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Testimony: Cooperation in Space and Missiles

By Gary Milhollin

Testimony of Gary Milhollin

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

Before the House Committee on Science

June 25, 1998

I am pleased to appear today before this distinguished Committee. In accordance with the Committee’s request, I will discuss the U.S. policy of cooperation with foreign space programs and the risk that this cooperation could contribute to the spread of missile technology.

Helping India and Pakistan

I would like to begin with a bit of history. There is an important lesson to be learned about the origin of India’s largest nuclear-capable missile, the “Agni.”

In November 1963, NASA began the Indian space program by launching a U.S. rocket from Indian soil. Between 1963 and 1975, more than 350 U.S., French, Soviet and British rockets were launched from India’s new Thumba Range, which the United States helped design. Thumba’s first group of Indian engineers learned rocket launching and range operation from the United States.

Among these engineers was A. P. J. Abdul Kalam, the Agni missile’s chief designer. After the Indian nuclear tests last month, he was also hailed as the “father” of the Indian atomic bomb. In 1963-64, he spent four months in training in the United States. He visited NASA’s Langley Research Center in Virginia, where the U.S. Scout rocket was conceived, and the Wallops Island Flight Center in Virginia, where the Scout was being flown. The Scout was a four-stage, solid-fueled launcher used to orbit small payloads. It was also used to test the performance of reentry vehicles–a technology necessary to deliver nuclear warheads. According to NASA officials, the Indian engineers saw the blueprints of the Scout during their visit.

In 1965, the Indian government asked NASA for design information about the Scout. The request should have raised some eyebrows. It came from the head of the Indian Atomic Energy Commission. Nevertheless, NASA obligingly supplied the information. Kalam then proceeded to build India’s first big rocket, the SLV-3, which was an exact copy of the Scout. The first stage of the SLV-3 is now the first stage of the Agni missile.

The second stage of the Agni is based on a surface-to-air missile known as the SA-2 that India bought from Russia. But in order to build the second stage, India also had to learn about liquid propulsion. For this, India turned to France. The French willingly transferred the technology needed to build a powerful liquid-fueled rocket motor called the “Viking,” which powers the European Space Agency’s Ariane satellite launcher. Thus, India learned how to build the first stage of the Agni from the United States, and how to build the second stage from France and Russia. The U.S. and French help was supposed to be for peaceful space exploration, but it wound up helping India’s missile program.

The Agni also needed a guidance system. For this, India turned to the German Space Agency. In the 1970s and 1980s, Germany conducted an intensive tutorial for India in rocket guidance. The assistance–once again–was supposed to be for peaceful space exploration. But each step in the process for building a guidance system for India’s space launcher moved India further down the road to building a guidance system for the Agni missile. In fact, India seems to have invented a new term to describe its progress. Again and again, India’s Department of Space, in its annual reports, announced that it was able to “indigenize” another piece of essential equipment.

Germany also provided other help. The German Space Agency tested a model of the first stage of the SLV-3 (identical to the Scout) in its wind tunnel at Cologne-Portz. That first stage is now the first stage of the Agni missile. The German Space Agency also helped India build rocket test facilities, and trained Indians in the use of the special composite materials needed to make rocket nozzles and nosecones. I have included a graphic and a table in my testimony that summarizes the extensive foreign help that India received.

Thus, India’s biggest nuclear missile is an international product. Under the guise of peaceful space cooperation, the United States, France and Germany helped create the most advanced nuclear missile in South Asia. The Agni’s first stage, second stage and guidance system all come from Western technology, which proves beyond any doubt that you cannot help a country build space launchers without helping it build missiles.

The story in Pakistan is similar. In 1962, NASA launched Pakistan’s first rocket, a U.S. made Nike-Cajun, in a project led by Tariq Mustafa, the senior scientific officer of the Pakistan Atomic Energy Commission. NASA also trained Pakistani rocket scientists at Wallops Island. Other NASA-sponsored launches followed until 1970. Thus, the first rockets in both India and Pakistan were launched by NASA under a policy of peaceful space cooperation. The result of that cooperation, however, has been long-range missiles tipped with nuclear warheads.

Cooperation with China

This past March, the Administration invited China to join the Missile Technology Control Regime. In a memorandum dated March 12, White House staff member Gary Samore stated the reasons for making the offer. If China joined, the memo stated, China could expect “substantial protection from future U.S. missile sanctions.”

Mr. Samore could have said “complete protection.” Under Section 73 of the Arms Export Control Act, sanctions would not apply to a Chinese company if China joined the MTCR even if the company transferred complete missiles to Pakistan. Sanctions would be avoided if the sale were legal under Chinese law, or if China took action against the company, or if China found the company to be innocent. In effect, the Administration offered China a complete shield against U.S. sanctions law. The result would be to allow China to continue its sales of missile components and technology to Pakistan with no fear of punishment by the United States.

In addition, China’s own missile and space effort would probably get a boost from American imports. The United States now requires an export license for a missile-related item shipped to any country except Canada. It is likely that China would enjoy a presumption of approval for such licenses if China were admitted to the MTCR. Earlier this year, the pro-export Commerce Department announced that applications for dual-use nuclear exports to China would begin to benefit from a presumption of approval instead of a presumption of denial because of the new China-U.S. nuclear cooperation agreement.

China’s missile firms would also find it easier to import American goods that are not on the control list. An example would be a powerful computer operating at a speed just under the present control level, or a machine tool with an accuracy just under the control level. As things stand now, if a U.S. exporter gets an order from a known missile maker in China, the exporter cannot make the sale without notifying the U.S. government and getting an export license. This is required by Section 744.3 of the Export Administration Regulations. If China were to join the MTCR, however, no license would be required for such a sale. U.S. firms could deliberately outfit Chinese missile manufacturing sites without telling anyone.

There is also a risk that China could undermine the MTCR by making use of the knowledge it would gain by membership. The countries that participate in the MTCR notify each other of sales that they deny. If the United States decides, for example, not to sell a vacuum furnace to India, the United States notifies the other members of the MTCR of the denial so that the other members will not let their firms step in behind the American company and make the sale. In light of China’s past behavior on missile exports, there is a concern that China would pass the denial information along to Chinese firms that would make the sale.

It is important to remember that the firms with which we are cooperating in satellite launches are the same Chinese firms that are proliferating missile technology to Iran and Pakistan. Who are these companies? China Great Wall Industries, China Aerospace International Holdings Ltd. (CASIL, of Hong Kong) and their parent, China Aerospace Industry Corporation. These companies launch U.S.-made satellites on China’s Long March rockets. The United States has sanctioned both China Great Wall and China Aerospace Corporation in the past for supplying missile technology to Pakistan, and the intelligence community reports that the exports are still going on.

It is also important to realize that a satellite launch contract is one of the most lucrative things a Chinese aerospace company can get from the United States. It is a major source of revenue. By continuing our space cooperation with companies that sell missile technology to Iran and Pakistan, the United States is putting money into the pockets of companies that are directly undermining our nonproliferation policies. This is one of the clearest instances in which space cooperation contributes to missile proliferation.

Although I have not had time to research fully the question of American missile help to China, there are at least a few facts that the Committee might like to know. They concern the educational backgrounds of China’s leading rocket scientists. One of China’s most celebrated rocket scientists is Qian Xuesen, who studied at both the Massachusetts Institute of Technology and the California Institute of Technology, where he received his doctorate in 1938. He later taught at both MIT and Cal Tech before returning to China to lead its missile programs. Another leading rocket expert, Tu Shoue, received a master’s from MIT in aviation engineering before going home to design China’s launch vehicles as well as several intermediate-range missiles. A third is Liang Shoupan, who after getting the same master’s degree from MIT, taught at the military engineering academy of the People’s Liberation Army and served as China’s chief systems designer for ballistic missiles. And one might also mention Huang Weilu, a missile guidance specialist who studied at the University of London, and Ren Xinmin, a liquid propellant specialist who got a Ph.D. in engineering mechanics from the University of Michigan.

These scientists were no doubt welcomed to the United States under the assumption that they would use their learning for peaceful space exploration. We now realize, however, that American universities taught many of China’s leading scientists how to make better long-range missiles.

It is difficult to see how it would be prudent to allow China to join the MTCR at this time. China has repeatedly failed to comply with MTCR guidelines since promising to do so in 1992 and 1994. There is no real evidence that China has changed its ways. Thus, the main effect of the offer may be to insulate Chinese aerospace companies from U.S. sanctions laws so that satellite launches can continue.

The lesson from what I have said above is clear. The United States and its allies should only cooperate with countries that share our commitment to nuclear and missile non-proliferation. U.S. space cooperation should be a reward for countries that are part of the solution to proliferation, not a bribe to those that are part of the problem. That principle excludes, at a minimum, China, India, Israel and Pakistan. The latter three have rejected the Nonproliferation Treaty and China, while nominally a member, continues to spread missile technology through its exports. If we look back on our space cooperation with India and Pakistan, we can see that it was a mistake. Those countries are now poised to mount nuclear warheads on rockets, and those rockets were built from programs we have nurtured.

Missile Helpers

India did not build its missiles alone. The world’s leading rocket producers gave essential help in research, development, and manufacture.

France

  • Licensed production of sounding rockets in India
  • Supplied the liquid-fuel Viking rocket engine, now the “Vikas” engine of the PSLV second stage
  • Tested Indian-produced Vikas engine in France

Germany

  • Delivered measurement and calibration equipment to ISRO laboratories
  • Trained Indians in high-altitude tests of rocket motors and in glass and carbon fiber composites for rocket engine housings, nozzles and nose cones
  • Designed high-altitude rocket test facilities
  • Conducted wind tunnel tests for SLV-3 rocket
  • Developed radio frequency interferometer for rocket guidance
  • Developed computers for rocket payload guidance based on U.S. microprocessor
  • Supplied documentation for a filament-winding machine to make rocket engine nozzles and housings
  • Helped build Vikas rocket engine test facilities
  • Designed hypersonic wind tunnel and heat transfer facilities
  • Supplied rocket motor segment rings for PSLV

Russia

  • Supplied surface-to-air missiles which became the models for the Prithvi missile and the second stage of the Agni medium-range missile
  • Sold seven cryogenic rocket engines

United Kingdom

  • Supplied components for Imarat Research Center, home to the Agni missile
  • Supplied magnetrons for radar guidance and detonation systems to Defense Research and Development Laboratory

United States

  • Launched U.S.-built rockets from Thumba test range
  • Trained Dr. Abdul Kalam, designer of the Agni
  • Introduced India to the Scout rocket, the model for the SLV-3 rocket and the Agni first stage
  • Sent technical reports on the Scout rocket to Homi Bhabha, the head of the Indian Atomic Energy Commission
  • Sold equipment that can simulate vibrations on a warhead

Testimony: China’s Proliferation Record – 1998

By Gary Milhollin

Testimony of Gary Milhollin

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

Before the House Committees on International Relations and National Security

June 17, 1998

I am pleased to appear today before these distinguished Committees. I have been asked to discuss U.S. policy on satellite exports to China. I will direct my remarks to the effect of that policy on Chinese transfers of missile technology to countries that are trying to make weapons of mass destruction.

