This paper analyzes how U.S. export control policy for dual-use technology to China is made. That is to examine whether security or the economy more important in determining how countries behave. Trade generates wealth, and increased security is an externality of wealth. Countries are concerned about this externality when they begin to trade with others, so they introduce export controls or embargos to try and prevent their enemies from becoming wealthier than themselves.
The satellites used for either commercial or military communications contain one or more of militarily sensitive characteristics. Therefore there are concerns so that the satellite exports require a consultation among related officials. The exports of satellites are controlled either under the U.S. Munitions List (USML) of the Department of State or the Commerce Control List (CCL) of the Department of Commerce. One of the reasons why satellite exports are so concerned is the technological similarities both in satellite launch and ballistic missile launch.
In this research, the U.S. satellite exports toward China are to be analyzed from historical perspective, political decision mechanism, and priority between security and economy. The prior research considers trade a concept in its own right. However, it can more accurately be described as a combination of trade commodities and security relationships, Three types of trade commodity can be identified, depending on their fungibility and relevance to military capability: (1) munitions, (2) dual-use and (3) civilian goods. In terms of export, countries will be sensitive about trading munitions with enemies and non-allied states,and may even be reluctant to trade arms with its allies. On the other hand, there is less externality in exporting civilian goods than in exporting other commodities and they are in directly fungible over time, so that states are not concerned about them. Dual-use items come somewhere in between, and are less easy to categorize because they can be used for both munitions and civilian purposes, and they are directly and quickly fungible. This means that the export of these goods simultaneously raises issues of national security and economic interest, and export policies will therefore be vulnerable to changes in the bilateral political situation. In deciding whether to export or to prohibit the export of dual-use technology, a country faces the dilemma of whether to give priority to economic interests, which focus on gain, or to national security, which focuses on preventing the other country from developing its capabilities. In the case of trading with non-allied countries, the dilemma increases more, relative to the case with allied countries.
Commercial satellite is one of examples of dual-use technology. U.S. government had exported these satellites to China since 1988, but prohibited the export in 1999. To examine what factors affected on this policy change, this paper analyzes nineteen cases of export practices. In conclusion, (1) whether the security relationship is positive or not, (2) whether inputs from social actors are security or economy, and (3) condition of overall economy, can be traced as independent variables.