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The Arms Control Association is an "exceptional organization that effectively addresses pressing national and international challenges with an impact that is disproportionate to its small size." 

– John D. and Catherine T. MacArthur Foundation
January 19, 2011
China

China's Export Controls: Can Beijing's Actions Match Its Words?

Anupam Srivastava

At their September plenary in Madrid, members of the Missile Technology Control Regime (MTCR) decided not to take up the question of inviting China to join the group. China had applied to join the voluntary export control regime in July 2004, and that year’s October plenary in Seoul had “failed to reach a consensus” on Beijing’s bid. China’s failure to win consensus support underlines a more fundamental challenge Beijing poses to global nonproliferation efforts and institutions.

Recent interviews with U.S. and British officials reveal the reason for not formally considering Chinese membership again this year was continued concern over Beijing’s implementation of pledges to adhere to export control standards equivalent to the MCTR. Russia and the United Kingdom were more willing than the United States to acknowledge that China had made progress. But all of the other countries agreed that Beijing still needed to do much more to block certain weapons of mass destruction (WMD)-sensitive exports.

China has vastly improved its legal and procedural infrastructure to control trade in strategic goods and technologies.[1] Yet it has failed to block several instances of proliferation and lacks transparency in enforcement.[2] It is unclear whether the current gaps between policy pronouncements and actual behavior simply mark a transition period to its new responsibilities or if this mixed record is symptomatic of its continued perception of nonproliferation as a “selective, arbitrary tool” employed by Washington and its allies to maintain strategic and technological pre-eminence.

Most evidence indicates that China previously has followed a “bargain-embedded approach” in which its compliance with nonproliferation norms is legalistic, narrow, and largely tactical. U.S. and other Western policymakers have the opportunity to foster a broader, more strategic commitment to nonproliferation in China by demonstrating to Beijing how adhering to nonproliferation norms will serve some of its long-range foreign policy and economic interests.

Recent Changes

Recent years have marked several positive steps by Beijing and some setbacks.

Positive Steps

China has considerably improved the legal and procedural architecture governing its trade in dual-use goods and technologies. The improvements include new export control regulations regarding nuclear, chemical, biological, missile, and advanced conventional weapons and revised national control lists in the above spheres. Cumulatively, they have aligned China’s export control system more closely with the benchmarks established by the multilateral export control arrangements: MTCR; the Nuclear Suppliers Group (NSG), which aims to coordinate nuclear export policies to prevent countries from exploiting peaceful nuclear cooperation as a pathway to nuclear weapons; the Australia Group, which regulates exports that could contribute to chemical and biological weapons; and the Wassenaar Arrangement, which seeks to enhance cooperation in preventing sales of conventional arms and dual-use goods to countries or regions of concern.

In 2002, in an important nonproliferation signal, China became the first of the five de jure nuclear-weapon states to amend its domestic legal procedures to complete a voluntary additional protocol with the International Atomic Energy Agency (IAEA). Such agreements grant the IAEA greater authority to verify that non-nuclear-weapon states do not divert nuclear materials and technologies to weapons programs.

China’s 2003 White Paper on nonproliferation policy and associated measures provided additional evidence of growing domestic commitment. In 2004, China was formally invited to join the NSG, marking China’s membership into the first of the four regimes that it had long criticized as cartels designed to perpetuate the technology superiority of the advanced Western nations.

Setbacks

On the flip side, China’s nuclear and missile relations with Iran and Pakistan have raised questions about China’s commitment to global nonproliferation.[3] Ongoing U.S. and IAEA investigations into the clandestine network headed by Abdul Qadeer Khan, the “father” of Pakistan’s nuclear weapons program, have revealed the startling fact that China transferred a design for a 25-kiloton nuclear warhead and open test data to Pakistan in the mid-1980s.[4] This adds to well-known transfers of ring magnets and short-range missiles (M-9 and M-11) in the 1990s for which several Chinese and Pakistani entities were sanctioned by the United States.

In recent years, Chinese firms have been sanctioned many times for providing missile-related assistance to Iran in violation of the Iran Nonproliferation Act of 2000.[5] In the most recent episode late last year, the sanctioned entities included two of China’s largest companies: China North Industries Corp. (NORINCO) and China Great Wall Industry Corp. Both have been subject to repeated U.S. sanctions since the 1990s and described as part of China’s “serial proliferator” problem by senior officials in the Bush administration.[6]

Critics have also raised questions about a May 2004 Chinese agreement to build a second civilian nuclear reactor at Chasma in Pakistan. Although the agreement predates China’s NSG membership and the reactor will be placed under IAEA safeguards, questions remain about the merit of nuclear transfers to a country whose weak export controls permitted the Khan network to undermine global security and where risks of unauthorized diversion of Chinese technologies and materials to its weapons program remain high. Further, media reports following Chinese Premier Wen Jiabao’s April 2005 visit to Pakistan quote senior Pakistani atomic energy officials saying that China wants to build additional reactors, although doing so would violate its obligations under current NSG guidelines.[7]

If the United States seeks to curb such sales, it will face new challenges following a July 18 agreement with India in which it agreed to provide New Delhi with civilian nuclear assistance.[8] The United States will need to clarify to China and other NSG members that its deal with India is a special case, justified by India’s strong nonproliferation record and by particular commitments New Delhi has made to separate its civilian reactors from its weapons complex and place the former under IAEA safeguards and to align its dual-use control lists with those of the MTCR and the NSG. Such explicit clarification would also enable the United States to rebuff any Pakistani expectations that Islamabad can receive similar treatment from Washington unless its record on enforcement improves.

Legal Authorities

According to government officials, China is currently drafting a new, overarching export control law to bring its national export control authorities under one statutory umbrella and to provide additional legal force to the 2004 Foreign Trade Law.[9] The current law, which amended a decade-old statute, provides legal authority to administer export controls in China and has strengthened criminal and administrative sanctions against illegal trade operations, including potential cancellation of operators’ licenses.

Although no details about the draft law or the timeline for its promulgation are available, additional changes to Chinese export control laws are required following China’s entry into the NSG and as the country further integrates into the international nonproliferation regime.

Even before the Foreign Trade Law, China had already made significant changes in its export control laws and regulation in recent years.

In late 2002, China promulgated new munitions, chemical, biological, and missile-related export control measures. Together with revised regulations in the nuclear sphere in 2001 and in customs and criminal law in 2000 and 2001, respectively, the measures effectively harmonized China’s legal infrastructure of export controls with multilateral standards. The arms control measures also enabled the international community to better assess China’s export control performance.

Other official regulations promulgated over the last 10 years provide additional legal authority to administer export controls, including China’s obligations as a signatory to the nuclear Nonproliferation Treaty (NPT), Biological Weapons Convention, and Chemical Weapons Convention (CWC), and to carry out international trade sanctions mandated by relevant UN Security Council resolutions.

Nuclear

China’s entry into the IAEA in 1984 and the NPT in 1992 helped establish domestic legal authority in the nuclear sphere. Administrative circulars issued in May and September 1997 included control lists similar to those of the NSG and the Zangger Committee, a smaller 35-member group of nuclear suppliers that produces the so-called “trigger list” of nuclear materials, equipment and technology requiring IAEA safeguards. A June 1998 circular, which was amended in 2001, brought China’s nuclear and nuclear dual-use export control regulations into effective compliance with international standards. Following its NSG membership, China has said it plans to publish an amended nuclear dual-use control list and regulations in 2005 that will make them identical to the NSG, but it has not yet done so.

Missiles

In the missile sector, China’s August 2002 regulations have harmonized its legal provisions with those of the MTCR. Further, the revised control list is virtually identical to the MTCR’s equipment, technology, and software annex. The real gap, however, lies in Beijing’s markedly slender technical interpretation of the military end uses of critical dual-use technologies in adjudicating license applications, especially when exporting to end users in countries of proliferation concern such as Iran.

Chemical Weapons and Technology

China approved chemical weapons and technology regulations in 1995 incorporating its CWC commitments into national law, and the appended control list contained four schedules that capture all items covered by the three CWC schedules and a fourth CWC category of unscheduled discrete organic chemicals. Its October 2002 regulations and the appended dual-use control list now cover all items on the Australia Group equipment and related technologies list as well as 20 dual-use items considered possible chemical weapons precursors, bringing China’s lists into effective compliance with CWC and Australia Group control lists.[10]

Biological Weapons and Technology

China published its first-ever export control statute in the biological weapons and technology realm in October 2002. Before this, dual-use biological items and technologies were regulated by an assortment of national laws, none of which specifically addressed dual-use biological export controls. This gap was closed with the control list appended to the 2002 regulations that is identical to the Australia Group control list.

Conventional Arms

China followed up its 1997 regulations by publishing a revised set of conventional arms regulations in October 2002 and a military products export control list a month later. Although this control list includes most items in the Wassenaar Arrangement’s control list, it provides far broader categories and vaguer definitions. This lack of specificity could be exploited by Chinese enterprises to evade responsibility for certain transfers.

China has in recent years also begun to incorporate provisions that relate to emerging issues of international concern. Thus, each set of the 2002 regulations explicitly covers not only traditional exports but also intangible technology transfers and the difficult issues of “deemed exports.” Such exports might occur, for example, if information that would require an export license is shared by a U.S. citizen with a foreign national on U.S. soil. In that case, information is “deemed” to have been exported to the home country of the foreign national and, as such, requires an export license.

Moreover, Article 16 in each of these regulations contains a catch-all clause that instructs the exporting entity not to export an item if “it knows or should know…that the [item] will be used by the receiving party directly for the purpose of [WMD programs], whether included in the control list or not.” Article 6 of the December 2003 White Paper further amplifies this new legal responsibility of the domestic exporter. China is reportedly working to introduce this clause in the revised nuclear guidelines that will be published to incorporate changes necessitated by its NSG membership. However, implementation of catchall controls might violate China’s 2004 Administrative Law, which stipulates that mere suspicion of diversion or proliferation is not sufficient grounds to block the export or import of goods or technology.

Brokering, transit, and transshipment controls represent areas of remaining weakness in the legal system. According to the Ministry of Commerce, China does not recognize the status of brokers in export transactions. This makes it unclear whether China disallows brokering activities or they simply remain unregulated. Also, no provisions are specifically designed to control the transit or transshipment of strategic goods and technologies. Article 24 of the amended Customs Law does require all transits, transshipments, and through-shipments of sensitive items to be declared to customs authorities, but it does not provide the legal basis to regulate their movement through Chinese territory.

Export Licensing Process

The publication of comprehensive licensing regulations for all strategic commodity classes by late 2003 has opened China’s export control system to an unprecedented degree of regulatory transparency, although in some areas, the military in particular, responsibility remains unclear. Licensing regulations are publicly accessible, and the December 2003 White Paper provides details of how China’s dual-use export licenses are processed.

