moment's notice in a contingency.
Recognized experts observe that China's modernization program appears
to be focusing on "pockets of excellence," where advances in select
technologies can be leveraged for disproportionate benefit in a
potential conflict. Several such "pockets" include: preemptive
long-range precision strike capabilities; information dominance;
command and control; and integrated air defense. In support of these
efforts, Beijing has identified the development of an indigenous
microelectronics industry as one of its highest priorities. A
cutting-edge domestic microelectronics sector will support both
military and commercial modernization in China. China's increasing
emphasis on development of very large-scale integrated circuits will
have direct application in future military systems, for example,
advanced phased-array radars.
China continues to be one of [the] world's key sources for missile and
WMD-related technology, including to some terrorist sponsoring states.
Chinese firms have provided some important missile related items and
assistance to countries like Iran, Libya, and North Korea.
Additionally, Chinese entities have provided extensive support in the
past to Pakistan's nuclear and ballistic missile programs and have
supported some nuclear and chemical programs in rogue states.
How Does Our Export Control System Deal With China?
The United States has a variety of tools to protect sensitive
technologies from inappropriate Chinese exploitation, as well as
multilateral means to encourage similar approaches among allies.
My colleagues from the Departments of Commerce and State address our
dual-use and munitions regulatory systems in detail in their prepared
statements. I want to reiterate that the number of Munitions List
exports to China has been extremely small over the past several years.
In the dual-use area, the export licensing system provides the U.S.
government with a useful set of procedures for controlling dual-use
commodities that could be used for military purposes.
The dual-use control system under the Export Administration
Regulations addresses commodities falling within four areas of special
military sensitivity: national security, nuclear nonproliferation,
missile technology and chemical and biological weapons. The regulatory
scheme assumes a policy of license denial for these commodities if
they make a "direct and significant," or "material" contribution,
depending on the area, to Chinese capabilities. Examples under the
"national security" area of sensitivity include electronic and
anti-submarine warfare, intelligence gathering, power projection and
air superiority.
Another means of regulating the flow of technology to China is the
Commerce Department "Entity List." This list identifies foreign
entities that are believed to pose proliferation risks; there are
currently 19 Chinese entities on the list. Other tools include the
various multilateral nonproliferation regimes: the Missile Technology
Control Regime, the Australia Group, and the Nuclear Suppliers Group.
A particularly important element of these regimes is a "no undercut"
policy, which remains to be adopted in a fourth multilateral regime,
the Wassenaar Arrangement.
DOD's Role in the Licensing Process
The Department of Defense is a full partner in the interagency export
license process, reviewing all sensitive munitions and dual-use
license applications referred by the Departments of State and
Commerce. Moreover, we are actively engaged in fashioning the
conditions and provisos that address any national security concerns
posed by export licensing applications. DoD's export licensing
functions are executed by the nearly 200 military and career civilian
personnel of the Defense Technology Security Administration. This
cadre includes a tremendous depth of expertise in the "hard" sciences,
engineering and manufacturing techniques. These technology specialists
support licensing officers who review individual licenses referred to
DoD under provisions of the Export Administration Regulations (EAR)
and the International Traffic in Arms Regulations (ITAR), administered
by the Departments of Commerce and State, respectively. We have a
dedicated space launch monitoring division that is tasked specifically
with reviewing licenses and then developing and implementing the
technology safeguard programs for space launches of U.S.-made
equipment on foreign launch vehicles. In addition, the space launch
division implements technology safeguards for U.S. launches of
U.S.-built satellites of certain foreign ownership. Members of our
space launch division combine both scientific and licensing expertise
to provide "cradle to grave" supervision of space launch technology
safeguard programs. There have been no waivers of "Tiananmen
sanctions" to permit any launch of U.S. equipment from China since
1998. However, DTSA's space launch division is ready to resume
monitoring immediately, if a policy decision to issue such a waiver is
made.
Whether in the space launch division, dual-use or munitions licensing,
DTSA personnel review each license application individually with input
as necessary from the military services, the Joint Staff, and, as
necessary, any other DoD component. It is a process that is
time-consuming, with some 24,000 licenses processed in calendar year
2001 (about 14,000 munitions licenses and 10,00 dual-use licenses).
The DoD dual-use license review process also includes reviews of the
end-user to minimize the risk of diversion. DTSA realigned its
end-user reviews to create an assessment unit that provides more
comprehensive checks on end-users identified in all dual-use license
applications. This unit also assists reviews of munitions licenses.
