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To: DaveMG who wrote (31232)	5/28/1999 10:20:00 AM
From: brian h	Respond to of 152472

DaveMG, Here is some threats to LU and MOT. China will buy CDMA products from ERICY, Nokia, Samsung, Sony, etc. Thanks to smart Dr. J. and teams. U.S. Hi-Techs Fear Anti-China Mood By Matt Pottinger BEIJING (Reuters) - U.S. high-tech firms are worried about losing business in China following an inflammatory congressional report that calls for tighter export controls to combat alleged spying by Beijing, executives said Friday. ''The potential for really screwing things up for high-tech is very high right now,'' said Mark Mechem, a senior analyst at the U.S. Information Technology Office, which represents the computer and high-technology industries in Beijing. A special Congressional committee chaired by Representative Christopher Cox released a thick report this week alleging successful efforts by Chinese spies to learn sensitive nuclear and military technology secrets from the United States. China flatly denies the charges, attributing them to ''Cold War'' warriors who need an enemy now the Soviet Union is gone. Among the U.S. report's recommendations for tightening U.S. security was a review of high-technology export licensing standards -- a move some fear will lead Congress to block sales of civilian goods with the potential to benefit Beijing's military modernization. The list of so-called ''dual use'' technologies could range from satellites and high performance computers to machine tools used for making engine turbines, to telecommunications equipment with encryption capability, analysts said. ''We've had restrictions for some time on high-tech machine tools,'' said a Beijing-based executive at a U.S. firm. ''I don't think any improvements could come in the near future, and things might get tougher for us." Pentagon officials have frowned in the past on the export to China of U.S. mobile phone technology known as CDMA (Code Division Multiple Access), arguing the encrypted format of CDMA would make it hard for U.S. spy satellites to eavesdrop. A move to restrict CDMA equipment exports could cost U.S. firms such as Motorola and Lucent billions. They have only just won the right from Chinese regulators to sell to domestic telecommunications carriers. ''If they screw that up, it will screw Lucent up pretty horribly,'' said a company executive in China. ''It would really be shooting ourselves in the foot.'' Lucent and its competitors would lobby hard in Washington to protect CDMA business, the executive said. In 1998, the United States blocked the export to China of goods worth less than $50 million. But in a sign of a tougher regime, Washington barred the export of a satellite worth $450 million earlier this year. But U.S. efforts to staunch the flow of speedy computer chips to China were doomed to backfire, because China could buy identical chips from ''tens of thousands'' of licensed dealers in third countries, a U.S. industry analyst said in Beijing. Jim Jarrett, China president for semi-conductor giant Intel Corp (Nasdaq:INTC - news), said he believed members of Congress would balance commercial interests with national security concerns. ''Don't assume the sentiment in Washington is only going one way,'' said Jarrett, who was on Capitol Hill last week to lobby for China's membership in the World Trade Organization. Jarrett said Congress could even move as early as next week to ease export restrictions on micro-processors and other computer components to allow Intel to sell its speedy 550Mhz Pentium 3 chips in China. ''This would give us the headroom we need to get us through the end of the year,'' he said. Brian H.