China’s licensing and regulatory institutions also have been restructured in a process that began in 1998. The Export Control Division of the Science and Technology Department in the Ministry of Commerce is the main licensing and regulatory body for dual-use export controls, but a number of Chinese agencies are tasked to participate in the interagency review of licenses:

  • The Ministry of Foreign Affairs principally evaluates the foreign policy or national security implication of a proposed export or whether it might violate China’s international treaty obligations.

  •  

  • The National CWC Implementation Office is charged with regulating the domestic dual-use chemical sector and implementing China’s CWC commitments.

  •  

  • The China Atomic Energy Authority licenses nuclear trade and issues governmental assurances to foreign regulatory bodies.

  •  

  • The Ministries of Health and Agriculture participate in the review process in their relevant domains. The Ministry of Commerce also can call on a cadre of 200 experts from diverse technical fields as required.

The main licensing body to administer controls on advanced conventional weapons exports is the Commission on Science, Technology and Industry for National Defense (COSTIND). Prior to the 1998 restructuring, it reported both to the State Council and the Central Military Commission of the People’s Liberation Army (PLA). The 1998 restructuring wrested the arms export control agenda away from the PLA. Now under civilian control, COSTIND generally reports to the State Council, but its arms trade division receives and vets licenses for conventional and certain missile-related items. However, the vetting and eventual approval of export licenses also requires extensive consultation with the PLA’s General Armaments Department, with oversight from the Central Military Commission. As a result, there is continued ambiguity about controls on conventional arms exports and regulations governing export behavior of the reorganized defense industrial enterprises of China that have resulted in several questionable exports to Iran, Iraq, and North Korea in recent years.

Enforcement as the Litmus Test

Enforcement is presently the weakest link in China’s export control system. A wide disparity exists between the dictates of established Chinese law and the capacity of the Chinese state to consistently enforce them. For China, this is a significant challenge. Overcoming it will require both political will and a massive injection of physical, technical, and financial resources. Given China’s checkered track record of controlling trade in sensitive goods and technologies, the international community is likely to use effective enforcement as the ultimate criterion for assessing Beijing’s commitment to nonproliferation.

In recent years, China has sought to close the long-standing gap between official pronouncements and actual behavior by strengthening and clarifying the criminal and civil penalties incurred for export control-related violations. The Customs Laws of the People’s Republic of China, originally promulgated in 1987 and amended in 2000, provides the General Administration of Customs enhanced legal authority to control cross-border traffic, including the right to search, detain, and seize cargo leaving China. The Ministry of Commerce has provided additional authorization and guidelines to General Administration of Customs to inspect any cargo suspected to be an illegal export. China’s recent decision to join the U.S.-led Container Security Initiative (CSI) and to make Hong Kong and Shanghai CSI-compliant ports will require additional provisions and capacity for real-time coordination among intelligence agencies, customs officials, and border guards for search and seizure of WMD-sensitive cargo in domestic ports or territorial waters.

For now, export control enforcement remains opaque and susceptible to jurisdictional turf-battles, with prosecution dependent on the type of violation. Customs-related violations are presumably enforced by customs, CWC-related violations by local government bodies, criminal law-related violations by the Public Security Bureau and the General Attorney for the Prosecution Office, and Administrative Law-related violations by local government offices. The Ministry of Commerce also reportedly handles certain aspects of export control enforcement. China’s export control enforcement is weakened by overlapping jurisdictional claims, unclear designation of lead agencies to prosecute violations, and bureaucratic wrangling.

A persistent problem in ascertaining the scale of illicit dual-use proliferation from China results from its lack of transparency. China does not make publicly available such data as the number of license applications, number of license approvals and denials, reasons for denial, instances where catch-all controls were employed, and number of violations prosecuted annually. In 2004, Beijing for the first time announced that two chemical companies in China were found guilty of export control violations. However, no specific information is available about the precise nature of violations and the type of penalties imposed on them.

In addition, Beijing still relies mainly on foreign intelligence to unearth illicit transactions.[11] China’s very limited use of pre-license checks and post-shipment verification increases the risk of unauthorized diversion of an export to prohibited end uses or its re-export to prohibited end users. These problems are exacerbated by widespread corruption and the lack of an independent judiciary.

It is important to recognize, however, the enormity of the challenge that China confronts, given that it has one of the longest land-air-sea borders in the world. The General Administration of Customs, in charge of all cargo clearing China’s borders, employs 46,000 officials stationed in 41 customhouses across the country. In addition, it oversees 300 affiliated customhouses and 245 ports, while the Public Security Bureau and the People’s Armed Police secure the areas immediately outside of customs surveillance zones. Customs officials possess specialized equipment to detect nuclear, biological, chemical, and dual-use items, although the quality of the equipment, the familiarity of the staff with the equipment, and the motivation to monitor illicit transactions rigorously varies markedly from one border post to another. Many customhouses are equipped with large-scale X-ray machines, electronic platform balances, plate identification systems, electronic gates, and container number identification systems. Several others lack even rudimentary equipment and training for its staff. A good case in point is Dandong, located on China’s border with North Korea. According to unnamed Chinese government officials, it lacks basic equipment to scan vehicles and large containers and adequate space for on-site inspections. Effective enforcement efforts at China’s border posts and custom houses, especially in the southern and western provinces, are routinely undermined by seasoned smugglers.

A New Export Control Dynamic

With the enactment of the 2002 laws and regulations, a new dynamic is apparent within China’s official export control community.[12] One school of thought views the new laws and regulations as sufficiently detailed and easily accessible so that companies have no excuse for ignorance. As such, if domestic companies are now found in violation, stiff penalties and prosecutions should deter future offenders as well as send the message for industry to comply with its new and increased export control obligations.

Another school of thought recognizes industry as the “first line of defense” to prevent unauthorized exports, as well as the need for increasing outreach to the industry. To this group, improved interaction with the industry is crucial because most advanced technologies are dual-use in nature and increasingly fungible within and across civilian and military sectors. This problem gets compounded in a continent-sized country with extensive and often undermanned or under-equipped borders.

Further, the post-World Trade Organization economic landscape of China has seen a steady growth in the number of dual-use producing industries basing manufacturing and trading operations in China to serve markets in the country and abroad. Yet, even those government officials who recognize the critical need for more outreach to the industry are often unwilling to cooperate with other departments in organizing outreach workshops or are lukewarm in supporting domestic or foreign nongovernmental entities in such endeavors.

In a broader context, China’s “mixed record” in the multilateral arena underscores the difficulty in ascertaining the degree to which its policy elite and industry managers have imbibed the normative and practical components of export controls and the overarching nonproliferation “security culture.” China’s agreement to build additional nuclear reactors in Pakistan while its application to the NSG was pending and its missile-related transfers to Iran while its MTCR application is still pending points to a continued bargain-embedded approach toward its nonproliferation obligations. Similarly, following the December 2004 sanctions, NORINCO offered to develop an internal compliance program in return for the lifting of U.S. sanctions—an offer that was rejected—instead of abjuring such transfers in order to end sanctions and facilitate its goal of doing business in the United States.

In framing future nonproliferation negotiations with China, a critical issue to bear in mind is the pivotal role of high technology in China’s economic and security priorities. China has emerged as the global manufacturing hub for low-technology products but recognizes that its cost advantages are fleeting and that, in order to attract foreign investments in advanced technology, it needs to improve the state of technology security and build up its high-technology sectors. Viewed from this perspective, export controls can be a tool to help China achieve its strategic objectives and by extension can provide important leverage for securing greater Chinese cooperation on nonproliferation.

Similarly, Beijing’s developmental imperatives have prompted the doctrine of “peaceful rise of China” (heping jueqi) and a dedicated pursuit to increase its comprehensive national power.[13] Its recent, energetic diplomacy with its neighbors in Southeast Asia and Central Asia, many of whom are battling rising Islamic militancy and terrorism, reveals its desire to assure them that China would be a factor of stability in Asia. Lack of adequate safeguards on China’s own strategic arsenal would undermine their confidence in China’s leadership credentials within the evolving security architecture of Asia. This represents another important avenue for calibrating U.S. and multilateral negotiations to secure greater Chinese cooperation on nonproliferation.

Finally, the European Union is currently debating whether to lift its arms embargo stemming from China’s Tiananmen Square incident of 1989. Lifting the embargo could give China access to EU arms and technologies that are superior to those it is currently acquiring from Russia and Israel. The EU, under the United Kingdom’s current presidential term, is unlikely to lift the embargo, but the issue might be revisited in the spring of 2006 during the Austrian presidency of the EU.

If and when it tackles the issue again, one useful condition that the EU could tacitly impose for lifting the embargo—although it was imposed for human rights violations—would be to require China first to demonstrate a practical improvement in its export control implementation and safeguarding of sensitive technologies. Indeed, U.S. and EU officials confirm that this factor has featured prominently in their deliberations. Further, the Pentagon’s July 2005 report to Congress on Chinese military power warns that lifting the embargo could lead to greater proliferation from China:

Beijing ’s track record in transfers of conventional arms and military suggests EU or other third-party sales to China could lead to improvements in the systems that Chinese companies market abroad, including to countries of concern, such as Iran. Of note, some of China’s major recipients of military assistance— Burma, Sudan, and Zimbabwe—all are subject to EU arms embargoes.[14]

In sum, China’s economic priorities and foreign policy goals stress a growing need to improve export controls and strengthen technology security in its civilian and military enterprises. A wise policy for the United States and its allies to follow would be to leverage China’s growing self-interest in stronger adherence to global nonproliferation regimes and practice to push Beijing to improve the transparency and enforcement of its export control obligations and to help it meet its growing international responsibilities.


Anupam Srivastava is director of the Asia Program at the Center for International Trade and Security at the University of Georgia.


ENDNOTES

1. “PRC White Paper: China Adheres to Enforcing Nonproliferation Export Control,” Xinhua, September 1, 2005.

2. Evan S. Medeiros, “Chasing the Dragon: Assessing China’s System of Export Controls for WMD-Related Goods and Technologies,” RAND, 2005.

3. Stephen Rademaker, Remarks to the U.S.-China Economic and Security Review Commission, March 10, 2005.

4. See William Burr, ed., “ China, Pakistan, and the Bomb: The Declassified File on U.S. Policy, 1977-1997,” National Security Archive Electronic Briefing Book No. 114, March 5, 2004.

5. The Iran Nonproliferation Act of 2000 authorizes the president to penalize any foreign entity that transfers items to Iran that could aid its pursuit of dangerous weapons.

6. David Sanger , “ U.S. Is Punishing 8 Chinese Firms for Aiding Iran,” New York Times, January 18, 2005.

7. “ Pakistan to Build More Nuclear Power Plants With Chinese Help,” News ( Islamabad), April 9, 2005.

8. “ Pakistan Wants Civilian Nuclear Deal,” Associated Press, September 8, 2005; Wade Boese, “Bush Promises India Nuclear Cooperation,” Arms Control Today, September 2005, pp. 23-25. See Harold Bengelsdorf, Fred McGoldrick, and Lawrence Scheinman, “India-U.S. Nuclear Deal: Taking Stock,” Arms Control Today, October 2005, pp. 6-12.

