Boeing sale to China skirts ban on technology transfer

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China has obtained military navigation technology from Boeing used on advanced U.S. missiles and warplanes that was improperly approved by the State Department, according to U.S. government officials.

The dual-use commercial-military items, known as QRS11 gyroscopic microchips, were sent to China inside the guidance systems of several Boeing 737-800 commercial jets sold to China Southern Airlines, one of several state-run Chinese airline companies.

The transfers and the U.S. government's role in improperly allowing the exports were outlined in a letter sent in October to Secretary of State Colin L. Powell from two senior members of Congress.

"We are deeply troubled by the decision to export military items to the [Peoples Republic of China] absent the required license (and requisite non-transfer and end-user certificates) and believe such a decision is suspect on both policy and legal grounds," Reps. Henry J. Hyde, Illinois Republican, and Tom Lantos, California Democrat, stated in the Oct. 10 letter.

Defense Department officials said the Chinese could obtain important details of guidance systems used in U.S. missiles and aircraft that could be used to counter those weapons. The Chinese also could reverse-engineer the specialty chips and use them in their own guided missiles and warplanes, the officials said.

A State Department official involved in the issue said the transfer of the chips inside Boeing 737 control systems was approved orally, without a written authorization, during a period of disruption in U.S. government operations caused by Hurricane Isabel in mid-September.

"We wanted the transfer of the aircraft to proceed on time," the official said. "It was extremely important to Boeing that the sale of civil aircraft to China go through."

The export also was approved by President Bush under a waiver of the ban on military-related sales to China for the 737s.

Mr. Hyde and Mr. Lantos, however, stated that the waiver still required Boeing to obtain a State Department export license and to obtain assurances from China that the chips would not be diverted to military use by the Chinese.