Testimony: China's WMD Exports

Testimony of Gary Milhollin

Professor, University of Wisconsin Law School and
Director, Wisconsin Project on Nuclear Arms Control

Before the Senate Committee on Foreign Relations

October 8, 1997

I am pleased to appear today before this distinguished Committee. I will direct my remarks to three subjects: First, China’s exports to countries that are trying to make weapons of mass destruction, second, the strategic impact of American exports to China, and third, nuclear cooperation between the United States and China.

China’s exports to proliferant countries

Today, China’s exports are the most serious proliferation threat in the world. They have been so for the past decade and a half. Since 1980, China has supplied billions of dollars’ worth of nuclear weapon, chemical weapon and missile technology to South Asia, South Africa, South America and the Middle East. It has done so in the teeth of U.S. protests, and despite repeated promises to stop. The exports are still going on, and while they do, they make it impossible for the United States and its allies to halt the spread of weapons of mass destruction.

I have attached tables to my testimony that list China’s exports of nuclear, chemical and missile technology since 1980. The tables reveal that China has consistently undermined U.S. nonproliferation efforts for nearly two decades and is still doing so today.

Missiles

In the early 1990s, Chinese companies were caught selling Pakistan M-11 missile components. The M-11 is an accurate, solid-fuel missile that can carry a nuclear warhead about 300 kilometers. In June 1991, the Bush administration sanctioned the two offending Chinese sellers. The sanctions were supposed to last for at least two years, but they were waived less than a year later, in March 1992, when China promised to abide by the guidelines of the Missile Technology Control Regime, a multinational agreement to restrict missile sales.

But the sales continued and in August 1993, the Clinton administration applied sanctions again for two years, after determining that China had violated the U.S. missile sanctions law a second time. Then in October 1994, the United States lifted the sanctions early again, when China pledged once more to stop its missile sales and comply with the Missile Technology Control Regime.

Since 1994, the stream of missile exports has continued. U.S. satellites and human intelligence have watched missile technicians travel back and forth between Beijing and Islamabad and have watched steady transfers of missile-related equipment. U.S. officials say that China’s missile exports have continued up until the present moment, unabated.

In fact, our officials have learned that they were duped in 1992 and 1994. China was not promising what we thought it was. Our officials now realize that China interprets its promises in 1992 and 1994 so narrowly as to make them practically meaningless. It is clear that China has not complied with the Missile Technology Control Regime in the past, that it is not complying now, and that it probably never will comply unless something happens to change China’s attitude on this question.

In addition to its sales to Pakistan, China has also sold Saudi Arabia medium-range, nuclear-capable missiles, and sold Iran missile guidance components. The intelligence community has completed an air-tight finding of fact that the missile sale to Iran happened. All the legal and factual analysis necessary to apply sanctions has been finished since last year, but the findings have lain dormant since then. The State Department has chosen not to complete the administrative process because if it did, it would have to apply sanctions and give up its engagement policy. The sanctions law is not achieving either deterrence or punishment, as Congress intended.

In its latest venture, China is helping to build a plant to produce M-11 missiles in Pakistan. U.S. officials say that activity at the plant is “very high.” If the Chinese continue to help at their present rate, the plant could be ready for missile production within a year. This activity, combined with the State Department’s refusal to apply sanctions to China, means that the United States is now giving a green light to one of the most dangerous missile plants in the world.

Poison gas

In addition to missiles, China has been selling the means to make poison gas. In 1995 I discovered, and wrote in the New York Times, that the United States had caught China exporting poison gas ingredients to Iran, and that the sales had been going on for at least three years. In 1996, the press reported that China was sending entire factories for making poison gas to Iran, including special glass-lined vessels for mixing precursor chemicals. The shipments also included 400 tons of chemicals useful for making nerve agents.

The result is that by now, in 1997, China has been outfitting Iran with ingredients and equipment to make poison gas for at least five years. U.S. officials say that the poison gas sales are continuing despite our government’s decision in May 1997 to sanction five Chinese individuals and two companies for contributing to Iran’s chemical weapons program.

