Week of June 11, 1999

SUMMARY:

Six new entries of Chinese sites--including some research institutes--were added to the list of foreign military and nuclear sites requiring Federal approval before purchasing high-performance computers, the export of which has become key to the debate of China’s use of American technology to enhance its weapons program. Alarmed by the recent Cox Report, conservatives in the U.S. claim that because the Chinese state is closely linked to the private sector, selling technology and equipment originally intended for private use will end up in the hands of the state. In the mid-1990s, several hundred advanced computers were sold to Chinese commercial buyers, but there is no direct evidence that the technology has been applied to developing nuclear weapons. This increase of sales limitations marks a growing conservative trend in the U.S. approach to China that may interfere with the long-term goal of an engagement policy.

SUMMARY:

Until recently, Chinese officials formerly disavowed internal pressure to back down on proposals for WTO entry. In light of the recent downturn in U.S.-China relations over the accidental China embassy bombing in Belgrade and espionage accusations, acknowledging internal discord on WTO entry may work toward China’s advantage during negotiations. The challenge will be to balance American demands with domestic pressure. In an effort to calm local officials who are upset about the prospect of international competition once China enters the WTO, China’s leading trade official, cabinet member Wu Yi, issued a report suggesting that proposals for WTO entry are still in the negotiation stage and can be altered.

The U.S. and China This Week