Order Code IB92056
CRS Issue Brief for Congress
Received through the CRS Web
China’s Proliferation of Weapons of Mass Destruction
and Missiles: Current Policy Issues
Updated October 30, 2001
Shirley A. Kan
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

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CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Recent PRC Proliferation Transfers
Nonproliferation Commitments but Continued Concerns
Nuclear Technology Sales to Pakistan
Ring Magnets
Furnace and Diagnostic Equipment
Missile Technology Sales to Pakistan
M-11s and Sanctions
Missile Plants, MRBMs, and Sanctions
Nuclear Technology Sales to Iran
Missile Technology Sales to Iran
Ballistic Missiles
C-802 Anti-Ship Cruise Missiles
Chemical Sales to Iran and Sanctions
Missile Technology Sales to North Korea
Missile Technology Sales to Libya
Missile Technology Sales to Syria
Policy Issues and Options
Foreign and Defense Policies
Engagement and Dialogue
Missile Defense
Linkage to the Taiwan Issue
Trade Controls
Satellite Exports
Nonproliferation Sanctions
War on Terrorism
Nuclear Cooperation Agreement
U.S. Import Controls
U.S. Export Controls
Nonproliferation and Arms Control
Nonproliferation Regimes
CTBT and Fissile Materials Production
International Lending and Japan

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China’s Proliferation of Weapons of Mass Destruction and Missiles:
Current Policy Issues
SUMMARY
Congress has long been concerned about
NPT and/or contradictions of the MTCR or
challenges to U.S. security posed by the Peo-
U.S. laws, which may require sanctions. China
ple’s Republic of China (PRC) in the prolifera-
is not in the MTCR, Nuclear Suppliers Group,
tion of weapons of mass destruction (WMD)
nor Australia Group.
and missiles that could deliver them. Recipi-
ents of China’s technology include Pakistan
Successive Administrations have pursued
and countries that the State Department says
a policy of “engagement” with Beijing, while
support terrorism, like Iran, North Korea,
some have argued that U.S. policy needs a
Libya, and Syria. Policy issues pertain to the
tougher approach to advance non-proliferation
extent of this threat and U.S. responses (e.g.,
interests. In 1998, President Clinton issued
sanctions, satellite exports).
certifications to implement the 1985 Nuclear
Cooperation Agreement. The Clinton Admin-
Since 1991, Beijing has taken steps to
istration encouraged the PRC to join the
mollify concerns about its role in proliferation.
MTCR and proposed to allow more PRC
Steps include the: 1991-1992 promise to abide
satellite launches. In November 2000, the
by the Missile Technology Control Regime
State Department agreed to waive sanctions
(MTCR); March 1992 accession to the Nu-
and consider new satellite exports in return for
clear Nonproliferation Treaty (NPT); January
a missile non-proliferation pledge from China.
1993 signing and subsequent ratification of the
Chemical Weapons Convention (CWC); Octo-
The FY2000 Defense Authorization Act
ber 1994 statements on the MTCR and fissile
(P.L. 106-65) said that the PRC should not be
material production; November 1995 white
allowed to join the MTCR without meeting
paper on arms control and disarmament; May
certain conditions and required a report on the
1996 reiteration on making only safeguarded
PRC’s adherence to the MTCR (submitted
nuclear transfers; July 1996 announcement of
August 18, 2000). Congress passed the Iran
a moratorium on nuclear testing; signing of the
Nonproliferation Act (P.L. 106-178).
Comprehensive Test Ban Treaty in September
1996; October 1997 entry to the Zangger
Under this new law, on June 14, 2001,
Committee; and November 2000 missile
the Bush Administration imposed sanctions for
nonproliferation pledge.
PRC chemical weapon proliferation in Iran.
On September 1, the State Department im-
Nonetheless, as the Director of Central
posed missile proliferation sanctions, after
Intelligence reports, the PRC remains a “key
China violated the November 2000 agreement.
supplier” of technology inconsistent with
nonproliferation goals — particularly missile
See also CRS Report 96-767, Chinese
or chemical technology transfers. China has
Proliferation of Weapons of Mass Destruc-
aggravated trends that result in more ambigu-
tion: Background and Analysis; and CRS
ous technical assistance, more indigenous
Report 98-485, China: Possible Missile Tech-
capabilities, longer range missiles, and second-
nology Transfers From U.S. Satellite Export
ary (retransferred) proliferation. Some trans-
Policy – Actions and Chronology.
fers raise questions about violations of the
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
On September 1, 2001, the State Department imposed sanctions on a PRC company,
the China Metallurgical Equipment Corporation (CMEC), for proliferation of missile
technology (Category II items of the MTCR) to Pakistan. The sanctions have the effect of
denying licenses for the export of satellites to China. The CIA issued its latest proliferation
report on September 7, continuing to name China as a “key supplier” of technology. The
September 11 terrorist attacks added a compelling U.S. interest in policy toward China.
BACKGROUND AND ANALYSIS
Congress has long been concerned about U.S. policy to address transfers by the People’s
Republic of China (PRC) adding to the proliferation of weapons of mass destruction (WMD)
and missiles. This proliferation problem refers to the threat of nuclear, chemical, or biological
weapons and missiles that could deliver them. Some have argued that certain PRC transfers
have violated international commitments, including the NPT, and/or have contravened U.S.
laws that require sanctions. Even if no laws or treaties are violated, many view China’s
transfers as undermining U.S. security interests. This Issue Brief discusses current policy
issues and options concerning the PRC’s proliferation of WMD and missiles. For background
and analysis on the 1980s to 1996, see CRS Report 96-767, Chinese Proliferation of
Weapons of Mass Destruction: Background and Analysis.
Recent PRC Proliferation Transfers
Nonproliferation Commitments but Continued Concerns
Since 1991, Beijing — facing significant U.S. and other pressures — has taken some
steps to advance its nonproliferation commitments. China promised to abide by the Missile
Technology Control Regime (MTCR) in 1991-1992 and reaffirmed that commitment in a
October 4, 1994 statement. The MTCR is not an international agreement and has no legal
authority. It is a set of voluntary guidelines that seeks to control the transfer of missiles that
are inherently capable of delivering at least a 500 kg (1,100 lb) payload to at least 300 km
(186 mi). It is unclear whether China has adhered to the revised MTCR guidelines of 1993
calling for the presumption to deny transfers of any missiles capable of delivering any WMD.
According to a Senate Foreign Relations Committee report of September 11, 2000, the State
Department has argued that China agreed to the MTCR Guidelines, but not the Annex.
However, State has also stated that China indicated it would control exports “consistent with
the MTCR Guidelines and Annex” and that the MTCR consists of a common policy
(Guidelines) applied to a common list (Annex). On November 21, 2000, Beijing said that it
has no intention of assisting any other country in developing ballistic missiles that can be used
to deliver nuclear weapons (missiles with payloads of at least 500 kg and ranges of at least
300 km). It also promised to issue missile-related export controls “as soon as possible.”

