Order Code RL31555
CRS Report for Congress
Received through the CRS Web
China and Proliferation of Weapons of Mass
Destruction and Missiles: Policy Issues
Updated May 20, 2004
Shirley A. Kan
Specialist in National Security Policy
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

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China and Proliferation of Weapons of Mass
Destruction and Missiles: Policy Issues
Summary
Congress has long been concerned about whether U.S. policy advances the
national interest in reducing the role of the People’s Republic of China (PRC) in the
proliferation of weapons of mass destruction (WMD) and missiles that could deliver
them. Recipients of China’s technology include Pakistan and countries that the State
Department says support terrorism, such as Iran, North Korea, and Libya. This CRS
Report discusses the national security problem of China’s role in weapons
proliferation and issues related to the U.S. policy response, including legislation,
since the mid-1990s. A table summarizes the U.S. sanctions imposed on PRC
entities for weapons proliferation. This report will be updated as warranted.
Since 1991, China has taken some steps to mollify U.S. concerns about its role
in weapons proliferation. Nonetheless, supplies from China have aggravated trends
that result in ambiguous technical aid, more indigenous capabilities, longer range
missiles, and secondary (retransferred) proliferation. As the Director of Central
Intelligence (DCI) has reported to Congress, China remains a “key supplier” of
weapons technology — particularly missile or chemical technology.
Policy issues in seeking PRC cooperation have concerned summits, sanctions,
and satellite exports. On November 21, 2000, the Clinton Administration agreed to
waive missile proliferation sanctions, resume processing licenses to export satellites
to China, and discuss an extension of the bilateral space launch agreement, in return
for another promise from China on missile nonproliferation. However, PRC
proliferation activities again raised questions about sanctions. On ten occasions, the
Bush Administration has imposed sanctions on PRC entities (not the government)
for transfers (related to ballistic missiles, chemical weapons, and cruise missiles) to
Pakistan and Iran. Among those sanctions, on September 1, 2001, the Administration
imposed missile proliferation sanctions that effectively denied satellite exports (for
two years), after a PRC company transferred technology to Pakistan, despite the
November 2000 promise. During preparations for the U.S.-PRC summit in October
2002, China, in August 2002, published the missile export controls promised in
November 2000, but questions have persisted about China’s enforcement of those
regulations. On September 19, 2003, the State Department imposed more missile
proliferation sanctions on NORINCO, a defense industrial firm, denying satellite
exports to China for two more years, while waiving for one year the import ban on
other PRC government products related to missiles, space, electronics, and military
aircraft (sanctions that could affect $12 billion in imports from China).
Critics say that President Bush has not forcefully pressed China’s leaders on
weapons nonproliferation. Meanwhile, Bush has sought China’s help in a
multilateral effort to dismantle North Korea’s nuclear weapons programs. In April
2004, the Commerce Department agreed to review whether to change China’s “non-
market economy” status, based upon which the “Helms Amendment” has broadened
missile proliferation sanctions. The House International Relations Committee held
a hearing on May 18, 2004, to question the Administration’s support for China’s
membership in the Nuclear Suppliers Group (NSG).

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Contents
Purpose and Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
PRC Proliferation Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Nonproliferation Commitments but Continued Concerns . . . . . . . . . . . . . . . 1
Nuclear Technology Sales to Pakistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Ring Magnets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Other Nuclear Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Missile Technology Sales to Pakistan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
M-11 Missiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Missile Plants and MRBMs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Nuclear Technology Sales to Iran . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Missile Technology Sales to Iran . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Ballistic Missiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Anti-Ship Cruise Missiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Chemical Sales to Iran . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
North Korea’s Missile and Nuclear Weapons Programs . . . . . . . . . . . . . . . 15
Missile Technology Sales to Libya . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Missile Technology Sales to Syria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Policy Issues and Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Issues for Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Debate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
The PRC Government’s Role . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Foreign and Defense Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Summits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Counter-Terrorism Campaign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Missile Defense and Counter-Proliferation . . . . . . . . . . . . . . . . . . . . . 23
Export Control Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Linkage to the Taiwan Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Economic Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Satellite Exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Sanctions and the “Helms Amendment” . . . . . . . . . . . . . . . . . . . . . . . 25
Capital Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Nuclear Cooperation Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
U.S. Import Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
U.S. Export Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Nonproliferation and Arms Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Nonproliferation Regimes (MTCR, NSG, etc.) . . . . . . . . . . . . . . . . . . 29
CTBT and Fissile Materials Production . . . . . . . . . . . . . . . . . . . . . . . 30
International Lending and Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
List of Tables
Table: PRC Entities Sanctioned for Weapons Proliferation . . . . . . . . . . . . . . . . 31

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China and Proliferation of Weapons of Mass
Destruction and Missiles: Policy Issues
Purpose and Scope
Congress has long been concerned about whether U.S. policy advances the U.S.
interest in reducing the role of the People’s Republic of China (PRC) in the
proliferation of weapons of mass destruction (WMD) and missiles and obtaining
China’s cooperation in weapons nonproliferation. This problem refers to the threat
of nuclear, chemical, or biological weapons and missiles that could deliver them.
Some have argued that certain PRC transfers violated international treaties or
guidelines, and/or have contravened various U.S. laws requiring sanctions to shore
up those international standards. Even if no laws or treaties are violated, many view
China’s transfers as threatening U.S. security interests. This CRS Report
(superseding CRS Issue Brief IB92056) discusses the national security problem of
the PRC’s role in weapons proliferation and issues related to the U.S. policy
response, including legislation, since the mid-1990s. The table at the end of this
Report summarizes the U.S. sanctions imposed on PRC entities for weapons
proliferation.
For a discussion of the policy problem in the 1980s to 1996, see CRS Report
96-767, Chinese Proliferation of Weapons of Mass Destruction: Background and
Analysis, September 13, 1996, by Shirley Kan. See also, by the same author, CRS
Report 98-485, China: Possible Missile Technology Transfers Under U.S. Satellite
Export Policy — Actions and Chronology.
PRC Proliferation Challenges
Nonproliferation Commitments but Continued Concerns
Since 1991, Beijing has taken steps to address U.S. and other countries’
concerns by increasing its partial participation in international nonproliferation
regimes and issuing export control regulations. However, questions have remained.
China first promised to abide by the Missile Technology Control Regime (MTCR)
in 1991-1992 and reaffirmed that commitment in an October 4, 1994 joint statement
with the United States. The MTCR, set up in 1987, is not an international agreement
and has no legal authority, leaving issues about U.S. sanctions to shore up the
standards. It is a set of voluntary guidelines that seeks to control the transfer of
ballistic and cruise missiles that are inherently capable of delivering at least a 500 kg
(1,100 lb) payload to at least 300 km (186 mi), called “Category I” or “MTCR-class”
missiles. It was unclear whether China adhered to the revised MTCR guidelines of
1993 calling for the presumption to deny transfers of any missiles capable of

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delivering any WMD (not just nuclear weapons). A 1996 Fact Sheet of the State
Department said that China unilaterally committed to controlling exports “consistent
with the MTCR Guidelines and Annex,” with the MTCR consisting of a common
export control policy (Guidelines) applied to a common list of controlled items
(Annex). However, a Senate Foreign Relations Committee report of September 11,
2000, said the State Department argued to Congress that China agreed to the MTCR
Guidelines, but not the 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) and
promised to issue missile-related export controls “as soon as possible.” After a
contentious period that saw new U.S. sanctions, the PRC finally published those
regulations and the control list (modeled on the MTCR) on August 25, 2002, as
Washington and Beijing prepared for a Bush-Jiang summit on October 25, 2002.

China acceded to the Nuclear Nonproliferation Treaty (NPT) on March 9, 1992.
The NPT does not ban peaceful nuclear projects. 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.
Premier Li Peng issued 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.
In November 1995, China issued its first public defense white paper, which
focused on arms control and disarmament. Also, China signed the Chemical
Weapons Convention (CWC) in January 1993. On April 25, 1997, China deposited
its instrument of ratification of the CWC, before it entered into force on April 29,
1997. From 1993-1998, the PRC issued export control regulations on chemicals. On
October 14, 2002, on the eve of a Bush-Jiang summit, the PRC issued regulations for
export controls over dual-use biological agents and related technology. On
December 3, 2003, China issued a white paper on nonproliferation, which stated that
its control lists are almost the same as those of the Zangger Committee, Nuclear
Suppliers Group, CWC, Australia Group, and MTCR.
Nevertheless, China is not a member of the MTCR, Nuclear Suppliers Group
(NSG) (requiring full-scope safeguards), or Australia Group (AG) (on chemical and
biological weapons). China did not join the 93 countries in signing the International
Code of Conduct Against Ballistic Missile Proliferation in The Hague on November
25, 2002, nor the 11 countries in the Proliferation Security Initiative (PSI) announced
by President Bush on May 31, 2003. PRC weapons proliferation has persisted,
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.” As required by Section 721 of the FY1997 Intelligence
Authorization Act, P.L. 104-293, the DCI’s report to Congress, “Unclassified Report

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to Congress on the Acquisition of Technology Relating to Weapons of Mass
Destruction and Advanced Conventional Munitions,” has named China (plus Russia
and North Korea) as “key suppliers” of dangerous technology. (Subsequent
discussions of the DCI’s report refer to this reporting requirement. Original
legislation required a semi-annual report, and the FY2004 Intelligence Authorization
Act, P.L. 108-177, changed the requirement to an annual report.)
Nuclear Technology Sales to Pakistan
Ring Magnets. In 1996, some in Congress called for sanctions after reports
disclosed that China sold unsafeguarded ring magnets to Pakistan, apparently in
violation of the NPT and in contradiction of U.S. laws, including the Arms Export
Control Act (P.L. 90-629) and Export-Import Bank Act (P.L. 79-173), as amended
by the Nuclear Proliferation Prevention Act of 1994 (Title VIII of P.L. 103-236). On
February 5, 1996, the Washington Times 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 that can be used
in gas centrifuges to enrich uranium. Reportedly, intelligence experts believed that
the magnets provided to Pakistan were to be used in special suspension bearings at
the top of rotating cylinders in the centrifuges. The New York Times, on 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 (issued on 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 complicated by
considerations of U.S. corporations doing business in China. 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, Secretary of State Warren
Christopher instructed the Export-Import Bank to suspend financing for commercial
deals in China for one month, reported the New York Times (February 29, 1996).
Christopher reportedly required time to try to obtain more information to make a
determination of whether sanctions would be required. Meanwhile, DCI John
Deutch reportedly said at a White House meeting that PRC officials at some level
likely approved the sale of magnets. Defense Secretary William Perry supported this
view, but officials of the Commerce and Treasury Departments and the U.S. Trade
Representative argued there was lack of solid proof, according to the Washington
Post (April 1, 1996).
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 that 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

