Thursday, January 20, 2011

IBD: Trading Away Secrets To China

IBD weighs in on GE's proposal to share advanced aircraft engine technology with Red China - a country on a fast upward trajectory to challenge America militarily, economically and technologically in the forseeable future. This seems an incredibly foolish act:

. . . The aircraft industry remains one of America's strongest manufacturing sectors, providing needed jobs and industrial sales. Already buffeted by the heavily subsidized European Airbus, it may also face stiffer competition one day from a Chinese behemoth buying what American technology it cannot steal.

General Electric plans this week to sign a joint-venture agreement under which it will share its most sophisticated airplane electronics, including technology from Boeing's 787 Dreamliner, with state-owned Aviation Industry Corp. of China, or Avic. . . .

Avionics are electronics that control an aircraft's basic in-flight operations. The risk is that in exchange for short-term sales, however significant, GE is providing a future industrial competitor with technology that also has military applications.

China recently rolled out its version of our fifth-generation F-22 Raptor fighter. Critics have said the Chinese J-20 will be in need of better avionics and more powerful jet engines to fulfill its ominous potential.

The GE deal supposedly forbids transfer of any technology to military applications. The joint venture to be headquartered in Shanghai will occupy separate offices from Avic's military division, and the computer systems involved are said to be incapable of transferring data to that division. Anyone working on the project is barred for two years from working on Avic's military projects.

Yet China's disrespect for intellectual property rights is legendary. . . .

We have seen the harmful effects of the transfer of "civilian" technology when we aided China's early space efforts. After the failed launch of a satellite built by Loral Space & Communications Ltd. and attached to a Chinese rocket in February 1996, Loral provided 200 pages of data to China's Great Wall Industry Corp. to correct the guidance system problems of their Long March rockets, which blew up 75% of the time.

A May 1997 classified Pentagon report concluded that Loral had "turned over expertise that significantly improved China's nuclear missiles" and that as a result "United States national security has been harmed."

According to the Pentagon, the technology that improved the Long March satellite launcher has also made the Dong Feng ICBM series more lethal.

Technology is fungible and can be used for good or ill. Whether enabling a future competitor or potential combatant, its transfer can come back to bite us.

We have laws on the books against transferring duel use technology - and this clearly falls into that category. While I am all for free trade, this crosses the line, particularly since it involves a country that is so blatantly on a collision course with the U.S. militarily. Hopefully, Congress will dust off its copy of the U.S. Code and give this proposed trade a serious look before allowing it to go through.

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