US to restrict high-tech exports to China?

US high-tech products that have traditionally escaped restrictions on exports to China could be scooped up in an upcoming proposal outlined on Friday by a Bush administration official.

Speaking at the Center for Strategic and International Studies in Washington, undersecretary of commerce David McCormick said his department plans in the coming weeks to release preliminary rules spanning 47 categories of technology goods. The new policy appears to deal exclusively with China and not other countries for which the US has historically regulated exports.

Export controls, a product of the Cold War era, are intended to limit the shipment and sales of goods that could pose national security threats if obtained by certain countries of concern. Some of the policy surrounds "dual use" items that could have both civilian and military applications, including high-performance computers and encryption products.

The proposed rules sketched out on Friday appear in part to be a response to a recent report released by the Commerce Department's Office of Inspector General, which called on the government to beef up export restrictions to China. The report said loopholes in existing policy could be putting "sensitive US commodities" in Chinese hands for the development of "conventional weapons".

That means other, as-yet-unregulated technologies may also be worth scrutiny, McCormick indicated. "US policy should facilitate sales of American-made semiconductors to companies in China for use in stereos or a child's Game Boy but not for advanced missile systems or submarines," he said.

That development could prove displeasing to technology companies which have argued in the past that export controls have resulted in barriers to increasing legitimate trade with China. An Intel representative contacted by silicon.com sister site CNET News.com on Friday said the chipmaker would decline comment until the final rules are published.

Government analysts have attempted to pare down the list of technologies to only those "that would actually contribute to military modernisation," McCormick said. But in earlier remarks, he mentioned broad categories, such as avionics, semiconductor equipment and electronics, as forms of tech that would be covered by the proposed rules. He said the government welcomes feedback on the proposal, which will be open for comment for 120 days after it is published in the Federal Register.

At the same time, the new approach is designed to streamline the process by which US companies traffic in those goods with Chinese businesses, McCormick said. Rather than having to obtain licences certifying their products comply with the cumbersome demands of US export control regulations, they would be allowed to trade freely with anyone on a list cleared by the US government.

Such businesses would earn eligibility to buy from US tech companies only if they hold up to "very specific criteria" and "demonstrate an established record of non-proliferation and responsible civilian use of US imports," he said. The government will continue to do "on-the-ground spot checks" in hopes of preventing supplies from being diverted to military end users.

As China, the world's fourth-largest economy, has become a particularly attractive market for US technology companies, the nation should be exploring ways to expand trade while looking out for security, McCormick said.

He acknowledged in his speech that China's record on intellectual property and human rights - including free expression on the internet, a topic that garnered attention from Congress earlier this year - leaves much to be desired. But "none of those concerns preclude a very real commitment to try to increase legitimate civilian high-tech trade," he said.

Anne Broache writes for CNET News.com