Irrational U.S. Fear of China Undermines National Security, Says Former Pentagon Official

4/30/2010
By Sandra I. Erwin
America’s paranoia about China has blinded U.S. policy makers and, as a result, has severely undermined U.S. security and economic interests, said former deputy defense secretary John Hamre.
The United States in the late 1990s decided to restrict exports of high-tech systems such as satellites and other key space-system components because it wanted to freeze China out of the market. The concern was that China would use that technology to enhance its ballistic-missile arsenal. That call was misguided because it assumed that the United States could single-handedly control the evolution of technology, Hamre said in a speech today at the Center for Strategic and International Studies, where he is currently the CEO.
During his tenure as deputy defense secretary under the Clinton administration, Hamre was closely involved in what he characterized as “painful discussions” about whether to give American firms export licenses to sell satellites. The thinking was that the U.S. government would not grant a license until a firm could prove that foreign competitors were able to design and manufacture similar products.
“What sense did that make?” Hamre asked. “We used regulation to guarantee a protected market to other countries before we let our companies compete. … Is that a sensible security strategy?
“It’s as though our political preferences can control the evolution of technology,” he said. “That’s just crazy.”
Irrational fears of China put the United States in a position where it is now rapidly losing clout in the space market, he said.
The space industry for years has been clamoring for an ease of restrictions for exporting satellites, claiming that foreign competitors have capitalized on those restrictions to grab a bigger share of the global market. European firms, for instance, now make satellites that have zero U.S.-made components so they’re not subject to U.S. export rules and, therefore, more marketable, experts said.
Up until 1998, satellites were not treated as munitions under State and Defense Department jurisdiction but rather as dual-use items that were governed by less restrictive Commerce Department export rules. But a breach of security occurred in 1998, when a Chinese space vehicle supplier gained access to classified information after a failed launch of a Hughes Co.-built satellite. The response was to reclassify commercial satellites as munitions.
The Obama administration and many members of Congress, particularly those from districts that are home to aerospace firms, now regard that decision as anoverreaction. “It’s fair to ask if Congress’ toughening of satellite licensing 10 years ago has played a role in reducing American leadership in satellite communications,” said Rep. Edward Royce, R-Calif., during a hearing last summer.
The loss of international sales means the space industry is now heavily dependent on the U.S. government for its survival. About 90 to 95 percent of the industry’s sales are related to the U.S. government.
Another consequence of America’s “static” approach to industrial security is that the U.S. government and private sector have not been able to benefit from the technological advances that other countries have made, Hamre said. “There’s so much talent in other places. It’s not like it was in 1952 when 70 percent of the GDP of the world was in this country.”
The world’s most reliable commercial space booster is now in China, Hamre said. “Yet we thought we were going to freeze them out and they wouldn’t move forward if we didn’t work with them. … Was that an intelligent security strategy?”
From an economic standpoint, export policies have severely hurt the United States, he added. “Our paranoia is creating an incentive to move jobs to China. We haven’t updated our thinking. We have these very obsolete ideas about security.”
Hamre’s comments were a prelude to the unveiling of new CSIS study, “National Security and the Commercial Space Sector,” which is an analysis and evaluation of options for improving commercial access to space. The study currently is in draft format. CSIS is soliciting comments (can be emailed to SpaceStudy2010@csis.org) and the final report will be published in June.
The Obama administration recently put forward aplan to reform export controls. Congress is expected to debate the issue later this year.

Topics: International, Space

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