ER use straight shank tools. ER 16 will take up to a 3/8" shank.
Taig sells a fly cutter that will work.
Little Machine Shop sells a boring head adapter that replaces the ER 16 nut: http://littlemachineshop.com/product...3122&category=
AFAIK the air-cooled chinese spindles will not run under 6000 or 8000 rpm (cooling issue). The water-cooled ones might but I doubt that they would have enough torque at low speeds.