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June 10, 1999, Thursday, Late Edition - Final

SECTION: Section A; Page 8; Column 3; Foreign Desk

LENGTH: 813 words

HEADLINE: U.S. Adds 6 Chinese Sites to List That Alerts Computer Sellers

BYLINE: By JEFF GERTH

DATELINE: WASHINGTON, June 9

BODY:
In an effort to prevent sensitive technology from being used by the Chinese military, the Commerce Department has told exporters that shipments to six missile and nuclear sites in China will require Federal approval.

The sites -- which include research institutes -- were publicly identified last month, when their names and addresses were published in the Federal Register. The move came the same week a select Congressional committee, headed by Representative Christopher Cox, Republican of California, criticized the Commerce Department for not being vigilant enough in policing exports of technology to China. In late 1995, President Clinton decided to relax export controls on some high-performance computers and transferred responsibility for screening buyers of these computers from the Government to exporters. The White House promised to create a program to help them and began to compile a list of foreign military and nuclear sites that would still require Federal approval.

The list first appeared in 1997, with over a dozen sites, including some in Russia and India.

R. Roger Majak, the Assistant Secretary of Commerce for Export Administration, said that of the six new entities on the list, most were added after American companies inquired about possible sales months ago.

He said that the delay in adding the six were caused by the Administration's desire to be cautious in labeling foreign sites, as well as by the process of getting consent from a handful of other Federal agencies.

Gary Milhollin, the director of the Wisconsin Project on Nuclear Arms Control, a nonprofit watchdog group affiliated with the University of Wisconsin, said all six sites have long been known to be involved in nuclear or missile work and should have been on the list earlier.

In the wake of the release of the Cox Committee report on China's acquisition of American technology, and as Congress begins to weigh its recommendations, the export of powerful computers has emerged as a particularly nettlesome issue.

Almost 150 advanced computers were sold to commercial buyers in China under the relaxed rules in 1996 and 1997. Hundreds more have been sold since then, but under tighter rules imposed by Congress.

Given the role of the state in China's economy, it is not easy to tell whether China's military gained access to technology bought by commercial customers. Mr. Cox told a Senate hearing last month about China's "application of U.S. high-performance computers to nuclear weapons applications."

But Mr. Majak said that the Administration's position was: "There is no evidence that any American computers have been used by China for nuclear weapons purposes."

On Thursday, the Senate Banking Committee, which has jurisdiction over export controls, is to hear from Mr. Cox and the select committee's ranking Democrat, Norm Dicks, of Washington State. The committee's unanimous report included a recommendation that Congress renew the Export Administration Act, which expired in 1994.

Last year, during President Clinton's visit to China, Beijing agreed for the first time to allow checks on American imports. But the Cox Committee said the agreement was "wholly inadequate" in general and "useless" with regard to computers.

The Administration, citing Beijing's concerns about its sovereignty, did not allow the committee to disclose details of the agreement.

But a copy of the agreement, labeled "secret," shows that inspections are left to the discretion of Beijing. The agreement says that Chinese officials will conduct inspections "on a case-by-case basis" and "if personnel and resources permit." Officials from the United States Embassy "will be invited, as necessary, to participate" in the checks, it says.

Dan Hoydysh, the director of trade policy for Unisys Corporation, a computer manufacturer, said that some of the Cox Committee's ideas were commendable, but its advice on what kinds of computers need to be strictly controlled was "really outdated." And he said the committee's call for tighter inspections of advanced computers sold to China was "not feasible" because projected computer sales worldwide were "literally in the hundreds of thousands."

On Friday, he and other computer executives are to meet at the White House with Administration officials to discuss their concerns. They are likely to find a receptive audience.

Soon after he took office in 1993, President Clinton wrote a computer executive that "one reason I ran for President was to tailor export controls to the realization of a post-cold war world."

Easing controls, Mr. Clinton added, "can help unleash our companies to compete successfully in the global market."

The Cox Committee has raised the question of whether the Clinton Administration's emphasis on global competition has been consistent with American national security.

http://www.nytimes.com

LOAD-DATE: June 10, 1999