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there was no evidence that the PRC government had willfully aided or abetted
Pakistan’s nuclear weapon program through the magnet transfer. 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, since 1984, China has
declared a policy of nuclear nonproliferation and a requirement for recipients of its
transfers to accept IAEA safeguards, and China acceded to the NPT in 1992.
That year, Congress responded to the Administration’s determination not to
impose sanctions by adding language on “persons” in the Export-Import Bank Act,
as amended by Section 1303 of the National Defense Authorization Act for FY1997
(P.L. 104-201), enacted on September 23, 1996.
Other Nuclear Cooperation. On October 9, 1996, the Washington Times
reported that a CIA report dated September 14, 1996, said 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 suspected that the transfer was intended for Pakistan’s nuclear
weapons program said 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. According to the press, the CIA report said
that the equipment was set to arrive in early September 1996. The Washington Post,
on October 10, 1996, further reported that the equipment was intended for a nuclear
reactor to be completed by 1998 at Khushab in Pakistan. On October 9, 1996, the
State Department said that it had not concluded that China violated its promise of
May 11, 1996. However, the State Department did not publicly address whether the
suspected transfers occurred before May 11, 1996, violated the NPT, or contradicted
U.S. laws (including the Arms Export Control Act, Export-Import Bank Act, and the
Nuclear Proliferation Prevention Act).
Concerns have persisted about PRC assistance to Pakistan’s nuclear facilities.
As reported by Pakistani and PRC news sources in 1992, China began to build a
nuclear power plant at Chashma and was suspected in 1994 of helping Pakistan to
build an unsafeguarded, plutonium-producing reactor at Khushab.1 Operational since
2001, the Chashma reactor has IAEA safeguards but not full scope safeguards.2
Referring specifically to Pakistan’s efforts to acquire equipment, materials, and
technology for its nuclear weapons 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 Pakistan, and Pakistan followed with nuclear tests on May 28
and 30, 1998. China, as Pakistan’s principal military and nuclear supplier, failed to
avert the tests and did not cut off nuclear aid, but condemned the tests at the U.N.
1 Nucleonics Week, June 19, 1997 and February 26, 1998.
2 Nucleonics Week, April 26, 2001; and IAEA, Annual Report 2001.

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The Arms Control and Disarmament Agency’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.”
In 2000, news reports said that some former U.S. nonproliferation and
intelligence officials suspected that China provided equipment for Pakistan’s secret
heavy water production plant at Khushab, where an unsafeguarded reactor reportedly
started up in April 1998 and has generated weapons-grade plutonium. Clinton
Administration officials at the White House and State Department reportedly denied
China’s involvement but said that they did not know the origins of the plant.3 The
DCI reported in November 2003 that, in the first half of 2003, continued contacts
between PRC entities and “entities associated with Pakistan’s nuclear weapons
program” cannot be ruled out, despite the PRC’s 1996 promise not to assist
unsafeguarded nuclear facilities. The Director of the Defense Intelligence Agency
(DIA), Vice Admiral Lowell Jacoby, testified to the Senate Intelligence Committee
on February 24, 2004, that PRC entities “remain involved with nuclear and missile
programs in Pakistan and Iran,” while “in some cases,” the entities are involved
without the government’s knowledge, implying that there are cases in which the PRC
government has knowledge of the relationships.
China’s past and persisting connections to Pakistan’s nuclear program has raised
questions about whether China had involvement in or knowledge about the long-time
efforts, publicly confirmed in early 2004, of Abdul Qadeer Khan, the former head of
Pakistan’s nuclear weapon program, in selling uranium enrichment technology to
Iran, North Korea, and Libya — particularly since China was an early recipient of the
uranium enrichment technology Khan acquired in Europe.4 Also, there are questions
about whether China has shared intelligence about Pakistani nuclear technology
transfers. With the troubling disclosures, China may be more willing to cooperate
on nonproliferation or may remain reluctant to confirm its involvement, particularly
after a report said that the Pakistani network sold Libya a nuclear bomb design that
originated in China.5 DCI George Tenet confirmed A.Q. Khan’s network of nuclear
trade in open testimony to the Senate Intelligence Committee on February 24, 2004.
On May 5, 2004, China signed a contract to build a second nuclear power
reactor (Chashma-2) in Pakistan. This contract raised questions because of
continuing PRC nuclear cooperation with Pakistan and its signing right before a
decision on May 24 by the Nuclear Suppliers Group (NSG) on China’s membership.
With a pre-existing contract, Chashma-2 would be exempted from the NSG’s
3 Hibbs, Mark, “CIA Knew About Khushab D2O Plant But Not Source, Officials Claim,”
Nucleonics Week, March 23, 2000; “Pakistani Separation Plant Now Producing 8-10 Kg
Plutonium/Yr,” Nuclear Fuel, June 12, 2000.
4 David Sanger and William Broad, “From Rogue Nuclear Programs, Web of Trails Leads
to Pakistan,” New York Times, January 4, 2004.
5 Joby Warrick and Peter Slevin, “Libyan Arms Designs Traced Back to China,” Washington
Post, February 15, 2004.

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requirement for full-scope safeguards (not just IAEA safeguards on the reactor).6
(See Nonproliferation Regimes below for policy discussion.)
Missile Technology Sales to Pakistan
M-11 Missiles. Transfers of the PRC’s M-11 short range ballistic missiles
(SRBMs) 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). Issues
about U.S. sanctions have included the questions of whether PRC transfers to
Pakistan involved M-11 missile-related technology (Category II of the MTCR) or
complete missiles (Category I). Sanctions are mandated under Section 73(a) of the
Arms Export Control Act (AECA) and Section 11B(b)(1) of the Export
Administration Act (EAA) (as amended by the FY1991 National Defense
Authorization Act).
In June 1991, the Bush Administration first imposed sanctions on entities in
China for transferring M-11 technology to Pakistan. 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). On
October 4, 1994, Secretary of State Warren Christopher and Foreign Minister Qian
Qichen signed a joint statement, saying 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 Administration
waived the sanctions on November 1, 1994.
However, contentious policy questions about imposing sanctions for the 1992
transfer of complete M-11 SRBMs (not just components) persisted until 2000. The
Washington Times (March 14, 1997) said “numerous” intelligence reports indicated
that M-11 missiles were “operational” in Pakistan, but these findings were disputed
by some policymakers. Secretary of Defense William Cohen issued a Pentagon
report in 1997 stating that Pakistan acquired “SRBMs” as well as related equipment
from China in the early 1990s.7 In a 1998 report to Congress on nuclear
nonproliferation in South Asia, the Department of State acknowledged its concerns
about “reports that M-11 missiles were transferred from China to Pakistan” but added
that it had not determined that such transfers occurred, “which would be sanctionable
under U.S. law.”8 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.9
6 “Pakistan, China Agree on Second Chashma Unit,” Nucleonics Week, May 6, 2004.
7 Office of the Secretary of Defense, Proliferation: Threat and Response, November 1997.
8 Department of State, “Report on Nuclear Nonproliferation in South Asia,” March 17, 1998.
9 Commission to Assess the Ballistic Missile Threat to the United States (popularly known
(continued...)

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Some said that sanctions were not imposed for transfers of complete M-11s,
because the missiles remained inside crates at Sagodha Air Base, according to the
Wall Street Journal (December 15, 1998). Critics, especially in Congress, said the
Clinton Administration avoided making determinations of whether to impose
sanctions, by delaying tactics, re-writing reports, and setting high evidentiary
standards. The Senate Foreign Relations Committee issued a report in September
2000, saying that the Administration avoided such determinations through the use of
“bureaucratic maneuvers” to delay the drafting of “Statements/Findings of Fact” by
the intelligence community and to not schedule interagency meetings to consider
those findings.10
On September 9, 1999, the intelligence community publicly confirmed for the
first time that “Pakistan has M-11 SRBMs from China” and that they may have a
nuclear role.11 However, the State Department argued on September 14, 1999, that
it required a “high standard of evidence” and had not yet determined that Category
I sanctions were warranted, despite the intelligence judgment. (Category I sanctions
would deny licenses for exports of Munitions List items, among other actions, and
Congress transferred satellites back to the Munitions List, effective March 15, 1999.)
The Far Eastern Economic Review reported on May 18, 2000, that the Clinton
Administration and Senator Helms of the Foreign Relations Committee struck a deal
in 1999 that required a decision 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 promise.
Missile Plants and MRBMs. 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, according to the Washington Post (August 25, 1996).
Analysts disagreed, however, about whether the plant would 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 reported on June 30, 1997, that the Clinton
Administration would not discuss possible sanctions based on intelligence on the
missile plant. The November 1997 report of the Secretary of Defense also confirmed
Pakistan’s facility “for the production of a 300 kilometer range ballistic missile.” By
1998, the missile plant in Fatehjung was almost finished, awaiting delivery of crucial
equipment from China, reported the Wall Street Journal (December 15, 1998).
9 (...continued)
as the Rumsfeld Commission), report, July 15, 1998.
10 Senate Foreign Relations Committee, “Chairman’s Overview of China’s Proliferation
Track Record,” September 11, 2000.
11 National Intelligence Council, “Foreign Missile Developments and the Ballistic Missile
Threat to the United States Through 2015,” September 1999.

