US defends curbs on high-tech sales to Beijing

David McCormick, US undersecretary of commerce for industry and security, told the FT that the controls would be handled "in a very targeted way" and the department was certain they would "not place a burden on industry".

The US is preparing to enact restrictions on the sale to China of 46 new types of products in 10 categories – including specialised chemicals, lasers, electronics and telecommunications – in case those products find their way into the hands of the Chinese military.

A draft of the proposed restrictions was circulated in March and the US is expected to propose the changes formally after Mr McCormick returns from China, where he is briefing leaders on the plans.

Bill Reinsch, president of the National Foreign Trade Council, a US business group that opposes the controls, said that, while the commercial impact of the restrictions would be minimal, US exporters opposed the move. "We still don’t think they’ve made the case that these are things that need to be controlled for national security reasons," he said.

The list was likely to annoy Beijing, Mr Reinsch said, as the items were drawn from a range of goods restricted only for states regarded as sponsoring terrorism on the US, such as Iran and North Korea.

The US is trying to minimise criticism of the restrictions by pointing out that existing controls place a small burden on US-China trade.

Chinese leaders have re-peatedly said Washington could reduce bilateral trade imbalances by easing its controls on high-tech goods. But Mr McCormick said the Chinese claims were vastly overstated. Of the Dollars 41bn (Euros 32bn, Pounds 21.8bn) in US exports to China last year, about Dollars 2.4bn had involved licensed technology – and only Dollars 12.5m worth of goods had been denied export permission, Mr McCormick said.

"It’s a fraction of a fraction of a fraction of the overall trade deficit," he said. "The numbers just don’t, in any objective analysis, support any correlation between the trade deficit and our export control regime."

Mr McCormick also said Washington was moving to make it easier to sell high-tech products to legitimate civilian Chinese importers that had long-standing ties with US suppliers.

China’s rapid economic development and growing military clout have made technology exchange a highly sensitive issue in the US, but companies argue that the controls simply hurt US business and help rival suppliers from the European Union and Japan.

The American Chamber of Commerce in China said many Chinese companies had told its members that they never bothered to approach US suppliers of high-tech goods "because of the uncertainty surrounding the approval and licensing programmes".

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