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 CounterproliferationThe
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 htmect 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 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.