China Computer Sale Causes Split : Technology: State and Commerce departments favor proposed export. Pentagon warns of military uses.

In a classic test of the competing interests of economics and national security, the Bush Administration is locked in a bitter dispute over whether to clear the way for China to buy a new, high-speed U.S. supercomputer.

Both the State Department and the Commerce Department have recently given their support to a proposal by Cray Research to sell a $2-million supercomputer to China’s State Meteorological Administration, its national weather service. Proponents hope to win final approval before Commerce Secretary Barbara Hackman Franklin visits Beijing beginning Dec. 16.

But the Defense Department has been trying to block the deal. Pentagon officials contend the supercomputer can be used for research on nuclear weapons, missiles and anti-submarine warfare. Further, they argue, China doesn’t deserve a supercomputer because it has a bad record on weapons proliferation.

Asked why the State Department favors the sale, one U.S. official replied, “It’s the economy, stupid”--mimicking the famous slogan that President-elect Bill Clinton’s campaign team pinned on the wall of his Little Rock, Ark., headquarters.

Senior officials of the State, Defense and Commerce departments were scheduled to meet Friday afternoon to try to work out their differences. A senior Administration official said he did not expect any final decision at the session but suggested there might be action before Franklin’s trip to China.

Administration officials say the proposed sale of the supercomputer has been complicated by recent U.S. intelligence reports indicating that Chinese M-11 missiles have appeared in Pakistan, despite China’s promises to the Administration not to sell the weapons.

A federal law requires the imposition of sanctions on any country or entity that exports materials in violation of the Missile Technology Control Regime, an international accord that China has joined. Last year, the United States froze the sale of high-speed computers to China in retaliation for Beijing’s sale of missile launchers to Pakistan.

A senior Administration official said Friday that despite the intelligence reports, China’s sale of the M-11 missile to Pakistan is “not proved. . . . It just doesn’t add up. Why would they (China) do it now? Why would they do it at all?”

This official also attacked the U.S. intelligence reports about the Chinese missiles as “hypothesis built upon hypothesis built upon hypothesis.” Referring to a proposal by Sen. Daniel P. Moynihan (D-N.Y.) to abolish the CIA, the senior official said the reported detection of the missiles in Pakistan “is awfully useful to an agency trying to justify its existence.”

The supercomputer at issue has a speed of 958 million calculations per second, much faster than any other computer sold to China. In a letter to the President supporting the Defense Department’s position, Sen. Jesse Helms (R-N.C.) complained that the United States and its allies have never sold Beijing any computer with a speed of more than 70 million calculations per second.

But Cray Research officials say that even with the new supercomputer, China would still have only roughly one-twentieth of the computing power of advanced nations and would be about seven years behind them in technology. They point out that the European center for medium-range weather forecasting, which handles forecasts for all of Europe, has a speed of 16 billion calculations per second.

Both Administration officials supporting the sale and executives at Cray argue that there are humanitarian reasons for the sale. “China loses a fair number of lives, from time to time, from severe weather,” said Steve Conway, a Cray spokesman in Minneapolis. Conway insisted that the supercomputer would be “a highly secured system” that could be used only for weather purposes and not for weapons research.

Proponents of the sale tried to minimize the importance of the Defense Department’s opposition. “Defense opposes every supercomputer (export), because the Navy always says a supercomputer can be used in anti-submarine warfare,” one Administration official said.

But a Pentagon official disputed this claim. “We don’t oppose all sales,” he said. “We oppose sales to (weapons) proliferating countries.” He said he is afraid that the Administration will rush to grant an export license for the supercomputer because Franklin “wants to go to Beijing bearing gifts.”

Franklin is going to Beijing to revive regular commercial exchanges between the United States and China. The exchanges were officially suspended after China’s bloody crackdown on student demonstrations in June, 1989.