9. The Standing Committee of the 10th National People’s Congress of the PRC, Foreign Trade Law of the People’s Republic of China, April 6, 2004.

10. The measures were promulgated by Decree No. 33, dated October 18, 2002, of the then-Ministry of Foreign Trade and Economic Cooperation (now the Ministry of Commerce), the then-State Economic and Trade Commission (now the National Development and Reform Commission), and the General Custom Authority (also known as the General Administration of Customs), and went into effect November 19, 2002.

11. Interviews with author, Shanghai, September 2005; interviews with author, Beijing, June 2004.

12. This assessment is based on diverse communications with members of the export control community in China, the United States, and Europe.

13. Kurt M. Campbell, Testimony before the House Permanent Select Committee on Intelligence, February 2, 2005.

14. Office of the Secretary of Defense, “Annual Report to Congress: The Military Power of the People’s Republic of China, 2005,” p. 25.

 

Of Madmen and Nukes

Daryl G. Kimball

Chinese Major General Zhu Chenghu told journalists last July that China is prepared to use nuclear weapons against the United States if it targets Chinese ships, aircraft, or territory in a confrontation over Taiwan. “We Chinese will prepare ourselves for the destruction of all of the cities east of Xian. Of course the Americans will have to be prepared that hundreds…of cities will be destroyed by the Chinese,” he warned.

With Zhu’s suicidal nuclear threats as backdrop, U.S. Secretary of Defense Donald Rumsfeld told his military counterparts in Beijing last month that “advances in China’s strategic strike capacity raise questions” about its intentions. Rumsfeld suggested that “greater clarity would generate more certainty in the region.”

Excellent points, Mr. Secretary. But China, of course, is not the only state to amass nuclear weapons to defend and advance its interests. Although other Chinese officials disavowed Zhu’s remarks, he is not the first to suggest, officially or unofficially, that his government is “mad” enough to use massive nuclear force against conventional attacks.

Since the beginning of the nuclear age, U.S. presidents have developed policies and issued statements intended to make nuclear threats appear credible and create uncertainty about when and where they might be used. As unnerving as China’s estimated arsenal of 100-400 nuclear weapons and Zhu’s remarks may be, Beijing’s official no-first-use policy arguably makes its posture more restrained than that of the United States today.

To deter other nuclear-armed states, particularly Russia, from attacking with their nuclear arms, current U.S. strategy calls for the maintenance of a massive arsenal of approximately 2,200 deployed strategic nuclear warheads on high alert through 2012 and beyond. In addition, the United States will still possess some 3,000 additional strategic warheads in storage and several hundred substrategic weapons.

The Pentagon’s March 2005 draft “Doctrine for Joint Nuclear Operations” also outlines a wide range of options to deal with non-nuclear scenarios. It would allow for the possible first use of nuclear weapons to help support U.S. forces or allies against conventional attacks, such as a conflict with China over Taiwan, as well as other scenarios, including pre-emptive nuclear strikes on suspected chemical or biological weapons targets in non-nuclear-weapon states.

Given the absence of a hostile, well-armed nuclear adversary, U.S. conventional military dominance, and the possibility that additional states might acquire nuclear weapons, is such a large U.S. arsenal and expansive view of the role of nuclear weapons necessary, justifiable, and sustainable? No.

There is no conceivable circumstance in which the United States would need to use or could justify the use of nuclear weapons to fight or terminate a conventional conflict with a non-nuclear adversary. On several occasions, U.S. presidents from Truman and Eisenhower to Kennedy, Nixon, and George H. W. Bush have considered the limited use of nuclear weapons in tactical situations, but they have always rejected doing so. The calculus should be no different today.

Policies that assert a war-fighting role for nuclear weapons only deepen the risk of proliferation. They undermine existing pledges by nuclear-weapon states that they will not use nuclear arms against countries without them. They give states such as North Korea and Iran a cynical excuse to maintain their nuclear weapons options and send a green light to nuclear rivals India and Pakistan to contemplate their battlefield use.

The lessons of the Cuban missile crisis and other U.S.-Soviet confrontations during the Cold War make clear that even limited nuclear engagement risks escalation and unacceptable annihilation. Nuclear weapons are, therefore, not a realistic war-fighting option in a conventional conflict against a nuclear-armed adversary.

Some nuclear acolytes believe new types of weapons are needed to provide “credible” options against future adversaries and targets, including underground bunkers and chemical or biological threats. Such thinking ignores the reality that employing any nuclear weapon would produce disproportionate and unacceptable collateral destruction and severe political fallout.

A saner nuclear weapons policy is feasible and overdue. As long as the United States and others possess nuclear weapons, their role should be limited to deterring other states from using them. Further, if that is their only function, there is no reason why the United States cannot observe a policy of no-first-use. Nor would there be any need to develop and test new nuclear-weapon capabilities or maintain Cold War-sized arsenals on high alert, a condition that risks accidental or unauthorized launch.

It has been 60 years since the last nuclear bomb was used in war. Perhaps more than any other state, the United States has the most to lose if others not only seek to acquire nuclear weapons but come to view them as legitimate and useful instruments of coercion and war. But if U.S. policymakers expect nuclear restraint from China and other states, they must reconsider and readjust the role of U.S. nuclear forces.

 

U.S., Israel Reach China Arms Deal

Miles A. Pomper

The United States and Israel announced Aug. 16 that they had signed a memorandum of understanding to ease disputes over past Israeli arms sales to China and to govern future arms trade between Israel and some foreign countries. The action comes as Congress is putting additional pressure on Israel and the European Union to abjure arms trade with Beijing.

In signing the classified agreement, the Department of Defense and the Israeli Ministry of Defense hope to ease tensions that arose over a planned Israeli sale to Beijing of spare parts for Harpy Drone unmanned aerial vehicles. U.S. officials feared the upgrades could help China target U.S. and Taiwanese command-and-control facilities and forces during a possible future conflict.

In response, the United States suspended cooperation with Israel on a number of long-range military development projects, including cooperation with the Israeli Air Force on developing a new combat aircraft through the Joint Strike Fighter project. (See ACT, July/August 2005.)

The United States has considerable leverage over Israel as U.S. defense technology is often incorporated in Israeli weapons and the United States provides Israel with billions of dollars in military aid annually.

A joint Pentagon-Israeli Defense Ministry statement said the understanding is “designed to remedy problems of the past that seriously affected the technology security relationship between their defense establishments and which begins to restore confidence in the technology security area.” A first step, said a nongovernmental expert in Washington familiar with the issue, will be terminating the Harpy Drone deal. Israel will have to compensate China for the cancellation but is still negotiating the terms of that package.

The memorandum lays out broad parameters for the rules governing future Israeli arms sales to sensitive countries, particularly China, but specifics will have to be ironed out over the next few months. The joint U.S.-Israeli statement said that, “in the coming months, additional steps will be taken to restore confidence fully.”

Among those steps will be Israel’s adherence to, but not formal membership in, some elements of the Wassenaar Arrangement, a decade-old voluntary export control regime whose 34 members exchange information on transfers of conventional weapons and dual-use goods and technologies. In particular, Pentagon officials said that their Israeli counterparts had offered to implement controls on dual-use sensors and lasers that would conform to Wassenaar guidelines.

U.S. and Israeli officials are still negotiating how tightly Israel will adhere to other elements of the Wassenaar regime. Under the agreement, Israel is supposed to pass legislation and implement organizational changes that will bring it closer to compliance with Wassenaar’s strictures. Israel is also expected to follow transparent procedures similar to Wassenaar and has agreed to consult closely with the United States about potential sales.

Still, Israeli officials did not pledge to notify the United States in advance of exports or obtain U.S. approval for such sales.

“It doesn’t create any veto power for the United States,” said Pentagon spokesperson Major Paul Swiergosz.

On the other hand, U.S. officials forced Israel to agree that U.S.-Israeli long-range development projects would only be restored gradually over a number of months, as Israel implemented aspects of the deal.

“We simply want to ensure that technology that is being shared would not go for other purposes,” Swiergosz said. “Full cooperation will be restored once confidence is built up.”

The dispute reflects mounting U.S. concerns over China. In recent years, U.S. officials have watched warily as China upgraded its military. Beijing has reportedly been increasing its spending at double-digit rates and importing major weapons systems, mostly from Russia, as well as improving its own weapons manufacturing capabilities. But China’s military still lags far behind U.S. forces technologically. Intent on preserving their strategic edge, U.S. officials and Congress have pressured the EU and Israel not to permit arms sales to China.

Only a few months ago, the EU appeared on the verge of ending its embargo on arms sales to China. The ban was originally imposed in reaction to the Chinese government’s ruthless 1989 crackdown on peaceful demonstrators at Tiananmen Square.

Some EU member states argued that the embargo was an unnecessary obstacle to better relations with Beijing. Such sales, they contended, would be constrained by its voluntary 1998 Code of Conduct on Arms Exports that sets out criteria, such as a potential arms buyer’s human rights record, that are supposed to be taken into consideration before any export occurs. (See ACT, January/February 2005.)

However, efforts to lift the embargo have slowed. European officials were taken aback when China adopted a law March 14 that authorizes the use of force against Taiwan, should that country assert its independence. (See ACT, April 2005.)

The United States has also applied considerable pressure. Congress, in particular, has threatened retaliation if arms deals with China go forward.

In May the House passed fiscal year 2006 Defense Department authorization legislation requiring the Pentagon not to procure any goods or services for five years from any firms that transfer arms to China.

And in July, the House passed a fiscal year 2006 State Department authorization bill that would threaten sanctions against EU firms and others that provide China with weapons or dual-use items banned under international export control agreements. The Senate has yet to complete action on companion legislation for either bill.

In an attempt at compromise, EU officials, such as nonproliferation chief Annalisa Giannella, say they are ready to adopt more stringent rules on arms exports (see "Between Noble Goals and Sobering Reality: An Interview With EU Nonproliferation Chief Annalisa Giannella"). The compromise would strengthen the code of conduct and convert it into a legally binding document.

 

 

United States Unsure of Chinese Military's Modernization Aims

Wade Boese

Beijing’s military capabilities are growing but with what end remains unclear to the United States, according to an annual Pentagon assessment of China’s armed forces. The report’s release coincided with conflicting Chinese statements about whether it would ever initiate the use of nuclear weapons against the United States.

Mandated by Congress, the Pentagon’s July 19 report details China’s longtime effort to modernize its military, ranging from acquiring advanced fighter aircraft and developing more survivable long-range ballistic missiles to improving its armed forces’ joint operational capabilities. The report paints a picture of a country that is slowly but steadily obtaining the accoutrements of a modern military but is still trying to put all the pieces together.

The report underscores that “secrecy envelops most aspects of Chinese security affairs,” making judgments about China’s long-term strategy and policy goals speculative. Indeed, infighting about China’s intentions within the Pentagon and among other senior administration officials reportedly delayed the report’s release by several months. It was supposed to be completed by March 1.