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Also, China acceded to the Nuclear Nonproliferation Treaty (NPT) on March 9, 1992.
The NPT does not ban peaceful nuclear projects. China signed the Chemical Weapons
Convention (CWC) in January 1993. In November 1995, China issued its first public defense
white paper, which focused on arms control and disarmament. On May 11, 1996, the PRC
issued a statement promising to make only safeguarded nuclear transfers. China, on July 30,
1996, began a moratorium on nuclear testing and signed the Comprehensive Test Ban Treaty
(CTBT) in September 1996, but (like the United States) has not ratified it. On April 25,
1997, China deposited its instrument of ratification of the CWC. The CWC entered into force
on April 29, 1997. Premier Li Peng issued new nuclear export control regulations on
September 10, 1997. On October 16, 1997, China joined the Zangger Committee (on nuclear
trade). On June 6, 1998, the U.N. Security Council (including China) adopted Resolution
1172, asking states to prevent exports to India or Pakistan’s nuclear weapon or missile
programs. The PRC issued regulations on dual-use nuclear exports on June 17, 1998.
Nevertheless, PRC weapons proliferation has continued, aggravating trends that result
in more ambiguous technical assistance, longer range missiles, more indigenous capabilities,
and secondary (retransferred) proliferation. The Director of Central Intelligence (DCI) noted
that, for July-December 1996, “China was the most significant supplier of WMD-related
goods and technology to foreign countries.” The 1998 report of the Rumsfeld Commission
identified China’s weapons proliferation as a “threat.” The DCI’s semi-annual reports have
named the PRC (plus Russia and North Korea) as “key suppliers” of such technology.
Nuclear Technology Sales to Pakistan
Ring Magnets. In early 1996, some in Congress called for sanctions after reports said
that China sold unsafeguarded ring magnets to Pakistan, apparently in violation of the NPT
and contradiction of U.S. laws, including the Arms Export Control Act and Export-Import
Bank Act (as amended by the Nuclear Proliferation Prevention Act of 1994). On February
5, 1996, the Washington Times first disclosed intelligence reports that the China National
Nuclear Corporation, a state-owned corporation, transferred to the A.Q. Khan Research
Laboratory in Kahuta, Pakistan, 5,000 ring magnets, which can be used in gas centrifuges to
enrich uranium. According to the report, intelligence experts believed that the magnets
provided to Pakistan are to be used in special suspension bearings at the top of rotating
cylinders in the centrifuges. The facility in Kahuta is not under IAEA safeguards. The New
York Times of May 12, 1996, reported that the shipment was made after June 1994 and was
worth $70,000. The PRC company involved was China Nuclear Energy Industry
Corporation, a subsidiary of the China National Nuclear Corporation. The State
Department’s report on nonproliferation efforts in South Asia (January 21, 1997) confirmed
that “between late 1994 and mid-1995, a Chinese entity transferred a large number of ring
magnets to Pakistan for use in its uranium enrichment program.”
The Clinton Administration’s decision-making was apparently complicated by
considerations of trade interests of U.S. corporations with business in China. Administration
officials reportedly considered imposing then waiving sanctions or focusing sanctions only on
the China National Nuclear Corporation, rather than large-scale sanctions affecting the entire
PRC government and U.S. companies, such as Westinghouse Electric Corporation (which had
deals pending with China National Nuclear Corporation) and Boeing Aircraft Company. At
the end of February 1996, then-Secretary of State Christopher instructed the Export-Import
Bank to suspend financing for commercial deals in China for one month. Christopher
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reportedly required time to try to obtain more information to make a determination of
whether sanctions would be required. Meanwhile, then-DCI John Deutch reportedly said at
a White House meeting that PRC officials at some level likely approved the sale of magnets.
This view was said to have been supported by Defense Secretary Perry, but disputed by
officials from the Commerce and Treasury Departments and the U.S. Trade Representative
office, who cited a lack of solid proof (Washington Post, April 1, 1996). Observers noted the
latter departments are interested in promoting trade.
On May 10, 1996, the State Department announced that China and Pakistan would not
be sanctioned, citing a new agreement with China. Clinton Administration officials said China
promised to provide future assistance only to safeguarded nuclear facilities, reaffirmed its
commitment to nuclear nonproliferation, and agreed to consultations on export control and
proliferation issues. The Administration also said that PRC leaders insisted they were not
aware of the magnet transfer and that there is no evidence that the PRC government had
willfully aided or abetted Pakistan’s nuclear weapon program through the magnet transfer.
(Congress responded that year by adding language on “persons” in the Export-Import Bank
Act.) Thus, the State Department announced that sanctions were not warranted, and
Export-Import Bank considerations of loans for U.S. exporters to China were returned to
normal. On May 11, 1996, China’s foreign ministry issued a statement that “China will not
provide assistance to unsafeguarded nuclear facilities.” In any case, China since 1984 has
declared a policy of nuclear nonproliferation and requirement for recipients of its transfers to
accept IAEA safeguards. China formalized this policy by acceding to the NPT in 1992.
Furnace and Diagnostic Equipment. The October 9, 1996, Washington Times
reported on a September 14, 1996, CIA report that China sold a “special industrial furnace”
and “high-tech diagnostic equipment” to unsafeguarded nuclear facilities in Pakistan. In
September 1996, PRC technicians in Pakistan reportedly prepared to install the dual-use
equipment. The deal was allegedly made by the China Nuclear Energy Industry Corporation,
the same firm which sold the ring magnets. Those who suspect that the transfer was intended
for Pakistan’s nuclear weapons program say that high temperature furnaces are used to mold
uranium or plutonium. The CIA report was said to state that “senior-level government
approval probably was needed” and that PRC officials planned to submit false documentation
on the final destination of the equipment. The report said that the equipment was set to arrive
in early September 1996. The Washington Post, on October 10, 1996, reported that the
equipment was intended for a nuclear reactor to be completed by 1998 at Khushab in
Pakistan. This facility is not under IAEA safeguards. One U.S. aim is to prevent China from
providing reprocessing technology to this facility for separating plutonium from spent fuel
(Nucleonics Week, August 14, 1997). On October 9, 1996, the State Department responded
that it does not conclude that China has violated its statement that was issued on May 11,
1996 (see above). However, the State Department’s statement did not address whether the
reported transfers occurred before May 11, 1996, or violated the NPT or contradicted U.S.
laws (including the Arms Export Control Act, Export-Import Bank Act, and the Nuclear
Proliferation Prevention Act of 1994), which may require sanctions.
