Unisys Corp, Intel Corp and Sun Microsystems Inc are among US computer and chip producers that stand to gain billions of dollars in sales as a move to relax curbs on advanced technology exports advances in the US Congress.
Legislation to overhaul the Export Administration Act for the first time since the Cold War faces votes this week on the Senate floor and in the House International Relations Committee. The changes are backed by the Bush administration.
The legislation, stalled since April after a US Navy spy plane collided with a Chinese military jet near China, is picking up momentum partly because congressional anger is fading over the 11-day detention of 24 US crew members, analysts said.
"The China spy incident put a chill on everything," said Dan Hoydysh, director of the Washington office of Unisys, a computer systems provider that anticipates several billion dollars in expanded exports to China alone if the measure passes.
The export controls are a throwback to US efforts to keep advanced technology out of the hands of communist states during the Cold War. They limit the sale of equipment to more than 50 nations, including Russia, Vietnam, Pakistan, India and even Israel.
The relaxation of controls is especially important to US companies hoping to expand in the Chinese market, which already provides them with as much as 10 percent of sales, Hoydysh and other corporate officials said.
US friction with China has eased in recent weeks with an agreement between the two countries on terms for China to join the WTO, among other issues.
"We are now moving forward in a positive direction," US Secretary of State Colin Powell said in an interview with China Central Television during a visit this weekend to Beijing.
China this year will purchase US$18 billion in computer hardware and US$3 billion in software and services, projected analyst Juan Orozco at IDC, a computer industry research firm in Framingham, Massachusetts. Demand is expected to grow 18 percent for hardware, 40 percent for software and 55 percent for services each year through 2005, Orozco said.
Senate Democratic leader Tom Daschle said he wants a floor vote on the legislation before Congress leaves Friday on a month's recess, and House International Relations Committee Chairman Henry Hyde, a Republican, scheduled a hearing on a House version of the bill for today.
"We have to recognize that technology has gone way beyond the law here, and we have to update the law," Daschle said.
The shift by Hyde improves prospects for passage of the measure this year, company officials said.
Hyde, like some other legislators, had taken a harder line with China since April in delaying action on the bill. "Maintaining our position in the global economy should, in my view, not come at the expense of shortchanging our obligations to international peace and our respect for human rights," he told a committee hearing in May.
The Senate measure, similar to the House legislation and endorsed by the White House, would update a 1979 version of the Export Administration Act by giving the president wider discretion in deciding what high-technology products could be sold to which countries.
Chief among the changes is allowing the president to eliminate the system of Mtops, or millions of theoretical operations per second, for measuring the performance of computers.
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