We have heard a lot about satellites lately, especially American-made satellites going to China. We have also heard about campaign contributions, about waivers of export prohibitions, and about the transfer of control over satellites from one government agency to another.

What we have not heard, and what I will talk about today, are decisions by our government that have given Chinese companies a green light to sell missile technology to countries like Iran and Pakistan. The Administration has made three crucial decisions in this regard.

First, it has decided to transfer control over satellite exports from the State Department to the Commerce Department, an action that effectively pulls the teeth from any future U.S. sanctions against Chinese companies guilty of missile proliferation.

Second, it has decided to suspend, without any legal basis, the implementation of U.S. statutes that require sanctions to be imposed against Chinese companies for past sales of missile technology to Iran and Pakistan.

Third, it has decided to invite China to join the Missile Technology Control Regime, an invitation that, if accepted, would immunize Chinese firms from any future application of U.S. sanctions laws for missile proliferation.

When we look at the cumulative effect of these decisions, we see something both surprising and alarming. Our government has enabled Chinese companies to proliferate missile technology with little fear of punishment. More specifically, Chinese companies have been able to sell Iran and Pakistan components for nuclear capable missiles without worrying about losing U.S. satellite launch contracts.

Satellites

Our sanctions laws, as written by Congress, are based on a simple idea. A foreign company cannot import American missile technology with one hand and proliferate missile technology with the other. If a Chinese company decides to sell Pakistan or Iran a nuclear-capable missile or the means to make one, that company has to forget about importing any missile-related technology from the United States. U.S.-made satellites were originally part of this equation, because they contain missile-related American components.

That simple idea has now been abandoned by the executive branch. When, for example, the Administration transferred licensing authority over satellites from the State Department to the Commerce Department, satellites were effectively removed from the list of U.S. exports subject to missile sanctions.

Let me explain why this is so. If a Chinese company sells whole missiles to a country like Iran or Pakistan, the company would be guilty of what is known as a “Category One” violation. This is because whole missiles are listed on Category One of the Annex to the Missile Technology Control Regime, an agreement among countries that are trying to curb missile proliferation by controlling their exports. For selling a Category One item, the sanctions bar the guilty company for at least two years from importing any item controlled by the Export Administration Act. Category One sanctions would thus bar satellites even if controlled by the Commerce Department, which administers that Act.

China did export whole missiles to Pakistan in the fall of 1992. Since then, however, China has changed its tactics. It now exports missiles piecemeal, as components. An example would be a piece of guidance equipment. These items are on Category Two of the MTCR Annex. A “Category Two” violation bars only the export of U.S. “missile equipment or technology ” under the Export Administration Act and under Section 73 of the Arms Export Control Act.

But what is “missile equipment or technology”? According to the licensing practice of the State Department, a missile-related item retains its identity as a missile item even if it is embedded in a commercial satellite. Thus, if a Chinese company were sanctioned, the export of satellites would be blocked by the State Department because satellites have missile-related items embedded in them. In the view of the Commerce Department, however, a missile-related item loses its identity as a missile item if it is incorporated into a commercial satellite. Thus, the export of satellites would not be blocked by the Commerce Department even though the satellites contained items that would be considered missile-related if not embedded. These embedded items are such things as radiation-hardened computer chips, gyroscopes, and accelerometers.

The Administration first transferred export controls on satellites from State to Commerce in 1996, and in its implementing regulations, it also moved a number of missile-related items associated with satellites. Then in 1998, the Administration moved the rest of the missile-related items associated with satellite launches, even though the items are not embedded in satellites. These items included ground support equipment, test equipment, replacement parts, and non-embedded kick motors.

The result is that now, satellites are insulated from missile sanctions because control over virtually everything associated with launching them has been transferred to the pro-export Commerce Department, where sanctions will not be applied.

It is important to realize that the same Chinese companies that launch U.S. satellites also sell missiles to places like Pakistan. Who are these companies? China Great Wall Industries, China Aerospace International Holdings Ltd. (CASIL, of Hong Kong) and their parent, China Aerospace Industry Corporation. These companies launch satellites on China’s Long March rockets. The United States has sanctioned both China Great Wall and China Aerospace Corporation in the past for supplying missile technology to Pakistan.

It is also important to realize that a satellite launch contract is one of the most lucrative things a Chinese aerospace company can get from the United States. Thus, by removing satellites from the threat of sanctions, the Administration has surrendered one of the most important levers America has to stop Chinese missile proliferation. Chinese companies are free to sell missile technology to Iran or Pakistan without risking their most lucrative source of revenue.

Failure to apply sanctions laws

China’s exports remain the most serious proliferation threat in the world. 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 despite 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.

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.

But by December 1992, in violation of its promise, China had shipped 34 M-11 missiles to Pakistan. Waiving the sanctions was a mistake.

In August 1993, the Clinton administration applied sanctions 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 MTCR.

Since late 1994, the stream of missile exports has continued. U.S. officials say that China’s missile exports have continued up until the present moment, unabated. These exports include the sale of missile-related guidance and control equipment to Iran as well as Pakistan.

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 MTCR 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 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.

By the autumn of 1996, the intelligence community had completed an air-tight finding of fact on China’s missile transfers to Pakistan. There was clear proof that the transfers had happened. All the factual analysis necessary to apply sanctions had been finished. A similar finding on China’s missile exports to Iran had also been made.

And roughly one year earlier, an important legal analysis had been completed. The legal analysis established that sanctions could be applied where a foreign person “conspires to or attempts to engage in” the export of any MTCR equipment or technology. Thus, sanctions could be applied without a finding that hardware or technology had actually been exported. A conspiracy or even an attempt to transfer such items would be enough. One did not need a photograph of a missile with “made in China” written on the side.

The findings of fact and the legal analysis showed clearly that China should be sanctioned. Both the findings and the analysis had been circulated to the relevant agencies by the autumn of 1996. Both Pakistan and Iran were covered. The process, however, was short-circuited at that point.

The next step would have been for the National Security Council to call a meeting at which each agency could submit for the record its views on whether sanctions should be imposed. The NSC would then forward these views to the Department of State, which would prepare a decision memorandum for the Under Secretary, who has the legal authority to impose sanctions.

But none of these steps were ever taken. The State Department simply chose not to complete the administrative process. Thus, the sanctions law is not being implemented as Congress intended and, in fact, is being circumvented. It is obvious that the law can never take effect unless the administrative process is completed, so the failure to complete it is manifestly illegal.

Last week, in testimony before the Senate Committee on Foreign Relations, Mr. Gordon Oehler, who headed the CIA’s non-proliferation center when the findings were made, confirmed that the evidence of the missile transfers was clear. Mr. Oehler said that there was no doubt in his mind that the transfers happened, and that the rest of the intelligence agencies agreed.

The State Department has now admitted this fact by implication. The State Department is no longer saying that there is “not enough evidence” to apply sanctions to China. It is now saying that it has “not yet made a determination” to apply sanctions, which is quite different. In effect, the State Department is saying that it has not applied sanctions because it has not chosen to complete the administrative process. I recommend that Congress take steps to see that the law is enforced.

Now that Pakistan has demonstrated its nuclear weapon capability, and announced that it will mount nuclear warheads on missiles, this matter has become urgent. The Chinese-supplied M-11s will actually carry nuclear weapons. President Clinton has said that the world should try to prevent India and Pakistan from putting warheads on missiles, but his Administration refuses to apply a U.S. law designed to prevent Pakistan from acquiring missiles in the first place.

I would also like to mention the Iran-Iraq Nonproliferation Act of 1992. Under that Act, a foreign company is sanctioned if it exports “destabilizing numbers and types of advanced conventional weapons” to either Iran or Iraq. The sanctions bar any American product that needs an export license, including satellites.

In 1995, the China Precision Machinery Import Export Corporation sold Iran advanced C-802 anti-ship cruise missiles. Estimates of the number sold range from 60 to 100. The State Department admitted that the shipment occurred but concluded in 1997 that it was not of “a destabilizing number and type.” Thus, it declined to apply sanctions, despite the fact that Admiral John Redd, our naval commander in the Gulf, took the unusual step of complaining publicly about the sale. The missiles threaten our ships and sailors in Gulf and also commercial shipping.

If sanctions had been applied, the export of U.S. satellites would have been cut off. Under the Iran-Iraq Nonproliferation Act, the sanctions reach the parent organization of the guilty party. The parent of China Precision Machinery is the China Aerospace Corporation, which launches U.S.-origin satellites. This raises the question whether the State Department, when ruling that the missiles were not destabilizing, was simply trying to protect U.S. satellite makers.

China in the MTCR?

This past March, the Administration invited China to join the Missile Technology Control Regime. In a memorandum dated March 12, White House staff member Gary Samore stated the reasons for making the offer. Sanctions figured prominently among them. If China joined, the memo stated, China could expect “substantial protection from future U.S. missile sanctions.”

Mr. Samore could have said “complete protection.” Under Section 73 of the Arms Export Control Act, sanctions would not apply to a Chinese company if China joined the MTCR even if the company transferred complete missiles to Iran or Pakistan. Sanctions would be avoided if the sale were legal under Chinese law, or if China took action against the company, or if China found the company to be innocent. In effect, the Administration offered China a complete shield against U.S. sanctions law.

The Administration was also offering China a second benefit. As things stand now, if a U.S. exporter gets an order from a known missile maker in China, the exporter cannot make the sale without notifying the government and getting an export license. This is required by Section 6 of the Export Administration Act. If China were to join the MTCR, however, no license would be required for such a sale. U.S. firms could deliberately outfit Chinese missile manufacturing sites without telling anyone.

It is difficult to see how such an offer is prudent. China has repeatedly failed to comply with MTCR guidelines since promising to do so in 1992 and 1994. There is no real evidence that China has changed its ways. Thus, the offer seems to be yet another effort to insulate Chinese aerospace companies from U.S. sanctions laws so that satellite launches can continue.

Conclusion

When we look at the history of U.S. sanctions policy, we see a willingness to sanction China for missile proliferation in both the Bush Administration, which applied sanctions in 1991, and in the Clinton Administration, which applied sanctions in 1993. But in 1995, the Clinton Administration policy changes. China supplied the C-802s to Iran in 1995; China supplied other missile components to Iran and Pakistan in 1995 and has continued to supply up to the present time. And in 1996, the Administration refused to act on explicit findings by the intelligence community that the transfers occurred. Also in 1996, the Administration started transferring control over satellites exports from the State to the Commerce Department, insulating them from the application of missile sanction laws in the future. For some reason, the Administration decided in either 1995 or 1996 that missile sanctions would no longer be part of U.S. policy in dealing with China.

Why did U.S. policy change? I don’t know the answer to that question, but I urge the Committees to look into it.

We do know the result of the policy change. It gave China a green light to proliferate. Our government’s policy on sanctions has enabled Chinese satellite launch companies to sell missiles and missile components to Iran and Pakistan without fear of punishment. Thus, it may be that we are asking the wrong question about how our satellite export policy affects missile proliferation.

Whether or not our satellite exports caused U.S. missile technology to go to China, they have made it easier for Chinese missile technology to go to Pakistan.