There are persistent concerns about PRC assistance to Pakistan’s nuclear weapon-related
facilities. Referring specifically to Pakistan’s efforts to acquire equipment, material, and
technology for its nuclear weapon program, the DCI’s June 1997 report for the last half of
1996 (after China’s May 1996 pledge) stated that China was the “principal supplier.” Then,
on May 11 and 13, 1998, India conducted nuclear tests, citing China’s nuclear ties to
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Pakistan, and Pakistan followed with nuclear tests on May 28 and 30, 1998. China, as
Pakistan’s military and nuclear supplier, failed to avert the tests and has not cut off nuclear
aid, but condemned the tests at the U.N. The Arms Control and Disarmament Agency
(ACDA)’s annual report on arms control for 1998 stated that “there continued to be some
contacts between Chinese entities and Pakistan’s unsafeguarded and nuclear weapons
program.” China built a nuclear power plant at Chashma and was previously identified as
helping Pakistan to build an unsafeguarded, plutonium-producing reactor at Khushab. The
Chashma reactor is to have safeguards, but not full scope safeguards. China may have
provided some equipment for Pakistan’s secret heavy water production plant at Khushab,
which is reportedly generating weapons-grade plutonium (Nucleonics Week, March 23, 2000;
Nuclear Fuel, June 12, 2000). The DCI reported in September 2001 that the PRC in the past
provided “extensive support” to Pakistan’s nuclear weapons programs and that, in the 2nd half
of 2000, “continued contacts” between PRC entities and Pakistani nuclear weapons entities
cannot be ruled out, despite the PRC’s 1996 promise to stop assistance to unsafeguarded
nuclear facilities.
Missile Technology Sales to Pakistan
M-11s and Sanctions. Transfers of the PRC’s M-11 short range ballistic missiles or
related equipment exceed MTCR guidelines, because the M-11 has the inherent capability to
deliver a 500 kg (1,100 lb) warhead to 300 km (186 mi). U.S. sanctions were imposed on
transfers of PRC M-11 missile-related technology (Category II), not complete missiles
(Category I), to Pakistan. Sanctions were imposed twice under Section 73(a) of the Arms
Export Control Act and Section 11B(b)(1) of the Export Administration Act. In June 1991,
the Bush Administration first imposed sanctions on China for transferring M-11 technology
to Pakistan. The sanctions affected exports of supercomputers, satellites, and missile
technology. The Administration later waived the sanctions on March 23, 1992. On August
24, 1993, the Clinton Administration determined that China had again transferred M-11
equipment (not whole missiles) to Pakistan and imposed new sanctions (affecting exports of
some satellites). Later, Secretary of State Christopher and Foreign Minister Qian Qichen
signed a joint statement on October 4, 1994, that Washington would waive the August 1993
sanctions and Beijing would not export “ground-to-ground missiles” “inherently capable” of
delivering a 500 kg warhead 300 km. The sanctions were waived on November 1, 1994.
The Washington Times (March 14, 1997) said that “numerous” intelligence reports have
indicated that M-11 missiles are “operational” in Pakistan, but these findings were disputed
by some policy-makers. In a March 1998 report on Nuclear Nonproliferation in South Asia,
the Secretary of State acknowledged concerns about reports of M-11 missiles in Pakistan, but
added that there is no determination that such transfers occurred. Gordon Oehler, former head
of the CIA’s Nonproliferation Center, testified on June 11, 1998, to the Senate Foreign
Relations Committee that in November 1992, “the Chinese delivered 34 M-11s to Pakistan.”
In July 1998, the Rumsfeld Commission reported that China had transferred complete M-11s
to Pakistan. Still, some said that sanctions were not imposed for transfers of complete M-11s,
because the missiles remain inside crates at Sagodha Air Base (Wall Street Journal, December
15, 1998). Others said that the Administration avoided making any determinations in the first
place.
Then, on September 9, 1999, the CIA publicly confirmed for the first time that “Pakistan
has M-11 SRBMs from China” and they may have a nuclear role. Nonetheless, the State
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Department responded on September 14, 1999, that it required a “high standard of evidence”
and had not yet determined that Category I sanctions are warranted, despite the intelligence
judgment. (Category I sanctions would deny licenses for exports of Munitions List items,
among other actions, and Congress in 1998 transferred satellites back to the Munitions List.)
The Far Eastern Economic Review reported on May 18, 2000, that the Clinton
Administration and Senator Helms of the Foreign Relations Committee had struck a deal in
1999 that required a decision within six months on sanctions for the PRC’s M-11 transfer to
Pakistan in exchange for the confirmation of Robert Einhorn as Assistant Secretary of State
for Nonproliferation (approved on November 3, 1999). On November 21, 2000, the Clinton
Administration said it determined that PRC entities had transferred Category I and Category
II missile-related items to Pakistani entities, and sanctions would be waived on the PRC for
past transfers, given its new missile nonproliferation commitment.
Missile Plants, MRBMs, and Sanctions. While China promised not to transfer
missiles, it has reportedly helped Pakistan to achieve an indigenous missile capability. U.S.
intelligence reportedly concluded in a National Intelligence Estimate that China provided
blueprints and equipment to Pakistan to build a plant for making missiles that would violate
the MTCR (Washington Post, August 25, 1996). Analysts disagreed, however, about
whether the plant will manufacture some major missile components or whole copies of the
M-11 missile. Construction of the plant allegedly began in 1995. On August 25, 1996, Vice
President Al Gore acknowledged concerns about the plant. Time alleged on June 30, 1997,
that the Clinton Administration would not discuss possible sanctions based on intelligence on
the missile plant. A November 1997 report by the Secretary of Defense also confirmed the
facility. By 1998, the missile plant in Fatehjung was almost complete, awaiting delivery of
crucial equipment from China (Wall Street Journal, December 15, 1998).
Pakistan first tested its nuclear-capable Ghauri medium-range ballistic missile (MRBM)
on April 6, 1998. The Administration, on April 17, 1998, imposed Category I sanctions on
North Korean entities, because the Ghauri is based on the North Korean No Dong missile.
U.S. intelligence is said to suspect that China Poly Ventures Company delivered, perhaps in
1999, U.S.-made specialized metal-working presses and a special furnace to Pakistan’s
National Development Center, a missile plant, reported the Washington Times (April 15,
1999). China reportedly has been building a second missile plant and providing specialty
steel, guidance systems, and technical aid (Far Eastern Economic Review, June 22, 2000;
New York Times, July 2, 2000). Apparently confirming these stories, the DCI reported in
August 2000 that, besides North Korean help, PRC entities provided “increased assistance”
to Pakistan’s ballistic missile program in the 2nd half of 1999. Also, China reportedly has
assisted Pakistan with development of the Shaheen-2 two-stage, solid-fuel MRBM (Jane’s
Defense Weekly, Dec. 13, 2000), and DCI Tenet confirmed U.S. concerns about such
assistance in testimony on February 7, 2001 and in his February 2001 report on proliferation.
