Defense News
11/16/2011
Congress
Challenges GE-China Aviation Deal
By WENDELL MINNICK
TAIPEI - Members of
the U.S. Congress are calling on Defense Secretary Leon Panetta to conduct a
National Security Review and a Committee on Foreign Investment in the United
States review of a new joint venture between General Electric (GE) and the
Aviation Industry Corporation of China (AVIC).
AN OFFICE FOR China's People's Liberation Army is
seen next to an office for General Electric in Zhuhai, China. The U.S. Congress
is calling for the Pentagon to review a new joint venture between GE and the
Aviation Industry Corporation of China. (Wendell Minnick / Staff)
Two letters sent to
Panetta - from Rep. Randy Forbes, R-Va., and Rep. Frank Wolf, R-Va. - criticize
the GE deal with AVIC by questioning the formation of an enterprise to develop
integrated modular avionics (IMA) hardware and software for China.
"This IMA
technology was developed originally for the ... F-22 and F-35 fifth-generation
fighter program," Forbes wrote in the Oct. 17 letter.
Forbes said he is
concerned the technology could end up in China's new stealth fighter, the J-20,
under production by AVIC.
Wolf responded with a
Nov. 14 letter strongly supporting Forbes' call for a review and questioning whether
GE could protect secrets from an aggressive Chinese espionage effort.
"Given the
breadth and scope of this espionage, GE's assertions that they will be able to
fully protect sensitive technology lacks credibility," he wrote.
"Should the GE-AVIC joint venture proceed, there is no question that all
the sensitive technology involved will be completely compromised by the PLA
[China's People's Liberation Army]."
Forbes and Wolf are
not the only ones raising concerns over the GE-AVIC deal. A new report to be
released this week by the U.S.-China Economic and Security Review Commission
notes that the joint venture will result in the transfer of ownership of GE's
existing civilian avionics operations to China, and be "the single
route-to-market for integrated avionics systems for both GE and AVIC."
GE defends the
agreement.
"We have been
extremely transparent and responsive in briefing all relevant and interested
regulatory agencies, including the Department of Defense - the outcome has no
current direct military application," said Rick Kennedy, GE media
relations manager.
GE insists that IMA
technology was not developed for the F-22 and F-35, "or any other fighter
jet program," Kennedy said; Forbes and Wolf are "misinformed" on
the issue.
"If you look
into the avionics on the F-22 and F-35, you will find off-the-shelf commercial
avionics technology," he said.
GE was notified Oct.
4 that the Department of Commerce and the Pentagon "determined the IMA
technology does not require a license to export to China." The IMA
technology being offered to China has no current direct military application.
"Significant
measures are in place to safeguard against any unauthorized transfer of
intellectual property," Kennedy said.
GE's product
offering for the joint venture, the civil IMA system, "contains
functionality tailored only for commercial applications," he said. No
synthetic avionics will be transferred to the joint venture, and no U.S.
government-funded capabilities or technology will be part of the joint venture,
Kennedy said.
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