BIS Official Outlines New China Export Control Policy

In recent remarks to the Center for Strategic and International Studies, Under Secretary of Commerce for Industry and Security David McCormick gave an overview of an upcoming regulation on exports of dual-use items to China. McCormick said the rule, which he said is not properly characterized as a “catch-all,” is aimed at increasing civilian high-tech trade with China while ensuring that such exports do not benefit the Chinese military.

McCormick said the proposed changes aim to free trade in certain dual use items with certified importers in China for civilian purposes. Specifically, U.S. exporters seeking to increase their market share in sectors such as semiconductor equipment and electronics will not have to apply for licenses for sales to these certified companies. To become certified, Chinese companies will have to demonstrate an established record of nonproliferation and responsible civilian use of U.S. imports. McCormick said this certification process will require “unprecedented openness and cooperation on the part of Chinese companies … [and] create incentives for them to demonstrate good faith and sound practices.”

In addition, McCormick said, the new rule will prevent exports of 47 categories of high-tech products for incorporation into Chinese weapons systems. “It is not a wide-ranging ‘catch-all regulation’ that subjects everything from fountain pens to office furniture to government scrutiny,” he stressed. “Rather, these changes carefully target certain technologies that, while unrestricted until now, have the potential to materially enhance China’s military capabilities. The Administration will also urge others, particularly in Europe and Japan, to take similar steps. And we will continue to conduct on-the-ground spot checks in China to reduce the risk that civilian exports are diverted to third parties or to China’s own military purposes.”