In the first several months of 2001, a PRC company reportedly delivered 12 shipments
of missile components for Pakistan’s Shaheen-1 SRBM and Shaheen-2 MRBM programs
(Washington Times, August 6, 2001). On September 1, 2001, the State Department imposed
sanctions on the China Metallurgical Equipment Corporation (CMEC) for proliferation of
missile technology (Category II items of the MTCR) to Pakistan. The sanctions also applied
to Pakistan’s National Development Complex. (Also see Nonproliferation Sanctions.) On
September 7, 2001, the DCI reported that, in the 2nd half of 2000, PRC entities provided
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“significant assistance” to Pakistan’s ballistic missile programs, including serial production of
solid-fuel SRBMs (e.g., Shaheen-1 and Haider-1) and the Shaheen-2 MRBM.
Nuclear Technology Sales to Iran
Suspecting that any nuclear technology would be used to build a scientific and technical
infrastructure for Iran’s clandestine nuclear weapon program, Washington has urged China
(and Russia) not to sell any nuclear technology to Iran, although peaceful nuclear energy
projects are allowed by the NPT and Iran cooperates with IAEA inspectors. In 1995, China
suspended a sale of nuclear reactors to Iran. Showing Israeli influence, Prime Minister
Benjamin Netanyahu publicly reported in August 1997 that PRC Vice Premier Li Lanqing
said that China canceled plans to build the reactors. However, there have been other
controversial PRC nuclear deals with Iran which have pointed to an Iranian nuclear weapon
program. PRC technicians built a calutron, or electromagnetic isotope separation system, for
enriching uranium at the Karaj nuclear research facility, according to “confidential reports”
submitted to President Rafsanjani by his senior aides. The PRC system is similar to the one
used in Iraq’s secret uranium enrichment program. (Washington Times, September 25,
1995.) Iran’s nuclear facility at Karaj is not under IAEA safeguards. The Secretary of
Defense reported in April 1996 that “the Iranians have purchased an electromagnetic isotope
separation unit from China.”
The China Nuclear Energy Industry Corporation reportedly had plans to sell Iran a
facility to convert uranium ore into uranium hexafluoride gas, which could be enriched to
weapons-grade material (Washington Post, April 17, 1995; June 20, 1996). According to
past intelligence reports, the deal was proceeding with PRC nuclear experts going to Iran to
build the new uranium conversion plant near Esfahan (Washington Times, April 17, 1996).
However, some PRC civilian nuclear officials indicated to the IAEA and U.S. officials that
China would not transfer the uranium conversion facility, ostensibly because of Iran’s inability
to pay. Some analysts point to changes as stemming from Iran’s turn to Russian reactors and
China’s increasing dependence on Mideast oil. Also, China may have responded to concerns
of Israel (a key supplier to China’s military). Robert Einhorn reportedly told Members of
Congress that China canceled this deal but had provided Iran with a blueprint to build the
facility (Washington Post, September 18, 1997). On the eve of a U.S.-China summit in
Washington in October 1997, PRC Foreign Minister Qian Qichen provided a secret letter to
Secretary of State Madeleine Albright, promising not to begin new nuclear cooperation
specifically with Iran, after building a small nuclear research reactor and a factory to fabricate
zirconium cladding to encase fuel rods in nuclear reactors (Washington Post of October 30,
1997). U.S. officials say the projects are not significant for nuclear proliferation. In his
February 2001 report (on the 1st half of 2000), the DCI dropped an earlier observation that
this pledge appears to be holding. The DCI reported in September 2001 there were “some
interactions” between PRC and Iranian entities that raised questions about Beijing’s continued
commitment to the pledge.
As uncovered during a closed hearing of the Senate Foreign Relations Committee on
Mar. 12, 1998, the Washington Post reported that, in January 1998, the China Nuclear
Energy Industry Corporation negotiated with Iran’s Isfahan Nuclear Research Center to
provide “a lifelong supply” of hundreds of tons of anhydrous hydrogen fluoride (AHF), or
hydrofluoric acid, under falsified documents about end-users. The AHF chemical could be
used to produce uranium hexafluoride used in uranium conversion facilities. AHF is also a
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precursor for the chemical weapon agent Sarin. After Washington protested, Beijing
reportedly stopped the sale. The Administration argued that Beijing responded positively and
the chemical is controlled by the Australia Group (on chemicals) and not on a nuclear control
list. An April 2, 1999 U.S. intelligence report is said to suggest that the China Non-metallic
Minerals Industrial Import/Export Corporation “revived” negotiations with the Iranian
Atomic Energy Organization on the construction of a plant to produce graphite (used as a
moderator in some reactors), reported the Washington Times (April 15, 1999).
Missile Technology Sales to Iran
Ballistic Missiles. Depending on the specifications of the equipment and whether the
equipment have been delivered, China may have violated its commitment to observe the
MTCR and U.S. laws, including the Iran Nonproliferation Act, Iran-Iraq Arms
Nonproliferation Act, Arms Export Control Act, and Export Administration Act. The CIA
reportedly found that China delivered dozens or perhaps hundreds of missile guidance systems
and computerized machine tools to Iran sometime between mid-1994 and mid-1995,
according to the International Herald Tribune (June 23, 1995). The November 21, 1996
Washington Times cited a CIA report which said that China agreed in August 1996 to sell to
Iran’s Defense Industries Organization gyroscopes, accelerometers, and test equipment,
which could be used to build and test components for missile guidance. On the same day,
State Department spokesman Glyn Davies did not comment on the details of the report, but
said that “we believe at this stage that, in fact, the Chinese are operating within the assurances
they have given us.”
The Washington Times, on September 10, 1997, cited Israeli and U.S. intelligence
sources as saying that China Great Wall Industry Corp. (which markets satellite launches) was
providing telemetry equipment used in flight-tests to Iran for its development of the Shahab-3
and Shahab-4 MRBMs (with ranges, respectively, of about 800 mi. and 1,240 mi.). Over 100
PRC and North Korean experts are reportedly working there (Washington Times, November
23, 1997; Washington Post, December 31, 1997). Citing a May 27, 1998 intelligence report,
the June 16, 1998 Washington Times reported that, in May 1998, China discussed selling
telemetry equipment (for testing missiles) to Iran. On July 22, 1998, Iran first tested the
mobile Shahab-3 missile, which the Pentagon confirmed to be based on a North Korean
Nodong missile. In Beijing in November 1998, Acting Undersecretary of State John Holum
protested continuing PRC missile technology aid to Iran, including a reported shipment of
telemetry equipment in November 1998 (Washington Post, November 13, 1998; Washington
Times, December 7, 1998). U.S. intelligence reportedly suspected continued PRC sales of
missile technology to Iran in 1999, including specialty steel, telemetry equipment, and training
on inertial guidance, reported the Washington Times (April 15, 1999). On November 21,
2000, the State Department announced that it determined that PRC entities had transferred
Category II items (missile components) to Iranian entities and U.S. sanctions would be
waived on the PRC given its new missile nonproliferation commitment. According to a report
(Washington Times, Jan. 26, 2001), NORINCO (a PRC defense industrial firm) shipped
materials (metals and chemicals) for missile production to Iran. The DCI reported in
September 2001 that, in the 2nd half of 2000, PRC (and Russian and North Korean) entities
continued to supply “crucial” ballistic missile-related technology to Iran.