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On April 6, 1998, Pakistan first tested its nuclear-capable Ghauri (Hatf-5)
medium-range ballistic missile (MRBM), which is based on the North Korean No
Dong missile. U.S. intelligence was 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 was building a
second missile plant and providing specialty steel, guidance systems, and technical
aid, said the Far Eastern Economic Review (June 22, 2000) and 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 second half of 1999. Also, China has
assisted Pakistan with development of the Shaheen-2 two-stage, solid-fuel MRBM,
reported Jane’s Defense Weekly (December 13, 2000). DCI George Tenet confirmed
U.S. concerns about such assistance in testimony on February 7, 2001, before the
Senate Intelligence Committee, and in his February 2001 report on proliferation.
Despite the PRC’s November 2000 missile nonproliferation pledge, in the first
several months of 2001, a PRC company reportedly delivered 12 shipments of
missile components to Pakistan’s Shaheen-1 SRBM and Shaheen-2 MRBM
programs, according to the Washington Times (August 6, 2001). On September 1,
2001, the State Department imposed sanctions on China Metallurgical Equipment
Corporation (CMEC) for proliferation of missile technology (Category II items of the
MTCR) to Pakistan. In November 2003, the DCI reported that, in the first half of
2003, PRC entities helped Pakistan to advance toward serial production of solid-fuel
SRBMs (previously identified as the Shaheen-1, Abdali, and Ghaznavi) and
supported Pakistan’s development of solid-fuel MRBMs (previously noted as the
Shaheen-2 MRBM).
Nuclear Technology Sales to Iran
Suspecting that Iran uses nuclear technology to build the technical infrastructure
for its clandestine nuclear weapon program, Washington has urged Beijing (and
Moscow) not to transfer any nuclear technology to Iran. In 1995, China suspended
a sale of nuclear reactors to Iran. Showing Israeli influence, Prime Minister
Benjamin Netanyahu publicly stated in August 1997 that PRC Vice Premier Li
Lanqing said that China canceled plans to build the reactors.
However, there were other controversial PRC nuclear deals with Iran pointing
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 Iranian President
Rafsanjani by his senior aides, according to the London Sunday Telegraph (as
reported in the September 25, 1995 Washington Times). As reported, the PRC
system was similar to the one used in Iraq’s secret uranium enrichment program.
Secretary of Defense William Perry confirmed in an April 1996 report that “the
Iranians have purchased an electromagnetic isotope separation unit from China.”12
12 Office of the Secretary of Defense, Proliferation: Threat and Response, April 1996.

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The China Nuclear Energy Industry Corporation had plans to sell Iran a facility
to convert uranium ore into uranium hexafluoride gas, which could be enriched to
weapons-grade material, according to the Washington Post (April 17, 1995; June 20,
1996). Intelligence reports said that the deal proceeded with PRC nuclear experts
going to Iran to build the new uranium conversion plant near Isfahan, reported the
Washington Times (April 17, 1996). However, PRC civilian nuclear officials later
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, reported the
Washington Post (November 6, 1996). China’s role as nuclear supplier may have
been affected by Iran’s turn to Russian reactors. Also, China may have responded
to concerns of Israel (a key supplier to China’s military).
China’s concerns about its standing with the United States were also important.
State Department official Robert Einhorn told Congress that China canceled this deal
but had provided Iran with a blueprint to build the facility, reported the 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 with Iran, after building a small nuclear research reactor and a factory to
fabricate zirconium cladding to encase fuel rods in nuclear reactors, according to the
Washington Post (October 30, 1997). U.S. officials said the projects would not be
significant for nuclear proliferation.
After President Clinton signed certifications in January 1998 to implement the
1985 bilateral nuclear cooperation agreement, as promised at the 1997 summit, the
Washington Post (March 13, 1998) reported that at a closed hearing of the Senate
Foreign Relations Committee on March 12, 1998, Clinton Administration officials
disclosed negotiations in January 1998 between the China Nuclear Energy Industry
Corporation and 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 precursor for the chemical weapon agent Sarin.) According to the press, after
Washington protested, Beijing stopped the sale. The Administration argued that
Beijing responded positively and that the chemical is controlled by the Australia
Group and not on a nuclear control list. Later, an April 2, 1999 U.S. intelligence
report was 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).
In a February 2001 report (on the first half of 2000), the DCI dropped an earlier
observation that the 1997 pledge appeared to be holding. In testimony before the
Senate Governmental Affairs Subcommittee on International Security, Proliferation,
and Federal Services on June 6, 2002, Assistant Secretary of State John Wolf stated
concerns about possible PRC-Iranian interactions “despite China’s 1997 pledge to
end its nuclear cooperation with Iran.”
In late 2002, an Iranian opposition group reported that Iranian front companies
procured materials from China (and other countries) for secret nuclear weapons

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facilities, while experts from China have worked at a uranium mine at Saghand and
a centrifuge facility (for uranium enrichment) near Isfahan, reported the Washington
Post (December 19, 2002 and February 20, 2003). Moreover, Nucleonics Week
(February 27 and March 6, 2003) reported that Iran, since 2000, has been building a
secret uranium enrichment plant at Natanz with technology for gas centrifuge
enrichment from Pakistan (Khan Research Laboratories), a country that has received
nuclear cooperation from China. Also, the IAEA found out in 2003 that, in 1991,
China supplied Iran with 1.8 metric tons of natural uranium, reported Nucleonics
Week (June 12, 2003).
In testimony to Congress on February 11, 2003, DCI George Tenet pointed to
China’s “firms” (rather than the government) and warned that they “may be backing
away from Beijing’s 1997 bilateral commitment to forego any new nuclear
cooperation with Iran.” The DCI reported in November 2003 that “some interactions
of concern” between PRC and Iranian entities continued in the first half of 2003. The
Director of the Defense Intelligence Agency, Vice Admiral Lowell Jacoby, testified
to the Senate Intelligence Committee on February 24, 2004, that PRC entities
“remain involved with nuclear and missile programs in Pakistan and Iran, while, “in
some cases,” the entities are involved without the PRC government’s knowledge.
In April 2004, the Administration imposed sanctions under the Iran
Nonproliferation Act. Assistant Secretary of State John Wolf testified to the House
International Relations Committee on May 18, 2004, that “most” of the sanctions
related to non-nuclear transfers, but there were concerns in the nuclear area as well.
Missile Technology Sales to Iran
Ballistic Missiles. The CIA 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, reported the International Herald
Tribune (June 23, 1995). The November 21, 1996 Washington Times cited a CIA
report as saying 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, the State
Department would only say publicly that “we believe at this stage that, in fact, the
Chinese are operating within the assurances they have given us.”
The Washington Times (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 1,250 mi.). Over 100 PRC and North Korean experts worked
there, reported the Washington Times (November 23, 1997) and 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, on the next day, confirmed to be based on a
North Korean Nodong MRBM. 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,

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according to the Washington Post (November 13, 1998) and Washington Times
(December 7, 1998). U.S. intelligence 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, under the AECA and EAA, the Clinton Administration
announced it determined that PRC entities had transferred Category II items (missile
components) to Iranian entities and U.S. sanctions would be waived on China given
its new missile nonproliferation promise.
Still, the Washington Times (January 26, 2001) said that NORINCO (a PRC
defense industrial firm) shipped specialty metals and chemicals used in missile
production to Iran. On the national emergency regarding weapons proliferation,
President Bush continued to report to Congress in June 2002 that PRC (and North
Korean and Russian) entities “have continued to supply Iran with a wide variety of
missile-related goods, technology, and expertise.”13 The report confirmed that the
May 2002 sanctions under the Iran Nonproliferation Act of 2000 (P.L. 106-178) were
imposed on three PRC entities for conventional transfers to Iran related to
unspecified missiles. It also noted that the Administration did not impose new
missile proliferation sanctions (under the AECA and EAA) between November 2001
and May 2002. (The Iran Nonproliferation Act authorizes sanctions on a foreign
person based on “credible information” of a transfer to Iran (not necessarily a
weapons program) of technology controlled by multilateral nonproliferation regimes.
The AECA and EAA require sanctions based on a Presidential determination that a
foreign entity “knowingly” transferred any MTCR missile equipment or technology
to a program for an MTCR Category I missile.)
On May 23, 2003, the Administration imposed sanctions on NORINCO and
Iran’s Shahid Hemmat Industrial Group, under Executive Order (E.O.) 12938 (as
amended by E.O. 13094). According to U.S. officials, the Administration banned
imports from NORINCO for two years (worth over $100 million annually), because
it transferred missile technology to Iran, even after the PRC issued missile technology
export controls in August 2002, that would assist the development of medium- or
long-range ballistic missiles, reported Reuters (May 22) and Wall Street Journal
(May 23, 2003). E.O. 12938 requires sanctions if the Secretary of State determines
that a foreign person has “materially contributed or attempted to contribute
materially” to WMD or missile proliferation. Again on June 26, 2003, the
Administration imposed sanctions under the Iran Nonproliferation Act on five PRC
entities (including NORINCO) and one North Korean entity. The State Department
noted that it added in the Act’s required report to Congress (a classified report was
submitted on June 25) transfers of items that have the potential to make a “material
contribution” to WMD, cruise missiles, or ballistic missiles, even if the items fall
below the parameters of multilateral export control lists. The DCI reported in
November 2003 that, in the first half of 2003, PRC (and former Soviet and North
13 President Clinton declared the national emergency with respect to the proliferation of
weapons of mass destruction in Executive Order 12938 on November 14, 1994. President
George W. Bush, Report to Congress on the Emergency Regarding Proliferation of
Weapons of Mass Destruction, June 18, 2002.

