President Bush’s plan to toughen restrictions on technology exports to China has set off a struggle between U.S. national security officials concerned about China’s military threat and American companies increasingly dependent on overseas markets.
The U.S. Commerce Department plans to issue new rules by year’s end imposing stricter limits on the export of civilian technology that can be exploited for military use, such as aircraft parts, computer chips and machine tools, said Peter Lichtenbaum, the department’s acting undersecretary for industry and security.
The rules would expand the number of items prohibited for sale to China, as well as those that must be licensed by the government if sold, he said.
The plans come at a time when U.S. companies such as Intel Corp. and Boeing Co. increasingly rely on Asia to increase sales, and have billions of dollars invested in assembly, research and testing operations in China.
Intel has operations in Colorado Springs. Semiconductors have been Colorado’s largest export to China for the past seven years, according to the World Trade Center in Denver.
World Trade Center president Jim Reis said it’s unclear what kind of impact the restrictions would have on businesses in Colorado.
“Our exports to China are down 71 percent for the first five months of this year,” Reis said. “They’re down more than the national average.”
Each year, the U.S. Bureau of Industry and Security holds a seminar in Denver to inform companies of rules surrounding export licensing and enforcement. Between 50 and 100 companies in the region attend, and more than half are from Colorado.
“Those rules are very strict already,” Reis said. “If they totally prohibit this type of technology from going over there, then it will have an impact.”
Equipment used to monitor and control the quality of manufactured products are also a top export from Colorado. Reis said China is a growing market for that technology.
“U.S. industry is integrating with China, but the Bush administration is taking steps that are taking U.S. policy in a virtually opposite direction,” said Edmund Rice, president of the Coalition for Employment Through Exports. “They’re heading for a clash.”
Administration officials say that isn’t the intention. “We want to be sure that we find that balance between national security concerns and commercial opportunity,” Commerce Secretary Carlos Gutierrez said.
Bloomberg News and Denver Post staff writer Kimberly S. Johnson contributed to this report.