The report offers more definitive judgments about China’s short-term military aspirations. The Pentagon says China’s immediate interest is in preventing Taiwan from asserting its independence and dissuading other countries, namely the United States, from rushing to the island’s defense if a military conflict occurs in the Taiwan Strait. China considers Taiwan a rebellious province that should be brought under the mainland’s control, if necessary by force.

The Pentagon assesses that China is sparing few expenses toward this mission. Although China claims that it spends some $20 billion annually on its military, the Pentagon contends Beijing expends about two or three times as much, possibly as much as $90 billion. This high-end estimate is dwarfed by current annual U.S. military spending of more than $400 billion, but it would rank China as Asia’s biggest spender.

Beijing has objected to previous U.S. estimates of Chinese military expenditures. Chinese Foreign Ministry spokesperson Liu Jianchao described U.S. claims June 8 as “totally groundless.” Liu explained that China’s military budget “has witnessed a slight increase, the bulk of which is used for improving the living conditions of military officials and soldiers.”

In contrast, the Pentagon report emphasizes the new weapons systems that China is procuring. In recent years, China has indigenously produced or imported combat aircraft, destroyers, submarines, and anti-aircraft missiles. One ongoing deal involves the acquisition of eight Kilo-class diesel-electric submarines from Russia to supplement the four China had previously imported.

Russia is China’s major arms source. Key weapons sold by Moscow to Beijing over the past decade include more than 150 advanced combat aircraft, two destroyers (with two more on tap), and more than 1,000 various missiles, including air defense missiles with ranges greater than the 160-kilometer-wide Taiwan Strait.

In a departure from earlier reports, the Pentagon identifies Israel as China’s other top weapons supplier. A 2001 Israeli transfer of Harpy unmanned aerial vehicles to China and subsequent maintenance work on the drones in 2003 and 2004 has strained the normally close U.S.-Israeli military relationship. Seeking to mend relations, U.S. and Israeli officials recently concluded an agreement to ease U.S. concerns about Israeli arms sales (see "U.S., Israel Reach China Arms Deal").

Washington bristles over its allies supplying China with arms and technologies that the Pentagon fears could be used against Taiwanese or U.S. forces. In its report, the Pentagon reaffirms U.S. opposition to the 25-member European Union lifting its 1989 arms embargo against China. The consequences of such a move would be “serious and numerous,” the Pentagon states. After China adopted a March law codifying its resolve to use force to forestall Taiwanese independence, the EU postponed a decision on ending the embargo, although it still intends to do so (see "Between Noble Goals and Sobering Reality: An Interview with EU Nonproliferation Chief Annalisa Giannella").

China’s drive to get the EU to lift its embargo and Beijing’s continuing reliance on Russia for advanced weapons reflects that its domestic production capabilities are still lagging behind those of the West. “According to intelligence community estimates, China’s defense industries are inefficient and dependent on foreign suppliers for key technologies,” the Pentagon assesses.

The Pentagon further notes Beijing’s difficulties in marrying its arms imports and domestically produced weapons into a cohesive force. China’s military has an “overall lack of operational experience” and a “limited” capability to “project conventional military power beyond its periphery,” the report states. Still, the Pentagon warns, “[c]urrent trends in China’s military modernization could provide China with a force capable of prosecuting a range of military operations in Asia—well beyond Taiwan—potentially posing a credible threat to modern militaries operating in the region.”

The Pentagon also highlights China’s efforts to augment and upgrade its ballistic missile forces. Across from Taiwan, China has now arrayed up to 730 short-range conventionally armed ballistic missiles. Last year, the Pentagon put the number of such missiles at approximately 500.

China, according to the report, is also expected to realize “over the next several years” its decades-old ambitions to add new, mobile, nuclear-armed, land-based ICBMs and a new type of submarine-launched ballistic missile, the JL-2, which was flight-tested in June. The test did not necessarily indicate the missile’s readiness for deployment, and Beijing is still developing the submarine that the JL-2 is supposed to outfit.

U.S. intelligence predicts that, with the eventual addition of these new strategic ballistic missiles, China’s arsenal of some 20 ballistic missiles capable of targeting the United States could expand fivefold. The United States deploys several thousand strategic nuclear weapons capable of striking China.

China has forsworn the first use of nuclear weapons. Hence, Chinese leaders consider the mobility of the new ballistic missiles as crucial because it would make them more difficult for an adversary to pinpoint and destroy in a first strike.

Notwithstanding China’s long-standing nuclear policy, Chinese General Zhu Chenghu implied July 14 that China might not wait for the United States to strike the first nuclear blow. Zhu, a dean at China’s National Defense University, told reporters, “If the Americans draw their missiles and position-guided ammunition on to the target zone on China’s territory, I think we will have to respond with nuclear weapons.”

U.S. officials quickly denounced the remark. Department of State spokesperson Sean McCormack labeled Zhu’s comment the next day as “highly irresponsible” and “unfortunate.” Three days later, Secretary of Defense Donald Rumsfeld mused, “[I]t will be interesting to see to what extent [Zhu’s] remarks do or do not reflect the views of his government.”

Initially, a Chinese Foreign Ministry spokesperson was quoted as saying Zhu was speaking in a personal capacity. The state-run Xinhua news agency later reported Chinese Foreign Minister Li Zhaoxing July 22 as disavowing Zhu’s comment and stating unequivocally that Beijing would not be the first to use nuclear weapons “at any time and under any condition.”

 

 

U.S., Israel Seek to Cut Deal On China Arms Sales

Miles A. Pomper

Under pressure from the Bush administration and Congress to cut off arms shipments to China, Israel hopes to iron out an agreement this summer with the United States on how future potential sales to Beijing will be considered.

Israeli government officials and a nongovernmental expert in Washington familiar with the issue said the two sides were seeking to fashion a memorandum of understanding that would make such sales more transparent by defining “rules of the road.” The United States has considerable leverage over Israel as U.S. defense technology is often incorporated in Israeli weapons.

“I believe that very soon we are going to agree on a procedure with regard to Israeli exports to China,” Yuval Steinitz, chairman of the Israeli Knesset (Parliament) Foreign and Defense Committee told Arms Control Today in a June 8 interview.

Still, Secretary of State Condoleezza Rice acknowledged June 16 that some outstanding issues remain. “We have had some difficult discussions with the Israelis about this,” Rice told reporters.

The nongovernmental expert said that the differences involved exactly how much Israel would defer to the United States on such sales and whether the agreement would be limited to Israeli sales to China or extended to Israeli sales to other countries. Israel is pushing for a limited agreement, while the United States would prefer a broader pact.

At the same time, a version of the fiscal year 2006 defense authorization bill approved by the House May 25 requires the secretary of defense not to procure any goods or services for five years from any firms that transfer arms to China, a provision that could affect Israel’s defense sector, which is one of its largest industries. U.S. officials have been pushing in recent months to prevent U.S. allies from selling high-tech weapons to China, which might be used against the United States or Taiwan in a future military conflict. Under U.S. pressure, the European Union has delayed plans to lift its arms embargo on Beijing. (See ACT, April 2005.)

“Israel has a responsibility to be sensitive” to U.S. concern about China, “particularly given the close defense cooperation between Israel and the United States,” Rice said during a visit to Israel June 19. The United States provides billions of dollars of military aid to Israel each year.

The recent dispute stems in part from Israel’s planned sale to China of spare parts for a fleet of as many as 100 Harpy Killer unmanned drones. The drone sale was singled out in a 2004 report from the U.S.-China Economic and Security Review Commission, which said that the unmanned aerial vehicles could “detect, attack, and destroy radar emitters,” posing a significant threat to command-and-control facilities on Taiwan and to U.S. operational forces in the region. U.S. officials fear that Israel planned to help China upgrade the systems and not just supply spare parts. In particular, they fear the addition of sensors that might be able to detect radar sites even when they are turned off.

The Israeli newspaper Ha`aretz reported June 26 that under the proposed memorandum, the Israeli government will not return the drone components to China and expects to pay compensation.

Ha`aretz reported June 13 that Washington has demanded that Israel provide details of more than 60 recent security deals with China. It claimed that, in the interim, the United States has suspended cooperation with the Israeli Air Force on developing a new fighter through the Joint Strike Fighter project and on other high-tech military equipment used by ground troops, out of concern that China could then obtain the technology.

Independent analysts and government officials say that Israeli arms sales to China have fallen off since July 2000, when the United States persuaded Israel to cancel the sale to China of the Phalcon, an advanced, airborne early warning system. A senior Israeli government official said that incident “sensitized” Israel to U.S. security concerns about Beijing and that it has subsequently been cautious about such sales.

By contrast, Israeli officials contend that U.S. complaints elsewhere often reflect the desire of U.S. defense firms to prevent competition from other suppliers.

As an example, they point to India, where the United States is considering selling a version of the Patriot missile defense system but has prevented Israel from selling the Arrow, a similar joint U.S.-Israeli system.

U.S. officials argue that they oppose sales of the Arrow because they would violate the provisions of the Missile Technology Control Regime, whose 34 members are supposed to restrict exports of missile systems and technologies capable of delivering a 500 kilogram payload at least 300 kilometers. U.S. officials say the Arrow system exceeds this threshold while the Patriot does not.

But Israeli officials seethe. “It is one of the great absurdities of U.S.-Israeli relations. We developed this system together, we produced together, we can earn together, we can gain together,” former Deputy Defense Minister Ephraim Sneh, a leading Labor Party voice on defense policy, told Arms Control Today in a June 8 interview. “This is the best operational anti-missile defense in the world, and we are not allowed to export it?”

 

China: A Crucial Bridge for the 2005 NPT Review Conference

Li Bin

China’s unique nuclear philosophy, nuclear arsenal, and attitude toward nuclear nonproliferation mean that Beijing is likely to play a critical role at the 2005 nuclear Nonproliferation Treaty (NPT) Review Conference, serving as a vital bridge between the nuclear “haves” and the “have-nots.”

Among the five recognized nuclear-weapon states, China has the longest and deepest commitment to nuclear disarmament. For decades, Beijing has pressed for “a complete and thorough elimination of nuclear weapons” and consistently stressed the illegitimacy of the permanent existence of these arms, insisting that they will disappear if all the people in the world strongly oppose them.[1]

China has also sought to minimize the role of nuclear weapons in its military planning and diplomacy, contending that nuclear weapons have little military significance and the sole legitimate role of nuclear weapons should be the prevention of nuclear blackmail. For this reason, China has unconditionally committed not to use or threaten to use nuclear weapons against non-nuclear states and has repeated the pledge at the preparatory meetings for the review conference.[2] Indeed, until recently, the Chinese government even challenged the legitimacy of nuclear deterrence, and it still criticizes the policy of nuclear deterrence based on the first use of nuclear weapons. And even though China has the smallest and least sophisticated arsenal of the five declared nuclear powers, China’s leaders have largely contended that efforts to significantly improve the quantity and quality of its nuclear weapons were not warranted.