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Korean) entities continued to supply ballistic missile-related equipment, technology,
and expertise to Iran, which is pursuing longer-range missiles. The report also said
that PRC entities provided missile-related assistance to Iran that helped it to advance
toward its goal of self-sufficient production of ballistic missiles.
On April 1, 2004, the Bush Administration imposed sanctions under the Iran
Nonproliferation Act based on “credible information” that five PRC entities (along
with other foreign entities) transferred unspecified prohibited items to Iran. Assistant
Secretary of State John Wolf testified to the House International Relations
Committee on May 18, 2004, that “most” of the sanctions related to non-nuclear
transfers, but there were concerns in the nuclear area as well.
Anti-Ship Cruise Missiles. China sold land-, sea-, and air-launched anti-
ship missiles to Iran, raising policy issues about imposing sanctions. In January
1996, Vice Admiral John Scott Redd, as Commander of the U.S. Fifth Fleet, first
reported that China supplied to Iran C-802 anti-ship cruise missiles, as disclosed in
the 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, reported the 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 argued that the transfer violated the Iran-Iraq Arms
Nonproliferation Act of 1992, 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.” Still, Einhorn contended 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 were 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, because they were “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
(CPMIEC) 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 was 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, reported Reuters (January 20, 1998). During another visit to

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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, 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 then 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, reported the 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 as saying that
China signed an $11 million agreement to improve Iran’s FL-10 anti-ship cruise
missiles. 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.
On May 9, 2002, the Bush Administration imposed sanctions on eight PRC
entities, under the Iran Nonproliferation Act of 2000, for unspecified transfers. The
Washington Times (May 17 and July 26, 2002) reported that Iran had acquired PRC
patrol boats armed with anti-ship cruise missiles. Also, the Washington Times
alleged on May 20, 2002, that three of the sanctioned PRC entities had transferred
cruise missile components to Iran. These entities were reported to be: China
Shipbuilding Trading Co., CPMIEC, and China National Aero-Technology Import
and Export Corp., and they allegedly helped Iran to develop a new ground-launched
anti-ship cruise missile with a range of about 310 miles. In June 2002, the
President’s report on weapons proliferation confirmed that three of the PRC entities
sanctioned in May had engaged in “conventional weapons-related cooperation with
Iran,” but it did not specify whether the entities engaged in the proliferation of
ballistic and/or cruise missiles.14
On July 9, 2002, the Administration again imposed sanctions on China
Shipbuilding Trading Co., this time under the Iran-Iraq Arms Nonproliferation Act
of 1992 (P.L. 102-484) (in addition to eight PRC entities sanctioned for chemical
weapons proliferation in Iran). It was the first use of this law. The sanctions on
China Shipbuilding appeared to be for “knowingly and materially” contributing to
the proliferation of destabilizing numbers and types of cruise missiles in Iran. The
Administration did not apply sanctions to the PRC government.
The China Aerospace Science and Technology Corporation (CASC) was
collaborating with Iran to produce C-701 and C-801 anti-ship cruise missiles,
reported Jane’s Defense Weekly (December 4, 2002). CASC is a defense-industry
corporation under the PRC’s State Council.
14 President George W. Bush, Report to Congress on the Emergency Regarding
Proliferation of Weapons of Mass Destruction, June 18, 2002.

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Chemical Sales to Iran
Concerning chemical weapons, the Washington Post of March 8, 1996, reported
that U.S. intelligence, for over one year, was monitoring transfers of precursor
chemicals and chemical-related equipment from China to Iranian organizations
affiliated with the military or the Revolutionary Guards. According to the report, the
equipment included glass-lined vessels for mixing the caustic precursors and special
air filtration equipment to prevent poison gas leaks. Iran was also reportedly 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, banning U.S. government procurement and imports,
were imposed under the AECA and EAA, as amended by the Chemical and
Biological Weapons Control and Warfare Elimination Act of 1991 (P.L. 102-182).
However, the Administration did not impose sanctions under the Iran-Iraq Arms
Nonproliferation Act of 1992 (affecting “persons” or “countries”), because the
transfers apparently occurred before February 10, 1996, the date when provisions on
WMD proliferation took effect, as amended by the FY1996 National Defense
Authorization Act (P.L. 104-106). Also, the State Department said that it had no
evidence that the PRC or Hong Kong governments were involved.
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,
reported the Washington Times (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, supplied to Iran 500 tons of phosphorus
pentasulphide (controlled by the AG for making nerve agents).
On June 14, 2001, the 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 companies sanctioned in 1997) for
proliferation of chemical weapons-related materials or equipment to Iran. According
to the Washington Times (June 28, 2001), the PRC company helped Iran to build a
factory to manufacture dual-use equipment applicable to chemical weapons. Again,
on January 16, 2002, the Administration imposed similar sanctions (for transfers of
chemical and/or biological items controlled by the Australia Group) on Liyang
Chemical Equipment Company, China Machinery and Electric Equipment Import
and Export Company, and a PRC citizen (Chen Qingchang). Chen was also
sanctioned in 1997. Sanctions were imposed for two years, but there was no
economic effect because of the absence of U.S. government contracts, assistance,
arms sales, or dual-use exports with/to such “persons.”
With those actions, the State Department did not impose sanctions under the
AECA, EAA, or the Iran-Iraq Arms Nonproliferation Act, apparently because unlike
those laws, the Iran Nonproliferation Act requires semi-annual reports to Congress

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and authorizes sanctions based on “credible information” that a person, since 1999,
transferred to Iran items controlled by multilateral export control lists (NSG, MTCR,
AG, CWC, or Wassenaar Arrangement). The Administration again imposed
sanctions under the Iran Nonproliferation Act on May 9, 2002, and a Presidential
report to Congress in June 2002 confirmed that five of the eight PRC entities were
sanctioned for transferring AG-controlled items to Iran.15 The Washington Times
(May 20, 2002) said that the transfers involved anti-corrosive glass-lined equipment
to make chemical weapons and that NORINCO was sanctioned but not listed among
the eight publicly named PRC entities.
On July 9, 2002, the Bush Administration imposed sanctions under the Iran-Iraq
Arms Nonproliferation Act of 1992 (in the first use of this law), as well as the AECA
and EAA (as amended by the Chemical and Biological Weapons Control and
Warfare Elimination Act of 1991), on eight PRC entities (including those previously
sanctioned) for “knowingly and materially” contributing to Iran’s chemical weapons
program, according to the State Department. The Administration did not impose
sanctions under the Iran-Iraq Act on the PRC government. The Washington Times
(July 19, 2002) reported that the transfers took place between September 2000 and
October 2001.
The DCI’s November 2003 report said that, in the first half of 2003, evidence
showed that PRC entities continued to provide dual-use production equipment and
technology related to chemical weapons to Iran, despite sanctions. On April 1, 2004,
the Bush Administration imposed sanctions under the Iran Nonproliferation Act
based on “credible information” that five PRC entities transferred unspecified
prohibited items to Iran, which might include chemical weapon-related items.
North Korea’s Missile and Nuclear Weapons Programs
Since 1998, there have been public reports about and U.S. government
confirmation of PRC assistance to North Korea’s missile program. There are
questions about whether the PRC has interests in North Korea’s missile advances.
The PRC’s Lieutenant General Xiong Guangkai, a Deputy Chief of General Staff,
visited North Korea in early August 1998, before the surprising test-firing of a three-
stage, medium-range Taepo Dong 1 missile on August 31, 1998. However, increased
worries about North Korea’s missile program spurred U.S. and Japanese support for
missile defenses opposed by China. Some say PRC entities acted on their own.
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 was not confirmed to be linked to the Taepo Dong MRBM program, said
the Washington Times (February 23, 1999). An NSA report dated March 8, 1999,
suggested that China sold specialty steel for use in North Korea’s missile program,
reported the Washington Times (April 15, 1999). In June 1999, U.S. intelligence
reportedly found that PRC entities transferred accelerometers, gyroscopes, and
15 President George W. Bush, Report to Congress on the Emergency Regarding
Proliferation of Weapons of Mass Destruction, June 18, 2002.

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CRS-16
precision grinding machinery to North Korea, according to the Washington Times
(July 20, 1999). An October 20, 1999 classified report was 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, reported the
Washington Times (November 19, 1999). In December 1999, the NSA discovered
an alleged PRC deal to supply unspecified PRC-made missile-related items to North
Korea through a Hong Kong company, said the Washington Times (January 1, 2000).
The DCI first publicly confirmed PRC supplies to North Korea in July 1999.
The DCI’s April 2003 report said that, in the first half of 2002, North Korea
continued to procure missile-related raw materials and components from foreign
sources, but it dropped a previous reference about those foreign supplies as especially
going through North Korean firms in China. There are direct implications for U.S.
national security, since DCI George Tenet confirmed that North Korea has a missile
capable of striking the U.S. west coast and probably has one or two plutonium-based
nuclear devices, in testimony to the Senate Armed Services Committee on February
12, 2003. PRC technology transfers have further implications for secondary, or
retransferred, proliferation, since North Korea reportedly has supplied technology to
Iran, Syria, Pakistan, Egypt, Libya, and Yemen.
A serious case of such secondary proliferation involves North Korea’s secret
program to enrich uranium to develop nuclear weapons, a program surprisingly
acknowledged by North Korea during talks on October 4, 2002, but not publicly
disclosed by the Bush Administration until October 16, 2002. The DCI’s April 2003
report stated that the United States was suspicious of a uranium enrichment program
in North Korea for “several years” but did not obtain “clear evidence indicating that
North Korea had begun constructing a centrifuge facility until recently.” While the
DCI previously reported that North Korea has another program using plutonium that
produced one or two nuclear weapons, the Washington Post reported on April 28,
2004, that U.S. intelligence newly estimated that North Korea has at least eight
nuclear weapons. (Also see CRS Issue Brief IB91141, North Korea’s Nuclear
Weapons Program, by Larry Niksch.)
This case raises a question about whether China’s nuclear technology has
indirectly contributed to North Korea’s nuclear weapons program through Pakistan,
since China was the “principal supplier” to Pakistan’s nuclear weapons program.
There are also questions about China’s knowledge about the Pakistani-North Korean
trade and whether Beijing has shared its intelligence with the United States.
The New York Times and Washington Post reported on October 18, 2002, that
U.S. officials believed Pakistan provided equipment, including gas centrifuges, for
the North Korean uranium enrichment program, in return for North Korea’s supply
of Nodong MRBMs to Pakistan by 1998. Another Washington Post report added on
November 13, 2002, that the Bush Administration has knowledge that Pakistan
continued to provide nuclear technology to North Korea through the summer of 2002.
Henry Sokolski of the Nonproliferation Policy Education Center wrote in National
Review Online (November 19, 2002) that “one might call on Pakistan, Russia, and
China to detail what nuclear technology and hardware they allowed North Korea to
import.” John Tkacik of the Heritage Foundation wrote in the Asian Wall Street
Journal (December 2, 2002) that most in the U.S. intelligence community doubt