India, of course, has watched this happen. India watched China help Pakistan make not only missiles but the nuclear warheads to go on them. India also watched the United States invent every excuse possible not to do anything about it. America asked the Indians to show restraint in nuclear testing, but America was unwilling to put restraints on its own satellite companies by sanctioning China. The Indians no doubt concluded that Uncle Sam was against the spread of the bomb unless it might cost him something. It should not surprise us if our non-proliferation policy lacks credibility.

 Dangerous Exports Table

Testimony: US Satellite Exports and China

By Gary Milhollin

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

June 11, 1998

I am pleased to appear today before this distinguished Committee. I will direct my remarks to U.S. foreign policy toward China, particularly as it concerns transfers of missile technology by China to countries that are trying to make weapons of mass destruction. I will discuss the failure of the United States to sanction China under U.S. law for these exports, and the link between this failure and the current U.S. policy on satellite exports.

We have heard a lot about satellites lately, especially American-made satellites going to China. We have also heard about campaign contributions, about waivers of export prohibitions, and about the transfer of control over satellites from one government agency to another.

What we have not heard, and what I will talk about today, are decisions by our government that have given Chinese companies the green light to sell missile technology to countries like Iran and Pakistan. The Administration has made three crucial decisions in this regard.

First, it has decided to transfer control over satellite exports from the State Department to the Commerce Department, an action that effectively pulls the teeth from any future U.S. sanctions against Chinese companies guilty of missile proliferation.

Second, it has decided to suspend, without any legal basis, the implementation of U.S. statutes that require sanctions to be imposed against Chinese companies for past sales of missile technology to Iran and Pakistan.

Third, it has decided to invite China to join the Missile Technology Control Regime, an invitation that, if accepted, would immunize Chinese firms from any future application of U.S. sanctions laws for missile proliferation.

When we look at the cumulative effect of these decisions, we see something very surprising and very alarming. Our government has enabled Chinese companies to proliferate missile technology with little fear of punishment. More specifically, Chinese companies have been able to sell Pakistan components for nuclear capable missiles without worrying about losing U.S. satellite launch contracts.

Satellites

Our sanctions laws, as written by Congress, are based on a simple idea. A foreign company cannot import American missile technology with one hand and proliferate missile technology with the other. If a Chinese company decides to sell Pakistan or Iran a nuclear-capable missile or the means to make one, that company has to forget about importing any missile-related American technology. U.S.-made satellites were originally part of this equation, because they contain missile-related American components.

That simple idea has now been abandoned by the executive branch. When, for example, the Administration transferred licensing authority over satellites from the State Department to the Commerce Department, satellites were effectively removed from the list of U.S. exports subject to missile sanctions.

Let me explain why this is so. Under Section 73 of the Arms Export Control Act, sanctions apply to a Chinese company that sells components to a country like Iran or Pakistan for use in a program to make nuclear-capable missiles. The sanctions prevent the guilty company from importing U.S. missile-related items for a period of two years if the company’s sale was of something less than a complete rocket system or subsystem. Most sales fall into this category. An example would be a rocket motor casing or a piece of guidance equipment. These are known as “Category II” items on the Annex of the Missile Technology Control Regime, an agreement among countries that are trying to curb missile proliferation by controlling their exports.

So sanctions bar the guilty company from buying missile-related items from the United States. But what is a “missile-related item”? According to the licensing practice of the State Department, a missile-related item retains its identity as a missile item even if it is embedded in a commercial satellite. Thus, if a Chinese company were sanctioned, the export of satellites would be blocked by the State Department because satellites have missile-related items embedded in them. In the view of the Commerce Department, however, a missile-related item loses its identity as a missile item even if it is incorporated into a commercial satellite. Thus, the export of satellites would not be blocked by the Commerce Department even though the satellites contained items that would be considered missile-related if not embedded. These embedded items are such things as radiation-hardened computer chips, gyroscopes, and accelerometers.

The Administration first moved export controls on satellites from State to Commerce in 1996, and in its implementing regulations, it also moved a number of missile-related items associated with satellites. Then in 1998, the Administration moved the rest of the missile-related items associated with satellite launches, even though the items are not embedded in satellites. These items included ground support equipment, test equipment, replacement parts, and non-embedded kick motors.

The result is that now, satellites are insulated from missile sanctions because control over everything associated with launching them has been transferred to the Commerce Department, where sanctions will not be applied.

It is important to realize that the same Chinese companies that launch U.S. satellites also sell missiles to places like Pakistan. Who are these companies? China Great Wall Industries, China Aerospace International Holdings Ltd. (CASIL, of Hong Kong) and their parent, China Aerospace Industry Corporation. These companies launch satellites on China’s Long March rockets. The United States has sanctioned both China Great Wall and China Aerospace Corporation in the past for supplying missile technology to Pakistan.

It is also important to realize that a satellite launch contract is one of the most lucrative things a Chinese aerospace company can get from the United States. Thus, by removing satellites from the threat of sanctions, the Administration has surrendered one of the most important levers America has to stop Chinese missile proliferation. Chinese companies are free to sell missile technology to Iran or Pakistan without risking their most lucrative source of revenue.

Failure to apply sanctions laws

In October of last year, I testified before this Committee on China’s export behavior. I will not repeat that testimony here, except to summarize some points that are especially important to keep in mind.

China’s exports remain the most serious proliferation threat in the world. 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 despite 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.

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.

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 MTCR.

Since 1994, the stream of missile exports has continued. U.S. officials say that China’s missile exports have continued up until the present moment, unabated. These exports include the sale of missile-related guidance and control equipment to Iran.

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 MTCR 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 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.

In the autumn of 1996, the intelligence community had completed an air-tight finding of fact on China’s missile transfers to Pakistan. There was clear proof that the transfers had happened. All the factual analysis necessary to apply sanctions had been finished. A similar finding on China’s missile exports to Iran had also been made.

And roughly one year earlier, an important legal analysis had been completed. The legal analysis established that sanctions could be applied where a foreign person “conspires to or attempts to engage in” the export of any MTCR equipment or technology. Thus, sanctions could be applied without a finding that hardware or technology had actually been exported. A conspiracy or even an attempt to transfer such items would be enough. One did not need a photograph of a missile with “made in China” written on the side.

The findings of fact and the legal analysis showed clearly that China should be sanctioned. Both the findings and the analysis had been circulated to the relevant agencies by the autumn of 1996. Both Pakistan and Iran were covered. The process, however, was short-circuited at that point.

The next step would have been for the National Security Council to call a meeting at which each agency could submit for the record its views on whether sanctions should be imposed. The NSC would then forward these views to the Department of State, which would prepare a decision memorandum for the Under Secretary, who has the legal authority to impose sanctions.

But none of these steps ever happened. The State Department simply chose not to complete the administrative process. Thus, the sanctions law is not being implemented as Congress intended and, in fact, is being circumvented. It is obvious that the law can never take effect unless the administrative process is completed, so the failure to complete it is manifestly illegal. I recommend that Congress take steps to see that the law is enforced.

Now that Pakistan has demonstrated its nuclear weapon capability, and announced that it will mount nuclear warheads on missiles, this matter has become urgent. The Chinese-supplied M-11s will actually carry nuclear weapons. President Clinton has said that the world should try to prevent India and Pakistan from putting warheads on missiles, but his Administration refuses to apply a U.S. law designed to prevent Pakistan from acquiring missiles in the first place.

China in the MTCR?

This past March, the Administration invited China to join the Missile Technology Control Regime. In a memorandum dated March 12, White House staff member Gary Samore stated the reasons for making the offer. Sanctions figured prominently among them. If China joined, the memo stated, China could expect “substantial protection from future U.S. missile sanctions.”

Mr. Samore could have said “complete protection.” Under Section 73 of the Arms Export Control Act, sanctions would not apply to a Chinese company if China joined the MTCR even if the company transferred complete missiles to Iran or Pakistan. Sanctions would be avoided if the sale were legal under Chinese law, or if China took action against the company, or if China found the company to be innocent. In effect, the Administration offered China a complete shield against U.S. sanctions law.

It is difficult to see how such an offer is prudent. China has repeatedly failed to comply with MTCR guidelines since promising to do so in 1992 and 1994. There is no real evidence that China has changed its ways. Thus, the offer seems to be yet another effort to insulate Chinese aerospace companies from U.S. sanctions laws so satellite launches can continue.

Conclusion

Our government’s export policy on satellites has enabled Chinese companies to sell missile components to Pakistan without fear of punishment. Thus, it may be that we are asking the wrong question about how our satellite export policy affects missile proliferation.

Whether or not our satellite policy has caused U.S. missile technology to go to China, it has certainly made it easier for Chinese missile technology to go to Pakistan.

India, of course, has watched this happen. India watched China help Pakistan make not only missiles but the nuclear warheads to go on them. India also watched the United States invent every excuse possible not to do anything about it. Uncle Sam asked the Indians to show restraint in nuclear testing, but Uncle Sam was unwilling to put restraints on his own satellite companies by sanctioning China for missile proliferation. The Indians no doubt concluded that Uncle Sam was against the spread of the bomb unless it might cost him something. It should not surprise us if our non-proliferation policy lacks credibility.

 Dangerous Exports Table

Made in America? How U.S. Exports Helped Fuel the South Asian Arms Race

By Gary Milhollin

The Washington Post
June 7, 1998, p. C1

India and Pakistan, fresh from testing nuclear devices, are poised to build missiles that could deliver the bomb deep into each other’s territory. The United States deplores these developments, but along with other countries, stands guilty of supplying much of the necessary technology.

In fact, India’s next generation of nuclear missiles will probably be designed with the help of American-made equipment.

U.S. officials say that in 1996, Digital Equipment Corp. shipped a supercomputer to the Indian Institute of Science in Bangalore, a key missile research site. Supercomputers are the most powerful tools known for designing nuclear weapons and the missiles to deliver them. They can model the thrust of a rocket, calculate the heat and pressure on a warhead entering the Earth’s atmosphere and simulate virtually every other force affecting a missile from launch to impact. Because of the billions of computations needed to solve these problems, a supercomputer’s speed is invaluable for efficiently finding design solutions.

The DEC computer will come in handy at the Indian Institute of Science. The institute is on the British government’s official list of organizations that procure goods and technology for India’s missile programs. It develops India’s most advanced rocket propellants, guidance systems and nose cones. Its wind tunnels and other equipment analyze rocket fuel combustion and flight performance. It has even been linked in published reports to India’s new nuclear-capable missile called the “Sagarika,” intended to be launched from submarines.

International Business Machines Corp. supplied the institute with an even more powerful supercomputer. According to IBM spokesman Fred McNeese, IBM installed the supercomputer at the institute’s Supercomputing Education and Research Center, which specializes in computer-aided design. The machine operated at 1.4 billion operations per second when installed in 1994, and IBM upgraded it in March 1997 to perform 3.2 billion operations per second and again in June 1997 to 5.8 billion, making it one of the most powerful computers in India.

The pro-export Commerce Department granted a license for the DEC sale, despite the notoriety of the institute as a missile site. Commerce also licensed the original installation by IBM, but IBM performed the upgrades without a license, in apparent violation of the law.

