Commerce Secretary Malcolm Baldrige yesterday announced a major change in export control policy to allow China to buy almost 75 percent of the high-technology products it wants from the United States.
The new rules, which Baldrige told the House special subcommittee on U.S.-China trade was a "major change in our policy," will allow China to buy higher levels of technology, some of which have the potential for military use, without any review from the Defense Department.
Applications in this category "will receive, for the most part, routine approval," Baldrige said. He added that the policy change could add as much as $2 billion in sales of electronic and sophisticated telephone and communications equipment by U.S. firms within two years without damaging U.S. security.
The Baldrige announcement, which came after 18 months of negotiations within the administration, coincided with Defense Secretary Caspar W. Weinberger's meeting in Peking with top Chinese officials on the possible sales of very high levels of technology with a more direct military application. Baldrige said the sales will require close review by defense specialists, though he said he expects approval in a large number of cases "unless the commodity or technology poses a clear threat to U.S. security interests."
Baldrige said a classified "red zone" of "the most advanced technologies," usually not even shared with allies, will most likely be barred for export to China.
The Defense Department had taken a hard line on the transfer of technology to China, fearing it would be leaked to the Soviet Union. But Baldrige said yesterday that defense officials fell into line once President Reagan announced in May that he wanted restrictions eased on high-technology exports to China.
The opening up of trade with China has been a major project of Baldrige, and has drawn attacks from officials within the administration who remain staunch supporters of Taiwan. The Taiwan government protested against the easing of restrictions on high-technology sales to China, but Baldrige said he didn't believe easing controls would harm Taiwan.