Identifier
Created
Classification
Origin
06BEIJING18589
2006-09-05 07:35:00
SECRET
Embassy Beijing
Cable title:  

PRC EXPERT ON EXPORT CONTROL ENFORCEMENT

Tags:  PARM ETTC PREL MTCR CH 
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O 050735Z SEP 06
FM AMEMBASSY BEIJING
TO SECSTATE WASHDC IMMEDIATE 5910
INFO CHINA POSTS COLLECTIVE
S E C R E T BEIJING 18589 


DEPT FOR T, ISN, EAP/CM

E.O. 12958: DECL: 08/07/2026
TAGS: PARM ETTC PREL MTCR CH

SUBJECT: PRC EXPERT ON EXPORT CONTROL ENFORCEMENT
INADEQUACIES

Classified By: Charge d'Affaires David S. Sedney. Reasons 1.4 (b/d).

S E C R E T BEIJING 18589


DEPT FOR T, ISN, EAP/CM

E.O. 12958: DECL: 08/07/2026
TAGS: PARM ETTC PREL MTCR CH

SUBJECT: PRC EXPERT ON EXPORT CONTROL ENFORCEMENT
INADEQUACIES

Classified By: Charge d'Affaires David S. Sedney. Reasons 1.4 (b/d).


1. (C) Summary: Chinese firms must export to survive and may
view export control laws and regulations as an impediment to
profitability, China Institute of Contemporary International
Relations (CICIR) Senior Research Professor and Deputy
Director Ouyang Liping told Poloff. (Note: CICIR is
affiliated with the Ministry of State Security. End Note.)
PRC enforcement agencies are unable to punish these firms
because of the close, personal connections between company
officials and senior Chinese leaders and because Chinese
culture eschews public humiliation, she said. According to
Ouyang, an internal document sent to "relevant agencies"
details Chinese firms' export control violations. She stated
that PRC inter-agency coordination, although much improved,
is still inadequate. Export control seminars and training
programs create awareness, but are not causing Chinese firms
to implement internal control procedures, Ouyang said. End
Summary.


2. (C) Poloff met CICIR arms control and disarmament expert
Ouyang Liping on August 31 to gauge her views on China's
efforts to enforce its export control laws and regulations.

Profit Motivation
--------------


3. (C) Ouyang began by acknowledging that the PRC is not
adequately enforcing its export controls, which she
attributes to the "profit motive" of Chinese firms and to the
country's still developing export control system. If Chinese
firms are unable to export, she said, they cannot survive.
PRC officials, particularly provincial leaders, are under
pressure to ensure that GDP figures remain high and that
workers remain gainfully employed. As a result, Ouyang
explained, Chinese firms must export and may view export
control laws and regulations as an impediment to
profitability. PRC enforcement agencies are unable to punish
these firms because of the close, personal connections
between company officials and senior Chinese leaders, she
claimed. In the United States, law enforcement officials
would also find it hard to punish a cabinet secretary's son,
she quipped. Poloff provided her with several examples to
the contrary.


4. (C) According to Ouyang, Chinese culture, which eschews
public humiliation, complicates enforcement, making it
difficult to publicly punish individuals and firms. She
claimed even publishing the name of a company in a public
document would violate these norms. Ouyang volunteered that
"relevant agencies" receive an internal document that
describes export control violations by Chinese firms. This
document, which she referred to as an internal memorandum,
names names, she said. "I can promise you," Ouyang asserted,
"We are investigating and punishing violators."

Growing Pains
--------------


5. (C) The nascent nature of China's export control system
further complicates effective enforcement, according to
Ouyang. China is trying to establish a "modern export
control system" in a short period of time, compared to the
decades afforded the United States and European countries,
she added. Ouyang believes that PRC export control
enforcement officials need training to improve their
technical capabilities and that PRC inter-agency
coordination, although much improved, is still inadequate.


6. (C) Continuing, Ouyang said that many Chinese companies
are unaware that China even has export control laws. She
mentioned that she is encouraging Chinese ministries to
create websites that contain user-friendly information for
exporters, including an explanation of the policies behind
China's export control laws. According to Ouyang, export
control seminars and training programs are useful at
spreading awareness, but may not be leading to changed
behavior at Chinese firms. She said the Ministry of Commerce
often "orders" firms to send representatives to these
training programs and many company officials attending such
events are simply there to fill seats. The attendee may
"take a few notes," but will probably not implement new
internal export control policies when they return to work,
she noted. At large firms, she said, senior officials may
thoroughly understand PRC export control laws and
regulations, but do not feel compelled to translate this
knowledge into internal control procedures affecting sales
and export decisions made by officials at the firm's lower
ranks.
SEDNEY


NNNN




End Cable Text