This week, the U.S. Customs Service opened an investigation into the IBM upgrades. It is already investigating IBM for selling a supercomputer to Russia’s leading nuclear weapons lab under similar circumstances.

The U.S. government requires an American company to obtain an export license if it wants to sell to a bomb-prone nation like India a computer that performs more than 2 billion operations per second. IBM claimed an exception, that allows such computers to be shipped as long as the buyer is not connected to nuclear weapons, chemical weapons, missile or military work. The seller must ensure that the exception applies, which IBM failed to do. McNeese of IBM says only that the company “has no indication that the machine has been used for anything other than university research.”

And there is the case of Viewlogic Systems Inc. of Marlborough, Mass. According to the Journal of Commerce, Viewlogic shipped computer software for designing printed circuit boards to an Indian missile manufacturer on the very day that President Clinton announced sanctions against India for its five nuclear weapon tests.

The Commerce Department approved the sale, despite the fact that the buyer was Bharat Dynamics Ltd. (BDL), a leading entry on the British government’s list of Indian missile makers. BDL manufactures and assembles India’s single-stage Prithvi missile, which can deliver a nuclear payload about 150 miles, and the two-stage Agni, which can deliver one about 1,500 miles. Both threaten Pakistan’s major cities.

With better electronic circuits, BDL’s nuclear missiles will be more accurate and reliable. The same is true of the antitank and other guided missiles that BDL makes, and advertises in a public catalogue.

How the Commerce Department could approve a sale to India’s main missile assembly site remains a mystery. Both Viewlogic and the Commerce Department decline to comment on the sale. This misguided policy of helping India develop missiles is not new. In 1963, the United States began India’s missile program by launching a U.S. rocket from India’s new Thumba Range, which the United States helped design. Despite his recent claim to being “indigenous,” A.P.J. Abdul Kalam, the “father” of the Indian bomb, spent four months in training in the United States. After visiting NASA’s Wallops Flight Facility on the Virginia coast, where he saw the U.S. Scout space rocket in action, he returned to India to build a copy.

The U.S. government obligingly supplied data on the Scout’s design after a request from the Indian Atomic Energy Commission. The Scout’s first-stage rocket is identical to the first stage of India’s longest-range missile, the Agni.

Virtually every element of India’s nuclear and missile programs has been imported directly or copied from imported designs. The Agni’s second-stage rocket motor is derived from a Russian-supplied surface-to-air missile and the Agni’s guidance system was developed with help from Germany’s space agency.

The story in Pakistan is similar. In 1962, NASA launched Pakistan’s first rocket, a U.S.-made Nike-Cajun, in a project led by Tariq Mustafa, the senior scientific officer of the Pakistan Atomic Energy Commission. NASA also trained Pakistani rocket scientists at Wallops Island. The Pakistanis were there at the same time as the Indians. Other NASA-sponsored launches followed until 1970. China stepped in later to supply Pakistan’s need for bigger missiles, but Uncle Sam launched Pakistan’s missile program just as he did India’s.

Sanctions will stop at least some of the exports from the United States. Because of the recent nuclear tests, U.S. law now bars the sale to India or Pakistan of any “goods and technology” controlled by the Commerce Department. Although the White House was quick to apply financial sanctions, it is still deciding how to interpret this export prohibition. It could cost big exporting companies real money. The companies are already lining up to limit the sanctions as much as they can.

On May 14, the Industry Coalition on Technology Transfer, the exporters’ main lobbying group, wrote to the White House urging that the sanctions be confined to nuclear-related items. They hope the White House will decide that missile-related and chemical weapon-related items will still be free for export. They also requested that they be allowed to sell spare parts and service for U.S. products already in place — such as the DEC and IBM computers. The exporters seem content to watch India and Pakistan build nuclear missiles with American technology.

The administration is now considering three options. The first is to forbid any item controlled for export to be sold to anyone in India or Pakistan — no one could buy a military-related item or any item that could help make nuclear weapons, chemical/biological weapons or missiles. Only 1 percent of U.S. sales to India are now controlled for export, so this option would be effective and painless.

The second option is to deny the nuclear and missile items to everybody, but allow private companies in India and Pakistan to buy only conventional military and chemical/biological items. The third option would allow the two governments to buy such items as well. These latter two options would undermine the integrity of the legislation passed by Congress.

What will the president decide? The pro-trade and pro-India forces are leaning on him, and he is bending. He has already hinted that he would be satisfied if India merely promised to sign the Comprehensive Test Ban Treaty and to cap its production of nuclear weapon material.

But neither pledge would mean much. The treaty tries to limit the qualitative improvement of nuclear weapons by countries that already have arsenals. It has little to do with proliferation — the decision of a country to build an arsenal in the first place. Even if India and Pakistan signed the treaty tomorrow, they would still be free to build an unlimited number of bombs and the missiles to deliver them. Both countries now have nuclear test data and India even has American supercomputers to process it.

Capping nuclear material production won’t work either. By the time a limit could be negotiated, India could have enough for well over 100 warheads. Pakistan could have enough for at least a couple dozen. The total yield could still devastate the subcontinent.

The only solution is the Nuclear Non-Proliferation Treaty, which obliges countries other than the five big nuclear powers to give up the bomb. Although neither India nor Pakistan would join the treaty now, while tempers and rhetoric are boiling, there is a decent chance in the long run. The goal must be to get South Asia to behave like South Africa. Pretoria secretly built six workable warheads, but decided life would be better without them. Trade, investment and high-tech imports were judged more valuable than a nuclear arsenal. Argentina and Brazil made the same decision, as did Belarus, Kazakhstan and Ukraine, which inherited nuclear warheads from their Soviet days.

All of these countries gave up the bomb and all except Brazil joined the Nuclear Non-Proliferation Treaty as non-nuclear weapons states in the 1990s.

That’s the direction the world is going and the direction the world must press India and Pakistan to take. Pakistan has said repeatedly that it will join if India does, so the situation can still be reversed, even after Pakistan’s tests.

Sanctions are the best hope of getting there. President Clinton should adopt a broad ban on high technology and convince U.S. allies to join. At a minimum, it would sever the technological lifeline that has always sustained the South Asian nuclear and missile effort. That alone would be a worthy achievement. It would prevent the Commerce Department from licensing more mass destruction.

And because a cutoff would ban much civilian high technology as well, India in particular would be deprived of what it needs to modernize its industry and armed forces. After a few years, India would face the technology gap that doomed the Warsaw Pact.

India’s tests were a reckless maneuver by a shaky government to shore up domestic political support. The tests left Pakistan little choice but to answer in kind. When the aftershocks die down, and more rational heads prevail, the path away from the bomb will open once again.

Should We Sell Supercomputers to Algeria?

By Gary Milhollin

The New York Times
April 24, 1998, p. A26

Since January, the Clinton Administration has been quietly circumventing a new law designed to keep American supercomputers away from third world bomb and missile makers. Supercomputers are the most powerful tools available for designing nuclear weapons and the missiles to deliver them. The world may soon face more weapons of mass destruction, all so computer companies can reap a few export dollars.

The Digital Equipment Corporation has asked the Commerce Department for permission to sell a supercomputer to India’s Nuclear Power Corporation, which runs a string of reactors, widely assumed to produce plutonium used in atomic bombs. Digital also wants to supply China’s Harbin Institute of Technology, which makes rocket casings and other components for long-range missiles.

Sun Microsystems wants to outfit the Indian Institute of Technology, which develops rocket propellants and performs wind tunnel research to improve the flight of nuclear missiles. And Silicon Graphics, Inc. is hoping to supply supercomputers to another company that develops India’s biggest rocket and missile engines.

By law, American companies must notify the government before shipping a supercomputer to countries like Russia and China, which don’t control their exports effectively, and India, Israel and Pakistan, which reject the Nuclear Nonproliferation Treaty. If a Federal agency objects to a sale within ten days of notification, the seller must provide more information.

Congress passed legislation last fall after Silicon Graphics and IBM were caught shipping supercomputers to Russia’s leading nuclear weapon labs without the required export licenses.

But in January, Gary Samore, the White House official in charge of nonproliferation and export controls, knocked the teeth out of the law. He informed the Federal agencies that they could not object to a sale unless an undersecretary personally put the objection in writing. This is like requiring the Postmaster General to personally forward your mail.

A Pentagon expert told me that this requirement is “outrageous,” because even formal license applications–which are more important than notices–are handled by mid-level personnel. David Tarbell, a senior Pentagon official, complained in a memo that the White House seemed to want to “ensure that no (or very few) objections would ever be received.”

The Energy Department has not objected to a single sale, because staffers there believe they would not get an objection up their chain of command within ten days. Even Federal agencies that have persisted have been unsuccessful. In February, the American arm of Siemens, the German electronics giant, announced that it wanted to sell a powerful computer to the Russian Academy of Sciences. The Pentagon objected because the Academy’s institutes still design nuclear warheads and missiles. But the Commerce Department returned the objection because an undersecretary hadn’t signed it. The Russians got the machine, and the Pentagon got stiffed. Only the tiny Arms Control and Disarmament Agency has been nimble enough to lodge effective objections.

Most recently, the Commerce and Energy Departments are trying to drop more than twenty countries that are now covered by the law. They want to allow supercomputer exports to Algeria, a terrorist-plagued state that is planning to process plutonium. The two departments also want to drop restrictions on countries like Vietnam and Vanuatu, which have no export controls, so technology could be easily diverted to other countries.

For all this, the computer companies would gain relatively little. The countries on the list of risky destinations account for only five percent of the potential market for supercomputers. Is it worth the risk, if someday American soldiers and sailors face Russian- and Chinese-supplied missiles in the Persian Gulf? Unless the Clinton Administration follows the intent of the law, those missiles will be designed with American help.

Proliferation Tango

The Progressive
April 1998

[…] Gary Milhollin, founder of the Wisconsin Project on Nuclear Arms Control, […] is a complicated character. One of the main advocates dedicated to exposing and stopping the spread of weapons of mass destruction, he is respected by colleagues in the anti-nuclear movement for his groundbreaking work. At the same time, with his hawkish views on U.S. foreign policy, he is friendly with the national security establishment. […]

To read the complete article, click here:  Proliferation Tango

Arrow Anti-Tactical Ballistic Missile System and Ofek Satellite Program Suffer Setbacks

According to a report in Jane’s Defence Weekly, development of the Arrow-2 “Chetz” antitactical ballistic missile (ATBM) system has fallen at least one year behind schedule due to bureaucratic red tape and a fire at its production facility in April 1997.

A Israeli Knesset member recently disclosed that major project management errors had been discovered which have slowed the development of the Arrow. In addition, the Israeli Ministry of Defense conceded in January 1998 that the fire and explosion at an Israel Aircraft Industries (IAI) plant, where much of the Arrow work is conducted, caused about $30 million in damage and set back the program six to nine months.

The Arrow-2 is a two-stage, solid-fuel missile, and is a key component of Israel’s program to develop an anti-missile shield linked to Israeli military surveillance satellites that are launched by IAI’s Shavit rockets. The Arrow is a joint project of Israel and the United States.