Nuclear weapons

China has also been the leading proliferator of nuclear weapon technology in the world. China gave Pakistan nearly everything it needed to make its first atomic bomb. In the early 1980s, China gave Pakistan a tested nuclear weapon design and enough high-enriched uranium to fuel it. This has to be one of the most egregious acts of nuclear proliferation in history. Then, China helped Pakistan produce high-enriched uranium with gas centrifuges. More recently, it has helped Pakistan build a reactor to produce plutonium and tritium for nuclear weapons, and has helped Pakistan increase the number of its centrifuges so it can boost its production of high-enriched uranium.

China’s most recent export was of specialized ring magnets, which are used in the suspension bearings of gas centrifuge rotors. The sale was revealed in early 1996. The magnets were shipped directly to a secret nuclear weapon production site in Pakistan, and were sent without requiring international inspection. The seller was a subsidiary of the China National Nuclear Corporation, an arm of the Chinese government. In my opinion, this export violated China’s pledge under the Nuclear Nonproliferation Treaty, which it joined in 1992. Article III of the Treaty forbids the sale of such items without requiring international inspection. The sale also violated China’s pledge under the Article I of the Treaty not to help other countries make nuclear weapons. Yet, the State Department has not sanctioned China for this sale, or even complained about it publicly.

There is also concern within the U.S. government that Pakistani scientists may be receiving nuclear weapon related information through their visits to the Chinese Academy of Engineering Physics. The Academy designs China’s nuclear weapons.

Iran is the next candidate for China’s nuclear help. The Beijing Research Institute of Uranium Geology (BRIUG) has been helping Iran prospect for uranium. Attached to my testimony is a picture of this Institute’s personnel prospecting in Iran. Any uranium it finds is likely to go directly into Iran’s nuclear weapon program. This Institute is part of the China National Nuclear Corporation (CNNC). I have also included a picture of the Deputy Chief of the China National Nuclear Corporation posing with Reza Amrollahi, Vice President of Iran and President of the Atomic Energy Organization of Iran. China has apparently promised to stop this activity, but this promise, like China’s other promises, must be treated with skepticism.

China has also been talking to Iran about selling a 25 to 30 megawatt nuclear reactor, which is an ideal size for making a few nuclear weapons per year. Also on the horizon is a plant to produce uranium hexafluoride from uranium concentrate, a step necessary to enrich uranium for use in atomic bombs.

These latter two sales are being held over our heads like swords. If we don’t start cooperating more with China in the nuclear area, then China will complete these two dangerous export deals with Iran. This amounts to nuclear blackmail.

The conclusion has to be that our engagement policy toward China has failed. The policy is not producing any change in China’s behavior, nor even producing engagement. The negotiation process is effectively dead. The Chinese are not even talking to us about their chemical and missile exports. We are simply watching the Chinese shipments go out, without any hope of stopping them. All our present policy has produced is a new missile factory in Pakistan, an upgraded nuclear weapon factory in Pakistan and new chemical weapon plants in Iran. In time, it will probably produce a nuclear weapon factory in Iran.

This failure will be compounded if the United States begins nuclear trade with China without stopping these exports. If we sell China nuclear reactors while China is still selling missiles and poison gas ingredients to Iran and Pakistan, what will we be saying to the world? The message will be that no matter how bad China’s exports are, we still can’t resist making a buck from our own exports. No wonder China doesn’t take us seriously. The United States should not begin exporting nuclear technology to China until China stops exporting mass destruction technology to other countries. It would be folly to “de-link” nuclear proliferation from other forms of proliferation.

Buying from America and exporting to Iran

There is considerable evidence that American technology may be fueling some of these dangerous Chinese exports. I have listed two cases where this appears to have happened. There are undoubtedly others.

Case #1: The C-801 and C-802 anti-ship missiles

Iran recently bought these new anti-ship missiles from the China Precision Machinery Import-Export Corporation (CPMIEC). Admiral John Redd, our naval commander in the Persian Gulf, took the unusual step of complaining publicly about the sale. Iran appears to have up to 60 of these missiles so far, plus fast attack boats to carry them. The missiles are a threat to our ships and sailors in the Gulf and they are also a threat to commercial shipping.

It seems quite likely that these missiles were built with help from the United States. In the appendix to my testimony, I have listed the sensitive, controlled equipment that the U.S. Commerce Department approved for export to China Precision Machinery from 1989 to 1993. It includes computer workstations for the simulation of wind effects, analyzers and computer equipment. The ability to simulate wind effects is something the designer of an anti-ship missile could find quite useful. I would like to emphasize that all of this equipment was deemed so sensitive that it required an individual validated export license to leave the United States.

