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Western 'dual technology' may be on its way to China

President Carter's first meeting with Chinese leader Hua Guofeng in Tokyo this week takes place as China's defense relationships with the West grow steadily stronger.

Despite continued restrictions on "lethal" arms sales to China, United States and British scientists and commercial firms are moving into "dual technology" deals in aviation, military electronics, radar, and gunnery, which skirt rather close to actual arms sales.

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These deals were speeded by the tacit US- Chinese agreement sealed by statements during US Defense Secretary Harold Brown's visit to China last January that Washington and Peking would take "parallel" actions to counter the Soviet invasion of Afghanistan, US defense officials acknowledge.

A new conflict, which now may be brewing between China and Soviet- backed Vietnamese troops that have been harassing US-assisted Thailand, may accelerate the process.

Questioned about the impending defense deals and technology transfers. US State Department and Pentagon officials quoted Assistant Secretary of State Richard Holbrooke's June 4 policy statement to the National Council for US-China trade:

"We do not sell arms to China, or engage in joint military planning arrangements with the Chinese. . . . Nevertheless, we can and will assist China's drive to improve its security by permitting appropriate technology transfers, including the sale of carefully selected items of dual-use technology and defensive military support equipment. We have begun to do so."

Senior Chinese defense official Geng Biao and Chinese military and civil aviation delegations visited major US defense industries last spring. Resulting or coincident defense deals and technology transfers, most of which will be reported in the forthcoming issue of China Business Review, the magazine of the National Council for US-China Trade here. include:

* Three British avionics firms, Marconi, Rediffusion, and Ferranti, are competing for a $500 million contract to upgrade China's aging Shenyang F-7 combat jets. A marconi delegation has just visited China. Marconi sold China field artillery control equipment last year.

The F-7, the National Council has learned, now is produced at a rate of 300 a year at China's Shenyang aircraft factory. It is powered by a Soviet designed MIG-21 engine China obtained through Romania. A newer plane, the F-8, is reported modeled after France's Mirage 2000, and will be ready for full-scale production next year.

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* The US Defense Department has licensed Bell Helicopter Corporation of the US to produce its civilian mode 212 helicopters at the aircraft factory in Harbin, China. State Department officials confirmed this July 8.

* Major US dual-use computer deals are pending. IBM Corporation shortly will receive approval to sell a major program computer for Peking and Chinese provinces. China says it is needed to take a census of China's nearly 1 billion people.

The Prime Computer Company has received an order from the Peking Institute of Aeronautics and Astronautics for a prime 650 digital computer worht $400,000, never exported to any communist country. Prime has not yet applied for an export license, but expects to get it. The computer, China says, is for educational training in aircraft design.

State Department officials say another license application, from the Burroughs Corporation, will get very close scrutiny. The UN Development Program wants a Burroughs B- 6800 main-frame system with an extremely high data-processing rate. This has many possible military applications.

Honeywell Information Systems, one of the plants visited by the Chinese Army's chief of staff, Gen. Liu Huaqing, this spring, is interested in a $100 million deal to transfer to a Peking plant manufacturing software, and training technology. China says the plant specializes in telephone switching gear and computers. No license application has yet been completed.

* Anxious for Chinese business, US defense firms are willing to make at least token purchases from China. These earn foreign exchange for China, and give at least the appearance of "two-way street" deals:

McDonnell Douglas and Boeing are competing to develop, in partnership with China, a Chinese version of the DC-9 super 80, or the 737, respectively. McDonnell Douglas recently agreed to buy up to 200 landing gear doors for 100 super 80s for $2 million from the Shanghai Aircraft Factory.

* Visiting Chinese science and military delegations continue to show extreme curiosity about US space and high-energy physics, and other nuclear matters. In their civilian applications, these are covered by the 1979 US-China scientific agreements.

China has successfully tested a 7,000-mile range ballistic missile and has said it would expand its satellite program to include astronaut training for manned space launches. It has tested its own nuclear weapons since 1964. Deputy Army Chief of Staff Wu Xiu-quan told newsmen with Secretary Brown last January: "A man in space is possible. It is not our top priority."

Such advanced areas as high energy reactions in a magnetic field and the kind of technology that could "clean up" China's reportedly "dirty" (highly radioactive) warheads has drawn Chinese interest at the Argonne, Massachusetts Institute of Technology, and Berkeley, Calif., physics laboratories, and elsewhere.

US officials insist no warhead or other military nuclear technology has been "leaked" to China. However, articles in Chinese military journals have expressed China's need to acquire enhanced-radiation (neutron) weapons.

Soviet commentaries now stress that a US defense "tilt" toward China is dangerous for the US as well as for the Soviet Union.

A June 1 Izvestia article commented that while the Chinese have succeeded in worsening Soviet-American relations, "it would be interesting to know what the Americans have received" in return.

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