Chinese Nuclear and Missile Proliferation




Updated October 24, 2023
Chinese Nuclear and Missile Proliferation
The U.S. government has continued to express concerns
to Chinese nuclear export policy, as well as other Chinese
about China’s record concerning the proliferation of
nonproliferation efforts.
nuclear- and missile-related technologies to other countries,
The United States has extensive nuclear cooperation with
with more recent focus on the threat of Chinese acquisition
China, which is governed by a civil nuclear cooperation
of U.S.-origin nuclear technology. (See CRS In Focus
agreement, renewed in 2015. (See CRS Report RL33192,
IF11050, New U.S. Policy Regarding Nuclear Exports to
U.S.-China Nuclear Cooperation Agreement.) The above-
China, by Paul K. Kerr and Mary Beth D. Nikitin.) Official
described changes in Chinese behavior took place after the
U.S. government reports indicate that the Chinese
two governments concluded their first nuclear cooperation
government has apparently ended its direct involvement in
agreement in 1985. Laws subsequently adopted by
the transfer of nuclear- and missile-related items, but
Congress required, as a condition for U.S. implementation
China-based companies and individuals continue to export
of the agreement, the President to submit to Congress
goods relevant to those items, particularly to Iran and North
certain nonproliferation-related certifications, as well as a
Korea. U.S. officials have also raised concerns about
report about Beijing’s “nonproliferation policies and
entities operating in China that provide other forms of
practices.” President William Clinton stated in a January
support for proliferation-sensitive activities, such as illicit
1998 letter to Congress that China had “made substantial
finance and money laundering.
strides in joining the international nonproliferation regime,
Background
and in putting in place a comprehensive system of nuclear-
related, nationwide export controls,” since concluding the
China did not oppose new states’ acquisition of nuclear
1985 agreement.
weapons during the 1960s and 1970s, the Department of
State wrote in a declassified January 1998 report to
Beijing acceded in 1992 to the Nuclear Nonproliferation
Congress. According to a 1983 National Intelligence
Treaty (NPT) as a nuclear-weapon state (NWS) and has
Estimate (NIE), China had exported “nuclear materials
voluntary IAEA safeguards on its civil reactors. The treaty
since 1981” that were not subject to International Atomic
defines NWS as those that exploded a nuclear weapon or
Energy Agency (IAEA) safeguards. Beijing did so “mainly
other nuclear explosive device prior to January 1, 1967:
to earn hard currency,” the estimate assesses, explaining
China, France, Russia, the United Kingdom, and the United
that the
States. All other NPT states-parties are nonnuclear-weapon
states. According to the treaty, a NWS is not to transfer
Chinese became aware in 1979 that they had
nuclear weapons to “any recipient whatsoever” or to “in
insufficient resources for their initially grandiose
any way … assist, encourage, or induce any” nonnuclear-
modernization program and that they needed to
weapon state “to manufacture or otherwise acquire nuclear
generate more revenue through expanded foreign
weapons.”
trade. Accordingly, the State Council directed its
subordinate ministries in late 1979 to begin selling
China is also a participant in the Nuclear Suppliers Group
surpluses.
(NSG)—a multilateral control regime for nuclear-related
exports. The Missile Technology Control Regime (MTCR)
Consequently, according to the NIE, Beijing ended its
performs an analogous function for missiles and related
“abstention from commercial trade in conventional arms
items. China is not an MTCR partner but has agreed to
and nuclear materials.” During the 1980s and 1990s, China
adhere to the regime’s export guidelines.
transferred nuclear and missile technology to other
countries’ weapons programs. China provided assistance to
The Chinese government continues to express support for
Pakistan’s nuclear weapons program and engaged in
the international arms control and nonproliferation regime.
nuclear cooperation with Iran. Beijing exported missiles to
According to a July 2019 Chinese government publication
Pakistan, Saudi Arabia, and Iran. (For more information,
titled China’s National Defense in the New Era, “China
see CRS Report RL33192, U.S.-China Nuclear
actively participates in international arms control,
Cooperation Agreement, by Mark Holt, Mary Beth D.
disarmament and non-proliferation” and “objects to arms
Nikitin, and Paul K. Kerr.)
race and strives to protect global strategic balance and
stability.” Similarly, Fu Cong, Director General of the
According to U.S. government reports and official
Department of Arms Control of China’s Ministry of
statements, China significantly curtailed its nuclear- and
Foreign Affairs, stated during a December 2020 conference
missile-related transfers during the 1990s; Beijing also
that “China is ready to enhance non-proliferation policy
committed to improving the government’s export controls.
exchanges and cooperation with all countries, including the
For example, the 1998 State Department report cited above
incoming U.S. administration.” More recently, China’s
noted China’s 1996 pledge to refrain from assisting
Ambassador for Disarmament Affairs of China Ll Song
unsafeguarded nuclear facilities and Beijing’s 1997 changes
explained in a October 2022 statement to the UN General
https://crsreports.congress.gov

