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January 1, 1999, Friday, Home Edition

SECTION: Part A; Page 1; National Desk

LENGTH: 1272 words

HEADLINE: REPORT ON CHINA COULD LAUNCH EXPORT REFORMS

BYLINE: JIM MANN, TIMES STAFF WRITER

DATELINE: WASHINGTON

BODY:
The completion of a top-secret House committee report on American technology transfers to China sets the stage for a major battle in coming weeks over how many of the report's details will be declassified and made public.

The committee, headed by Rep. Christopher Cox (R-Newport Beach), said Wednesday it found that U.S. national security was harmed by Chinese acquisitions of American military technology over the last two decades.

The report by itself could lead to some tightening of controls on U.S. high-technology exports to China and to further restrictions on Chinese access to U.S. facilities, such as the nuclear weapon laboratories at Los Alamos, N.M., and the Lawrence Livermore National Laboratory near San Francisco.

But until the details are released, it will be impossible to know whether the committee has come up with groundbreaking revelations or is pulling together and giving a new boost to information that has already been on the public record for many years. "So far, it's all classified. I can't tell if they're coming up with something new or just recycling stuff and putting alarming rhetoric on it," said Gary Milhollin of the Wisconsin Project on Nuclear Arms Control. Milhollin, a specialist on technology transfers, testified before Cox's committee.

For example, one section of the House report is said to focus on Chinese thefts of U.S. high-tech secrets. That could well involve new material. Or it might summarize disclosures that date back a decade or more. In 1989, the FBI counterintelligence chief in Los Angeles told The Times in an interview that China had surpassed the Soviet Union in operations to steal technology in California.

Similarly, the House report is said to describe how China stole nuclear weapon design technology from the U.S. national laboratories run by the Department of Energy.

That could be an updated account of a story first reported by the San Jose Mercury News in 1990, which said Chinese scientists had built and tested a neutron bomb using secrets stolen from the Lawrence Livermore lab. Or the committee's conclusion may be based on new information the congressional investigation uncovered.

"I don't think this is just a tempest in a teapot," said James Mulvenon, a China specialist at the Rand Corp.'s Washington office, and another committee witness. "I think they have got something and they're figuring out how to use it."

Declassified Version in the Works

The release of the report, Mulvenon said, "is just the beginning. The report could serve as the launching point for a series of embarrassing public hearings with the executive branch."

In a telephone interview Thursday, Cox said his committee's classified report includes important new information.

"If you weighed it, I suppose 50% of it by weight has been in the press before, just because you can't have every word be new," Cox said. "But our significant findings are new."

The panel's 700-page document was based on a six-month investigation, during which the Select Committee on the People's Republic of China Technology Transfers held 22 hearings and took testimony from 75 witnesses. The committee launched its inquiry following disclosures, first reported in the New York Times, that U.S. satellite firms may have shared information that enabled the Chinese to improve their ballistic missile technology.

For now, however, its findings are classified "top secret." The committee plans to publish an unclassified version, but it is not yet resolved how many of the details in the classified report will be included in the subsequent document.

Over the next few weeks, there could well be considerable skirmishing between Congress and the Clinton administration about how much information should be declassified and released.

"I want to declassify essentially the whole thing," Cox told The Times. "We've talked to a number of experts like former CIA Director James Woolsey . . . who agree that we can move to declassification. We've got some leverage on this because the House has the power to declassify."

If the Clinton administration is "dragging its feet" about declassifying the report, Cox said, the House intelligence committee could have a closed session to decide how much of the report can be released, and the full House could meet in executive session to make a final decision.

Cox would not discuss the specifics of the report. But according to sources familiar with the committee's investigation, the report includes sections on China's acquisition of U.S. technology for supercomputers, machine tools and missile guidance technology.

"What's important here is that the committee is putting the whole picture together," Milhollin said. "These activities have been covered separately in the news media. But nobody's put the whole story together, to combine the transfers in different areas to show what China has been getting.

"These technologies are interrelated. For example, supercomputers allow you to do rocket design and testing activities faster. To make nuclear weapons more accurate, you have to make the parts well, and if you can get U.S. machine tools, that's important."

The House report could open the way for a new wave of Republican attacks on the Clinton administration's policy of engagement with China.

Mulvenon said Wednesday that he believes Republicans on Capitol Hill will try to use the report against President Clinton and Vice President Al Gore. During the congressional investigation, he said, "I heard from a number of people that House Majority Whip Tom DeLay R-Texas was upset with Cox for not leaking more information."

But the report itself was not a partisan one. The House committee approved its conclusions and recommendations by a vote of 9 to 0.

The panel's ranking Democrat, Rep. Norman D. Dicks of Washington--a veteran of the House Intelligence Committee who has often backed the interests of U.S. high-tech industries--called the report "a solid bipartisan effort." Among the Republicans signing the report is Rep. Doug Bereuter of Nebraska, who has generally supported the policy of engagement with China.

Although Republican congressional leaders have criticized the Clinton administration for being too lax in approving U.S. high-technology exports to China, the U.S. business community has so far headed off legislative efforts to impose drastic restrictions on these sales.

For example, after the disclosure last year that American commercial firms had helped China to improve the reliability of its rocket launches, the House passed a bill that would have banned further exports of U.S. satellites for launch on Chinese rockets.

But a few months later, the sweeping restriction died quietly in the Senate. Instead, the Republican Congress passed much narrower legislation that permits the exports but transfers the licensing authority over commercial satellites from the Commerce Department back to the State Department.

Fight for Controls May Lie Ahead

During his 1992 campaign, Clinton attracted unusually strong business support from executives of high-tech industries in places such as Silicon Valley. After taking office, his administration took a series of steps aimed at liberalizing the controls on high-tech exports for products such as advanced computers.

At the time, proponents argued that the existing restrictions were cumbersome and unnecessary, curtailing imports of goods that could easily be obtained elsewhere. But critics argued that the liberalized export controls could help countries such as China to improve missile and nuclear capabilities.

LOAD-DATE: January 1, 1999