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China was “completely in the dark,” as PRC President Jiang Zemin said at his
summit with President Bush at Crawford, TX, in October 2002. The New York
Times reported on January 4, 2004, about a history of nuclear technology
proliferating from Pakistan’s Khan Research Laboratories headed by Abdul Qadeer
Khan and disclosed that he transferred designs for uranium-enrichment centrifuges
to China first. DCI George Tenet publicly testified to the Senate Intelligence
Committee on February 24, 2004, that North Korea is pursuing a “production-scale
uranium enrichment program based on technology provided by A.Q. Khan.”
Moreover, there may be PRC firms directly or indirectly involved in North
Korea’s nuclear weapons programs or weapons proliferation to other countries. In
June 1999, authorities in India inspected the North Korean freighter Kuwolsan and
found an assembly line for Scud ballistic missiles intended for Libya, including many
parts and machines from China or Japan, according to the Washington Post (August
14, 2003). The Washington Times reported on December 9 and 17, 2002, that a PRC
company in the northeastern coastal city of Dalian sold to North Korea 20 tons of
tributyl phosphate (TBP), a dual-use chemical that U.S. intelligence reportedly
believed would be used in the North Korean nuclear weapons program.
There are also questions about China’s role in allowing Pakistani, North Korean,
and Iranian ships and planes to use PRC ports and airspace (and perhaps military
airfields). China’s possible cooperation in interdiction, restrictions in the use of its
ports and airfields, law-enforcement, and intelligence-sharing has become a salient
question in light of the Bush Administration’s Proliferation Security Initiative (PSI)
announced in May 2003. As part of the military trade between Pakistan and North
Korea, in July 2002, Pakistan flew a C-130 transport aircraft to pick up missile parts
in North Korea, reported the New York Times (November 24, 2002). In December
2002, the Spanish and U.S. navies interdicted a North Korean ship (So San) with
Scud missiles bound for Yemen, and the Spanish Defense Minister reported that the
ship’s last port of call was in China. In addition, an Iranian ship stopped at the
Tianjin port in China and picked up missile components before sailing on to North
Korea to take delivery of missiles and rocket fuel in February and November 2002,
reported the South Korean newspaper, Joong Ang Ilbo (December 19, 2002). From
April to July 2003, China reportedly gave overflight rights to Iranian Il-76 cargo
planes that flew to North Korea at least six times to pick up wooden crates suspected
of containing cruise missiles, and the Bush Administration lodged a diplomatic
protest with Beijing, reported Time (Asian edition) on July 14, 2003. At a hearing
held by the Senate Foreign Relations Committee on September 11, 2003, on U.S.-
China relations, Assistant Secretary of State James Kelly confirmed to Senator
Russell Feingold that the State Department raised with China the issue of North
Korean planes flying through PRC airspace or making refueling stops in China.
Since the Bush Administration’s October 2002 disclosure about North Korea’s
ongoing nuclear weapons programs, it has sought China’s cooperation in a
multilateral effort (not repeating bilateral negotiations as North Korea has demanded)
to achieve the complete, verifiable, and irreversible dismantlement (not just a freeze)
of North Korea’s nuclear weapons programs (both using plutonium and uranium) as
well as nuclear weapons. At the October 25, 2002 summit in Crawford, TX, PRC
leader Jiang Zemin agreed with Bush on the objectives of a nuclear-free Korean
peninsula, peace and stability, and a peaceful resolution.

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However, some have questioned whether China has been too restrained in using
its leverage with North Korea. China appears to have additional concerns, including
(1) a preference for stability and international sustainment of the North Korean
regime rather than its collapse (fearing conflict, a massive influx of refugees, and the
loss of a perceived buffer between China and U.S. forces); (2) fear of losing
international standing in any appearances of limited PRC influence; and (3) questions
about whether Beijing’s support for Washington would result in limits in U.S.
support for Taiwan in the longer term. Others have questioned whether China even
has sufficient leverage.
On February 7, 2003, Bush said he had to “remind” Jiang of “joint
responsibilities” in achieving common objectives concerning North Korea. Two days
later, Secretary of State Colin Powell said in an interview on Fox News Sunday that
China has “considerable influence with North Korea.” Powell reported that North
Korea depends on China for 80 percent of its energy and economic activity, and
urged China to play an active role in the dispute. While in Beijing on February 24,
2003, Secretary Powell noted that “the United States and China share the goal of a
diplomatic and peaceful resolution to this problem. It cannot simply be treated,
however, as a bilateral matter between the United States and North Korea.”16 Later,
in November, Powell disclosed that after he had pressed the need for China to “rise
to its responsibilities in dealing with this regional problem,” PRC Vice Premier Qian
Qichen made an “important contribution” in March 2003 by flying to North Korea
and delivering the message that “there would be no alternative to multilateral talks
in which all countries of the region would be fully involved, China included.”17
Thus, on April 23-25, 2003, China hosted trilateral talks among China, North
Korea, and the United States (without South Korea, Japan, and Russia), and Secretary
Powell noted positively that “China has stepped up.” On June 9, 2003, in Tokyo,
Deputy Secretary of State Richard Armitage “saluted” China’s cooperation on the
problem of North Korea and declared “a new phase of our relationship with China.”
In mid-July 2003, PRC President Hu Jintao dispatched Deputy Foreign Minister Dai
Bingguo to Pyongyang with a letter for Kim Jong-Il that proposed a multilateral
meeting with U.S.-North Korean talks on the sidelines, reported the New York Times
(July 16, 2003). On August 27-29, China hosted the first round of six-country talks,
but North Korea threatened to test a nuclear weapon. In early September 2003,
China’s replaced paramilitary troops with People’s Liberation Army (PLA) military
soldiers along its border with North Korea, according to a Hong Kong report and as
confirmed by the PRC Foreign Ministry (People’s Daily, September 16, 2003),
apparently to warn North Korea against provocations to raise tensions.
16 Department of State, “Secretary Colin L. Powell’s press conference,” Beijing, China,
February 24, 2003.
17 Department of State, “Secretary of State Colin L. Powell’s Remarks at Conference on
China-U.S. Relations,” College Station, Texas, November 5, 2003.

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The Administration sought another round of multilateral talks before the end of
2003, with a tentative date set by November for around December 17,18 but the talks
were not held then. When PRC Premier Wen Jiabao visited President Bush at the
White House on December 9, 2003, the Taiwan question eclipsed the issue of North
Korea in their discussions. The Washington Post disclosed on January 7, 2004, that
at a meeting in Seoul the week before, a PRC diplomat, Fu Ying, questioned the
credibility of U.S. intelligence that North Korea has a highly enriched uranium
program. China hosted the second round of six-party talks on February 25-28, 2004,
for which Assistant Secretary of State James Kelly expressed appreciation. However,
North Korea reportedly denied the suspected uranium enrichment program. The
State Department’s statement at the end of the talks did not report any progress in
either freezing or dismantling North Korea’s nuclear weapons programs, but rather
pointed to “progress on a regularized process” for peacefully resolving this issue.
Missile Technology Sales to Libya
Beginning in 2000, public reports appeared on PRC assistance to Libya’s
missile program. The Defense Department discovered in December 1999 that the
PRC had plans to build a hypersonic wind tunnel in Libya for missile design,
reported the Washington Times (January 21, 2000). A classified March 2, 2000
report by the NSA was said by the newspaper to describe the PRC’s missile
technology transfer to Libya that month, helping Libya to develop the Al Fatah
SRBM with a range of 600 miles. CPMIEC allegedly began cooperating with Libya
in March 1999, according to the Washington Times (April 13, 2000). The June 30,
2000 Washington Times, citing a classified NSA report, said that the PRC was
training Libyan missile experts at the Beijing University of Aeronautics and
Astronautics. Aside from wind tunnels, PRC assistance has also covered
navigational and guidance systems, reported Jane’s Defense Weekly (February 13,
2002). The DCI’s August 2000 report publicly confirmed PRC missile assistance to
Libya for the first time. The DCI’s November 2003 report said that in the first half
of 2003, Libya continued to depend on assistance from PRC and other “entities” for
developing ballistic missiles. A news report in February 2004 said that the Pakistani
network headed by A.Q. Khan sold Libya a nuclear bomb design that originated in
China, raising questions about China’s role in and knowledge about proliferation.19
Missile Technology Sales to Syria
A Pentagon report in 2001 said that PRC firms, in addition to North Korean and
Russian entities, contributed equipment and technology to Syria’s liquid fuel missile
program.20 However, while criticizing North Korean and Russian assistance to
Syria’s ballistic missile development, Under Secretary of State John Bolton did not
cite PRC help at a speech at the Heritage Foundation on May 6, 2002. The DCI’s
public reports have not specified PRC assistance for Syria’s missile program.
18 Kyodo News, November 24, 2003.
19 Joby Warrick and Peter Slevin, “Libyan Arms Designs Traced Back to China,”
Washington Post, February 15, 2004.
20 Secretary of Defense, Proliferation: Threat and Response, January 2001.

