Broadcom won't play into Chinese requirement for in-country manufacture of chips with proprietary security standard: The pressure has been building for months, ever since China's new WAPI standard was suddenly announced. Wired Authentication and Privacy Infrastructure (WAPI) is a homegrown proprietary extension to Wi-Fi that only a handful of Chinese manufacturers have access to. Equipment made and sold in China after Dec. 1, 2003, must have WAPI support, and chips must be made in China.
The head of the Wi-Fi Alliance says in this article that sharing U.S. chip manufacturing secrets with Chinese companies could result in piracy of their designs. Discussions are continuing.
I have assumed all along, and see no reason to doubt, that the WAPI standard contains backdoor technology that will allow China to monitor any communications sent over "secure" links. Given the propensity for Chinese government monitoring of general Internet activity specifically, and warnings from security firms about purchasing technology designed in China that could contain embedded corporate espionage tools, this isn't so much speculation as a high probability.