C-802 Anti-Ship Cruise Missiles. China has sold land-, sea-, and air-launched anti-
ship missiles to Iran. In January 1996, Vice Admiral John Scott Redd, as Commander of the
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U.S. Fifth Fleet, reported that China supplied to Iran C-802 anti-ship cruise missiles
(Washington Times, March 27, 1996). In 1997, General J.H. Binford Peay, Central
Command commander, said that China transferred 20 patrol boats with 15 equipped with
C-802 missiles (Washington Times, January 29, 1997). The C-802 is a subsonic (0.9 Mach)
missile which has a range of 120 km. (75 mi.) and carries a 165 kg. (363 lb.) warhead. No
international agreement bans transfers of anti-ship missiles, and the C-802 is not covered by
the MTCR, which controls exports of ballistic and cruise missiles that can deliver 500 kg.
warheads to 300 km. Nevertheless, some argue that the transfer has violated the Iran-Iraq
Arms Nonproliferation Act (P.L. 102-484), which requires sanctions for transfers that
contribute to Iranian or Iraqi efforts to acquire “destabilizing numbers and types of advanced
conventional weapons” (including cruise missiles) or WMD. On April 10, 1997, Deputy
Assistant Secretary of State for Nonproliferation Robert Einhorn testified that “especially
troubling to us is that these cruise missiles pose new, direct threats to deployed U.S. forces.”
Einhorn also stated that “we have concluded that the C-802 transfers that have occurred so
far are not of a destabilizing number and type.” Arguments against sanctions were in part
based on the case that anti-ship cruise missiles are not a new type of weapon in Iran’s arsenal;
China previously transferred Silkworm anti-ship cruise missiles to Iran. Others in Congress
and the Pentagon argued that U.S. sanctions should be imposed on China for the delivery of
C-802 anti-ship cruise missiles to Iran which are “destabilizing” to the region.
According to Reuters, on June 17, 1997, Defense Secretary Cohen reported Iran had
test-fired PRC air-launched, anti-ship cruise missiles. They were C-801 missiles fired from
F-4 fighters. (China Precision Machinery Import-Export Corporation markets air-launched
anti-ship cruise missiles called C-801K and C-802K. The subsonic C-801K has a range of 50
km (31 mi).) Cohen added that the U.S. military is watching very closely and has “the
capability to defeat any weapon system that Iran might possess.” After seeking to clarify
apparently vague PRC assurances made at the U.S.-China summit in October 1997, Defense
Secretary Cohen said in Beijing on January 20, 1998, that the PRC President promised that
China does not plan to transfer to Iran additional anti-ship cruise missiles, including those
under contract, or technology to achieve over-the-horizon capability or indigenous production
(Reuters, January 20, 1998). During another visit to China, Secretary Cohen said on July 10,
2000, that the PRC has “abided by that agreement” made in 1998 “as far as the shipment of
cruise missiles to the Iranians.” In his January 2001 report on proliferation, Secretary Cohen
did not mention China’s promises on Iranian cruise missiles.
U.S. intelligence reportedly believed that China already delivered perhaps 150 C-802
missiles to Iran, which has made additional C-802s, using suspected French TRI-60 engines
manufactured and sold by Microturbo SA to China beginning in 1987 and perhaps also to Iran
in 1998 (Washington Post, April 3, 1999). Responding to U.S. diplomatic protests, Paris said
that the French firm sold generators, not missile engines. The DCI reported in July 1999 that
“China also was an important supplier of [advanced conventional munitions] to Iran through
the second half of 1998, but President Jiang Zemin pledged to cease supply of cruise missiles”
[in January 1998]. The report did not say whether that pledge was holding. The Washington
Times (August 19, 1999) cited intelligence reports that said China signed an $11 million
agreement to improve Iran’s FL-10 anti-ship cruise missiles. North Korea reportedly has
helped Iran to improve the over-the-horizon accuracy of the C-802 cruise missiles, according
to the London Times (January 11, 2000). The DCI’s August 2000 report, on the second half
of 1999, said that China (and others) helped Iran to develop its capability to produce
conventional weapons, including PRC-designed anti-ship cruise missiles.
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Chemical Sales to Iran and Sanctions
Concerning sales for chemical weapons, the Washington Post of March 8, 1996,
reported that U.S. intelligence had been monitoring transfers of precursor chemicals and
chemical-related equipment from China to Iranian organizations affiliated with the military or
the Revolutionary Guards. The equipment includes glass-lined vessels for mixing the caustic
precursors and special air filtration equipment to prevent poison gas leaks. Iran is also buying
PRC technology for indigenous and independent production.
Confirming long-suspected PRC transfers, on May 21, 1997, the Clinton Administration
imposed sanctions on two PRC companies, five PRC citizens, and a Hong Kong company for
transfers to Iran contributing to chemical weapon proliferation. U.S. sanctions, affecting U.S.
government procurement and imports, were imposed under the Arms Export Control Act and
Export Administration Act (as amended by the Chemical and Biological Weapons Control and
Warfare Elimination Act). Sanctions were not imposed under the Iran-Iraq Arms
Nonproliferation Act (affecting “persons” or “countries”), because the transfers apparently
occurred before February 10, 1996, the date when provisions on WMD proliferation took
effect; and because the State Department said that it had no evidence that the PRC or Hong
Kong governments were involved. The sanctions remain in effect.
An intelligence report was said to allege that China completed in June 1997 a plant in
Iran for making glass-lined equipment used in producing chemical weapons, wrote the
Washington Times on October 30, 1997. The Nanjing Chemical and Industrial Group built
the factory, and North Chemical Industries Corporation (NOCINCO) brokered the deal.
(NOCINCO is affiliated with NORINCO, a defense-industrial firm.) However, the PRC
government reportedly held up supplies of raw materials. The London Daily Telegraph (May
24, 1998) reported that SinoChem Corp.’s branch in Tianjin, China, concluded a sale to Iran
of 500 tons of phosphorus pentasulphide (which is controlled by the Australia Group as useful
for production of nerve agents). The DCI’s September 2001 report said that, in the 2nd half
of 2000, Iran continued to seek production technology, training, expertise, equipment, and
chemicals from PRC (and Russian) entities for chemical warfare.
On June 14, 2001, the George W. Bush Administration imposed sanctions (under the
Iran Nonproliferation Act of 2000) on Jiangsu Yongli Chemicals and Technology Import and
Export Corporation (one of the two PRC entities sanctioned in 1997) for proliferation of
chemical weapons-related materials or equipment to Iran (Federal Register, June 26, 2001).
Although sanctions remain for two years, there is no economic effect because of the absence
of U.S. Government contracts, assistance, arms sales, or dual-use sales with/to the company.