China’s doctrine and practice in many ways echoes demands that non-nuclear-weapon states have long made: that the nuclear-weapon states need to do more to meet their commitments under Article VI of the NPT to make good-faith efforts toward disarmament. China’s doctrine also reflects the country’s unique status as the least wealthy member of the nuclear five and its sympathy to countries not aligned with either the United States or the Soviet bloc.

At the upcoming conference, the non-nuclear-weapon states, as they have done at every previous review conference, are sure to raise questions about how much the nuclear-weapon states have done to meet their Article VI commitment. If the nuclear “have-nots” are not satisfied with the explanations offered by the nuclear “haves,” their interest in abiding by and strengthening the nuclear nonproliferation regime might waiver. Coupled with technical and economic developments that have made it far easier to acquire nuclear capabilities, the possibility of widespread nuclear proliferation might become more likely.

On the other hand, if the five nuclear-weapon states are able to convince the non-nuclear-weapon states that they have indeed been meeting their commitments, a successful conference could ensure strengthening support for nonproliferation norms. China’s credibility with the non-nuclear-weapon states in this regard could play a crucial role in tipping the conference’s outcome toward success.

To be sure, China is still likely to feel some heat at the conference, even if the conduct of its nuclear weapons program is highly defensible. For example, China signed the Comprehensive Test Ban Treaty (CTBT) in 1996 but has yet to ratify the treaty. China’s hesitancy stems less from technical than political obstacles. Chinese lawmakers would like to follow the example of the U.S. Congress in the late 1990s when it provided its advice and consent to ratification of the Chemical Weapons Convention and approved implementing legislation. During consideration of that treaty, the U.S. Congress approved some treaty reservations and conditions that convinced Beijing that similar cautions might not be a bad idea when it comes to the CTBT.

China’s lack of transparency about its nuclear weapons program will certainly prompt some scrutiny. But China’s behavior is not without cause as it is in a more difficult position than some of the other nuclear powers: its small and lightly deployed nuclear force makes an easy target for an enemy armed with the right intelligence. This is why China is nervous about nuclear transparency, particularly public declarations about the number of nuclear weapons in its arsenal or the locations in which they are deployed. In the not-too-distant future China might be able to tackle this problem head on; efforts to make China’s nuclear force less vulnerable to a first strike through increased mobility may soon allow China to offer more quantitative transparency.[3]

Nonetheless, at the conference China will surely be pressed to explain whether its nuclear modernization program is aimed at building a large force with strong offensive and war-fighting capabilities—including multiple types of weapons with the ability to launch quickly—or retaining a small force while enhancing its safety and survivability. At the preparatory sessions for the review conference, China indicated that it had chosen the latter course and claimed that the Chinese nuclear program has been cut in the last decade. Such transparency is certainly welcome; as China has emerged in recent years as a major economic power, international concern has risen that it will devote substantial resources to boosting the size of its nuclear arsenal. China’s recent announcement that it has reduced its nuclear program, however, indicates that the size of China’s force is being dictated by political rather than economic judgments.

China’s emergence on the international stage is reflected in the evolution of some of its views on nuclear nonproliferation. China used to take a quite radical position on nuclear nonproliferation. Although it has been defined by the NPT as a nuclear-weapon state for decades, China did not accede to the treaty until 1992, calling it discriminatory for establishing a distinction between the nuclear-weapon and non-nuclear-weapon states.

In 1995, at its first NPT review conference after its accession, China began to coordinate its positions with the other nuclear parties. Since then, China’s nonproliferation policy has evolved. On the one hand, China still shares most views with the non-nuclear-weapon states on nuclear issues and supports almost all of their proposals in various disarmament and nonproliferation forums. It has also offered support for various nuclear-weapon-free zones. On the other hand, China has begun to feel that it is part of the nuclear club. It is now quite eager to join various export control regimes, which it previously labeled as unfair. It joined the Nuclear Suppliers Group in January 2004 and is seeking admission to the Missile Technology Control Regime. One likely side effect of this change is that China can no longer be expected to take the lead in pushing for some radical disarmament measures. For example, China will likely not press for nuclear disarmament within a particular timeframe, which could embarrass the other nuclear-weapon states.

At the conference, China can be expected to restate its traditional support for complete disarmament, its no-first-use pledge, and its assurances that it will not use or threaten to use nuclear weapons against non-nuclear-weapon states. The fifth traditional policy is opposition to the weaponization of outer space.

But China can also be expected to advance some positions different from those it advocated at the 2000 NPT Review Conference. A significant change is that in 2003 China agreed on the establishment of the ad hoc committees at the Conference on Disarmament (CD) on a multilateral, nondiscriminatory and effectively verifiable treaty banning the production of fissile material for nuclear weapons or other explosive devices. If the United States had not concluded in July 2004 that effective international verification of a fissile material cutoff treaty could not be realistically achieved, there would now be a great opportunity to bring the CD out of a deadlock that has stalled progress in that forum for many years.

In the documents issued by China and the speeches presented by Chinese officials, there appear new offers of nuclear disarmament. One is China’s opposition to tactical nuclear weapons and, indirectly, U.S. research on low-yield nuclear weapons. In a Chinese working paper,[4] China suggested that “no state should research into and develop low-yield easy-to-use nuclear weapons.” The above statement is the first time China formally and explicitly expressed its position on this matter and also represents a major step toward nuclear transparency.

China also has sought a ban on new nuclear weapons designs. At a 2003 conference aimed at bringing the CTBT into force, the head of the Chinese delegation, Ambassador Zhang Yan, suggested that the nuclear-weapon states should refrain from conducting research on new weapons designs.[5] At a NPT-related workshop in April 2004, Liu Jieyi, director general of the Arms Control and Disarmament Department of the Chinese Foreign Ministry, was more explicit.[6] He called on nuclear-weapon states “not to research into or develop new types of nuclear weapons.” China clearly is open to accepting a constraint over new nuclear weapons design, should the other nuclear-weapon states agree, or accepting such an interpretation of the CTBT.

Another proposal is China’s support for de-alerting nuclear weapons. In its working paper, China suggested that “the nuclear-weapon states should take all necessary steps to avoid accidental or unauthorized launches.” China did not specify how this would be done, but a rational way to do this is by de-alerting nuclear weapons. This is also in compliance with China’s nuclear philosophy. If China’s appeal receives positive feedback from the other nuclear states, it is possible that China would go further to issue a more explicit statement about its own nuclear weapon readiness.

China’s unique nuclear philosophy imposes some limitations. For example, China cannot join phased quantitative nuclear reductions. Since it already has a very small nuclear force, it does not make much sense to cut its arsenal step-by-step even if it has the political will to do so. For China, a more feasible approach might be to set a ceiling to be later followed by complete elimination. Still, China’s unique history—and future—means that its views and actions might prove important to making the 2005 NPT Review Conference a success rather than a failure.

ENDNOTES

1.. For discussion of China’s nuclear philosophy, see Cai Lijuan, “On Mao Zedong’s Nuclear Strategic Thought,” Masters Degree Dissertation, Tsinghua University, 2002.

2. “Fact Sheet: China: Nuclear Disarmament,” April 27, 2004. (For this and other statements see China’s Ministry of Foreign Affairs at http://www.fmprc.gov.cn/eng)

3. Li Bin, “China's Nuclear Disarmament Policy,” Harold Feiveson et al., eds., “The Nuclear Turning Point—A Blueprint for Deep Cuts and De-alerting of Nuclear Weapons,” Brookings Institution Press, Washington DC, 1999, pp. 325-332.

4. Working Paper submitted by China, “On the Issue of Nuclear Disarmament and Reduction of the Danger of Nuclear War,” April 28, 2004.

5. “Statement by H.E. Ambassador Zhang Yan, Head of the Chinese Delegation at the Conference on Facilitating the Entry into Force of the Comprehensive Nuclear-Test-Ban Treaty,” September 4, 2003.

6. “Statement by Mr. Liu Jieyi, Director General of Arms Control and Disarmament Department, Foreign Ministry of China, on Nuclear Disarmament and Security Assurances,” April 6, 2004.

 

China on Key Nuclear Issues

Nuclear Warhead Arsenal: Up to 400 warheads total.

Latest Nuclear Force Developments: China is engaged in a slow-paced, long-standing modernization of its strategic nuclear forces. U.S. intelligence assesses that China is developing mobile land-based, long-range ballistic missiles and is working to replace liquid-fuel ballistic missiles with solid-propellant models. The Pentagon estimated in May 2004 that China’s current estimated force of roughly 20 ICBMs could triple by 2010.

Comprehensive Test Ban Treaty: Signed September 24, 1996. Chinese government officials have stated they fully support the treaty and are waiting on the National People’s Congress to approve the accord.
Fissile Material Production for Weapons: China has reportedly ceased production of fissile material for weapons purposes, although it has made no official announcement. China publicly supports negotiation of an “effectively verifiable” fissile material cutoff treaty (FMCT). In October 2004, a high-ranking Chinese arms control official said Beijing was “studying in a serious manner” the U.S. proposal to negotiate an FMCT without verification mechanisms.

Nuclear Use Doctrine: China is the sole nuclear-weapon state to declare publicly that it will not be the first to use nuclear weapons.

—COMPILED BY WADE BOESE

Sources: Arms Control Association, Institute for Science and International Security, Natural Resources Defense Council, and national governments.



Li Bin is director of the Arms Control Program at the Institute of International Studies at Tsinghua University in Beijing, China.

EU Retains China Arms Embargo

Wade Boese

The European Union Dec. 8 rejected a Chinese bid to end a 15-year-old arms embargo, delighting the United States. Yet, Beijing’s disappointment and Washington’s satisfaction could be short-lived as the embargo’s eventual end appears likely.

In a joint statement issued at the end of the EU-China summit held at The Hague, the 25-member EU declared its “political will to continue to work towards lifting the embargo.” China “welcomed the positive signal” but also stated that the embargo “should be immediately removed.”

The EU’s main decision-making body Dec. 17 indicated it wanted to make a final decision on the embargo within the next several months. The result “should not be an increase of arms exports from EU Member States to China, neither in quantitative nor qualitative terms,” the European Council stated.

With a wholesale military modernization program underway, Beijing has pressed the EU to drop its prohibition on arms sales originally imposed in reaction to the Chinese government’s ruthless 1989 crackdown on peaceful demonstrators at Tiananmen Square. Beijing contends its human rights record has improved and labels the embargo an anachronism of the Cold War.

Some European capitals share Beijing’s view that the embargo is outdated and an impediment to improving ties between Europe and China. Paris and Madrid are lobbying hard for abolishment of the embargo, as is German Chancellor Gerhard Schroeder, whose position is not supported by his own Social Democratic Party.

Nevertheless, one European diplomat from a country favoring the embargo told Arms Control Today Dec. 15 that momentum is building for the eventual lifting of the embargo, but when that will happen “is uncertain.”

U.S. officials expressed similar resignation. In a Dec. 15 interview with Arms Control Today, a Department of State official said the United States, which also bans arms sales to China, was “pleased” with the summit’s conclusion, but conceded the issue “is not a problem that is going to go away.” A congressional staffer interviewed the same day predicted a European reversal could come in a matter of months.