I have attached a print-out from the database that my Project publishes. It is called the Risk Report. It lists the companies around the world that are suspected of contributing to the proliferation of weapons of mass destruction. It includes China Precision Machinery Import-Export Corporation, which was sanctioned in 1993 by the United States for exporting missile components to Pakistan.

If the question is: Who has been helping Iran build anti-ship missiles to threaten our sailors? The answer may well be: The U.S. Commerce Department.

Case #2: Air surveillance radar

Iran recently imported a powerful surveillance radar from the China National Electronics Import-Export Corporation. The radar is now part of Iran’s air defense system, and it can detect targets up to 300 kilometers away. If the United States ever comes to blows with Iran, American pilots will have to contend with it.

This radar too seems to have been built with help from the United States. In the appendix to my testimony, I have listed the sensitive, controlled equipment that the U.S. Commerce Department approved for export to China National Electronics from 1989 to 1993. It totals $9.7 million. It includes things like equipment for microwave research, a very large scale integrated system for testing integrated circuits, equipment for making semiconductors, and a shipment of computer gear worth $4.3 million. All of this equipment appears highly useful for developing radar, and all of it was deemed so sensitive that it required an individual validated export license to leave the United States.

If the question is: Who has been helping Iran build air defenses? The answer may well be: The U.S. Commerce Department.

I would like to point out that in these two cases, the exports were approved under the Bush Administration. I urge the Committee to obtain and study the exports approved under the Clinton Administration. The generally pro-export stance of the Clinton Administration leads one to suspect that China is importing even more sensitive high-technology from the United States today. I cannot emphasize too strongly the need for effective Congressional oversight of our export licensing process. The lack of Congressional oversight was one of the main reasons why the Commerce Department approved so many sensitive American exports to Iraq before the Gulf War.

In addition to these two cases, other Chinese organizations involved in military or nuclear weapon work have either received sensitive American products or may do so soon.

A fusion reactor

In 1993-94, the Institute of Plasma Physics of the Chinese Academy of Sciences transferred a nuclear fusion research reactor to the Azad University in Tehran. The reactor is a training device ostensibly used for peaceful purposes. Despite this help to Iran, and despite being a well-known contributor to China’s nuclear and missile programs, the Academy of Sciences managed recently to import an American supercomputer from Silicon Graphics, Inc.

So if the question is: what happens to a Chinese organization that helps Iran do nuclear research? The answer is: It can import an American supercomputer.

Uranium exploration

I have mentioned above the uranium prospecting in Iran by the China National Nuclear Corporation (CNNC). The CNNC has been implicated in the sale of ring magnets to the A. Q. Khan Research Laboratory in Pakistan, which enriches uranium for nuclear weapons, and it is also involved in the development of Pakistan’s secret nuclear reactor at Khusab. A CNNC subsidiary is currently constructing a power reactor for Pakistan at Chashma. CNNC would be the key player in any nuclear cooperation agreement that might be implemented between the United States and China. Right now, our government, under pressure from Westinghouse, is planning to revive the cooperation agreement that has been stalled since 1984 because of China’s bad proliferation behavior.

If the question is: What happens to a Chinese organization that helps Iran prospect for uranium and helps Pakistan make nuclear weapons? The answer is: the United States government tries to find a way to sell it American nuclear technology.

None of these Chinese missile, nuclear and military organizations is on the Commerce Department’s list of dangerous buyers. American exporters are free to sell these companies sensitive dual use equipment as long as the equipment is not on the small list of items that are still controlled for export. These organizations could get a high-speed American computer–performing up to two billion operations per second–without an export license, or in some cases up to seven billion if the exporter could claim that it did not know what the buyer was up to.

The names of these four organizations should be added to the Commerce Department’s list immediately. So should several others such as China North Industries Corporation (Norinco). Its Hong Kong subsidiary was shut down in July by the Hong Kong government for smuggling materials to make poison gas to Iran, and in 1996 its employees were indicted for conspiring to import 2,000 automatic weapons into California for street gangs.

I urge this Committee to ask the U.S. intelligence agencies why these companies have not been listed. I am convinced that our government–and in particular our intelligence agencies–should be doing more to help exporters avoid dangerous sales.

