Increase Aviation Export Controls on China but Don’t Decouple, US Commission Hears
The U.S. should consider strengthening export controls on technology that China needs for its aerospace industry, an aviation industry expert told a U.S. commission last week, but not so much that it risks decoupling the two nations’ aviation supply chains.
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Richard Aboulafia, managing director for aerospace consulting firm AeroDynamic Advisory, said U.S. export controls on aerospace parts and technologies destined to China are “absolutely critical” because many of those items have military uses. He applauded the U.S. for setting guardrails around what type of aerospace exports can be sent to China and for calling out certain Chinese aerospace firms for being military end-users, pointing specifically to the Aviation Industry Corporation of China, which has affiliates on the Commerce Department Entity List.
“I think we're doing a pretty good job,” Aboulafia said during a hearing last week by the U.S.-China Economic and Security Review Commission. “We should be doing perhaps just a little bit more.”
Aboulafia said export controls should be focused on avionics, specifically mentioning “computational” systems. “It's absolutely essential to consider what we give them,” he said of China.
He also noted that one of the main reasons the U.S. aviation industry is ahead of China’s -- and why aerospace-related export controls are working -- is that China relies on Western aerospace supply chains. He said most engines in Chinese jets are imported from the West, but if the U.S. imposes too stringent controls on China, or China is able to break away from U.S. aviation supply chains, the controls could lose their effectiveness.
“I think it's extremely important to keep China within the Western ecosystem supply chain, because the alternative of having them completely decoupled would lead to a situation where we would have no leverage whatsoever about the evolution of their aviation business,” Aboulafia said. “There's nothing that Europe couldn't provide” China.
Asked by Commissioner Leland Miller whether the U.S. should be taking any lessons from the “success story” of its aviation sector as it considers how to remain ahead of China in advanced semiconductors, Aboulafia stressed that the U.S. should keep China reliant on chip technology.
“A total and complete break is perhaps not the most productive solution,” he said. “Obviously anything that keeps them within the fold, anything that keeps them at the point where we could conceivably cut off key technologies, is to our advantage, frankly.”
Aboulafia said the U.S. can still keep a “very close eye” on what kind of chip technology is shared with China without decoupling, including by restricting companies from participating in joint ventures with Chinese firms that lead to technology development. The U.S. has imposed outbound investment restrictions on three Chinese technology sectors, including its chip industry (see 2501210059).
“You need to keep a very close eye on what technology -- and how accessible it is to them -- because of course they're going to copy it and create a homegrown solution. We've seen this with countless components and systems and technologies in the aviation business,” he said.
“So we keep it protected, even encrypted, and it gets delivered in a large box, and you can use that system, but you have no access to the architecture of that system.”