U.S. Able to Boost Communications Sales to China

Western nations have agreed to eliminate some curbs on exports of communications gear to China, a move that could mean new U.S. sales of $1.5 billion to $5 billion during the next five years, the Commerce Department has announced.

The new rules, which take effect immediately, were approved by the 16-nation Coordinating Committee for Multilateral Export Controls, a Paris-based group that monitors strategic exports to the East.

The changes signify that “we assess the strategic threat of China as much lower, and that there is an ever widening gap between China and the Eastern Bloc and Soviet Union,” said Paul Freedenberg, Commerce Under Secretary for Export Administration.

He said the changes assured that U.S. telecommunications exporters would have a crack at the fast-growing Chinese market. China plans to spend $5 billion to $10 billion in the next five years to improve its telecommunications infrastructure.

$3.1 Billion in Exports

U.S. firms could garner one-third to one-half of those planned purchases, Freedenberg said in a telephone interview.

“The U.S. telecommunications market has grown at a mere 5% a year recently and U.S. exporters are turning to the Pacific Rim markets which are expected to grow in the double digits for the foreseeable future,” Freedenberg said.

In 1987, U.S. telecommunications industry exports totaled about $3.1 billion, of which $56 million were shipped to China.

Export control restrictions on low level transmission multiplex equipment and some old technology telegraph equipment were eliminated under the new rules. However, COCOM tightened controls on optical fibers and cables in the belief that these could be used in military command and control systems, Freedenberg said.

Another change will allow some higher-level equipment to be exported under a general license that does not require prior Commerce Department approval.

COCOM consists of Japan and the members of the North Atlantic Treaty Organization, minus Iceland--which has no significant high-technology exports.