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CRS-20
Policy Issues and Options
Issues for Policy
Weapons proliferation by the PRC and/or its organizations raises policy issues
concerning: (1) assessments of the nature and seriousness of the PRC government’s
role in the proliferation threat; (2) the priority of this issue relative to other U.S.
interests (i.e., other security issues, Taiwan, trade, human rights); and (3) U.S.
leadership and leverage (including the use of sanctions and diplomacy, and
congressional actions) to obtain China’s cooperation in nonproliferation.
Debate. Successive Administrations have pursued a policy of “engagement”
with Beijing. Some policymakers and advocates stress a cooperative approach. In
1998, President Clinton issued certifications to implement the 1985 Nuclear
Cooperation Agreement. The Clinton Administration also encouraged the PRC to
join the MTCR and proposed to allow more PRC satellite launches. In November
2000, the State Department agreed to waive sanctions and consider new satellite
exports in return for another missile non-proliferation pledge from China. Some
officials and experts cite PRC nonproliferation statements as signs that the United
States made progress in nonproliferation goals. Some also say that U.S. sanctions are
counterproductive and are too broad. Rather, they note that China needs to recognize
nonproliferation for its own national interests and develop stronger export controls,
perhaps with U.S. assistance. Also, some stress that China would be more
cooperative if brought in to draw up “the rules.” Some argue that “entities” in China
largely operate without the PRC government’s knowledge.
Critics argue that the “engagement” policy needs a tougher approach to counter
China’s activities that undermine U.S. security interests. They note that PRC
weapons proliferation activities have continued and repeated PRC assurances have
proved to be unreliable. Also, they say that U.S. security interests are better served
with a stronger approach to deter China’s transfers, which may include appropriate
sanctions. Some argue that the United States should not “subsidize” China’s missile
and nuclear industries. These proponents tend to see the U.S. position as stronger
than China’s. Some are skeptical that China sees nonproliferation as in its national
interest, since Beijing has made progress in nonproliferation commitments as part of
improving relations with Washington (surrounding summits) and tried to use its sales
as a form of leverage against Washington, especially on the issue of U.S. arms sales
to Taiwan. They note that PRC export controls are weak, even as government
repression can be harsh (e.g., against Falungong practitioners). They also doubt that
trade in sensitive nuclear weapons and missile technology can continue without the
knowledge of the PRC government and/or its military, especially given the status of
certain state-owned and defense-industrial enterprises as “serial proliferators.”
The PRC Government’s Role. Concerning the debate about any knowledge
or approval of the PRC government, at a hearing of the Senate Armed Services
Committee on March 19, 2002, DCI George Tenet told Senator Carl Levin that while
PRC firms sometimes operate on their own, there are instances in which “activities
are condoned by the government.” The DCI’s January 2003 report to Congress noted
that PRC entities could have continued contacts with Pakistani nuclear weapons

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CRS-21
facilities “without Beijing’s knowledge or permission,” but this comment was
dropped from the April 2003 report. The Director of the Defense Intelligence
Agency (DIA), Vice Admiral Lowell Jacoby, testified to the Senate Intelligence
Committee on February 24, 2004, that PRC entities “remain involved with nuclear
and missile programs in Pakistan and Iran,” while “in some cases,” the entities are
involved without the government’s knowledge, implying that there may be cases in
which the PRC government has knowledge of the relationships.
No matter what options are pursued, many argue that U.S. leadership and a
forward-looking and credible 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. Policy issues
have often centered on summitry, sanctions, and satellite exports.
Foreign and Defense Policies
Summits. After the downturn in U.S.-PRC relations because of the 1989
Tiananmen crackdown, the Clinton Administration resumed high-level exchanges in
1993 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 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. But China refused to join the MTCR, saying
that it was “actively studying” whether to join.
President Bush raised the unresolved missile proliferation issue in Shanghai in
October 2001 and in Beijing in February 2002. As Deputy Secretary of State Richard
Armitage arrived in Beijing to discuss the Bush-Jiang summit in Crawford, TX, on
October 25, 2002, China, on August 25, 2002, published the missile export control
regulations promised in November 2000, along with a control list that is modeled on
the MTCR. In addition, on October 14, 2002, the PRC issued regulations for export
controls over dual-use biological agents. China continued to approach weapon
nonproliferation as more a part of the U.S.-PRC relationship than a commitment to
international nonproliferation standards. At that summit, President Bush called
China an “ally” in the fight against terrorism.
With the improvement in U.S.-PRC relations, however, some observers say that
President Bush has not forcefully pressed China’s leaders on weapons
nonproliferation as a priority issue, even while imposing numerous U.S. sanctions.21
21 For example, Robert Einhorn, former Assistant Secretary of State for Nonproliferation in
(continued...)

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CRS-22
Briefing reporters on President Bush’s meeting with PRC President Hu Jintao in
France on June 1, 2003, a senior White House official acknowledged that the two
leaders did not discuss U.S. sanctions on NORINCO (which the Administration had
just imposed on May 23, 2003, for missile technology transfers to Iran) and that
President Hu did not respond to Bush’s general concerns about Iran’s nuclear
weapons program.22 In Thailand in October 2003, at another meeting between the
two presidents, Bush noted that they had a “very constructive dialogue” on trade,
Iraq, counter-terrorism, and North Korea, but he did not mention weapons
proliferation as an issue with China, although the Administration had imposed
another set of missile proliferation sanctions on NORINCO a month earlier.23 While
the White House hosted PRC Premier Wen Jiabao on December 9, 2003, a senior
official told reporters that “the President applauded the new Chinese white paper on
nonproliferation but noted that there is a need for tough implementation of the
commitments contained in that white paper” (just issued on December 3, 2003, on
the eve of Wen’s visit). But again, Bush did not highlight the issue of weapons
proliferation with China in his public remarks.24 Also, China did not join the 11
original members of the Proliferation Security Initiative (PSI) plus Norway,
Denmark, Singapore, and Canada in sending representatives to a meeting in
Washington on December 16-17, 2003, shortly after Premier Wen’s visit.25
Counter-Terrorism Campaign. The terrorist attacks of 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 as well as cooperation
in not further adding to instability in South Asia. Also, the Bush Administration
could maintain or strengthen its response to the proliferation problem, since PRC
entities have reportedly transferred nuclear, missile, and/or chemical weapons
technology to sponsors of terrorism (listed by the State Department), such as Iran,
21 (...continued)
the Clinton Administration, criticized the Bush Administration saying that “sanctions are
used, but they are usually simply imposed rather than used as a vehicle for trying to leverage
better behavior. ... There seems to be no real strategy today to try to promote continued
improvement in China’s nonproliferation record,” (“China and Non-Proliferation,” National
Interest, April 2, 2003). William Kristol, of the Project for the New American Century, in
a memo to opinion leaders, dated June 4, 2003, argued that “real progress in U.S.-China
relations is unlikely if the president is less than forceful and candid with his Chinese
counterpart on issues of importance to the United States.” Also see Susan Lawrence, “U.S.
Presses China on Arms, Quietly,” Wall Street Journal, October 30, 2003.
22 White House, “Background Press Briefing by Senior Administration Official on the
President’s Meeting with Chinese President Hu,” Evian, France, June 1, 2003.
23 White House, “Remarks by President Bush and President Hu Jintao of China,” Bangkok,
Thailand, October 19, 2003.
24 White House, “Remarks by President Bush and Premier Wen Jiabao in Arrival Ceremony”
and “Background Briefing on President’s Meeting with Chinese Premier Wen,” December
9, 2003.
25 Department of State, “Proliferation Security Initiative: Next Experts Meeting, China’s
Role,” December 3, 2003.

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CRS-23
North Korea, and Libya. If the Administration lifts sanctions for cooperating
countries, options include waiving proliferation sanctions on the PRC. (On China’s
role in counter-terrorism, see “People’s Republic of China” in the CRS Terrorism
Briefing Book, [http://www.congress.gov/brbk/html/ebter67.html], by Shirley Kan.)
In his January 29, 2002 State of the Union speech, Bush identified the two
primary threats as terrorism and weapons proliferation. He then issued the National
Security Strategy on September 20, 2002, warning:
The gravest danger our Nation faces lies at the crossroads of radicalism and
technology. Our enemies have openly declared that they are seeking weapons of
mass destruction, and evidence indicates that they are doing so with
determination. The United States will not allow these efforts to succeed. We
will build defenses against ballistic missiles and other means of delivery. We
will cooperate with other nations to deny, contain, and curtail our enemies’
efforts to acquire dangerous technologies. And, as a matter of common sense
and self-defense, America will act against such emerging threats before they are
fully formed. ...
Missile Defense and Counter-Proliferation. Some say that missile
defense should play a critical role in the strategy to counter the proliferation threat.
Others say the September 2001 attacks increased doubts about the likelihood of
terrorists using missiles for weapons delivery. China has opposed U.S. deployment
of missile defense systems and related 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
missile defense 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,
reported the Washington Post (July 14, 2000). Others say that PRC proliferation
activities and missile buildups would continue regardless.
On December 11, 2002, President Bush issued his National Strategy to Combat
Weapons of Mass Destruction, resting on the three pillars of counterproliferation,
nonproliferation, and response. The first pillar, counterproliferation, included
interdiction, deterrence, and defense (including preemptive measures and missile
defenses). On May 31, 2003, in Poland, President Bush announced the Proliferation
Security Initiative (PSI) to step up multinational efforts at interdiction and
intelligence-sharing. However, China has not joined the PSI, despite talks held by
Under Secretary of State for Arms Control and International Security John Bolton in
Beijing on February 16, 2004. But Bolton noted that “in the past several years, we
have had cooperation with China in some interdiction efforts.” China reportedly
seized a shipment of tributyl phosphate (TBP), a material used for nuclear weapons,
suspected by the CIA on a train bound for North Korea in the summer of 2003,
reported Asahi Shimbun (February 22, 2004).
The United States faces a challenge in obtaining China’s cooperation in counter-
proliferation (e.g., interdiction of shipments, inspections, or intelligence-sharing),