The State Department did not impose sanctions under the Arms Export Control Act nor the
Iran-Iraq Arms Nonproliferation Act, because unlike those laws, the Iran Nonproliferation
Act authorizes sanctions based on “credible information” that the person, since 1999,
transferred to Iran items controlled by various international nonproliferation groups.
According to the Washington Times (June 28, 2001), the PRC company has helped Iran to
build a factory to manufacture dual-use equipment applicable to chemical weapons.
Missile Technology Sales to North Korea
Since 1998, there have been public concerns about and U.S. government confirmation
of PRC assistance to North Korea’s missile program. The PRC may have interests in North
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Korea’s missile advances. Indeed, the PRC’s Lieutenant General Xiong Guangkai, a Deputy
Chief of General Staff, visited North Korea in early August 1998, right before the surprising
test-firing of a three-stage, medium-range Taepo Dong 1 missile on August 31, 1998.
However, North Korea’s missile program has harmed PRC interests, since that threat has
spurred U.S. and Japanese support for missile defense opposed by China. Some say PRC
entities acted on their own. Such PRC aid has further implications, since North Korea also
supplies Iran, Syria, Pakistan, and Egypt.
The National Security Agency (NSA) reportedly suspected in late 1998 that the China
Academy of Launch Vehicle Technology (CALT) was working with North Korea on its space
program (closely related to missiles) to develop satellites, but that cooperation is not
confirmed to be linked to the Taepo Dong MRBM program (Washington Times, February
23, 1999). An NSA report dated March 8, 1999, reportedly suggested that China sold
specialty steel for use in North Korea’s missile program (Washington Times, April 15, 1999).
In June 1999, U.S. intelligence reportedly found that PRC entities transferred accelerometers,
gyroscopes, and precision grinding machinery to North Korea (Washington Times, July 20,
1999). An October 20, 1999 classified report is said to say that China’s Changda Corp.
sought to buy Russian gyroscopes that are more of the same that China supplied to the North
Korean missile program earlier that year (Washington Times, Nov. 19, 1999). In December
1999, the NSA reportedly discovered an alleged PRC deal to supply unspecified PRC-made
missile-related items to North Korea through a Hong Kong company (Washington Times,
January 1, 2000). The DCI first publicly confirmed PRC supplies in July 1999. The DCI’s
September 2001 report said North Korea acquired missile-related raw materials and
components, especially through North Korean firms in China, in the 2nd half of 2000.
Missile Technology Sales to Libya
Beginning in early 2000, the press reported on PRC assistance to Libya’s missile
program. The Defense Department reportedly discovered in December 1999 that the PRC
plans to build a hypersonic wind tunnel in Libya for missile design (Washington Times,
January 21, 2000). A classified March 2, 2000 report by the NSA is said to describe the
PRC’s missile technology transfer to Libya that month, helping Libya to develop the Al Fatah
missile with a range of 600 miles. China Precision Machinery Import-Export Corp. allegedly
began cooperating with Libya in March 1999 (Washington Times, April 13, 2000). The June
30, 2000 Washington Times, citing a classified NSA report, said that the PRC is training
Libyan missile experts at the Beijing University of Aeronautics and Astronautics. The DCI’s
August 2000 report confirmed PRC missile assistance to Libya for the first time. The DCI’s
September 2001 report said that PRC (and other foreign) assistance was “critical” to Libya’s
ballistic missile programs in the 2nd half of 2000.
Missile Technology Sales to Syria
While the DCI’s public reports have not specified PRC assistance for Syria’s missile
program, Secretary of Defense Cohen’s January 2001 report (Proliferation: Threat and
Response) said that PRC firms, in addition to North Korean and Russian entities, have
contributed equipment and technology to Syria’s liquid fuel missile program.
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Policy Issues and Options
Weapon proliferation by the PRC raises policy issues concerning: (1) assessments of the
nature and seriousness of the security threat; (2) the priority of this issue relative to other U.S.
interests (i.e., war on terrorists, Taiwan, trade, human rights); and (3) the Administration’s
response (including the use of sanctions) and possible new legislation.
Successive Administrations have pursued a policy of “engagement” with Beijing.
Administration officials tend to cite PRC nonproliferation statements and agreements as
indications that the policy is advancing U.S. goals, especially on nuclear nonproliferation.
Some also say that U.S. sanctions are counterproductive and are too broad. Rather, China
needs to recognize nonproliferation for its own national interests and develop stronger export
controls. Also, China would be more cooperative if brought in to draw up “the rules.”
Others argue that PRC weapons proliferation activities have continued and PRC
assurances have proved to be unreliable. Also, they say that U.S. security interests are better
served with a tougher approach to deter China’s transfers, which may include appropriate
sanctions. Some argue that the United States should not be “subsidizing” China’s missile and
nuclear industries. These proponents tend to see the U.S. position as stronger than that of
China’s. They also point out that China’s suspension of its participation in the Middle East
Arms Control effort ended it, and China weakened wording about on-site inspections during
negotiations on the CTBT. Some are skeptical that China views nonproliferation as in its
national interest; Beijing may see its sales as a form of leverage against Washington.
No matter what options are pursued, many argue that U.S. leadership and a
forward-looking and coherent strategy are needed for dealing with China’s rising influence
in world affairs. A strategic approach might underpin short-term responses to violations and
use both positive and negative sources of leverage. Besides sanctions and satellite exports,
other unilateral, bilateral, and multilateral options may be considered.
Foreign and Defense Policies
Engagement and Dialogue. The Clinton Administration resumed high-level
exchanges and argued that “comprehensive engagement” with China advances U.S. security
goals, including nonproliferation. President Clinton granted Jiang Zemin summits in
Washington, on October 29, 1997, and in Beijing, on June 29, 1998. Leading up to the 1997
summit, the Administration urged China to adopt “comprehensive, nationwide regulations on
nuclear export control.” China responded by implementing a set of regulations (not a law)
on nuclear export controls signed by Premier Li Peng on September 10, 1997. The
regulations permit nuclear exports to only facilities under IAEA safeguards. China also joined
the Zangger Committee (on nuclear trade) on October 16, 1997. Then, China issued new
export control regulations on dual-use nuclear items on June 17, 1998. The 1998 summit in
Beijing produced an agreement on non-targeting nuclear weapons, and joint statements on
South Asia and on biological weapons. China refused to join the MTCR but said it was
“actively studying” whether to join. In visiting Beijing ahead of President Bush’s travels there
in October, Secretary of State Powell said on July 28, 2001, that expert talks would be held
on nonproliferation (which took place on August 23) and there are “outstanding issues” about
China’s implementation of the November 2000 agreement.