News of the delay comes on the heels of successful tests in 1996 and 1997. The inaugural intercept test, and the third overall, of the Arrow-2 was conducted on August 20, 1996. During this test, the target – a modified Arrow-1 missile with a radar cross section and payload designed to match that of a Scud – was fired from a launch platform in the Mediterranean. The Arrow-2 was then launched from the Israeli Air Force Test Range just south of Tel Aviv. Within 45 seconds, the Arrow-2 locked on and destroyed the target. The intercept was designed to test the capability of the Arrow-2’s missile guidance and control system, its ability to receive inflight updates from the fire control center, and to test its tracking and destruction of a target.

In its fourth test launch, in March 1997, the Arrow-2 scored a direct hit against a missile target, although, according to a report in Aviation Week and Space Technology, its fragmentation warhead failed to detonate due to a sensor malfunction. Despite the problem, U.S. and Israeli officials said the “overwhelming majority of test objectives were achieved” because the Arrow acquired, locked on, intercepted and destroyed the target. The March test also employed for the first time as an integrated system both the “Green Pine” fire control radar and the “Citron Tree” battle management center. “Green Pine” is manufactured by Israel’s Elta Electronics Industries and the fire control system is produced by Tadiran.

A month later, U.S. Secretary of Defense William Cohen and Israeli Defense Minister Yitzhak Mordechai agreed to continue their cooperation on the Arrow program, with the U.S. pledging a 25% increase in its annual $200 million contribution.

Arrow’s next test, in August 1997, was not successful. Seconds after launch, the missile veered from its planned flight path and had to be destroyed. According to a report in Jane’s Defence Weekly, the Israeli Ministry of Defense said the problem stemmed from an “irregular functioning of one of its subsystems,” but stressed that the aborted test would “not affect the timetable to complete the development and equipping of the Arrow system.”

Despite the failure, Israeli TV announced in November 1997 that the Arrow would be “partly operational” by mid-1998. Although the Ministry of Defense and IAI refuse to comment on the report, there is speculation that the Arrow is being readied in case Iran is successful in its bid to develop long-range missiles.

On the space front, Israel secretly launched the Ofek-4 spy satellite in January 1998, but it failed to reach its proper orbit, and was expected to burn up reentering the Earth’s atmosphere. Ofek-4 was set to replace the Ofek-3 satellite, which has been operating nine months longer than planned. Loss of the Ofek-4 means Israel will soon be without any reconnaissance satellites to monitor activities in Iran and Iraq.

The Ofek-4 satellite program is one of Israel’s most ambitious projects, and several of its top defense companies are involved: Elisra built the video compression, Elop manufactured its cameras, Elbit supplied the computer, Tadiran the communications, and Rafael provided Ofek’s electricity and power.

The Pitfalls of Nuclear Trade with China

By Gary Milhollin

The Boston Sunday Globe
February 22, 1998

China’s export record and its refusals speak of the need for US safeguards.

Congress is now debating whether to approve President Clinton’s recent agreement allowing nuclear trade with China. Will the deal encourage China to continue exporting weapons of mass destruction, as its opponents fear, or will it create American jobs and preserve U.S. security, as its backers claim?

Both sides agree that China’s nuclear export record is bad. Since 1980, China has supplied billions of dollars in nuclear, chemical and missile technology to South Asia, South Africa, South America and the Middle East. The shipments have flowed side-by-side with China’s promises to stop them.

In 1992, after the United States caught China giving missile assistance to Pakistan, China promised to stop such sales. The State Department then dropped trade sanctions against the offending Chinese companies. But it had to impose them again in 1993 because China was caught helping Pakistan again. The State Department lifted the sanctions once more in 1994, when China made a second promise to stop, but the missile shipments soon resumed, and they have continued.

China is also helping Pakistan to build its own missile plant, which will produce rockets powerful enough to hit Indian cities with nuclear warheads. State acknowledges the shipments are going on, but has chosen not to apply sanctions because it is following a policy of “engagement.”

China has also given Pakistan a tested nuclear bomb design. As recently as 1996, China supplied magnets specially designed to boost Pakistan’s production of atomic bomb fuel. If China’s aid were subtracted from Pakistan’s nuclear and missile programs, the programs would not exist.

The Clinton administration acknowledges all this, but argues that it has “seen a marked positive shift” in China’s nuclear export behavior. The administration points out that since May 1996, when U.S. diplomats confronted China over the magnet sale, China has stopped supplying nuclear components to plants not subject to international inspection.

Moreover, the administration says, China has promised to phase out its nuclear cooperation with Iran. Beijing planned to sell Tehran a plant to enrich uranium to nuclear weapons grade. The plant had no civilian use, and was an evident step toward the bomb.

China now says it will drop this deal, but it is fair to ask why China would agree to such an outrageous sale in the first place. Were the Chinese just pulling Uncle Sam’s beard, to see how many concessions he would deliver? And if America rewards China for not selling such a plant, how is that different from giving in to blackmail?

To open nuclear trade, President Clinton must certify that China is no longer helping other countries to make nuclear weapons. By ending its secret nuclear sales to Pakistan, and by phasing out its help to Iran, China has shown that it meets this litmus test, the administration says. Thus, it makes sense to reward China’s progress, especially if it means creating American jobs. The State Department calls the pact a “win-win situation.”

But what China hasn’t promised is even more important. Beijing has refused to cut off aid to Pakistan’s nuclear program: China promises only to refrain from shipping things to secret plants. Training Pakistan’s nuclear experts, and selling components that can be diverted from an inspected plant to a secret one, will continue. China has also refused to curb its missile exports to Pakistan and Iran, and refused to stop helping Iran to make poison gas. If China were truly mending its ways, critics say, it would stop these exports too.

The jobs issue was clearly paramount in the administration’s calculations. Increased trade has been Clinton’s main goal in foreign policy. So what’s in the deal for the American worker?

Westinghouse, which led the campaign to open trade, argues that China will buy up to sixty billion dollars worth of reactors over the next fifteen years. Each twin-reactor order would create 5,000 jobs, including 1,600 in Pennsylvania, according to Westinghouse estimates.

But that seems unlikely. China has said that most of the jobs will be Chinese. In September, a high Chinese official explained how China plans to buy its reactors. There will be three criteria: China must be offered the latest reactor design, the sale must be on credit, and the seller must teach China how to build the reactor on its own.

The last point is vital. In February, Zhao Chengkun, dean of China’s Nuclear Power Institute, laid out China’s plans for dealing with Westinghouse. China plans to start with the latest Westinghouse design, the advanced AP600 reactor, for which U.S. taxpayers shouldered half the development cost. Then, China and Westinghouse will jointly develop a Chinese version, the “China AP600.” According to Zhao, this will “facilitate independent design and domestic manufacturing.”

The “construction…should be done mainly by the Chinese,” Zhao said, under China’s policy of “international cooperation, with China taking the lead.” He estimated that China would “produce at least 70 percent of the equipment.” During construction, “a few Westinghouse experts may come to China to provide technical assistance on new technologies,” he said, but “the next century of reactors in China shall be designed and built in China and be economically competitive.”

No one should be surprised by this strategy. It is the same path that Japan and France chose decades ago. When those two countries were faced with building a string of new reactors, each bought an American plant to get the latest design. Then each country built the rest of its reactors on its own. If China doesn’t do the same, it will spend billions of dollars it can ill afford to squander.

France, in fact, is offering China the Westinghouse design that France originally imported from the United States. Framatome, the French reactor builder, uses Westinghouse technology under a U.S. license. If Congress approves the trade pact, Westinghouse will be competing in China against its own technology. This makes sound hollow the recent pronouncement of Michael Jordan, the Westinghouse chief executive officer, who told the press in October that “Westinghouse is perfectly delighted to have the opportunity to compete at long last with our foreign rivals in China’s $60 billion market for nuclear power.”

Jordan also forgot to mention that Westinghouse is leaving the business. After leading the charge to get the China agreement through the White House, the 111-year-old company became the CBS Corporation. In November, its management sold its power generation business to Siemens AG of Germany for $1.53 billion, and what’s left of its nuclear business will probably be disposed of this year to another foreign buyer.

Opening trade with China could make Jordan’s nuclear unit worth more on the auction block, which helps to explain his lobbying effort. Any American jobs produced by the pact probably will be few and short-lived.

The final question is whether China can or will control its exports. China promulgated its first regulation on nuclear trade only last fall, in a move that produced mostly skepticism. A leading defense authority in India observed that the new rule will be administered by the same Chinese government institutions that handled the nuclear sales to Pakistan. Thus, he concluded, “There is no guarantee that nuclear exports will not take place in the future.”

And there is the question of “dual-use” equipment. These are the high-accuracy machine tools and other sensitive items needed to make nuclear weapons, but which also have civilian applications. All the nuclear supplier states except China regulate their sale. Until China can control these items, it cannot truthfully assure the United States that it is not helping other countries build nuclear weapons. China is not expected to control dual-use items until mid-1998, at the earliest.

Congress would be prudent to require three things before allowing the nuclear pact to take effect. First, the President should certify that China can control its exports of dual-use technology. Until China can do so, there can be no confidence that Chinese equipment is not helping other countries build the bomb.

Second, the President should certify that China is no longer selling the means to make missiles and poison gas. China should not be able to receive American nuclear technology with one hand and spread missile and poison gas technology with the other.

Third, China should stop giving nuclear aid to Pakistan and other countries that do not open all their nuclear plants to inspection. If China wants the benefits of nuclear trade, it should accept the burdens of being a responsible nuclear supplier.

If Congress imposes these conditions, nuclear trade with China could make the world safer. Without them, weapons of mass destruction will continue to spread.

Iran Chemical Weapon Update – 1998

In February 1997, Director of Central Intelligence George Tenet named Iran as among the twenty countries that the CIA suspects of having or developing chemical and biological weapons. In May 1996, the CIA told the Senate Select Committee on Intelligence that Iran’s chemical weapon program was “already among the largest in the Third World, yet has continued to expand and become more diversified.” The CIA testified that Iran was “developing a production capability for the more toxic nerve agents,” and was trying to reduce its dependence on imported raw materials.

The CIA estimated the stockpile of Iran’s chemical weapons at several thousand tons in 1996, with agents including sulfur mustard, phosgene and cyanide. The CIA also stated that Iran has the ability to produce a thousand tons of agent each year. Delivery methods for these chemical agents include artillery, mortars, rockets, aerial bombs and possibly Scud missile warheads. A subsequent CIA report noted that during the second half of 1996, Iran obtained the “bulk of its CW [chemical weapon] equipment from China and India,” and has sought to obtain dual-use biological equipment from Asia and Europe.

Iran’s parliament ratified the Chemical Weapons Convention (CWC) in November 1997. As a signatory, Iran is prohibited from developing, producing and stockpiling chemical weapons. Iran is also a party to the Biological Weapons Convention of 1972.

Program history

The U.S. Defense Intelligence Agency (DIA) reported in 1990 that Iran’s offensive chemical weapon program had begun in 1983 “in response to Iraqi use of riot control and toxic chemical agents” during the Iran-Iraq War. According to the DIA, the program began under the Islamic Revolutionary Guard Corps (IRGC), with the role of the Ministry of Defense increasing over time. U.S. officials credit Iran’s Defense Industries Organization (Sazeman Sanaye Defa), a part of the Ministry of Defense, with assembling the various elements of Iran’s chemical and biological weapon programs.