The State Department official argued that the host of summit agreements between the European Union and China, including commitments to cooperate on nonproliferation and arms control issues, reveals that it is “possible to have a good relationship with China and still have an arms embargo.” The official further warned that a renewed arms trade relationship between China and European countries could prompt the United States to impose greater restrictions on arms and technology sold to Europe. “Congress will spank [the Europeans] on this,” the official added.

The congressional staffer affirmed this assertion. Concerns about U.S. technology leaking to China via Europe would likely sour congressional support for cross-Atlantic ventures on major weapons systems, such as the Joint Strike Fighter, the staffer said. An EU decision to lift the embargo, according to the staffer, would most likely produce an “overreaction by Congress.”

U.S. support for preserving the embargo reflects unease with the possibility that Beijing could turn the weapons against its own people or Taiwan, which China covets and the United States has pledged to help defend. Additional qualms stem from China’s past proliferation record of selling arms to purchasers hostile to the United States.

Some EU countries say U.S. fears are exaggerated and that waiving the embargo will not result in a splurge of European arms sales to China. European weapons deals, they argue, will be constrained by a 1998 EU Code of Conduct on Arms Exports that sets out criteria—such as a potential arms buyer’s human rights record—that are supposed to be taken into consideration before any export occurs. U.S. critics counter that the code, which EU members are considering revising, is nonbinding and not much of an obstacle to determined sellers.

 

 

 

Taiwan's Chen Proposes Arms Control With China, But Seeks U.S. Arms

Wade Boese

While lobbying for legislative approval of a huge U.S. arms package offer, Taiwanese President Chen Shui-bian suggested Oct. 10 that Taiwan and China give arms control a thought. Beijing, which is pressing Europe to drop a long-standing Chinese arms embargo, has not responded.

Delivering a speech celebrating Taiwan’s National Day, Chen declared that China and Taiwan “should seriously consider the issue of arms control and take concrete actions to reduce tension and military threats across the Taiwan Strait.” He further said both capitals should review their “armament policies” and explore a code of conduct for the strait to help keep the peace.

The same day, Chen issued a public message that Taiwan would “continue to strengthen the military and enhance our defense capabilities.” He also accused Taiwan’s lawmakers, who face parliamentary elections Dec. 11, of letting politics interfere with the island’s security by squabbling over, thereby postponing, a vote on roughly $18 billion in new arms procurement. “A decision should not be considered correct one day but incorrect the next merely for electoral or political considerations,” the president stated.

In April 2001, President George W. Bush offered to sell Taiwan four Kidd-class guided missile destroyers, eight diesel-powered submarines (even though the United States has not built a conventional submarine since 1959), and 12 P-3C Orion anti-submarine aircraft. (See ACT, May 2001.) Since then, the administration also has prodded Taiwan to acquire Patriot Advanced Capability-3 missile interceptors to protect itself against China’s ever-growing number of short-range ballistic missiles aimed across the 160-kilometer-wide strait. The Pentagon estimated this summer that 500 Chinese missiles sit opposite Taiwan.

The high cost of the U.S. arms, differences over the proper mix of weapons to buy, problems finding an appropriate submarine design and builder, and concerns about upsetting China have all combined to delay a final decision by Taipei. After narrowly winning re-election as president in March, Chen revived the push for the arms package.

China, which views Taiwan as a renegade province that should be under the mainland’s control, has vehemently objected to the pending U.S. deal. Although generally opposed to any foreign arms sales to Taiwan, Beijing is particularly agitated about the prospect of Taiwan importing advanced weapons with Chen at the helm because he has been a long-time proponent of Taiwanese independence.

Making matters worse from Beijing’s perspective is the perceived meddling of some U.S. officials, such as Deputy Undersecretary of Defense for Asian and Pacific Affairs Richard Lawless, exhorting Taiwan to stop its dallying and buy U.S. arms. Chinese Foreign Ministry spokesperson Kong Quan said Oct. 11 that such comments cause China “strong indignation.”

U.S. arms sales to Taiwan rankle Beijing so much that over the past two years it has reportedly floated a vague tradeoff involving a freeze or withdrawal of Chinese missile deployments targeting Taiwan for Washington turning off its arms pipeline to Taipei. Neither Taiwan nor the United States showed interest.

Washington committed itself in 1979 to provide Taiwan with enough arms to sustain a “sufficient self-defense capability.” More than $19 billion in U.S. arms have been delivered since then. China, which has received 152 combat aircraft and six warships from Russia over the past dozen years, ranks as the top arms buyer in the developing world since 2000 with more than $9.3 billion in new weapons deals, according to an August arms sales report by the Congressional Research Service. (See ACT, October 2004.)

Without remarking on Chen’s arms control proposal, Beijing blasted other aspects of his speech. Zhang Mingqing, a spokesperson for China’s Taiwan Affairs Office, denounced Oct. 13 Chen’s remarks as a “grave provocation to the peace and stability” of the region and as promoting separatism. Beijing has repeatedly warned it might use force against Taiwan if the island ever asserted its independence.

Meanwhile, China is working hard to persuade the European Union to lift its arms embargo imposed after Beijing’s brutal 1989 crackdown on unarmed protestors in Tiananmen Square. (See ACT, September 2004.) Chinese Foreign Ministry spokesperson Zhang Qiyue told reporters Oct. 12 that China’s human rights record had improved remarkably over the past several years, obviating that justification for retaining the embargo. “Lifting the weapons embargo is in line with the common interests of China and Europe,” Zhang concluded.

The United States, which also maintains an arms embargo on China, is urging the EU to turn a deaf ear to Beijing’s plea.

Missile Regime Puts Off China

Wade Boese

More than 30 countries dedicated to limiting the spread of ballistic missiles decided in October against letting China join their group because of Beijing’s alleged failure to meet their nonproliferation standards. They also expanded the list of items that governments should be more cautious about exporting.

After gathering Oct. 6-8 in Seoul for an annual decision-making meeting, the 34 members of the Missile Technology Control Regime (MTCR) made no mention of China’s membership bid, but a U.S. government official told Arms Control Today Oct. 15 that the absence of such a statement was evidence of Beijing falling short. Members could not reach the necessary consensus to offer China membership because of concerns about Beijing living up to the regime’s export control and behavior standards, according to the official, who added, “They’re not there yet.”

In the weeks preceding the MTCR meeting, the United States imposed proliferation sanctions on eight Chinese companies. One of those, Xinshidai, was specifically accused of missile proliferation. The others, two of which the Bush administration previously penalized for missile proliferation, were punished for unspecified deals with Iran, which Washington charges is covertly seeking nuclear weapons and developing ballistic missiles to deliver them.

Beijing vehemently objected to the U.S. accusations and sanctions. “We are firm and rigorous in our attitude, position, and laws and regulations on opposing the proliferation of [weapons of mass destruction] and their delivery vehicles,” Chinese Foreign Ministry spokesman Kong Quan stated Sept. 23. Deeming U.S. sanctions as “wrong practices,” Kong also warned that they “will not help expand China-U.S. cooperation on nonproliferation.”

Although it failed for now to win MTCR membership, China has made some headway this year in its campaign to gain acceptance as a responsible exporter. Beijing successfully acceded in May to the now-44 member Nuclear Suppliers Group, whose members restrict their nuclear trade. (See ACT, June 2004.)

Ten other countries, including Romania, Kazakhstan, and Slovenia, also saw their MTCR membership hopes at least temporarily dashed.

Meanwhile, MTCR members agreed to exercise greater controls on what they export. Topping the list of new products to be regulated are precision ball bearings, which are critical in building liquid-propellant missile engines.

MTCR members also vowed to focus on stopping proliferators from using intermediaries and front companies to get what they want. The U.S. official said this is a challenge that members are still “coming to grips with.”

Does China Belong in the Missile Technology Control Regime?

The prospect that China might soon join a U.S.-initiated regime aimed at controlling ballistic missiles might seem laughable. After all, the United States has imposed sanctions on China for years for hawking missiles and missile technologies to dozens of countries scattered around the globe. Yet, this month a gathering of U.S. and other diplomats in Seoul could signal support for China’s bid to join the two-decades-old Missile Technology Control Regime (MTCR). (Continue)

Victor Zaborsky

The prospect that China might soon join a U.S.-initiated regime aimed at controlling ballistic missiles might seem laughable. After all, the United States has imposed sanctions on China for years for hawking missiles and missile technologies to dozens of countries scattered around the globe. Yet, this month a gathering of U.S. and other diplomats in Seoul could signal support for China’s bid to join the two-decades-old Missile Technology Control Regime (MTCR).

Although the effort is likely to spur opposition from defense hawks worried about the growth of China’s military power and those who oppose any cooperation with China because of trade or human rights disputes, backing China’s entry into the MTCR is the right call. China has recently improved its export controls and has adjusted other policies so as to play a more cooperative and active role in nonproliferation efforts. Allowing Beijing to join the regime will support these positive trends toward transparency and prevent backsliding, particularly as MTCR membership could grant the right to participate in cooperative projects with fellow members of interest to the Chinese government and key industries. Leaving China out of the MTCR, on the other hand, is only likely to encourage Beijing to continue selling missile technology to countries of concern.

China’s Spotty Record
Negotiations to create an MTCR began in 1983 and reached fruition in 1987. The initial membership consisted of seven economically developed, technically advanced, and largely Western states—Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. These founding countries viewed themselves as having a mission to control transfers of missile technology to the rest of the world, primarily to the Communist bloc and countries with nuclear weapons programs. Communist China with its ICBM force was viewed by the Western nations as a particular threat and as one of the “target” countries with which the MTCR members should strictly control their missile exports. The MTCR restricts exports of missiles and related technology capable of carrying a 500-kilogram payload at least 300 kilometers or delivering any type of weapon of mass destruction.

Lessons From China's Successful
NSG Campaign

On May 28, China was accepted as a full member of the Nuclear Suppliers Group (NSG). Although China’s accession to the NSG received more solid support in the U.S. government than the issue of MTCR membership, partly because China is already an acknowledged nuclear power, it was still accompanied by a great deal of controversy and criticism. The debates that took place over the pros and cons of China’s NSG accession may shed light on the heated disputes likely to accompany China’s bid for MTCR membership.

First, does China’s nonproliferation record warrant membership in good standing in a regime whose mission is to fight proliferation?
Many in the Bush administration argued that China’s nuclear nonproliferation record and national nuclear export control infrastructure have improved enough to grant it membership. In public testimony, administration officials supported China’s membership in the NSG. In private, however, some administration officials, including Undersecretary of State for Arms Control and International Security John Bolton; Department of Defense officials; and some influential think tanks opposed admitting China to the NSG.[1] Beijing’s detractors pointed to China’s alleged sales of sensitive nuclear technology and equipment to countries of proliferation concern, which had previously triggered U.S. sanctions. They stated that it would be risky to assume that China will not sell nuclear materials, equipment, and expertise to its allies, given its lack of restraint in the past.