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Missile Defense. Some say that missile defense can play a role in the strategy to
counter the proliferation threat. However, China has opposed U.S. deployment of national
missile defense (NMD) or theater missile defense (TMD) cooperation with Japan or Taiwan,
and threatened to significantly increase its nuclear missile force. China is concerned that
missile defense would spur an arms race, negate its deterrence capabilities, forge closer U.S.-
Taiwan military cooperation, and violate the MTCR. During Defense Secretary William
Cohen’s visit to China in July 2000, the PRC reportedly warned that it would continue missile
proliferation activities if the United States provides TMD to Taiwan (Washington Post, July
12, 2000). Also, top PRC arms control official Sha Zukang warned that the PRC would
withhold cooperation on arms control and weapons nonproliferation in response to U.S.
deployment of NMD (Washington Post, July 14, 2000). Others say that PRC proliferation
activities and missile buildups would continue regardless.
Linkage to the Taiwan Issue. China has tried to link missile nonproliferation to
U.S. arms sales to Taiwan, and one policy issue is whether the United States would respond
to such linkage. During the 1998 summit in Beijing, the Clinton Administration allegedly
considered a PRC request for a U.S. pledge to deny TMD sales to Taiwan, if China promised
to stop missile sales to Iran; but no agreement was reached (Far Eastern Economic Review,
July 16, 1998). State Department official John Holum reported on July 8, 2000, that Beijing
raised “strong concerns” about U.S. arms sales to Taiwan during nonproliferation talks.
Trade Controls
Satellite Exports. There are policy issues about whether the use of satellite exports
to gain China’s cooperation in missile nonproliferation has been effective and is in U.S.
interests. Since 1988, the policy of granting export licenses and Presidential waivers of post-
Tiananmen sanctions (P.L. 101-246) have allowed satellites to be exported for launch by
China Great Wall Industry Corp. (the same company sanctioned for missile proliferation) and
– increasingly – for China’s own use. In the Clinton Administration, the National Security
Council, in a Secret memo on bilateral talks leading up to the 1998 summit (dated March 12,
1998, and printed in the Washington Times), proposed to expand space cooperation, increase
the number of satellite launches, issue a blanket Presidential waiver of sanctions, and support
China’s membership in the MTCR — in return for PRC missile export controls. On
November 21, 2000, the State Department said it would waive economic sanctions as well
as resume processing licenses to export satellites to China and discuss an extension of the
bilateral space launch agreement (to expire end of 2001), in return for another PRC promise
on missile nonproliferation. However, on September 1, 2001, the State Department imposed
sanctions on a PRC company, the China Metallurgical Equipment Corporation (CMEC), for
proliferation of missile technology to Pakistan, denying satellite exports to China. (Also see
Nonproliferation Sanctions.) (See CRS Report 98-485, China: Possible Missile
Technology Transfers From U.S. Satellite Export Policy – Actions and Chronology.)
Nonproliferation Sanctions. Policy debates concerning PRC technology transfers
have often centered on the question of whether to impose unilateral sanctions as required by
various U.S. laws or to enact new laws requiring sanctions. While certain PRC transfers may
not violate any international treaties, U.S. sanctions may be required under U.S. laws.
Congress has passed numerous laws to set U.S. nonproliferation policy and enforce
nonproliferation treaties and guidelines with unilateral sanctions in response to violations.
Underlying the question of whether sanctions should be used are disagreements about the
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most effective approach for curbing dangerous PRC sales and promoting U.S. interests.
While the Soviet threat dominated assessments of U.S. policy, the elimination of that threat
fostered sharp debates about the primacy of security interests over business or other foreign
policy interests.
In the 106th Congress, Members in 1999 passed the FY2000 National Defense
Authorization Act (P.L. 106-65), requiring a report on the PRC’s adherence to the MTCR
(the classified report was submitted on August 18, 2000). In 2000, Congress passed the Iran
Nonproliferation Act (P.L. 106-178). In May 2000, Senator Thompson, along with Senator
Torricelli, introduced S. 2645, the China Nonproliferation Act, to require annual reviews
(based on “credible information”), sanctions, and use of the U.S. securities market as a policy
tool. In September 2000, the Senate passed (65-32) a motion to table the legislation as an
amendment to the bill granting China permanent normal trade relations (PNTR) status.
On November 21, 2000, the State Department said it would waive economic sanctions
as well as resume processing licenses to export satellites to China and discuss an extension
of the bilateral space launch agreement, in return for another PRC promise on missile
nonproliferation. However, continued PRC transfers soon raised the issue of imposing
sanctions, and Beijing has not yet issued missile export controls as promised. By July 2001,
the United States formally protested to China about its compliance with the agreement
(Washington Post, July 27, 2001), and unsatisfactory talks were held on August 23.
On September 1, 2001, the State Department imposed sanctions on a PRC company, the
China Metallurgical Equipment Corporation (CMEC), for proliferation of missile technology
(Category II items) to Pakistan. The sanctions also applied to Pakistan’s National
Development Complex. (Federal Register, September 11, 2001) The sanctions have the
effect of denying licenses for two years for the export of satellites to China for its use or
launch by its aerospace entities, because the Category II sanctions deny U.S. licenses to
transfer missile equipment or technology (MTCR Annex items) to any PRC “person,” which
is defined by the so-called Helms Amendment (section 74(8)(B) of the AECA) as any PRC
government activity related to missiles, electronics, space systems, or military aircraft, and the
State Department considers that satellites are covered by the MTCR Annex since it includes
satellite parts. The President has the authority to waive the sanctions.
War on Terrorism. The vicious terrorist attacks, on September 11, 2001, added a
compelling U.S. interest in considering U.S. policy on PRC weapons proliferation. With
questions about the viability of Pakistan’s government after it gave strong support to the anti-
terrorism war, the United States could seek intelligence from the PRC about Pakistan’s
nuclear weapons. Also, the Bush Administration could maintain a firm U.S. response to the
problem, since PRC entities have reportedly transferred nuclear, missile, and/or chemical
weapons technology to sponsors of terrorism (listed by the State Department), like Iran,
North Korea, Libya, and Syria. However, if the Administration lifts sanctions for supportive
countries, options include waiving the September missile proliferation sanctions. On October
25, 2001, Senator Kyl warned against “rewarding” Beijing with any relaxation of U.S.
restrictions as we seek China’s anti-terrorism cooperation. (See “China” in CRS Terrorism
Briefing Book, [http://www.congress.gov/brbk/html/ebter67.html])
Nuclear Cooperation Agreement. As agreed during the U.S.-China summit in
October 1997, President Clinton, on January 12, 1998, signed certifications (as required by
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P.L. 99-183) about China’s nuclear nonproliferation policy and practices to implement the
1985 Nuclear Cooperation Agreement. According to President Clinton, the agreement serves
U.S. national security, environmental, and economic interests, and “the United States and
China share a strong interest in stopping the spread of weapons of mass destruction and other
sophisticated weaponry in unstable regions and rogue states — notably, Iran.” The President
also waived a sanction imposed after the Tiananmen crackdown (in P.L. 101-246). Later,
at the 1998 summit, the Department of Energy (DOE) and the PRC State Planning
Commission signed an agreement on peaceful nuclear cooperation, including bringing PRC
scientists to U.S. national laboratories, universities, and nuclear reactor facilities.
