United States Policy Regarding Technology Transfer to the People’s Republic of China

Nimmo, Elizabeth M. | January 1, 1984

This Comment will focus on the nature and likely effect of the new United States export licensing rules regulating the transfer of technology to China. Part I will address the history and development of United States export control policy to China. Part II will discuss both the ideo- logical debate over the appropriate China technology transfer policy, and the general licensing procedures under the United States Export Admin- istration Act. Part III will analyze the substantial changes in and practi- cal effect of the new licensing guidelines for China, and the policy reasons behind the changes. Part IV will assess the probable impact of the new export policy on United States-China trade relations and the potential problems United States exporters are likely to face in foreign trade with China. As of January, 1984, United States exporters were very optimis- tic about current predictions that trade between the United States and China will reach record figures in 1984. A gradual trend toward liber- alization of technology transfer controls to Communist China reflects the friendly attitude the countries are presently exhibiting toward one an- other, and each country’s recognition that better relations are mutually beneficial. However, as United States-Soviet relations demonstrate, friendly relations can quickly turn hostile, thereby upsetting trade rela- tions carefully negotiated over many years. Therefore, United States exporters should keep in mind that Sino- United States economic relations will be inextricably linked to the polit- ical climate and the economic conditions in each country. While the benefits of increased trade between China and the United States are po- tentially great for both countries, so too are the potential harms if either country’s expectations for a prosperous and smooth trading relationship are disappointed.