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The Dangerous Breakdown of Export Controls
Trade Alert ^ | 7/11/02 | Alan Tonelson

Posted on 07/12/2002 11:06:22 AM PDT by madeinchina

You'd think that with all the talk lately from Washington about axes of evil, rogue states, weapons of mass destruction, and missile defense, the U.S. government would make sure that its export control system is state of the art. And you'd be flat wrong.

Denying enemies the means to produce nukes, bugs, missiles, et al. clearly is America's first line of defense in the post-9/11 world. Yet U.S. export controls are in the process of breaking down completely. Anyone doubting this charge should look at the General Accounting Office's recent study on U.S. policy toward sending advanced computer chip-making capabilities to China.

Semiconductors and the equipment that manufactures them, the crucial building blocks of our Information Age, are so critical for advanced weapons systems that their sale overseas is limited both by American legislation and by the Wassenaar agreement, an international export control system created in 1996 by the world's leading technology powers after the reasonably successful Cold War COCOM export control regime was dismantled.

Indeed, the Wassenaar countries claim to be so worried about high tech products winding up in the wrong hands that they have agreed on unusually broad goals. Specifically, they avowedly are not content to deny advanced technologies and products to active enemies or proven threats. Instead, these countries are committed to preventing "destabilizing accumulations" of these items whenever they can help build militaries capable of undermining regional security and stability.

Since actual implementation of the accord is left to the Wassenaar countries themselves, there's plenty of slip between cup and lip. Still, the military potential that Washington has helped and permitted China to acquire from U.S. companies shows how completely the American export control system has broken down.

According to the GAO, fifteen years ago, China was five generations of technology behind the United States in semiconductor production capability. Today, China has narrowed the gap to one generation and even less in some areas. And the GAO asserts that this progress is "the direct result of the involvement of European, Japanese, and U.S. integrated circuit manufacturers in China."

By setting up factories and labs in the People's Republic and transferring factories to Chinese partners, these free world powers have "created a potential new source of integrated circuits for China's industry and military." Some of the most advanced Chinese production facilities have been built by America's own Motorola.

Last January, senior Pentagon official Lisa Bronson told the Congressionally-created U.S.-China Security Review Commission that Beijing is not seeking advanced semiconductor manufacturing capacity simply to turn out better DVD players. China's military modernization program, she testified, "appears to be focusing on 'pockets of excellence,' where advances in select technologies can be leveraged for disproportionate benefit in a potential conflict."

As Bronson sees it, an advanced microelectronics industry will enable China to develop long-range precision-strike capabilities, a cyber warfare arsenal, better command and control systems, and integrated air defenses. China's efforts in surveillance and missile guidance will benefit as well, the GAO reports.

The GAO authors caution that the ability to make sophisticated semiconductors does not automatically or easily translate into the ability to make advanced weapons -- which typically consist of thousands of different parts and systems whose successful integration is itself a major industrial challenge.

Still, even assuming that China's progress in weapons-manufacturing grinds to a halt forever, the continuing growth of China's semiconductor industry will pose ever greater threats to U.S. national security. For example, the Pentagon's Bronson notes that China has been a major proliferator of missile and other advanced military technology to countries like Iran, Libya, and North Korea. China's burgeoning technological prowess will make these transfers much more valuable to rogue states -- and much more dangerous to America.

A more technologically advanced China will also be able to upgrade significantly the weapons it already possesses -- like the destroyers and frigates now being outfitted with new communications systems. In addition, a leading-edge semiconductor industry will enable China to earn the export revenues to keep buying in volume those weapons it can't make -- like the eight attack submarines it has just ordered from Russia. Indeed, China is now the world's largest importer of weapons.

Perhaps most important, the more China's semiconductor industry develops with foreign help, the easier Beijing will find making further progress on its own. The result will be a country far less vulnerable to supply disruptions -- much less export controls -- than it is today.

Just as disturbing as the GAO's reports of China's free world-aided semiconductor progress and potential is its assessment of the international consensus in favor of export controls. As the study makes clear, this consensus is gone. The Wassenaar agreement, concludes the GAO, "has not affected China's ability to obtain semiconductor manufacturing equipment primarily because the United States is the only member...that considers China's acquisition of semiconductor manufacturing equipment a cause for concern."

Continues the GAO, "The United States is the only member that considers the relationship between semiconductor manufacturing equipment and military end uses sufficiently critical and considers China's acquisition of this technology a potential threat to regional or international stability.'

Nonetheless, U.S. export control authorities have joined the Europeans and Japanese in licensing sales of such equipment to China "that is at least two generations more advanced than the threshold stipulated" by Wassenaar and by the Commerce Department's own standards, and three generations ahead of what the Defense Department considers "militarily critical."

These practices shed new light on the perils created by the Bush administration's decision in 2001 to allow the Dutch chip equipment maker ASML to take over a smaller, more advanced American competitor, Silicon Valley Group -- which also happened to be the last major U.S.-owned company in the super-advanced field of lithography. Supporters described -- and trivialized -- the sale as a deal between NATO allies. Who could object? But with ASML's close partner Philips operating semiconductor factories in China, who can now reasonably doubt that SVG's leading-edge technology will soon migrate to the People's Republic?

Obviously, the Bush administration needs to pressure allies to take the Chinese threat and the Wassenaar agreement much more seriously. But it must also clean up its own sorry export control act. After all, vigilance, like charity, must begin at home.


TOPICS: Business/Economy; Editorial
KEYWORDS: bushadministration; cocom; exportcontrols; gao; wassenaaragreement

1 posted on 07/12/2002 11:06:22 AM PDT by madeinchina
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To: madeinchina
I can NOT believe that the author of this article could have failed to mention, even in passing, that ClinTOON opened the floodgates of technology transfers (to China as well as other not-so-friendly countries) as payback for, ummm, shall we say, hefty campaign contributions (I was tempted to say BRIBES, but no American president could possibly be suborned into treason by mere money, right?).
2 posted on 07/12/2002 1:09:47 PM PDT by TrueKnightGalahad
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To: madeinchina
In the days when one needed a CRAY supercomputer to design weapons, this article made some sense. Now if you buy a computer from Dell you have all the horsepower you need to run simulations. I'm sure there are many technologies worth protecting, but having the illusion that keeping computers is the key to our security is absurd.
3 posted on 07/12/2002 1:48:16 PM PDT by Leto
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To: Leto
In the days when one needed a CRAY supercomputer to design weapons, this article made some sense. Now if you buy a computer from Dell you have all the horsepower you need to run simulations

How many simulations do you need to run for a U235 gun device?

After all,the Little Boy design was so straightforward it was never tested.

The tricky part is getting the u235, but the world is awash in that nowadays.

Had we spent the last 10 years tracking down u235 with the fervor we chase down potheads, we might have made a difference. But now its too late.

Its only a matter of time before we lose a major urban area.

4 posted on 07/12/2002 2:44:03 PM PDT by AdamSelene235
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