In April 1984, the Iranian delegate to the United Nations, Rajai Khorassani, admitted at a London news conference that Iran was “capable of manufacturing chemical weapons … [and would] consider using them.” By 1987, U.S. State Department officials confirmed that Iran had provided chemical weapons to Libya. In December 1987, Iranian Prime Minister Hussein Musavi stated in a parliamentary address that Iran was producing “sophisticated offensive chemical weapons.”

By 1988, Iran reportedly was actively producing phosgene gas and cyanotic agents, and possibly nerve gas. Iran’s indigenous chemical weapon production capability was confirmed in a March 1990 U.S. DIA report which concluded that Iran had created or purchased its own version of sulfur mustard gas, samples of which had been collected by a United Nations team and were shown by independent analysis to be of “different origin than the mustard gas used by Iraq.” The DIA report also stated that a United Nations team had examined Iraqi victims of Iranian chemical attacks who “displayed the effects of exposure to a choking agent … believed to have been phosgene.”

As Iran’s chemical warfare capabilities grew, it became more difficult to determine which side was responsible for chemical attacks during the Iran-Iraq War. In March 1988, the Kurdish town of Halabja in northern Iraq, sandwiched between Iranian and Iraqi forces, was caught in a chemical weapon crossfire. Iranian commanders, believing the village was occupied by Iraqi troops, attacked with cyanide gas bombs and artillery. Iraqi forces replied with mustard gas the next day. Iran charged that Iraq was responsible and turned the catastrophe into a major propaganda event, ferrying journalists to the village to film corpses in the street. However, between 100 and 200 deaths from cyanide gas were confirmed, as many of the victims had blue lips, a common characteristic of cyanide poisoning. In 1990, a Defense Department reconstruction of the last stages of the Iran-Iraq War affirmed that Iranian cyanide gas had been responsible for many of the Kurdish civilian deaths at Halabja.

Chemical warfare production plants have been identified by unofficial sources at Qazum, Al Razi, Bashwir and Damghan. Facilities at Damghan are thought to produce artillery shells and possibly load other weapons with nerve gas. Other reported sites include Marvdasht, near Shiraz, where mustard gas is believed to be produced. A fire reportedly broke out at Marvdasht in 1987, killing 400 persons.

Foreign assistance

Foreign assistance has been vital to Iran’s chemical and biological weapon programs. In recent years China and India have been Iran’s primary sources for chemical weapon equipment and precursor chemicals. Companies in Germany, the United States and Israel have also been involved. In addition, Israel recently voiced concern over Russian assistance.

China

The U.S. State Department has taken steps against Iran’s suppliers by imposing sanctions against both individuals and organizations. In November 1994, Manfred Felber, an Austrian, Gerhard Merz, a German, and Luciano Moscatelli, an Australian, were all sanctioned for engaging in “chemical weapons proliferation activities.” In fact, they all supplied Chinese chemicals to Iran.

In February 1995, the State Department sanctioned three more companies, Asian Ways Limited, WorldCo Limited and Mainway International for chemical weapon proliferation. The U.S. government did not reveal where the companies were based or what they had done, but all the companies had used offices in Hong Kong to send poison gas ingredients from China to Iran. That same month, the companies were denied the right to do business in Hong Kong.

In March 1996, the Washington Post reported that companies in China were providing Iran with “virtually complete factories” suited for making chemical weapons. In May 1997, the State Department sanctioned one Hong Kong company, two Chinese companies and five Chinese individuals for providing Iran with chemical weapon technology. Nanjing Chemical Industries Group (NCI) and Jiangsu Yongli Chemical Engineering and Technology Import-Export Corporation, both Chinese concerns, and Cheong Lee Limited, a Hong Kong company were all prohibited from doing business with the United States for one year. The sanctioned Chinese individuals were Liao Minglong, Tian Yi, Chen Qingchang (aka Q.C. Chen), Pan Yongming, and Shao Xingsheng.

In January 1997, Rex International Development, a Hong Kong-based company owned by NORINCO (a huge Chinese state-run arms manufacturing conglomerate), reportedly handled a shipment of high-grade seamless steel pipes suitable for use in chemical or explosives manufacturing. The shipment went from Spain through Hong Kong to the Iranian port of Bandar Abbas, and then on to an Iranian chemical weapon plant. Iran’s Defense Industries Organization (DIO) reportedly was the consignee for the deal. Rex International was ordered closed down by the British colonial government shortly before the Chinese takeover of Hong Kong in June 1997 and volunteered to cease business under a settlement with the new Chinese government in July 1997.

India

In January 1995, the Washington Times reported that, according to a highly classified German intelligence report, Iran was “only months away from completing a secret poison-gas complex.” According to the report, Indian companies had been involved in the construction of the plant, which was intended for the production of the nerve gases sarin and tabun. The article claimed that equipment, including corrosion-resistant enamel reactors, pipes and pumps, were all being sought by Indian firms from German companies. The Indian companies seeking the goods were identified as Tata Consulting Engineering, Transpek, and Rallis India.

Germany

In June 1989, the West German trading company Rheineisen Chemical Products acknowledged that it had arranged the sale of 257 tons of thionyl chloride, a mustard gas precursor, from a chemical company in India to Iran. Rheineisen, which was owned by an Iranian family, cancelled the contract but denied that the transaction was a violation of West German export law. U.S. officials believed Rheineisen, which had been purchased from its original German owners in 1988, was a front company for Iranian chemical procurement efforts.

The Indian supplier, Transpek Private Ltd., denied that it had any contract with either Rheineisen Chemical Products or Iran, but later admitted that it had sold 60 tons of thionyl chloride to Iran in March 1989 through the government-controlled Indian State Trading Corporation. A Transpek official acknowledged that the contract for the planned 257-ton sale brokered by Rheineisen had been signed in June 1989.

United States

In January 1989, a U.S. Customs Service investigation revealed that an Iranian diplomat posted in West Germany, Seyed Kharim Ali Sobhani, had brokered three shipments of thiodiglycol, a precursor of mustard gas and a controlled commodity, from the United States to Iran in 1987 and 1988 through a West German company. The Iranian agent had instructed the German firm Chemco GmbH to purchase the chemical from Alcolac International of Baltimore, and shipments were routed through third countries (30 tons through Greece in March 1987 and 60 tons through Singapore in June 1987) to conceal their final destinations.

The Customs Service intercepted a third Alcolac shipment of 120 tons in April 1988, substituted water for the chemicals, and tracked the shipment through Singapore and Pakistan to a Tehran firm M/S Ray Textile Industries, that U.S. officials said was a front company for chemical purchases. The responsible officer at Chemco GmbH was arrested and pleaded guilty to violating U.S. export law, but subsequently jumped bond and fled to West Germany, where he could not be extradited or prosecuted under German law. The West German government, under pressure from the United States, forced Tehran to withdraw the Iranian diplomat from its embassy in Bonn.

Alcolac pleaded guilty to a single count of violating U.S. export law for manipulation of documents by its export manager, Leslie Hinkelman, to conceal the fact that the 120-ton shipment of thiodiglycol was destined for Iran. It was later revealed that Alcolac exported four other shipments of thiodiglycol totaling more than 400 tons through Nu Kraft Mercantile Corporation of New York, which were ultimately diverted via Jordan to Iraq.

In January 1997, the Los Angeles Times reported that two business partners, Henry Joseph Trojack and Abdol Hamid Rashidian, had been arrested on charges of conspiring to ship Iran impregnated alumina, a chemical that could be used to make VX and sarin nerve gas. The case is still pending.

Israel

In July 1994, Nahum Manbar, an Israeli citizen, and his companies Mana International Investments in Poland, and Europol Holding, Ltd. in the United Kingdom, were sanctioned by the State Department for engaging in “chemical weapons proliferation activities.” While Manbar admitted to the Israeli press only that he had sold anti-chemical and anti-biological suits to Iran, a senior U.S. official stated in June 1995 that Manbar “provided knowing and material support to a BW [biological weapon] or CW [chemical weapon] program of a country on our terrorist list,” that country being Iran. In May 1997, Manbar was arrested and charged in Israel with “assisting the enemy in its war against Israel, providing information to an outside enemy with the intent of harming state security, and providing Iran with the means to manufacture chemical weapons in exchange for 16m [million] dollars.” The case against Manbar is still pending.

Biological weapons

In 1996, the CIA told Congress that Iran had possessed a biological weapons program since the early 1980s. The CIA said that Iran held some stocks of BW agents and weapons, but that the program was mostly in the “research and development stage.” Delivery of biological agents could be accomplished by the same systems that Iran has for chemical weapons, namely artillery shells and aerial bombs. The CIA also stated that Iran had the “technical infrastructure to support a significant BW program and needs little foreign assistance,” and noted that Iran had “top-notch” biomedical research institutes that conduct legitimate research, which could support a biological weapon program. The CIA concluded that “because of the dual-use nature of biomedical technology, Iran’s ability to produce a number of both human and veterinary vaccines also gives it the capability for large-scale BW agent production.” In June 1997 the CIA reported that Europe and Asia were potential sources of dual-use biotech equipment.

In its 1996 Annual Report to Congress, the U.S. Arms Control and Disarmament Agency (ACDA) said Iran has produced BW agents and “apparently” has weaponized some. Facilities at Damghan and Karaj have been reported as possible biological weapon development sites.

China: Promises on Nonproliferation – 1981-1997

Adapted from a statement by Congressman Benjamin Gilman (R-NY) on November 5, 1997, during the House floor debate on China sanctions legislation.

“The question of assurance does not exist. China and Iran currently do not have any nuclear cooperation . . . We do not sell nuclear weapons to any country or transfer related technology. This is our long-standing position, this policy is targeted at all countries.”
— Foreign Ministry spokesman Shen Guofang, Los Angeles, 11/2/97, Reuters, 11/3/97.

“We don”t have to take it on faith . . . We received clear-cut, specific assurances.”
— Senior US official, AFP, 10/31/97 (referring to China”s vow not to commence new nuclear cooperation with Iran.)

China will . . . not help other countries develop nuclear weapons. At the same time, China also holds that prevention of nuclear proliferation should not affect international cooperation on the peaceful use of nuclear energy. The U.S. administration is clear on this point and so is the international community.”
— Foreign Ministry spokesman Tang Guoqiang, Beijing, 10/30/97, Ta Kung Pao, 10/31/97 (emphasis added).

“President Jiang and I agreed that the United States and China share a strong interest in stopping the spread of weapons of mass destruction and other sophisticated weaponry in unstable regions and rogue states; notably, Iran. I welcome the steps China has taken and the clear assurances it has given today to help prevent the proliferation of nuclear weapons and related technology.”
— President Bill Clinton, press conference, Washington, D.C., 10/29/97.

