More than a year after the Carter administration announced new high-technology trade with China, and months after the Reagan administration broadened that to include the possible sale of arms, U.S. manufacturers say sales are still lagging because of disagreements and resistance among middle-level officials in the Defense, State and Commerce departments.
Christopher H. Phillips, president of the National Council for U.S.-China Trade, told manufacturing executives in a private briefing here that the "striking contrasts between policy pronouncements and policy implementation" were giving Japanese and European competitors a distinct advantage in the China market.
In one instance cited by Phillips, RCA Corp. was twice refused permission in the last days of the Carter administration even to discuss sale of a defensive radar system with Peking, despite an earlier public announcement indicating such sales would be allowed. No relief has come from the Reagan administration so far, despite the fact that RCA has already sold similar equipment to India, which has Soviet military advisers.
Ming Hsu, an RCA staff vice president for international trade relations, said despite the announced U.S. commitment to high-technology trade with China, "There are bureaucrats who just do not want to sell to communist countries." Officials at the State and Defense departments said today it has taken longer than some expected to draft very complex rules guaranteeing that unauthorized offensive weapons do not fall into Chinese hands.
One official acknowledged that some personal opposition to sales to China may be slowing some of the work, but noted that administration announcements of relaxed new trade rules did not emphasize the time needed to write new rules.
"I can understand their frustration," said one military officer involved in the process, "but you can't do these things overnight."
Phillips said in his remarks to members of the Los Angeles area Chamber of Commerce that despite a March, 1980, Carter administration document allowing some defense support equipment to be sold to the Chinese, "the only licenses that have been issued have been one Cessna aircraft and one camera for a Cessna."
A Defense Department official said the Chinese have not demonstrated much interest in buying yet, but a Rockwell International executive said U.S. manufacturers are avoiding talks with the Chinese until they can be sure exactly what they are allowed to sell.
In June, Secretary of State Alexander M. Haig Jr. announced during a trip to Peking that Washington had decided to remove China from the munitions-control restrictions preventing any sale of lethal weapons. Haig said Chinese arms requests would be considered on a "case-by-case basis" when the restrictions were lifted.
But Phillips said no items on the munitions list had been sold to China, and Defense Department officials have told U.S. companies that as far as the Pentagon is concerned the policy has not changed.
A Defense Department official confirmed that a decision to liberalize sale of dual use (military and civilian) equipment to China had been delayed. The official said Defense and Commerce officials were still discussing rules for the liberalization, including how to decide which equipment sales need not be reviewed by U.S. allies.
Karen Berney, a staff member with Phillips' National Council, which serves as the principal private liaison between U.S. businessmen and Peking, said the need for some review by allies may further hinder U.S. technology trade. Washington has vetoed sale of one Japanese computer to the Chinese Railway Ministry, she said, because U.S. officials concluded that the computer was more sophisticated than needed for the job and might have an unauthorized military potential. Some American businessmen now fear the Japanese may veto some U.S. sales in turn.
In his remarks, Phillips also expressed fear that economic and diplomatic relations with Peking could be hurt badly if the Reagan administration allows the sale of an improved jet fighter to Taiwan.