Diverting American equipment

On July 1, the press reported that yet another sensitive American export had been diverted in China. A supercomputer manufactured by Sun Microsystems of Mountain View, California had wound up at China’s National University of Defense Technology in Changsha. The University, which is run by the People’s Liberation Army, does research and training in advanced weapons systems. It specializes in missile design, detonation physics, supercomputer development, and automatic target recognition. Scientists at Changsha plan to develop the next generation of Chinese weapons with American equipment.

Last month, our government announced that China had agreed to return the supercomputer. The Commerce Department claimed that this result was a victory, and that it was due to a safeguards system that the United States has in place for preventing diversions.

In fact, the United States has no such system. China’s diversion was a defeat for the Administration, and the decision to return the supercomputer was a victory for Congress.

The diversion of the Sun supercomputer was discovered only after Congress demanded an investigation to find out what had happened to the many American supercomputers that had been exported since early 1996, when the Administration slashed export controls. To satisfy Congress, the Commerce Department asked Sun Microsystems about its exports. Only then did Sun disclose the diversion. If Congress had not forced the Commerce Department to conduct an investigation, the Sun supercomputer would still be in China, helping to design advanced weapons.

The Sun diversion is not an isolated case. In 1994, China wanted to import sensitive American machine tools that had been used to build the B-1 strategic bomber. To do so, China promised the U.S. government that the machines would be used to make civilian aircraft in Beijing. Instead, the machines were diverted immediately to a missile and military aircraft factory in Nanchang. Satellite photos have since revealed that at the very time the Chinese were promising to use the machines in Beijing, the Chinese were constructing a special building in Nanchang to house one of the largest ones, a stretch press. China intentionally committed fraud to get the equipment.

The Commerce Department now admits that China has imported at least 47 American supercomputers since early 1996 without export licenses. The press reports that the real figure is much higher. These imports were made possible by the Clinton Administration’s decision in late 1995 to slash export controls. The Chinese Academy of Sciences, which helps develop China’s nuclear weapons and long-range missiles, bought a supercomputer from Silicon Graphics, Inc. that performs approximately six billion operations per second.

According to Chinese government publications, the Academy of Sciences oversees institutes that perform missile and military research as well as research related to nuclear weapons. In the 1970s, the Academy helped develop the flight computer for the DF-5 intercontinental missile, which can target U.S. cities with nuclear warheads. The Academy’s Mechanics Institute has developed advanced rocket propellant and helped develop the shield for the warhead of China’s first ICBM. The Academy’s Institute of Electronics has built synthetic aperture radar useful in military mapping and surveillance, and its Acoustic Institute has developed a guidance system for the Yu-3 torpedo, together with sonar for nuclear and conventional submarines.

In the nuclear field, the Academy has developed separation membranes to enrich uranium by gaseous diffusion, and its Institute of Mechanics has studied the effects of underground nuclear weapon tests and ways to protect against nuclear explosions. It has also studied the stability of plasma in controlled nuclear fusion. Its Institute of Electronics has developed various kinds of lasers used in atomic isotope separation.

According to information published by Silicon Graphics, the supercomputer it sold to the Academy is now the “most powerful SMP supercomputer in China,” and provides China “computational power previously unknown.” According to information that I have received from industry sources, the most powerful computers previously sold to China operated at approximately 1.5 billion operations per second. If this information is accurate, the Silicon Graphics machine is roughly four times more powerful than anything China had before.

The new computer, which was financed by a loan from the World Bank, has become the centerpiece of the Academy’s new Computer Network Information Center. According to the Academy, the computer is now available to “all the major scientific and technological institutes across China.” This means that any Chinese organization that is designing nuclear weapons or long-range missiles has access to it. In effect, Chinese weapon designers can use the Silicon Graphics machines to design lighter nuclear warheads to fit on longer-range and more accurate missiles capable of reaching U.S. cities. This is a giant loss for U.S. security.

Nuclear Cooperation between the United States and China

Chinese President Jiang Zemin is scheduled to visit the United States at the end of this month. In preparation for this event, the Clinton Administration is planning to certify that China has stopped helping other countries develop nuclear weapons. This certification, which no other American President has been willing to make for the past 12 years, would open the door for U.S. companies such as Westinghouse to sell China nuclear reactors.

