LETTER TO LIONEL H. OLMER FROM G. A. KEYWORTH

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85M00364R000200240041-2
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 12
• Document Creation Date: December 22, 2016
• Document Release Date: April 24, 2009
• Sequence Number: 41
• Publication Date: December 8, 1982
• Content Type: LETTER

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THE WHITE HOUSE
December. 8, 1982
Not referred to DOC. Waiver
applies.
Dear Lionel,
Considering the many discussions. that have ensued about
the request for export of the HYSHARE 700 computer to
the People's Republic of China, I feel compelled to
explain my strong support for this request.
The primary issue is not the intrinsic technology level
of the hardware, which is mid-1970's vintage, but the
enhanced system capability provided by the HYSHARE 700.
it incorporates analog computers with twice the capa-
bility contained in a downgraded version that is
currently approved for export to the PRC.
However, while this expanded system capability does offer
the potential for practical solution of more complex prob-
lems, it is my opinion that honoring this request would
have little impact on their military capability. Facili-
tating their missile trajectory calculations hardly
compromises our own strategic interests. Their ballistic
missiles represent a "force de frappe" to deter the Soviet
Union, albeit to a marginal degree. If we choose to reject
every request of potential military value, regardless of
its significance, then I question how the President's
directives to implement a more liberal export control
policy toward China can be-achieved. Export of the
HYSHARE 700 computer does not entail "major risks to our,
national security" and. is thoroughly consonant with my
interpretation of the President's export control policy
for the PRC. Considering the great importance of
maintaining and.extenclinn U.S. relations with the
People's Republic, I strongly-reconanend approval of
this request.
Very truly yours,
NSC review completed.
G. A. hcyworth
Science Advisor to the President
j=
The Honorable Lionel II. 01mer
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Under Secretary for International
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Department of commerce
via--hin(Iton, D.C. 20230
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EXPORT ADMINISTRATION REVIEW BOARD
January 17, 198.3
Participants
Secretary'Baldrige, Chairman
Secretary Shultz
Secretary Weinberger
CIA Director Casey
Science Advisor Keyworth
Assistant Secretary i'.eland (for Secretary Regan)
Gus Weiss, NSC (for Judge Clark)
Additional Attendees
Under Secretary Olmer
Assistant Secretary Perle, Defense
Assistant Secretary Wolfowitz, State
David Laux, NSC
CIA
David Griese, CIA
Jonathan Howe, State
Michael E. Zac'haria, Commerce.(Notetaker)
STAT
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Attachment B
Analysis of Attached Charts
Chart 1 illustrates the increasing number of cases received and
approved for the years 1979 through 1982. The chart, however,
says nothing about the level of sophistication of the cases
which have been approved nor the types of conditions that may
have been imposed on licenses to the PRC.
Chart 2 shows that the PRC two-times guideline has been applied
to only 32 product categories out of a potential 400 plus
categories which might pertain to products being exported to
the PRC. This means that Commerce and Defense have only agreed
upon the application of the-two-times policy in these 32
categories, and all other product categories require a
case-by-case review. Although there is some agreement on the
application of the two-times policy in 17 CCL entries, it does
not mean that an entire CCL entry is covered by the two-times
policy. For example, in the CCL entry 1529, Electronic:
Instruments, there are as many as'15 major product
sub-categories, but for only 4 is there an agreement to apply
the two-times policy.
Eighty percent of all PRC licenses received fall within 10 CCL
entries (see chart 3). Seventy-five percent of the cases fall
into only 6 of the CCL entries, with computers (CCL 1565A)
comprising almost 41 percent of all applications received.
Again, as stated earlier and as shown on chart 3, even in those
instances where the two-times benchmark is applied to a given
CCL entry, it does not address all the products within that
entry.
Exports of computers (CCL 1565A) are treated quite differently
from exports to either the USSR or the-Free World. For
example, 14 different technical parameters are used in
determining whether a given computer system will be licensed to
the PRC. In contrast, only 2 parameters, bus rate and
processing data rate, are used for determining which computers
may be exported to various Free World countries. Computers
requested for export to the PRC are subject to a far more
time-consuming stringent review which considers 12 additional
technical parameters beyond bus rate and processing data rate.
Charts 4 and 5 show 3 of those additional parameters. Chart 4
shows that the two-times policy does apply to the size of
.internal memory, yet this level of sophistication is
dramatically less than what can be licensed to the Free World.
The size of the graphic display is less than two-times that of
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the USSR and considerably less than for the Free World. Chart
5 also shows that performance-speed of disk memory commodities
exported to the PRC are less than two-times that of the USSR,
and once agaa.n, dramatically less than disk memory devices that
can be licened to the Free World. The two-times policy, even
in those instances where it has been successfully implemented,
usually'alloys for the licensing of commodities to the PRC
which are dramatically less technically sophisticated than
those commodities licensed to the Free World, including
countries like India or Yugoslavia.
Chart 6,.Mask Alignment Equipment, which is used for
microcircuit semiconduq*or production, illustrates a case where
two-times is not meanin~'ful because all such equipment is
denied export to the USSR. Because the two-times policy cannot
be applied, an agreement between Defense and Commerce was
reached to establish that the manufacture of 4K memory chips
would be the standard, but chips between 4K and 16K would be
decided on a case-by-case basis. This is in contrast to the
Free World availability of 64K chips and the capacity to
produce them. The capacity to produce 256K chips which is now
developing in several countries, will also become widespread.
Chart 7 illustrates how the two-times policy would apply to
A-to-D converters. It also dramatically demonstrates the
disparity between products licensed for the PRC and those for
the Free World. An A-to-D converter is a microcircuit
essential in converting analog information into a digital
format. Although the PRC two-times benchmark is 100 kilohertz,
the state-of-the-art for the Free World is 50,000 kilohertz or
500 times that of the PRC.
Chart 8 illustrates an example where the PRC benchmark and the
USSR benchmark is the same. Oscilloscopes below 100 megahertz
are not controlled to any country. For the PRC, exceptions can
be granted for up to 250 megahertz or that slightly above
oscilloscopes licensed to the USSR-. However, the 250 megahertz
guideline may be appropriate, because oscilloscopes in higher
ranges are widely used for nuclear development.
In essence, the commodities shown in the charts are from the
most active PRC commodity. license application areas. They
indicate that the two-times policy, in some instances, cannot
even be applied and, in instances where it is applied, it does
not usually represent a major "liberalization" of the licensing
decisions, especially when contrasted to the treatment. of the
same commodities going to the Free World, Yugoslavia, or India.
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