China has also drawn criticism by insisting on fulfilling a pledge to build two nuclear reactors in Pakistan, even though these sales would not have been permitted under NSG guidelines. Beijing argues that it announced its plans to do so three weeks prior to becoming an NSG member. This narrow approach angered many NSG members.[2] “One of the basic concepts of the Nuclear Suppliers Group is that you don’t supply reactors to countries [such as Pakistan] that are not members of the nuclear NonProliferation Treaty. What are the Chinese really giving up if they can supply a proliferant country like Pakistan with nuclear technology? What’s the point of having them in the group?” argues Gary Milhollin of the Wisconsin Project on Arms Control.[3]

Given that China has often followed a similar legalistic approach to its past missile proliferation commitments, critics may well ask about the wisdom of having China in the MTCR. To be sure, China’s formal missile export control infrastructure is becoming more and more compatible with that of most MTCR members. Nevertheless, the willingness of the government to fully implement and enforce the letter and spirit of the new system—and, consequently, China’s eligibility for MTCR membership—remains
questionable.

Second, what would be the effect of China’s joining the NSG?
More precisely, in the words of Rep. Henry Hyde (R-Ill.), chairman of the House Committee on International Relations, “how [might] China’s accession to the Nuclear Suppliers Group…hinder the work of that body?” Hyde referred to difficulties that Russia has posed in the NSG on certain issues, namely its involvement in exports with questionable legitimacy. Responding to this concern, Assistant Secretary of State for Nonproliferation John Wolf argued that “[w]e do not foresee China posing the same difficulties regarding [its] nuclear supply relationship, as this is not an issue for China.”[4] Yet, this may be an issue with respect to China’s MTCR obligations. For many years, China has been defending its right to export missiles and missile technology at its own discretion. It has developed a network of actual and prospective customers, including Pakistan and North Korea. If it came to sacrificing lucrative export deals because of MTCR membership obligations, it is reasonable to expect that China would, as with the NSG, use the narrowest possible interpretation of the regime’s norms and would search out loopholes to make those deals possible.[5]

Third, does China have sufficient economic incentives to join the NSG?
Absolutely. In 1998, the U.S.-Chinese agreement for peaceful nuclear cooperation entered into force. According to the congressional resolution approving the agreement, U.S. nuclear exports to China could not begin until the president made certain nonproliferation-related certifications.

As of today, the peaceful U.S.-Chinese nuclear cooperation contemplated in the agreement has only moved ahead slowly: U.S. officials announced in early September that the U.S. Nuclear Regulatory Commission has issued export licenses for certain components for Chinese nuclear power reactors. All told, 20 license exports for U.S. nuclear goods to China have been granted between August 1998 and June of this year.[6] Senior Department of State officials make it clear that the administration will continue to tie the implementation of the agreement on nuclear cooperation to China’s record on nuclear exports and its NSG membership. Moreover, referring to China’s plans to expand its nuclear energy sector significantly (Beijing aims to spend up to $35 billion in the next decade to build 30 nuclear power reactors), they argue that, “if the Chinese buy from the United States, we would have substantial influence on how China manages its civilian nuclear program in such areas as nuclear safety.”[7] Supporters put forward a similar argument about China’s bid for the MTCR, that the United States would know more about and exert more influence on the Chinese missile and space program if China were admitted into the MTCR and the International Space Station partnership. At the moment, it is not clear how strongly joint U.S.-Chinese nuclear and space projects will constrain China from nuclear and missile sales of proliferation concern, but it is obvious that the desire to secure lucrative commercial deals is a powerful motive behind China’s newly favorable attitude toward the MTCR and the NSG.

ENDNOTES

1. Carol Giacomo, “U.S. Backs China Joining Nuclear Group,” Reuters, May 12, 2004, available at http://in.news.yahoo.com/040511/137/2d173.html.

2. Daniel Horner, “Joining NSG Won’t Require China to Scrap Pakistan Reactor, U.S. Says,” Nuclear Fuel, March 1, 2004.

3. Giacomo, “U.S. Backs China Joining Nuclear Group.”

4. John S. Wolf, statement before the House International Relations Committee, May 18, 2004, available at http://wwwc.house.gov/international_relations/
108/wol051804.htm (hereinafter Wolf statement).

5. See Manpreet Sethi, “Despite NSG, China’s Aims Remain Unclear,” Defense News, July 27, 2004.

6. Office of the Spokesman, U.S. Department of State, “Nuclear Technology Exports to China,” September 2, 2004, available at http://www.state.gov/r/pa/prs/ps/2004/35937.htm.

7. Wolf statement.

In the early 1990s, the proliferation concerns with respect to China became twofold. In addition to concerns about missile proliferation to China, there emerged a challenge of missile proliferation from China. Although it remained a targeted recipient of MTCR-controlled technologies, China became a supplier of MTCR-restricted missiles, components, and technologies to countries such as Pakistan, Iran, Saudi Arabia, and Syria.[1] In other words, it had become an exporter not bound by any missile nonproliferation export control obligations. During this period, the United States assumed the role of the principal “watchdog” over China’s alleged missile sales. U.S. officials sought to use sanctions as levers to encourage China to follow MTCR guidelines, even though Beijing was not a regime member. All told, Washington has imposed sanctions on China 10 times, including three times last year.

In response, Beijing has repeatedly assured Washington that it would end the sales and twice endorsed joint statements avowing that they would respect MTCR guidelines. Nevertheless, Beijing has been accused of adhering to an overly narrow interpretation of the MTCR restrictions and neglecting the nonproliferation spirit and standards set by the regime’s “founding fathers” (see sidebar). The limits of this approach have clearly frustrated U.S. policymakers. As Assistant Secretary of State for Verification and Compliance Paula DeSutter stated in July 2003, “At the highest levels, the Chinese government has claimed that it opposes missile proliferation…. Unfortunately, the reality has been quite different.”[2]

Whether China’s membership in the regime would lessen or exacerbate this frustration is not obvious and depends on the answer to three questions. First, will the MTCR membership criteria allow the regime to admit a country like China? Second, if the MTCR deems Chinese membership acceptable in principle, what will be the potential bargaining chips in negotiations between China and the regime and, most importantly, between China and the United States? Third, in the long run, will China be more of an asset or a burden to the MTCR once it is admitted?

Will China Satisfy Membership Criteria?
At its inception, the regime’s informal membership criteria emphasized like-mindedness, effective export control laws and enforcement, and a strong nonproliferation track record and counted only exporters as members. As the MTCR has expanded to 34 members, however, its standards have eased, allowing countries to be admitted which are not completely like-minded, do not completely share the same nonproliferation ideals as the original members, and are not even exporters. These have included EU and NATO members such as Norway and Iceland, but also former Soviet republics such as Russia and Ukraine.

Rather than the more standardized criteria of the past, admission of new members to the MTCR today has become a bargaining process involving political and commercial tradeoffs and side payments. So, whether or not China joins the organization is going to depend largely on what demands the current members and Beijing bring to any accession negotiation and the prospects that they can be realized or surrendered.

China’s Goals
What benefits might China gain by joining the MTCR? For China, the most obvious advantages of joining the MTCR would be access to new technology and participation in new space-related projects that are not available to regime outsiders. Beijing is also looking for trade and concessions not directly related to space and missile activities.

Resuming Satellite Launches
Resuming the launching of U.S. satellites aboard Chinese rockets would pay immediate dividends for China. In January 1995, the United States and China signed the Agreement Regarding International Trade in Commercial Launch Services that gave Beijing the right to launch 15 U.S.-built satellites into geosynchronous orbit through 2001. The downturn in U.S.-China relations in the last years of the Clinton administration, however, rendered the agreement moot and darkened its prospects for extension.

In November 2000, the Department of State pledged to discuss an extension and provide China with a new satellite launch quota after China issued its most stringent and specific policy statement on missile nonproliferation to date, but the imposition of missile proliferation sanctions in September 2001 nullified that pledge. Presently, the negotiations are in limbo, although there is reason to believe that both sides will use the issue as a major bargaining chip while negotiating the terms of China’s accession to the MTCR.

Participation in the International Space Station
Another bargaining chip could be China’s participation in building the International Space Station (ISS). In October 2003, China launched its Shenzhou-5 spacecraft into orbit with taikonaut Yang Liwei on board, becoming the third nation to launch a man into space. The Chinese space program is ambitious, calling for the construction of a space station and a space shuttle, as well as lunar exploration, by 2010. China’s budding space effort would surely benefit by gaining a role in these prestigious and lucrative space endeavors and by learning from countries such as the United States and Russia.

The ISS, a 16-nation, $95 billion endeavor, could surely use the potential of China’s space program. It could also use China’s financial support. Yet, the notion of Chinese participation in the ISS has met with a tepid response from U.S. officials. For the record, they say that Chinese “technology is not mature” compared to the technology of the leading ISS partners.

The real reason behind Washington’s uncooperative reaction may be a suspicion that Beijing’s space effort is less a civilian program than a military endeavor that could eventually threaten the United States. Some experts contend that it is possible to develop military space technology through a manned program and that China’s piloted Shenzhou spacecraft could serve as a reconnaissance platform.[3] In such a case, bringing China into an ISS partnership that involves sharing information and technology would risk proliferating military technology to China. Moreover, given China’s proliferation record, that could further equate to the proliferation of missile technology from China to countries of concern.

Yet, some outside experts contend that allowing China to become an active ISS participant would bring significant nonproliferation advantages, by increasing transparency about its programs and capabilities.[4] By engaging China in joint space projects, the United States would have a better appreciation of how the military and civilian arms of the integrated Chinese rocket-science program interact and how the decision-making mechanism works. It would also provide Washington with much-needed leverage to persuade Beijing to stay in compliance with MTCR export control norms. U.S. law allows the United States to impose certain sanctions against individual companies in MTCR member states if they violate regime provisions. Until now, the dozens of sanctions imposed on Chinese companies have had a rather limited effect because most of these firms do no business with U.S. partners anyway.[5] (See ACT, September 2003.) Engaging Chinese firms in U.S.-led space projects would put Beijing in a position where it has much to lose if slapped with sanctions for inappropriate missile sales.

Full Market Economy Status
A non-space-related bargain between China and the United States could center around granting China full market economy status, which would effectively lower tariffs on Chinese imports and allow Beijing to better defend itself against charges that it dumps its goods by selling them abroad at below-production prices.[6] This issue has become more pressing due to recent trade spats between China and the United States and as China comes under increasing U.S. criticism for allegedly engaging in trade practices that hurt U.S. industry.[7]

The prospect of granting China full market economy status and providing it with nuclear reactor technology was among the major themes of the talks between U.S. Vice President Dick Cheney and Chinese officials in Beijing in mid-April 2004. China is soon expected to solicit bids from foreign partners to build new nuclear reactors, and U.S. companies will compete against other bidders for lucrative contracts.

U.S. May Not Deliver Its Part of the Bargain
China may receive less than it expects from entry into the MTCR. As the previous experience of other space powers such as Brazil, Russia, and Ukraine illustrate, MTCR membership does not guarantee equal treatment by Washington in civilian space programs or technology-sharing.