“In May 1996, China committed not to provide [unsafeguarded nuclear] assistance to . . . Pakistan or anywhere else. We have monitored this pledge very carefully over the course of the last 16, 18 months, and the Chinese appear to be taking their pledge very seriously. We have no basis to conclude that they have acted inconsistently with this May 1996 commitment. Also, the Chinese have provided assurances with respect to nuclear cooperation with Iran. What they have
assured us is that they . . . are not going to engage in new nuclear cooperation with Iran, and that they will complete a few existing projects, and these are projects which are not of proliferation concern. They [will] complete them within a relatively short period of time . . . the assurances we received are . . . sufficiently specific and clear to meet the requirements of our law and to advance our national security interests, and they are in the form of writing. They’re written, confidential communications . . . I would call them authoritative, written communications . . . Today was when the final exchange took place . . . We will make [them] available to members of Congress in confidence, because these are confidential diplomatic communications, an opportunity to read and judge for themselves these written assurances that we’ve been given . . . [Q] assurances specifically–different countries, specifically, say, Iran, Pakistan? . . . [A] Yes, just Iran . . . they have safeguarded peaceful nuclear cooperation with both Pakistan and India, and they told that at this particular point, they”re not prepared to suspend those projects . . . The President made very clear to him that this was an essential requirement; we needed to have this assurance on Iran, or there could be no certification . . . [Q] Who is the assurance addressed to? [A] We’re not going to discuss the . . . specifics of the issue. [Q] Is it in a letter, though, that’s addressed to someone in particular in the U.S. government? [A] It”s an authoritative, written communication.”
— Senior Administration Official, press briefing, The White House, 10/29/97, emphasis added.

“We have received assurances from the Chinese that they will not engage in any new nuclear cooperation with Iran, and that the existing cooperation–there are two projects in particular–will end. That is the assurance we have received. As to the form of that assurance, we will be discussing that with Congress . . .”
— Sandy Berger, National Security Advisory, press conference, 10/29/97

“The United States and China reiterate their commitment not to provide any assistance unsafeguarded nuclear facilities and nuclear explosion programs.”
— Joint U.S.-China Statement, The White House, 10/29/97.

“China has taken new, concrete steps to prevent nuclear proliferation that threaten the interests of both countries. China has . . . Provided assurances addressing U.S. concerns about nuclear cooperation with Iran . . .”
— White House Fact Sheet, “Accomplishments of US/China Summit. 10/29/97.

“. . . I think we have reached a point where we’re satisfied that we have the assurances that we need to have that China is not engaging, will not engage in assistance to states developing nuclear weapons, which would enable the President to go forward with the Peaceful Nuclear Energy Agreement of 1985.”
— Senior White House official, press conference, Washington, D.C., 10/29/97.

“China adopts a cautious and responsible attitude toward nuclear exports. It has never transferred nuclear weapons or relevant technology to any other country. China”s stand against nuclear weapons proliferation is consistent with clear-cut; that is, China has consistently opposed nuclear weapons proliferation. It does not advocate, encourage, or engage in nuclear weapons proliferation, nor has it helped other countries develop nuclear weapons. In the meantime, China takes the view that the fight against nuclear weapons proliferation should not affect international cooperation on the peaceful use of nuclear energy. The American side is well aware of the Chinese position on that.”
— Foreign Ministry spokesman Tang Guoqiang, Beijing Central Peoples Radio, 10/28/97

“I wish to emphasize once again China has never transferred nuclear weapons or relevant technology to other countries, including Iran . . . China has never done it in the past, we do not do it now, nor will be do it in the future.”
— Foreign Ministry spokesman Shen Guofang, Kyodo, 10/21/97.

“. . . China adheres to the policy that it does not advocate, encourage or engage in proliferation of nuclear weapons nor assist other countries in developing nuclear weapons. For many years the Chinese Government has exercised strict and effective control over nuclear and nuclear-related export, including exchanges of personnel and information, and has abided by the following three principles: (1) serving peaceful purposes only; (2) accepting IAEA safeguards; (3) forbidding transfer to any third country without China’s consent. With regard to any nuclear export, the recipient government is always requested to provide to the Chinese side an assurance in writing to acknowledge the above three principles and the export can proceed only after approval by relevant Chinese authorities . . . [regulations] strictly prohibit any exchange of nuclear weapons related technology and information with other countries . . . No [Chinese] agency or company is allowed to conduct cooperation or exchange of personnel and technological data with nuclear facilities not under IAEA safeguards . . . [these] regulations are applicable . . . also to all activities related to nuclear explosive devices . . . the Chinese side wishes to emphasize that the prevention of nuclear proliferation should in no way affect or hinder the normal nuclear cooperation for peaceful uses among countries, let along be used as an excuse for discrimination and even application of willful sanctions against developing countries. The prevention of nuclear proliferation and peaceful uses of nuclear energy constitute the two sides of one coin . . . this is the consistent policy of China.”
— Ambassador Li Changhe, Statement at Meeting of Zangger Committee, Vienna, 10/16/97.

“China”s position on nuclear proliferation is very clear . . . It does not advocate, encourage, or engage in nuclear proliferation, nor does it assist other countries in developing nuclear weapons. It always undertakes its international legal obligations of preventing nuclear proliferation . . . China has always been cautious and responsible in handling its nuclear exports and exports of materials and facilities that might lead to nuclear proliferation.
— Statement by Foreign Ministry spokesman Cui Tiankai, Beijing, Xinhua, 9/15/97.

“The state highly controls nuclear exports and strictly performs the international obligation on nonproliferation of nuclear weapons it has undertaken. The state does not advocate, encourage and engage in proliferation of nuclear weapons, and does not help other countries develop nuclear weapons. Nuclear exports are used only for peaceful purposes and are subjected to International Atomic Energy Agency”s guarantee and supervision . . . The state prohibits assistance to nuclear facilities not subject to International Atomic Energy Agency”s guarantee and supervision, and does not engage in nuclear exports or personnel and technological exchanges and cooperation with them.
— Regulations of the PRC on Control of Nuclear Exports, Xinhua, 9/11/97.

Our country . . . has followed the policy of not advocating, not encouraging, and not engaging in the proliferation of nuclear weapons, and not helping other countries to develop nuclear weapons . . . all relevant agencies and units engaged in the activities of foreign economic trade must thoroughly implement our country’s policy on nuclear exports; that is, not advocating, encouraging, or engaging in the proliferation of nuclear weapons and not helping other countries develop nuclear weapons; only using nuclear export items for peaceful purposes, accepting the International Atomic Energy Agency”s safeguards and supervision, and not allowing the transfer of such items to third countries without our country”s permission; and not giving assistance to the nuclear facilities of those countries that have not accepted the safeguards and supervision of the International Atomic Energy Agency . . . Nuclear material, nuclear installations and related technology, non-nuclear material used for reactors, and nuclear-related dual-use installations, material, and related technology . . . may not be supplied to or used by nuclear facilities that have not accepted the International Atomic Energy Agency”s safeguards and supervision. No unit or corporation is allowed to cooperate with nuclear installations that have not accepted the system of safeguards and supervision of the International Atomic Energy Agency, nor are they allowed to engage in exchanges of professional scientific and technical personnel and technological information . . .”
— Chinese State Council Circular No. 17, Beijing, 5/27/97.

“. . . we have absolutely binding assurances from the Chinese, which we consider a commitment on their part not to export ring magnets or any other technologies to unsafeguarded facilities . . . The negotiating record is made up primarily of conversations, which were detailed and recorded, between US and Chinese officials.”
Under Secretary of State Peter Tarnoff, congressional testimony, 5/16/96.

“Last week, we reached an understanding with China that it will no longer provide assistance to unsafeguarded programs . . . senior Chinese officials have explicitly confirmed our understanding the Chinese policy of not assisting unsafeguarded nuclear facilities would prevent future sales, future transfers of ring magnets.”
Secretary of State Warren Christopher, congressional testimony, 5/15/96.

“Being a signatory of the Nuclear Non-Proliferation Treaty, China strictly abides by its treaty commitments and has never engaged in any activities in violation of its commitments. China”s position of opposing nuclear weapons proliferation is constant and unambiguous. China will, as usual, continue to honor its international commitments and play a positive role in maintaining regional and world peace and stability.
— Foreign Ministry spokesman Cui Tiankai, Zhonggwo Ximven She, 5/15/96.

“China strictly observes its obligations under the treaty and is against the proliferation of nuclear weapons. China pursues the policy of not endorsing, encouraging or engaging in the proliferation of nuclear weapons, or assisting other countries in developing such weapons. The nuclear cooperation between China and the countries concerned is exclusively for peaceful purposes. China will not provide assistance to unsafeguarded and unsupervised Chinese nuclear facilities.
— Foreign Ministry spokesman, Xinhua, 5/11/96.

“Shen Guofang is an official press officer of the Chinese government and he has said several times that China is not exporting nuclear arms material nor spreading nuclear arms. The Central Intelligence Agency of the United States, the CIA, has accorded to Shen made several mistakes. The claim that China is exporting so-called ring magnets to Pakistan is one of the CIA”s mistakes, according to Shen.
— Interview with Chinese Shen Guofang, YLE Radio, Helsinki, 4/5/96.

“China has never transferred or sold any nuclear technology or equipment to Pakistan . . . We therefore hope the U.S. Government will not base its policy-making on hearsay.
— Foreign Ministry Deputy Secretary Shen Guofang, Hong Kong AFP, 3/26/96.

“China, a responsible state, has never transferred equipment or technology for producing nuclear weapons to any other country. Nor, as a responsible state, will China do so in the future.
— Foreign Ministry spokesman, Xinhua, 2/15/96.

“China is a responsible country. We have not transferred, nor will we transfer to any country, equipment or technologies used in manufacturing nuclear weapons. As a signatory to the nuclear weapons non-proliferation treaty, China scrupulously abides by the treaty concerning international legal obligations toward the prevention of nuclear weapons proliferation, and it does not advocate, encourage or engage in nuclear proliferation. While engaging in cooperation with other countries for the peaceful use of nuclear energy, China strictly abides by China”s three principles on nuclear exports and accepts the safeguards and supervision of the International
Atomic Energy Agency.
— Foreign Ministry spokesman Shen Guofung, Xinhua, 2/15/96.

“Foreign Ministry spokesman Shen Guofang today denied reports that China has transferred nuclear technology to Pakistan. He said that China carries out normal international cooperation with Pakistan and some other countries on the peaceful use of nuclear energy. The legitimate rights and interests of all countries in the peaceful use of nuclear energy should also be respected. China has constantly adopted a prudent and responsible toward the export of nuclear energy. It is totally groundless to say that China has transferred nuclear technology to Pakistan.
— Foreign Ministry spokesman Shen Guofang, as reported in Ta Kung Pao, 2/9/96
(follows 2/8/96 Washington Times story about China”s transfer of ring magnets to Pakistan”s unsafeguarded uranium enrichment plant).

“China has constantly stood for . . . pursuing a policy of not supporting, encouraging or engaging in the proliferation of nuclear weapons and assisting any other country in the development of such weapons . . . Since 1992 when [China] became a party to the [nuclear Non-Proliferation] treaty, it has strictly fulfilled its obligations under the Treaty, including the obligation to cooperate fully with the IAEA in safeguard application. China follows three principles regarding nuclear exports: exports serving peaceful purposes only, accepting IAEA safeguards . . . Only specialized government-designated companies can handle nuclear exports and in each instance they must apply for approval from relevant governmental departments. All exports of nuclear materials and equipment will be subject to IAEA safeguard. China has never exported sensitive technologies such as those for uranium enrichment, reprocessing and heavy water production.
— Information Office of the State Council of the PRC White Paper: “China: Arms Control and Disarmament”, Beijing Review, 11/27/95.