The certification is based on a statement on May 11, 1996, by an unidentified spokesman for the Chinese Foreign Ministry in response to a reporter’s question. The spokesman said that “China will not provide assistance to unsafeguarded nuclear facilities.” The Administration contends that China has not broken that promise for the past 16 months, and therefore, China has stopped helping other countries develop nuclear weapons.

First, there is the factual question: Is this true? I recommend that the Committee get a briefing from the intelligence agencies describing all of China’s nuclear aid to other countries since May 1996. The briefing should include information on whether China is still helping Iran prospect for uranium, and whether Pakistani scientists are receiving nuclear weapon related technology through visits to Chinese nuclear weapon sites.

Second, is the promise adequate? China is only promising not to aid facilities; it will remain free to aid programs. Pakistan’s program has unsafeguarded facilities that are producing nuclear weapons. China will continue to aid that program, and China’s aid will inevitably spill over into bomb-making. An atom cannot tell whether it is military or civilian.

China, in fact, is the only nuclear supplier country that refuses to require full-scope safeguards on its exports. Full-scope means requiring that all of a country’s facilities be under international inspection, which would bar aid to countries like Pakistan. In effect, China is trying to reap the benefits of nuclear trade without shouldering the burdens. With one hand, China wants to import American nuclear technology. With the other, it wants to help Pakistan’s nuclear bomb program. China should be required to make a choice. If China wants nuclear trade with the United States, it can give up nuclear trade with Pakistan. That is the only deal the United States should be willing to make.

CHINESE AND RUSSIAN SUPPLIERS TO IRANCase #1

Product: C-801 and C-802 anti-ship missiles
Supplier: China Precision Machinery Import-Export Corporation (CPMIEC)

Comments:
Iran has been steadily increasing its military presence in the Persian Gulf, and according to Admiral John Redd, Commander of U.S. naval forces attached to the Central Command, has tested a ship borne C-802 anti-ship cruise missile in January 1996. These missiles are deployed on Hudong Fast Attack Craft also supplied by China in 1994. Iran is believed to have obtained about 60 of the missiles, which are capable of destroying a warship, and could also pose a significant threat to commercial shipping in the Gulf. Iran reportedly tested a shore-launched C-802 in December 1995.

The China Precision Machinery Import-Export Corporation (CPMIEC) manufactures and markets the C-802. It is a long range, sea-skimming, multi-purpose anti-ship missile, powered by a turbojet engine. It can be deployed on warships, coastal bases, and aircraft. It can carry a warhead at high subsonic speed (Mach 0.9) to a range of 120 kilometers (75 miles) and is considered to be more sophisticated than the older Silkworm.

Iran has also obtained and deployed the C-801 anti-ship missile from CPMIEC. The smaller C-801 has a range of 40 kilometers and can also travel at high subsonic (Mach 0.9) speeds.

China Precision Machinery was sanctioned by the U.S. government in August 1993 for missile proliferation activities.

U.S. Exports: U.S. Commerce Departments records show that the following items were approved for export to CPMIEC from 1989 to 1993:

modems for data transmission – $32,628
modems for data transmission – $6,630
cables and adapters for a macroware system – $45,834
computer workstation for simulation of wind effects – $43,700
analyzers – $4,876
computer equipment – $7,707Total: 141,375

Case #2

Product: JY-14 three-dimensional tactical air surveillance radar
Supplier: China National Electronics Import-Export Corporation (CEIEC)

Comments:
According to U.S. Naval Intelligence, Iran recently acquired this tactical air surveillance radar from China. It can provide long-range tactical surveillance as part of an automated tactical air defense system. It can detect targets up to 300 kilometers away and at altitudes up to 75,000 feet, even when subjected to high electronic clutter or jamming. The system also provides automatic tracking and reporting of up to 100 targets. CEIEC also manufactures cryptographic systems, radars, mine detection equipment, fiber and laser optics, and communications technologies and is overseen by the Ministry of Electronics Industry (MEI), which is also known as the China Electronics Industry Corporation (CEIC) or Chinatron.