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CRS-24
given its long-lasting negative and emotional reaction to U.S. inspection in 1993 of
the PRC ship, Yinhe, which was suspected of carrying chemicals for Iran. Also,
China may have greater doubts about the credibility of U.S. intelligence after
President Bush launched the highly controversial war on Iraq in 2003 and failed to
find WMD in Iraq.
Export Control Assistance. The United States may provide assistance to
strengthen China’s export controls, including the areas of legislation, regulations,
licensing, customs, border security, and law-enforcement. The Departments of
Commerce and State testified to the Senate Governmental Affairs Subcommittee on
International Security, Proliferation, and Federal Services on June 6, 2002, that such
bilateral exchanges were very limited.
Linkage to the Taiwan Issue. China has tried to link the separate issues of
missile proliferation and U.S. conventional arms sales for Taiwan’s defense.
Congress has exercised oversight of the Administration’s response to any such
linkage. During the 1998 summit in Beijing, the Clinton White House reportedly
considered a PRC request for a U.S. pledge to deny missile defense sales to Taiwan,
if China promised to stop missile sales to Iran; but no agreement was reached,
reported the Far Eastern Economic Review (July 16, 1998). On February 26, 2002,
before the Director General in charge of arms control at the PRC Foreign Ministry,
Liu Jieyi, attended meetings in Washington on March 4-6, an unnamed PRC foreign
ministry official told the Associated Press that the United States “can’t just accuse
us of violating our commitments and at the same sell large amounts of arms to
Taiwan,” since such arms sales are “also a kind of proliferation.” The
Administration has cited the Taiwan Relations Act (TRA) as committing the United
States to provide defense articles and services for Taiwan’s sufficient self-defense.
Economic Controls
Satellite Exports. There have been debates about U.S. policy using satellite
exports to gain China’s cooperation in missile nonproliferation. Since 1988, the
policy of granting licenses to export satellites to China as well as Presidential waivers
of post-Tiananmen sanctions (Section 902 of 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 reported Secret memo
on bilateral talks leading up to the 1998 summit (dated March 12, 1998, and printed
in the March 23, 1998 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 sanctions as well as resume processing — not necessarily approving —
licenses (suspended in February 2000) to export satellites to China and discuss an
extension of the bilateral space launch agreement (expired at the end of 2001), in
return for another PRC promise on missile nonproliferation.
However, on September 1, 2001, the Bush Administration imposed sanctions
for two years on a PRC company, the China Metallurgical Equipment Corporation
(CMEC), for proliferation of missile technology to Pakistan, denying satellite exports

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CRS-25
to China. Before those sanctions expired, the State Department determined on
August 29, 2003, that NORINCO substantially contributed to missile proliferation
of Category II MTCR items and imposed sanctions that again effectively banned
satellite exports to China. (See Sanctions below.) The last Presidential waiver for
satellite exports to China was issued in February 1998. (See CRS Report 98-485,
China: Possible Missile Technology Transfers Under U.S. Satellite Export Policy —
Actions and Chronology, by Shirley Kan.)
Sanctions and the “Helms Amendment”. Policy debates concerning
PRC technology transfers have often centered on the questions of whether to impose
unilateral sanctions under U.S. laws, to enact new legislation to tighten mandates for
sanctions or reports, or to integrate the multiple laws. Also, there have been the
issues of whether to target the PRC government or PRC “entities” (usually defense
industrial organizations, like CPMIEC or NORINCO) and whether the PRC
government lacks the will or the capability to enforce its stated nonproliferation
policy. While certain PRC transfers may not violate any international treaties,
sanctions may be required under U.S. laws that Congress passed to set U.S.
nonproliferation policy and shore up nonproliferation treaties and standards. These
laws, as amended, include:
! Export-Import Bank Act (P.L. 79-173)
! Arms Export Control Act (AECA) (P.L. 90-629)
! Export Administration Act (EAA) (P.L. 96-72)
! Nuclear Proliferation Prevention Act (Title VIII of P.L. 103-236)
! Iran-Iraq Arms Nonproliferation Act (P.L. 102-484)
! Iran Nonproliferation Act (P.L. 106-178)
(On legislation requiring sanctions to address weapons proliferation, see CRS Report
RL31502, Nuclear, Biological, Chemical, and Missile Proliferation Sanctions:
Selected Current Law, by Dianne Rennack.)
Underlying the question of whether sanctions should be used are disagreements
about the most effective approach for curbing dangerous PRC sales and promoting
U.S. interests and leadership. Some argue that a cooperative approach, rather than
sanctions, is more effective. Others say that current sanctions are not effective in
countering the PRC’s proliferation practices (especially with certain entities being
repeatedly sanctioned, negligible penalties, and sanctions targeting companies but not
the government) and that legislation requiring sanctions should be toughened. Still
others say current sanctions serve to stress the problem in certain countries, signal
U.S. resolve, and shore up credibility on this important security issue.
As for whether to impose or waive missile proliferation sanctions, on November
21, 2000, the Clinton Administration agreed to waive missile proliferation sanctions,
again process — not necessarily approve — licenses to export satellites to China, and
discuss an extension of the bilateral space launch agreement, in return for a new PRC
pledge on missile nonproliferation and a promise to issue missile export controls.
However, continued PRC transfers again raised the issue of imposing sanctions.
By July 2001, the United States formally protested to China about its compliance
with the agreement, reported the Washington Post (July 27, 2001). Visiting Beijing
ahead of President Bush’s trip to Shanghai in October 2001, Secretary of State Colin

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Powell, on July 28, 2001, noted “outstanding issues” about China’s implementation
of its November 2000 commitment.
On ten occasions, the Bush Administration has imposed sanctions on PRC
entities (not the government) for transfers (related to ballistic missiles, chemical
weapons, and cruise missiles) to Pakistan and Iran, under the Arms Export Control
Act, Export Administration Act, Iran Nonproliferation Act of 2000, Iran-Iraq Arms
Nonproliferation Act of 1992, and Executive Order 12938. (See the summary table,
PRC Entities Sanctioned for Weapons Proliferation, at the end of this CRS Report.)
Among the actions, on September 1, 2001, the Bush Administration imposed
sanctions (for two years) on a PRC company, the China Metallurgical Equipment
Corporation (CMEC), for proliferation of missile technology (Category II items) to
Pakistan. The sanctions had 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(a)(8)(B) of the AECA, P.L. 90-629) as all PRC
government activity affecting the development or production of missiles, electronics,
space systems, and military aircraft, and the State Department considers that satellites
are covered by the MTCR Annex (since it includes satellite parts).
In Beijing with the President in February 2002, National Security Advisor
Condoleezza Rice said that the PRC should stop “grandfathering” contracts signed
before November 2000. On August 25, 2002, the PRC published missile export
control regulations (promised in November 2000), just before Deputy Secretary of
State Richard Armitage arrived in Beijing to discuss an upcoming Bush-Jiang
summit, showing that China still viewed nonproliferation in the context of relations
with the United States. Armitage welcomed the new regulations but added that
further discussions were needed. The State Department spokesperson stressed that
questions remained about enforcement of the controls and reductions in PRC
proliferation practices. With questions about enforcement and effectiveness of the
controls, President Bush did not waive the sanctions imposed in September 2001.
Moreover, the regulations raised a number of questions, including the roles of
the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) and Ministry
of Foreign Affairs. Part 1 of that control list (missiles and other delivery systems)
and dual-use items (in Part 2) for military use are subject to the Regulations on
Administering Arms Exports issued in 1997, under the jurisdiction of the State
Council and Central Military Commission (China’s military command). Also, unlike
the MTCR, the PRC’s regulations on missile-related exports do not state a strong
presumption to deny transfers of Category I items or any missiles or other items
judged to be intended to deliver any WMD.
In the 107th Congress, Senator Thompson inserted a section in the FY2003
National Defense Authorization Act (enacted on December 2, 2002, as Section 1209
in P.L. 107-314) to require the DCI to submit semi-annual reports that identify PRC
and other foreign entities contributing to weapons proliferation. However, in signing
the legislation, President Bush stated that he would construe this and several other
sections in a manner consistent with the President’s constitutional authority to

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CRS-27
withhold information, if disclosure could harm foreign relations, national security,
or the Executive Branch’s duties.
Before the September 2001 sanctions expired, the State Department determined
on August 29, 2003, that NORINCO substantially contributed to missile proliferation
of Category II MTCR items in a publicly unidentified country and imposed sanctions
for two years that ban the issuance to NORINCO of export licenses or U.S.
government contracts for missile equipment or technology, and that ban the
importation of NORINCO’s products.
The “Helms Amendment” again applied — denying exports of satellites to
China, but the Bush Administration contended that it was “essential to national
security” to waive for one year the sanction on imports when applied to other PRC
government activities relating to missiles, electronics, space systems, and military
aircraft. The sanctions took effect on September 19, 2003. Within a year, the
Administration would have to decide on the broader sanctions on imports of non-
NORINCO products, which could affect an estimated $12 billion in imports from the
PRC.26 That decision could also affect U.S. credibility on the non-proliferation issue.
However, in April 2004, the Commerce Department agreed to review whether to
change China’s “non-market economy” status, based upon which the “Helms
Amendment” has broadened missile proliferation sanctions.
Capital Markets. During the 106th Congress, 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.)
In the 107th Congress, Senator Thompson inserted a section in the FY2003
Intelligence Authorization Act (enacted on November 27, 2002, as Section 827 in
P.L. 107-306) to require the DCI to submit annual reports on PRC and other foreign
companies that are involved in weapons proliferation and raise funds in U.S. capital
markets. Reporting the bill on May 13, 2002, the Senate Intelligence Committee (in
S.Rept. 107-149) added that it did not intend to restrict access to those markets. The
108th Congress passed the FY2004 Intelligence Authorization Act (P.L. 108-177) that
included Section 361(e) to repeal the above reporting requirement.
Nuclear Cooperation Agreement. After the PRC promised not to start new
nuclear cooperation with Iran on the eve of the 1997 U.S.-China summit, President
Clinton, on January 12, 1998, signed certifications (as required by P.L. 99-183) on
China’s nuclear nonproliferation policy and practices to implement the 1985 Nuclear
Cooperation Agreement. According to President Clinton, the agreement would serve
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 —
26 Susan Lawrence, “Duel Over Sanctions,” Far Eastern Economic Review, November 6,
2003; and author’s interview with State Department official, November 2003.