“. . . there isn”t any nuclear cooperation between China and Iran that is not under the safeguard of the International Atomic Energy Agency.
— Foreign Ministry spokesman Chen Jian, Xinhua, 9/26/95.

“. . . China as a State Party and particularly as a developing country with considerable nuclear industrial capabilities, strictly abides by the relevant provisions of the NPT to ensure the exclusive use [of such capabilities] for peaceful purposes . . .”
— Ambassador Sha Zukang, NPT Extension Conference, at UN, 1/23/95.

“China does not engage in proliferation of weapons of mass destruction . . .
— Foreign Minister Qian Qichen, AP newswire, 10/4/94.

“China is a signatory to the Nuclear Nonproliferation Treaty. We do not support or encourage nuclear proliferation, this has been a consistent position.
— Premier Li Peng, Beijing Central Television Program One, 3/22/94.

“[T]he Chinese government has consistently supported and participated in the international communities efforts for preventing the proliferation of nuclear weapons.”
— Ambassador Hou Zhitong, address to the U.N. General Assembly, 10/21/92.

“[China] supports non-proliferation of nuclear weapons and other weapons of mass destruction.
— Foreign Minister Qian Qichen, at the U.N. Conference on Disarmament and Security Issues in the Asia-Pacific Region, 8/17/92.

“The reports carried by some Western newspapers and magazines alleging that China has provided Iran with materials, equipment, and technology that can be used to produce nuclear weapons are utterly groundless.
— Foreign Ministry spokesman, Xinhua, 11/4/91.

“China has always stood for nuclear nonproliferation, neither encouraging nor engaging in nuclear proliferation.
— Premier Li Peng, Xinhua, 8/10/91.

“The Chinese Government has made it clear that it adheres to a nuclear nonproliferation policy. This means that China does not support, encourage, or engage in nuclear proliferation. We said so and have done so, too.
— Premier Li Peng, interview with Iranian and Chinese journalists, Renmin Ribao, 7/10/91.

“China has struck no nuclear deals with Iran . . . This inference is preposterous.
— Chinese embassy official Chen Guoqing, rebutting a claim that China had sold nuclear technology to Iran, letter to Washington Post, 7/2/91.

“The report claiming that China provides medium-range missiles for Pakistan is absolutely groundless. China does not stand for, encourage, or engage itself in nuclear proliferation and does not aid other countries in developing nuclear weapons.
— Foreign ministry spokesman Wu Janmin, Zhongguo Ximwen She, 4/25/91.

“China”s position is clear cut, that is, China won”t practice nuclear proliferation. Meanwhile we are against the proliferation of nuclear weapons by any other country.
. .”. Premier Li Peng, Xinhua, 4/1/91.

“. . . the Chinese Government has consistently supported and participated in the international community”s efforts for preventing the proliferation of nuclear weapons.
— Ambassador Hou Zhitong, Xinhua, 10/24/90.

“China seeks a policy of not encouraging or engaging in nuclear proliferation and not helping any country develop the deadly weapons.
— Ambassador Hou Zhitong, Xinhua, 9/12/90.

“China has adopted a responsible attitude [on nuclear cooperation], requiring the recipient countries of its nuclear exports to accept IAEA safeguards and ensuring that its own nuclear import is for peaceful purposes.
— Foreign Minister Qian Qichen, Xinhua, 2/27/90.

“China does not advocate, or encourage, or engage in nuclear proliferation and would only cooperate with other countries in the peaceful application of nuclear energy.
— Foreign Minister Qian Qichen, Renmin Ribao, 9/15/89.

“China, though not a [NPT] signatory, has repeatedly stated that it abides by the principles of nuclear nonproliferation.
— Xinhua, 5/9/89.

“As everyone knows, China does not advocate nor encourage nuclear proliferation. China does not engage in developing or assisting other countries to develop nuclear weapons.
— Foreign Ministry spokesman, Beijing radio, 5/4/89.

“The cooperation between China and Pakistan in the sphere of nuclear energy [is] entirely for peaceful purposes. The relevant agreements signed between the two countries consist of specific provisions guaranteeing safety. The allegations that China has been assisting Pakistan in the field of nuclear weapons . . . are completely groundless . . .”
— Foreign Ministry spokesman Li Zhaoxing, Beijing Radio, 1/19/89.

“[Secretary of Defense Frank] Carlucci said Chinese leaders emphasized that they would never sell nuclear weapons to foreign nations. . .”. Washington Post, 9/8/88.

“China does not advocate or encourage nuclear proliferation, nor does it help other countries develop nuclear weapons.
— Vice Foreign Minister Qian Qichen, Beijing Review, 3/30/87.

“The State Department and its allies insist that the negotiators made no such concessions. They argue that despite the text of the [US/China nuclear] agreement, they have obtained private assurances from the Chinese that Beijing will cooperate with unwritten American expectations. In particular, the chief American negotiator, Special Ambassador Richard T. Kennedy, has prepared a classified “Summary of Discussions,” in which he asserts that the Chinese have provided further pledges to reform their nuclear export policies. Touting these unwritten, unofficial assurances, he claims that the China pact would not compromise our vigilance against the spread of nuclear weapons.
— The New Republic, 11/25/85, p. 9.

“Since that time [1983], we have received assurances from them [the Chinese government] and we have seen nothing, and there is no evidence, that indicates that they are not abiding by the assurances that they have provided us.
— Deputy Assistant Secretary of State James R. Lilley, congressional testimony, 11/13/85.

“The People”s Republic of China has clearly indicated that it shares our concerns about any nuclear weapons proliferation. . .”
— Secretary of Energy John S. Herrington, congressional testimony, 10/9/85.

“The Chinese made it clear to us that when they say they will not assist other countries to develop nuclear weapons, this also applies to all nuclear explosives . . . We are satisfied that the [nonproliferation] policies they have adopted are consistent with our own basic views.
— Ambassador Richard Kennedy, Department of State, congressional testimony, 10/9/85.

“The Chinese have also made a number of high-level policy statements, and I would emphasize that these were high-level policy statements and not mere toasts tossed off in haste and casually. These clearly set forth their position that they are opposed to the spread of nuclear weapons and do not assist or encourage others to develop weapons.
— Assistant Secretary of State Paul Wolfowitz, congressional testimony, 10/9/85.

“Since negotiations began on the proposed agreement, China has made significant new statements on its nonproliferation policy . . . These statements show that China is opposed to the spread of nuclear explosives to additional countries.
— Ambassador Richard Kennedy, Department of State, congressional testimony, 9/12/85.

“The People”s Republic of China has clearly indicated that it shares our concerns about any nuclear weapons proliferation . . .
— Assistant Secretary of Energy George Bradley, congressional testimony, 9/12/85.

“The Chinese know that nuclear cooperation with us rests on their strict adherence to basic nonproliferation practices discussed and clarified at such great length.”
— ACDA Assistant Director Norman A. Wulf, congressional testimony, 9/12/85.

“Our contacts with the Chinese . . . have demonstrated clearly that they appreciate the importance we attach to nonproliferation. We are satisfied that the policies they have adopted are consistent with our own basic views.
— Ambassador-At-Large Richard Kennedy, congressional testimony, 7/31/85.

“Over these past two years, the Chinese Government has taken a number of important nonproliferation steps. First, it made a pledge that it does “not engage in nuclear proliferation
— nor does it “help other countries develop nuclear weapons”. The substance of this pledge has been reaffirmed several times by Chinese officials both abroad and within China. In fact, China”s Sixth National People”s Congress made this policy a directive to all agencies of that large and complex government. As such, it constitutes a historic and positive change in China”s policies.
— ACDA Director Kenneth Adelman, congressional testimony, 7/31/85.

“Energy Department sources said a key part of the administration”s presentation to Congress would be a classified summary of a meeting between Li Peng and special US ambassador and nuclear negotiator Richard T. Kennedy in Peking in June. Kennedy was said to have “nailed down Chinese assurances that they will work to halt the spread of atomic weapons and will abide by all US safeguard requirements. The sources said Kennedy wrote the summary and “showed it to the Chinese, and they said it’s consistent with the way they view their policies.
— Sen. Alan Cranston (D-Calif.) said he was promised that written assurances of the Chinese position would be included in the nuclear agreement package.
— “US and China Sign Nuclear-Power Pact, Washington Post, 7/24/85.

“A long-dormant nuclear cooperation agreement with China apparently has been rejuvenated by new written assurances from China on its commitment to control the spread of nuclear weapons, accorting to Senate and administration officials.
— “US-China Nuclear Pact Near: New Assurances Said Received on Control of Weapons, Washington Post, 7/22/85.

“Discussions with China that have taken place since the initialling of the proposed [nuclear] Agreement have contributed significantly to a shared understanding with China on what it means not to assist other countries to acquire nuclear explosives, and in facilitating China”s steps to put all these new policies into place. Thus, ACDA believes that the statements of policy by senior Chinese officials, as clarified by these discussions, represent a clear commitment not to assist a non-nuclear-weapon state in the acquisition of nuclear explosives.
— ACDA, “Nuclear Proliferation Assessment Statement, submitted to Congress on 7/24/85 with
the US/China Agreement for Cooperation, 7/19/85.

“China is not a party to the NPT, but its stance on the question is clear-cut and above-board . . . it stands for nuclear disarmament and disapproves of nuclear proliferation . . . In recent years, the Chinese Government has more and more, time and again reiterated that China neither advocates nor encourages nuclear proliferation, and its cooperation with other countries in the nuclear field is only for peaceful purposes”.
— Ambassador He Qian Jiadong, speech given at the Conference on Disarmament in Geneva, 6/27/85 (quoted by Amb. Richard Kennedy in congressional testimony, 7/31/85).

“I wish to reiterate that China has no intention, either at the present or in the future, to help non-nuclear countries develop nuclear weapons . . . China”s nuclear cooperation with other countries, either at present or in the future, is confined to peaceful purposes alone.
— Vice Premier Li Peng, Xinhua, 1/18/85.

“We are critical of the discriminatory treaty on the nonproliferation of nuclear weapons, but we do not advocate or encourage nuclear proliferation. We do not engage in nuclear proliferation ourselves, nor do we help other countries develop nuclear weapons.
— Premier Zhao Ziyang, White House state dinner on 1/10/84, Xinhua, 1/11/84 (note: a US official later said that “These were solemn assurances with in fact the force of law, AP, 6/15/84).

“China does not encourage or support nuclear proliferation.
— Vice Premier Li Peng, Xinhua, 10/18/83.

“Like many other peace-loving countries, China does not advocate or encourage nuclear proliferation, and we are emphatically opposed to any production of nuclear weapons by racists and expansionists such as South Africa and Israel.
— Yu Peiwen, head of Chinese delegation to Conference on Disarmament in Geneva, Xinhua, 8/4/81.