U.S. Exports: U.S. Commerce Departments records show that the following items were approved for export to CEIEC from 1989 to 1993:

radio communication service monitor – $21,754
computer equipment and software – $4,375,000
personal computers and processor boards – $1,579,830
protocol tester for telecommunications – $4,100
equipment for basic microwave research – $10,916
traveling wave tube amplifier – $33,600
microwave frequency counter – $6,124
statistical multiplexer systems and accessory boards – $75,632
statistical multiplexers for use in data communications network – $65,120
integrated circuits – $17,326
computer equipment – $46,022
computer equipment – $29,094
equipment for circuit board design – $9,580
computer chips – $1,820
computer software – $105,000
equipment for semiconductor manufacture – $107,000
equipment for sweep generators for resale to Ministry of Machine Building and Electronics Industry – $32,000
equipment for semiconductor wafer testing – $82,610
computer equipment – $1,924
computer equipment – $10,457
computer equipment for oil reservoir numerical simulation – $92,916
computer equipment – $32,500
switching exchanges – $1,269,047
phosphorus oxychloride (nerve gas precursor) for transistor manufacture – $7,397
export telephone system – $15,000
circuit design software – $243,160
VLSI system to test integrated circuits – $1,315,000
transistors and amplifiers – $13,648
electronic equipment – $32,610
equipment for electronic component testing – $60,000Total: $9,696,117

Case #3

Product: Tokamak nuclear fusion reactor
Supplier: Chinese Academy of Sciences, Institute of Plasma Physics

Comments:
The Chinese Academy of Sciences’ Institute of Plasma Physics transferred a HT-6B Tokamak nuclear fusion research facility to the Azad University in Tehran in 1993-94. The Institute designed and developed the Tokamak in the mid-1980s and successfully operated the unit for 10 years, after which it was transferred to Azad. In 1994, the Institute sent technicians and engineers to Azad to assist in the unit’s installation and debugging, with the understanding that the two sides would continue joint nuclear fusion research in the future.

U.S. Exports: Despite being a well-known contributor to Iran’s nuclear program, the Academy of Sciences managed recently to import an American supercomputer. In March 1996, California-based Silicon Graphics Inc., sold the Academy a powerful supercomputer without bothering to obtain a U.S. export license. In addition to supplying Iran, the Academy has helped develop the flight computer for the Chinese DF-5 intercontinental missile, which can target U.S. cities with nuclear warheads. The Academy’s Mechanics Institute has also developed advanced rocket propellant, developed hydrogen- and oxygen-fueled rockets, and helped develop the nose cone for the nuclear warhead of the DF-5. Its Shanghai Institute of Silicate successfully developed the carbon/quartz material used to shield the tip of the DF-5’s reentry vehicle from the heat created by friction with the earth’s atmosphere. The Academy’s Institute of Electronics has built synthetic aperture radar useful in military mapping and surveillance, and its Acoustic Institute has developed a guidance system for the Yu-3 torpedo, together with sonar for nuclear and conventional submarines.

Case #4

Product: Uranium mining exploration
Supplier: Beijing Research Institute of Uranium Geology (BRIUG)

Comments:
BRIUG conducts scientific exchanges with Iranian and Pakistani nuclear scientists.

As part of the China National Nuclear Corporation (CNNC), BRIUG carries out research on radio metrical and conventional geophysical uranium prospecting methods and conducts geological interpretations throughout China using satellite images. It develops and designs spectrometers, laser fluorometers for trace uranium analysis, mineral inclusion analyzers, scintillation radon analyzers, scintillation spectrometers, laser analyzers for trace substances, and high and low frequency dielectric separators. BRIUG also conducts research on geological disposal of nuclear waste, and possesses scientific equipment including neutron activation analyzers, electron microscopes, electron microprobes, mass spectrometers, X-ray fluoro-spectrometers, X-ray diffractometers, infrared spectrophotometers, ultraviolet spectrophotometers, atomic absorption spectrophotometers, laser raman spectrophotometers, fluoro-spectrophotometers, gas chromatography analyzers, fluid chromatography analyzers, image processing system and computer and color plotter systems.

BRIUG’s parent, CNNC has been implicated in the sale of ring magnets to the A. Q. Khan Research Laboratory in Pakistan, which enriches uranium for nuclear weapons. CNNC is also involved in the development of Pakistan’s secret research reactor at Khusab and a CNNC subsidiary is currently constructing a power reactor for Pakistan at Chashma.

Dangerous Exports Table

Testimony: China’s WMD Exports

Testimony of Gary Milhollin

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