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CRS-28
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 served U.S. interests. They also pointed out
that China had not yet joined the Nuclear Suppliers Group. 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. Some Members pursued
several options to affect the agreement’s implementation. On November 5, 1997, the
House passed a bill with an amendment sponsored by Representative 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 Representative 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).
However, Nucleonics Week (March 23, 2000) and the Washington Times (May
9, 2000) reported that the Clinton 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, 2000, 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. Finally, on September 16, 2003, the Department of
Energy and China’s Atomic Energy Authority agreed on a Statement of Intent
concerning assurances from China that nuclear technology would not be retransferred
by China to third parties or used in China’s nuclear weapons program.
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 AECA and Section 11B(b)(1)(B)(iii) of the EAA, 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 are a possible policy tool, because
U.S. technology provides one source of leverage with respect to Beijing. After the
Cold War, U.S. export restrictions have been re-focused to the threat of WMD and
missiles. Some in Congress are concerned about U.S. technology reaching hostile
states with WMD programs through China. U.S. arms sales to China have been
banned under sanctions imposed after the 1989 Tiananmen Crackdown (in the

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CRS-29
Foreign Relations Authorization Act for FY1990-1991, P.L. 101-246), but there are
competing economic interests in exporting dual-use technology.
Nonproliferation and Arms Control
Nonproliferation Regimes (MTCR, NSG, etc.). Another policy approach
is to strengthen the international nonproliferation regimes. There are two prongs in
such efforts: (1) encouraging PRC support for strengthening the regimes (e.g., the
IAEA’s verification authority) to enforce compliance and (2) filling gaps in China’s
participation. Some say that efforts to include China would capitalize on its desire
to be treated as a “great power” and to be perceived as a responsible world leader.
In addition, they stress that China would be more cooperative if it helped to draw up
the “rules.” Others argue that China’s participation would risk its obstruction of
tighter export controls, possible derailing of arms control efforts, linkage of
nonproliferation issues to the Taiwan issue, and access to intelligence-sharing. One
basis for this view is the experience with the Arms Control in the Middle East effort
in the early 1990s, in which China refused to cover missiles in the effort and later
suspended its participation after President Bush decided in 1992 to sell Taiwan F-16
fighters.
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), Wassenaar Arrangement (military and dual-use export controls), and
International Code of Conduct Against Ballistic Missile Proliferation. Previously,
President Clinton’s National Security Council, in a reported 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. 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.
China was the only major nuclear supplier to shun the 40-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). In January 2004, China applied to join the NSG. However, on May 5,

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CRS-30
2004, China signed a contract to build a second nuclear power reactor (Chashma-2)
in Pakistan. This contract raised questions because of continuing PRC nuclear
cooperation with Pakistan and its signing right before a decision on May 24 by the
NSG on China’s membership. With a pre-existing contract, Chashma-2 would be
exempted from the NSG’s requirement for full-scope safeguards.27 The Bush
Administration decided to support China’s membership, after reportedly strident
debate between officials who questioned China’s commitment to nonproliferation
and those who wanted to encourage China’s further cooperation.28
On May 18, 2004, the House International Relations Committee held a hearing
to question whether the United States should support China’s membership in the
NSG, given concerns about PRC nuclear cooperation with Pakistan and Iran, about
whether China would be a spoiler in the NSG, and about loss of U.S. leverage.
Assistant Secretary of State John Wolf testified that the United States has urged
China to join the NSG since 1995, that China has not been a spoiler in the Zangger
Committee, and NSG membership will add multilateral influence on China’s nuclear
technology export policies. Wolf conceded, however, that Pakistan has a nuclear
weapons program and does not accept full-scope safeguards, and the United States
prefers that no country provide Pakistan with benefits of peaceful nuclear
cooperation. He noted that the Chashma-2 plant will be under IAEA safeguards, but
the NSG exempts full-scope safeguards for contracts signed before NSG
membership. Wolf also acknowledged that the Administration did not request that
China use its influence with Islamabad to secure tighter Pakistani export controls.
Also, he acknowledged that the Administration has not seen the contract for
Chashma-2 nor received the requested “full information” on any ongoing nuclear
cooperation projects that China seeks to grandfather.
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 the U.S. Senate rejected (51-48) the treaty on October 13, 1999, it
became doubtful that the PRC would ratify the CTBT. 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)). 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.
27 “Pakistan, China Agree on Second Chashma Unit,” Nucleonics Week, May 6, 2004.
28 Carol Giacomo, “U.S. Backs China Joining Nuclear Group,” Reuters, May 11, 2004.

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CRS-31
Table: PRC Entities Sanctioned for Weapons Proliferation
Entity/Person
Reason: Statutes
Dates
-China Great Wall Industry Corporation
Missile Proliferation:
June 25, 1991
-China Precision Machinery Import/Export Corp.
§73(a)(2)(A), Arms Export Control Act
waived on
(CPMIEC)
§11B(b)(1)(B)(i), Export Administration Act
March 23, 1992
(Category II items in MTCR Annex to Pakistan)
Ministry of Aerospace Industry, including CPMIEC,
Missile Proliferation:
August 24, 1993
and related entities, including:
§73(a)(2)(A), Arms Export Control Act
waived on
- China National Space Administration
§11B(b)(1)(B)(i), Export Administration Act
Nov. 1, 1994
- China Aerospace Corp.
(Category II items in MTCR Annex to Pakistan)
- Aviation Industries of China
- CPMIEC
- China Great Wall Industry Corp. or Group
- Chinese Academy of Space Technology
- Beijing Wan Yuan Industry Corp. (aka Wanyuan
Company or China Academy of Launch Vehicle
Technology)
- China Haiying Company
- Shanghai Astronautics Industry Bureau
- China Chang Feng Group (aka China Changfeng
Company)

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CRS-32
Entity/Person
Reason: Statutes
Dates
5 PRC citizens:
CW Proliferation:
May 21, 1997
- Liao Minglong
§81(c), Arms Export Control Act
remain in effect
- Tian Yi
§11C(c), Export Administration Act
- Chen Qingchang (aka Q.C. Chen)
(dual-use chemical precursors, equipment, and/or technology to Iran)
- Pan Yongming
- Shao Xingsheng
2 PRC companies:
- Nanjing Chemical Industries Group
- Jiangsu Yongli Chemical Engineering and Technology
Import/Export Corp.
1 Hong Kong company:
- Cheong Yee Ltd.
Jiangsu Yongli Chemicals and Technology
CW/BW Proliferation:
June 14, 2001
Import/Export Corp.
§3, Iran Nonproliferation Act
for two years
China Metallurgical Equipment Corp. (aka CMEC,
Missile Proliferation:
Sept. 1, 2001
MECC)
§73(a)(2)(A), Arms Export Control Act
for two years
§11B(b)(1)(B)(i), Export Administration Act
(MTCR Category II items to Pakistan)
-Liyang Chemical Equipment
CW/BW Proliferation:
Jan. 16, 2002
-China Machinery and Electric Equipment
§3, Iran Nonproliferation Act
for two years
Import/Export Co.
(Australia Group controls)
-Q.C. Chen

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CRS-33
Entity/Person
Reason: Statutes
Dates
-Liyang Yunlong (aka Liyang Chemical Equipment Co.)
Weapons Proliferation:
May 9, 2002
-Zibo Chemical Equipment Plant (aka Chemet Global
§3, Iran Nonproliferation Act
for two years
Ltd.)
(AG-controlled items and conventional weapons-related technology
-China National Machinery and Electric Equipment
related to unspecified missiles)
Import and Export Co.
-Wha Cheong Tai Co.
-China Shipbuilding Trading Co.
-CPMIEC
-China Aero-Technology Import and Export Corp.
-Q.C. Chen
-Jiangsu Yongli Chemicals and Technology Import
Weapons Proliferation:
July 9, 2002
Export Corp.
§1604(b), Iran-Iraq Arms Non-Proliferation Act
for two years
-Q.C. Chen
and
-China Machinery and Equipment Import Export Corp.
§81(c), Arms Export Control Act
for one year
-China National Machinery and Equipment Import
§11C(c), Export Administration Act
Export Corp.
(chemical weapons technology to Iran)
-CMEC Machinery and Electric Equipment Import
Export Co.
-CMEC Machinery and Electrical Import Export Co.
-China Machinery and Electric Equipment Import Export
Co.
-Wha Cheong Tai Co.
-China Shipbuilding Trading Co.
only under Iran-Iraq Arms Nonproliferation Act
(cruise missile technology)
North China Industries Corporation (NORINCO)
Missile Proliferation:
May 23, 2003
Executive Order 12938 (amended by Executive Order 13094)
for two years
(missile technology to Iran)

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CRS-34
Entity/Person
Reason: Statutes
Dates
-Taian Foreign Trade General Corporation
Missile Proliferation:
June 26, 2003
-Zibo Chemical Equipment Plant
§3, Iran Nonproliferation Act
for two years
-Liyang Yunlong Chemical Equipment Group Company
-NORINCO
-CPMIEC
CPMIEC
Missile Proliferation:
July 30, 2003
Executive Order 12938
for indefinite period
(missile technology to publicly unnamed country)
NORINCO
Missile Proliferation:
Sept. 19, 2003
§73(a)(2)(A) and (C), Arms Export Control Act
for two years
§11B(b)(1)(B)(i) and (iii), Export Administration Act
Waiver for one year on
(Substantial contribution in proliferation of MTCR Category II
import ban for non-
technology to publicly unnamed country)
NORINCO products
-Beijing Institute of Opto-Electronic Technology
Weapons Proliferation:
April 1, 2004
-NORINCO
§3, Iran Nonproliferation Act
for two years
-CPMIEC
(unspecified transfers to Iran controlled under multilateral export
-Oriental Scientific Instruments Corporation
control lists or having the potential to make a material contribution to
-Zibo Chemical Equipment Plant (aka Chemet Global
WMD or cruise or ballistic missiles)
Ltd., South Industries Science and Technology Trading
Company)
Note: This table summarizes the discussion of sanctions in this CRS Report and was compiled based on publication of notices in the Federal Register, reports and statements of the
Administration, legislation enacted by Congress, and news reports.

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