This unit is augmented by a cadre of reserve intelligence specialists
who provide regular support for the end-user checks.
Despite the overall volume of licenses, I am pleased that there has
been consistent improvement in processing times for munitions -- down
from an average of 38 days in 1999 to approximately 20 days today. On
the dual-use side of our operation, processing timelines have declined
from an average of 12 to 11 days over the past two years, though the
complexity of dual-use licenses has increased significantly. I believe
we have struck an appropriate balance between taking the time to
protect national security without unnecessarily delaying action on
industry's license applications.
Where Do We Go From Here?
China is both a problematic proliferator and the largest potential
future market for the U.S. It must be dealt with as part of the larger
national security and foreign policy agenda set by the President, who
has said that "America's next priority to prevent mass terror is to
protect against the proliferation of weapons of mass destruction and
the means to deliver them." This poses a significant policy challenge
with respect to China.
The challenge of China is striking the balance between the desire to
successfully compete in a vast untapped commercial market and the need
to protect national security, including through effective
nonproliferation. Our policies and practices must strive to minimize
transfers of technologies that could contribute to potentially
threatening modernization efforts. Our focus is already on the areas
Beijing has identified as its "pockets of excellence," but we need to
continually be vigilant in the licensing process for new areas where
our high technology might be exploited to our detriment. Our policies
and practices must ensure that U.S. companies can compete for
legitimate commercial sales on equal footing with their foreign
competitors. We are ready and willing to hear an exporter's case that
a commodity is already widely available in the international market.
For if a commodity is widely available, and not amenable to
multilateral controls, then export controls may not be the best tool
for addressing a national security or proliferation concern.
Specific Steps
In August 2001, the Deputy Secretary of Defense reestablished the
Defense Technology Security Administration as an organization under
the Under Secretary for Policy. This move reunited the technology
security, counterproliferation and non-proliferation functions under a
single under secretary. The Under Secretary for Policy has directed a
more integrated approach than has been taken in the past. In this
regard, my responsibilities include not merely export licensing and
technology security policy, but counterproliferation policy as well.
Counterproliferation refers to the range of military preparations and
activities to reduce the threat posed by weapons of mass destruction
and their delivery systems. It is distinguished from nonproliferation,
which includes the range of political, economic and diplomatic tools
to prevent, constrain or reverse the proliferation of weapons of mass
destruction and their delivery systems. Thus, my office is now
responsible for preventing potential adversaries from leveraging
controllable, sensitive technologies, as well as policies for dealing
with adversaries who may have already obtained such technologies.
By putting both our technology security and counterproliferation
offices under one organic management structure, we hope to give DoD a
more comprehensive approach to the interagency export control process,
and to the development of a U.S. strategy for managing technology
security and countering proliferation.
The realignment of technology security functions at DoD will pay
dividends across the board. But we are paying special attention to
China and its modernization and proliferation challenges in several
areas:
We oversee the DoD contribution to the ongoing review and revision of
the United States Munitions List. This review is informed by our
knowledge of China's key modernization priorities.
In particular, our review of microelectronics dual-use licenses is
colored by our evolving understanding of what China wants.
DoD licensing officers work with Commerce to fashion license
conditions designed to deny critical dual-use manufacturing technology
to Beijing but at the same time allow U.S. industry to compete where
end items are widely available from foreign suppliers.
If and when a decision is made to resume space launch licensing for
China, DTSA's license review, technology security planning and
monitoring infrastructure is prepared to protect U.S. technology.
We are exploring ways to strengthen multilateral regimes such as the
Wassenaar Arrangement.
Conclusion
September 11 was a grim reminder that government needs to better
integrate all elements of national power - military, law enforcement,
regulations, and intelligence - into a successful national security
strategy. Technology security is one of those elements. It has
implications for our troops deployed abroad as well as for "homeland
defense" within our borders.
The pursuit of a necessary balance between free markets and national
security is affected by many factors. Striking the right balance with
respect to China is especially difficult, and questions of Chinese
intentions, capabilities, and conduct weigh very heavily. In
confronting the challenges posed by China, I expect that the work of
this Commission will offer us very important insights.
Mr. Chairman, I appreciate the opportunity to appear before the
Commission and look forward to our discussions.
(end text)
(Distributed by the Office of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)
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