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U.S. eyes new limits on high-tech exports

Jet engines made by GE, French firm may go on block list

By Shawn Donnan, Bloomberg News
Published: February 18, 2020, 4:04pm

WASHINGTON — The Trump administration is considering new restrictions on exports of cutting-edge technology to China in a push aimed at limiting Chinese progress in developing its own passenger jets and clamping down further on tech giant Huawei’s access to vital semiconductors, according to four people familiar with the discussions.

Senior officials are expected to decide by the end of this month whether to block exports of jet engines made by a General Electric Co. joint venture with France’s Safran to China for use in the Commercial Aircraft Corporation of China’s C919 single-aisle passenger jet now undergoing flight tests, three of the people familiar with the discussions said.

At the same time, the administration is also considering separate measures to broaden export controls related to the Trump administration’s restrictions on Huawei Technologies Co. by blocking foreign chipmakers, such as Taiwan’s TSMC and U.S. suppliers, from selling components made overseas to Huawei, according to some of the people.

Both moves come as some within the Trump administration are pushing for more aggressive efforts to limit China’s technological rise and to contain what they see as a potential national security threats or rivals to U.S. innovative power in the 21st century. That effort so far has been focused largely on Huawei but has led to broader fears of a new technological Cold War splintering the global tech industry.

The steps being considered face debate within the administration and would ultimately need the president’s approval. A representative for the White House had no comment. But the discussions illustrate the sometimes dueling priorities inside the U.S. government on China.

Even as the moves are being contemplated, President Donald Trump is touting a Chinese commitment to buy an additional $200 billion over the next two years in American farm exports, manufactured products and energy as part of a “phase one” deal that went into effect Friday.

Some analysts and industry experts say a short-term effort to clamp down on China’s access to technology could have long-term consequences for vital U.S. export industries like the aviation and semiconductor sectors.

“What the administration seems to fail to understand is that U.S. advanced technology companies need global scale to succeed, whether in engines, chips or other advanced technologies,” said Rob Atkinson, president of the Information Technology and Innovation Foundation, a think-tank. “Cutting off exports works against that goal, and will limit U.S. innovation.”

Both new measures, first reported by The Wall Street Journal, are expected to be decided on at a meeting of cabinet-level officials Feb. 28, according to the four people familiar with the discussions.

The discussions over banning the sale of the GE/Safran Leap 1C engine to China is based on fears that it could help Chinese companies reverse engineer the technology used and speed up the development of their own jet engine programs. But the engine has been approved for sale to China multiple times since 2014 and a dozen of the engines have already been shipped to Comac, according to some of the people familiar with the situation.

GE, which is lobbying heavily against being blocked out of what it sees as a promising new market, said it had decades of experience selling products internationally. “We aggressively protect and defend our intellectual property and work closely with the U.S. government to fulfill our responsibilities and shared security and economic interests,” a GE spokesperson said by email.

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