During debate on the agreement, some in Congress, the nonproliferation community, and
elsewhere were skeptical that PRC policies changed sufficiently to warrant the certifications
and that they are in U.S. interests. They also pointed out that China had not yet joined the
Nuclear Suppliers Group. (See Nonproliferation Regimes below.) Congressional review
ended on March 18, 1998, and the agreement has since been implemented. U.S. firms may
apply for Export-Import Bank financing and licenses from the Nuclear Regulatory
Commission (NRC) and DOE to export nuclear technology to China, and foreign firms may
apply to re-export U.S. technology. Members pursued several options to affect the
agreement’s implementation. On November 5, 1997, the House passed a bill with an
amendment sponsored by Rep. Gilman, chairman of the Committee on International
Relations, to extend congressional review for implementation of the agreement from 30 to
120 days and provide for expedited review procedures. As amended by Rep. Gilman, the
National Defense Authorization Act for FY1999 (P.L. 105-261) requires the President to
notify Congress “upon” granting licenses for nuclear exports to a non-NATO country that has
detonated a nuclear explosive device (e.g., China). Nucleonics Week (March 23, 2000) and
the Washington Times (May 9, 2000) reported that the Administration had not obtained from
China an overall assurance that it will not re-export U.S. technology to another country, such
as Pakistan, thus affecting the issuance of export licenses. As required, the State Department,
on June 9, 2000, issued the first notification to Congress that NRC issued a license on
February 3 for the export of tantalite ore to China. The Administration issued this and
subsequent licenses based on case-by-case assurances from Beijing of no re-transfers.
U.S. Import Controls. While sanctions may affect U.S. exports, some policy steps
may affect imports of products produced by PRC military or defense-industrial companies
suspected of contributing to proliferation. Import controls have been included as possible
sanctions for missile proliferation under Section 73(a)(2)(C) of the Arms Export Control Act
and Section 11B(b)(1)(B)(iii) of the Export Administration Act, as well as affected by what
is popularly called the “Helms Amendment,” giving a broad definition of “person” as a target
of sanctions. Issues include whether to sanction imports and what the parameters should be.
U.S. Export Controls. Export controls can be an important policy tool, because U.S.
technology provides one source of leverage over Beijing. For example, the Reagan
Administration, in 1987, froze export control liberalization because China sold Silkworm anti-
ship missiles to Iran. After the Cold War, U.S. export restrictions have been reduced to focus
on items that contribute significantly to the development and production of WMD. Some in
Congress are concerned about U.S. technology reaching hostile states with WMD programs
through China. Congress may strengthen controls over missile-related technology. U.S.
military sales to China have not been allowed since sanctions were imposed after the 1989
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Tiananmen Crackdown, but there is increasing demand to export dual-use technology that
could enhance China’s military capabilities.
Nonproliferation and Arms Control
Nonproliferation Regimes. Another policy approach is to strengthen the
international nonproliferation regimes. There are two prongs in such efforts: encourage PRC
support for strengthening the regimes to enforce compliance and filling gaps in China’s
participation. Some say that including China would capitalize on its desire to be treated as
a “great power” and to be perceived as a responsible world leader. In addition, China might
be more cooperative if it helped to draw up the “rules.” Others argue that China’s
participation would obstruct efforts for tighter export controls, derail arms control efforts,
link them to the Taiwan issue (e.g., the Mideast arms control talks), or weaken provisions
(e.g., the CTBT).
For nuclear nonproliferation, the U.N. Security Council has recognized the limits to the
effectiveness of the NPT/IAEA safeguards system (as shown by Iraq’s and North Korea’s
advanced, clandestine nuclear weapons programs) and has tried to strengthen the IAEA’s
verification authority. Some advocate strengthening the Biological Weapons Convention
(BWC) with a verification protocol for inspections to monitor compliance.
The United States and others might encourage China to join the MTCR (as a member
after it establishes a record of compliance and effective export controls), Nuclear Suppliers
Group (NSG), Australia Group (on chemical and biological weapons), and Wassenaar
Arrangement (military and dual-use export controls). Indeed, the National Security Council
in a secret memo, dated March 12, 1998 (printed in the March 23, 1998 Washington Times),
proposed in a “China missile deal” to expand space cooperation with Beijing, increase the
number of satellites that China can launch, issue a blanket Presidential waiver of post-
Tiananmen sanctions on satellite launches, and support China’s membership in the MTCR —
in return for effective PRC missile export controls.
Critics say that membership in the MTCR would exempt China from certain sanctions,
provide it with intelligence, give it a potentially obstructionist role in decision-making, and
relax missile-related export controls to China. In September 1999, Congress passed the
FY2000 National Defense Authorization Act (P.L. 106-65), stating its sense that the
President shall take steps to obtain an agreement with the PRC on adherence to the MTCR
and its annex and that the PRC should not be allowed to join the MTCR without meeting
certain conditions. It also required a report on the PRC’s adherence to the MTCR, and the
classified report was submitted on August 18, 2000.
China joined the Zangger Committee (on nuclear trade) in October 1997, before a
summit in Washington. Also, China issued new export control regulations on dual-use
nuclear items on June 17, 1998, before another summit in Beijing. But China is the only
major nuclear supplier to shun the 39-nation NSG, which requires “full-scope safeguards”
(IAEA inspections of all other declared nuclear facilities in addition to the facility importing
supplies to prevent diversions to weapon programs).
CTBT and Fissile Materials Production. China, on July 30, 1996, began a
moratorium on nuclear testing and signed the CTBT on September 24, 1996. However, after
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the U.S. Senate rejected (51-48) the treaty on October 13, 1999, it became more doubtful
that the PRC would ratify it promptly. Also, the United States has sought PRC cooperation
on negotiating a global ban on the production of fissile materials for nuclear weapons and
other nuclear explosive devices. On October 4, 1994, the United States and China agreed to
“work together to promote the earliest possible achievement of a multilateral,
non-discriminatory, and effective verifiable convention” banning fissile materials production.
International Lending and Japan
Congress may seek to link U.S. support for loans made by international financial
institutions to China’s nonproliferation record. The Iran-Iraq Arms Nonproliferation Act
requires U.S. opposition to multilateral loans for sanctioned countries (Section 1605(b)(2)).
The World Bank and the Asian Development Bank have resumed substantial lending to China
since the Tiananmen crackdown of 1989. Coordination with Japan is important, since it
provides the most significant bilateral aid to China and, in 1995, was the only country to cut
aid to pressure China to stop nuclear testing. The U.S.-Japan Joint Declaration on Security
Alliance for the 21st Century (of April 17, 1996) provides a basis for bilateral coordination
on weapon nonproliferation issues.
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