Chinese Nuclear and Missile Proliferation
Assembly that Beijing “has played an active part in and
U.S. officials have described other concerns with regard to
worked to advance the international arms control,
Chinese proliferation behavior, such as money laundering,
disarmament and non-proliferation process.”
the provision of illicit financial services, and illegitimate
Current Proliferation Concerns
procurement by entities operating within China. According
to a 2018 Department of the Treasury report, “Chinese
As noted, official U.S. government reports indicate that the
entities and individuals” have engaged in proliferation
Chinese government has apparently ceased direct
financing activities “for the benefit of” Iranian and North
involvement in nuclear-related proliferation and transfers of
Korean weapons of mass destruction (WMD) programs. A
complete missile systems. However, Chinese entities have
2017 Department of the Treasury report similarly assesses
continued to engage in proliferation, according to the U.S.
that North Korea uses
government, which has also repeatedly expressed concerns
with regard to weaknesses in China’s export control system.
a network of financial representatives, primarily in
China, who operate as agents for North Korean
According to a 2019 Department of State report regarding
financial institutions … these representatives
states’ compliance with nonproliferation and arms control
agreements, “Chinese entities” continued in 2018 “to
orchestrate schemes, set up front or shell
supply MTCR-controlled items to missile programs of
companies, and manage surreptitious bank accounts
proliferation concern, including those in Iran, North Korea,
to move and disguise illicit funds, evade sanctions,
Syria, and Pakistan.” The United States also “raised a
and finance North Korea’s WMD … programs.
number of [other] cases with China concerning” Chinese
Then-Deputy Assistant Secretary of State Alex Wong
entities’ missile technology transfers to “programs of
asserted in November 2020 that “China hosts no less than
concern” in those same countries, according to the report,
two dozen North Korean WMD and ballistic missile
which added that, despite U.S. requests for Beijing to
procurement representatives and bank representatives.”
“investigate and put a stop to such activities, most of these
China has flouted UN Security Council resolutions’
cases remain unresolved.”
requirements to expel such representatives, Wong claimed,
The 2021 version of the report states only that “Chinese
adding that, although the United States has “provided China
entities continued to supply MTCR-controlled goods to
with ample actionable information” on these activities,
missile programs of proliferation concern.” Subsequent
Beijing “has chosen not to act.” The Department of the
editions of the report contain similar language. The U.S.
Treasury sanctioned two North Korean nationals “involved
government “has continued to engage” China “on
in the procurement of equipment and materials” to support
proliferation cases involving transfers of sensitive
North Korea’s ballistic missile program, according to a
technology from or through” the country “to programs of
June 15, 2023, announcement, which added that Pyongyang
concern,” according to a different State Department report
“continues to utilize a network of representatives” in China
covering 2022.
and other countries to obtain “restricted components
necessary to conduct research and development” for North
During the past several years, the United States has
Korea’s WMD programs.
sanctioned Chinese entities for proliferation:

Media outlets have reported that China is assisting in the
On October 20, 2023, the State Department announced
construction of facilities in Saudi Arabia for possible
that it was imposing sanctions on three China-based
uranium production. When asked about the topic during a
entities for working to supply “missile‐applicable items
September 2020 Senate Committee on Foreign Relations
to Pakistan’s ballistic missile program.”
hearing, Under Secretary of State for Political Affairs
• On June 6, 2023, the Department of the Treasury
David Hale declined to provide any information, citing
imposed sanctions on several Chinese entities for
classification concerns.
procuring items for use in Iran’s ballistic missile
China’s construction of five civil nuclear reactors in
program.
Pakistan’s Chashma Nuclear Power Generating St

ation has
On October 3, 2022, the U.S. government imposed
been another source of congressional concern. The United
sanctions on a Chinese company and a Chinese
States argues that only the first two Chinese reactor projects
individual for transferring controlled weapons
are consistent with Beijing’s NSG commitments. China and
technology to Iran, North Korea, and/or Syria.
Pakistan concluded contracts for these two reactors before
• On January 21, 2021, the State Department announced
China’s 2004 NSG accession. IAEA safeguards agreements
that it was imposing sanctions on three Chinese entities
are in force for all of these reactors, but NSG guidelines
for unspecified “missile technology proliferation
prohibit such projects in states, such as Pakistan, lacking
activities.”
IAEA safeguards on all of the country’s nuclear facilities.
Regarding government involvement in these sorts of
NSG members agreed in 2004 to “grandfather” only
transfers, former Deputy Assistant Secretary of State Vann
ongoing Chinese reactor projects in Pakistan, then-Assistant
Van Diepen told Politico in 2017 that, even if the transfers
Secretary of State Thomas Countryman said during a May
are not directly state-sponsored, “China hasn’t devoted the
2015 Senate Foreign Relations Committee hearing.
priority, effort, or resources to thwart” such activity, adding
“However, there was not agreement that that was an open-
that “when that continues to be the case over 20 years, even
ended clause,” Countryman explained, adding that
when they have been criticized, over time it becomes a
additional Chinese-supplied reactors are “not consistent
choice, and you have to wonder what’s going on.”
with the [NSG] rules.”
Paul K. Kerr, Specialist in Nonproliferation
https://crsreports.congress.gov

Chinese Nuclear and Missile Proliferation

IF11737


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https://crsreports.congress.gov | IF11737 · VERSION 11 · UPDATED