As the MTCR has grown, the United States has demonstrated a tendency to categorize MTCR members as more trusted and less trusted. The less trusted partners get less privileged treatment from Washington when it comes to sharing of technology or help in developing civilian space programs. For instance, Brazil entered the MTCR in hopes of gaining access to space technology unavailable to outsiders to the regime. In the bargain, Brasilia hoped to modernize its failure-plagued program. U.S. policy, however, has been to press Brazil to curb its space-launch development efforts, not improve them.[8]

The sometimes bumpy implementation of the Sea Launch venture also exemplifies the lack of “nonproliferation trust” extended by the United States to its partners in space exploration projects. Sea Launch is a U.S.-Russian-Ukrainian-Norwegian endeavor to launch payloads from a floating platform stationed in the equatorial waters south of Hawaii. The Ukrainian company Yuzhmash supplies Zenith rockets, Russian company Energia provides upper-stage engines for these rockets, the Norwegian firm Kvaerner modified the 30,000-ton oil rig into a launch platform and built a command ship, and Boeing is the lead investment partner and serves as overall system integrator. In 1998 the State Department put the Sea Launch project on hold for a couple of months and fined Boeing $10 million for allegedly violating Cold War-era export control procedures in transferring sensitive technology to its partners in the project—and fellow MTCR members—Russia and Ukraine.

In the case of China, it is more than likely that cooperative space projects with the United States and possibly some other Western nations will experience similar difficulties arising from a lack of trust about Beijing’s nonproliferation declarations and MTCR commitments. Concerns about the possibility of space cooperation between the United States and China turning into proliferation of missile technology was set in the mid-1990s, when U.S. satellite manufacturers improved the reliability of China’s Long March space launchers. In the aftermath of three failed launches that destroyed satellites built by Hughes and Loral, the two companies transferred rocket design information to China without obtaining the legally required licenses.

Congress’s controversial Cox report, issued in May 1999, blamed the two U.S. satellite manufacturers for improving China’s ballistic missile capabilities because the technology they had transferred could be used for both commercial and military purposes. The Cox report argued that, “[t]o the extent any valuable information was transferred to the [People’s Republic of China’s (PRC)] space program, such information would likely find its way into the PRC’s ballistic missile program. The ballistic missile and space-launch programs have long been intertwined and subordinate to the same ministry and state-owned corporation in the PRC.”[9]

Many in the U.S. government and Congress still argue that transferring dual-use technology to China for joint space projects would contribute to China’s effort to refine its ballistic missile capabilities or that China would secretly re-export technology it obtained from joint space projects to third parties. A long-time tradition of viewing China as a cheater will not vanish overnight, even if China acceeds formally to the MTCR.

China’s Likely Behavior as an MTCR Member

Still, a decision about admitting China to the MTCR ultimately involves a judgment by the United States and current MTCR members about China’s likely behavior once it becomes a member.

One concern stems from China’s impact on efforts to reach consensus on key decisions within the MTCR. Some argue that having a powerful member likely to have a “special opinion” on key issues would be destructive for a consensus-based regime. When making a decision on whether to bring China into the MTCR, the regime members will attempt to ensure that the new participant will contribute to constructive decision-making within the institution. A number of concerns will have to be addressed: Will China share the common perception of the rules and norms in the regime, or will it opt for a narrow interpretation of compliance? Will China facilitate more stringent control measures within the regime, or will it obstruct the introduction of such measures? Will China actively share information with other regime members, or will it be reluctant to do so? Will other members trust China enough to share sensitive information? Beijing has definitely come a long way from condemning the MTCR to considering full-fledged membership in the regime, but it remains unclear whether Beijing has come far enough to become a really valuable addition.

Most importantly, however, Beijing will have to persuade the MTCR that its days of spreading missiles and missile technology around the globe are over. After all, what current members would hope to gain from China’s entry into the MTCR is an end to this behavior and its assistance in deterring others from following the same path. Notwithstanding China’s numerous nonproliferation pledges and export control improvements, many administration officials fear that China might cheat on its obligations if it becomes a full member of the regime, undermining the integrity of the MTCR. Some argue that the right way to persuade China to comply with MTCR norms would be to continue the carrot-and-stick policy Washington has applied toward Beijing since the early 1990s. Getting them to end this policy requires them to feel confident that China will act as a responsible global citizen as part of the MTCR.

Conclusion
Such a judgment should not be impossible. In fact, the international community has already made a similar judgment in permitting China to join the Nuclear Suppliers Group (NSG) (see sidebar). China is clearly trying to assume a prominent role in the international arena, and the most effective way to do so is through integration into current economic, political, and security institutions and initiatives. Today’s war against terrorism and weapons of mass destruction (WMD) proliferation could serve as a vehicle driving China to a new level of trust and a new level of technological cooperation with the United States and other Western nations. For export control regimes such as the MTCR and NSG, China has been a target country for a long time. Its decision to apply for membership in these regimes—its apparent turn from being a part of the “problem” to being a part of the “solution”—marks a significant shift in China’s attitude toward nonproliferation policies and practices, toward the “discriminatory,” U.S.-led export control arrangements, and toward the United States itself.

As a part of its overall policy shift, China earlier this year voted for UN Security Council Resolution 1540, intended to strengthen nonproliferation measures. Under the six-party negotiations framework, Beijing is actively participating in the effort to resolve the North Korean nuclear crisis. On a national level, China has also made dramatic improvements to its nonproliferation export control infrastructure. As a follow-up to November 2000 and August 2002 statements imposing stringent missile nonproliferation measures, the Chinese government in December 2003 released a “White Paper on China’s Nonproliferation Policy,” which significantly upgraded the elements of China’s national export control mechanism.[10] (See ACT, January/February 2004.)

As far as the MTCR’s membership philosophy is concerned, embracing China seems to be a development in the right direction. One has to remember that the MTCR is the missile nonproliferation export control regime that strives mainly to combat the proliferation of WMD delivery systems, using controls on exports of WMD-relevant technology. Today, it seems that the political reasons for joining the MTCR appear to be much more important than those related to the ability to supply this technology. Although Romania, Malta, and Cyprus—other countries currently in line for MTCR membership—could be viewed as a valuable addition to the regime in terms of political support, they are nonexporting states and present rather limited, if any, proliferation risk. Instead, the major focus of MTCR activities should be to engage active exporters, such as China, within the control framework. It makes far more sense to bring China in and give it a chance to improve its image and practices than to keep it on the sidelines with no international constraints on its enormous missile export capabilities. ACT

ENDNOTES

1. “China Denies Missile Sales to Iran, S. Arabia,” Middle East Newsline, August 8, 2001.

2. U.S.-China Economic and Security Review Commission, “China’s Proliferation Practices and the North Korean Nuclear Crisis,” 108th Cong., 1st sess., July 24, 2003, p. 7.

3. Tariq Malik, “U.S. Snubbed China’s Offer for Space Cooperation: ‘Technology Not Mature,’” SPACE.com, April 28, 2004.

4. Jeff Foust, “China, Shenzhou, and the ISS,” Space Review, October 20, 2003.

5. See Jonathan Yang, “U.S. Imposes Sanctions on China, North Korea,” Arms Control Today, September 2003, p. 35.

6. Market economy status is usually used for anti-dumping cases. If the United States grants China full market economy status, the domestic price of a certain good and relevant cost calculation provided by Chinese enterprises can be applicable in the anti-dumping cases. Otherwise, prices and cost calculation of the same goods in the United States will be applied in the anti-dumping cases, and Chinese enterprises would be in a disadvantageous position when involved in anti-dumping cases.

7. “China Urges U.S. to Ease Tech Export Restrictions, Grant Full Market Status,” Agence France-Presse, April 14, 2004.

8. Frank Braun, “Brazilian Congress Criticizes Bilateral Agreement with U.S.,” Space News, May 14, 2001, p. 28.

9. The Cox report is the informal name for a report issued by a committee headed by Rep. Christopher Cox (R-Calif.) that investigated the transfers. See House Select Committee on U.S. National Security and Military/Commercial Concerns with the People’s Republic of China, 105th Cong., 2d sess., H. Rep. 851.

10. “Romania to Join Missile Technology Control Organization,” BBC Monitoring International Reports, February 14, 2003; “Weapons Control: Poland Presiding,” Warsaw Voice, February 23, 2003.

An End to the Game of Carrot and Stick?

Introducing and lifting sanctions and wringing nonproliferation assurances from China has been part of a “game” that the United States and China have played since the early 1990s, as Washington has tried to get Beijing to adhere to Missile Technology Control Regime (MTCR) guidelines without granting China membership in the organization. Imposing sanctions has been the main “stick” that Washington has used, and lifting sanctions the main “carrot.” Reluctant to trust Beijing, Washington has made small steps, lifting only the most recent sanctions and leaving previous ones intact.

In 1991 the United States for the first time imposed sanctions on China in accordance with the newly passed Missile Technology Control Act. The sanctions were imposed for alleged exports of M-11 ballistic missiles to Pakistan and alleged planned exports of M-9 missile technology to Syria. After verbal and written assurance from the Chinese government to abide by the MTCR restrictions, sanctions were lifted in 1992.

But not for long. In December 1992, reports surfaced that China had transferred 34 complete M-11 missiles to Pakistan and also allegedly built a turnkey missile plant for Pakistan at Tarwanah, a suburb of Rawalpindi, in violation of its 1991 pledge. As a result, in May 1993, the Clinton administration reimposed MTCR-related sanctions against China.

The Chinese government responded by calling the sanctions groundless and threatening to scrap its promise to abide by the MTCR guidelines. During post-sanctions negotiations with the United States, China argued that the deal did not violate the MTCR because the M-11 could deliver a 500-kilogram payload only over an advertised range of 280 kilometers, within the MTCR’s parameters, which only permit transfers of missiles that can fly less than 300 kilometers with that payload size. U.S. experts, however, insisted that the missiles in question could easily fly another 20 kilometers as a result of small shifts or cuts in the payload.

The impasse was broken in October 1994 when China and the United States issued a joint statement that underscored the intention of both countries “to work toward a Chinese commitment to control missile-related exports according to the current MTCR guidelines, as well as to promote eventual Chinese membership in the MTCR.” In particular, Beijing pledged that it would abide by Category I of the MTCR and ban exports of all ground-to-ground missiles exceeding the primary parameters of the MTCR. More significantly, China also agreed to the concept of “inherent capability,” which binds it from exporting any missile that is inherently capable of delivering a 500-kilogram payload a distance of more than 300 kilometers. Hence, by agreeing to the inherent capability clause, China agreed to prohibit future exports of the M-11 missile and other longer-range missile systems.[1]

At the time, the Clinton administration “encouraged China to undertake negotiations on a binding missile agreement whereby Beijing would adhere to current MTCR Guidelines and Annex.”[2] Beijing, however, instead waited nine years and endured the imposition and lifting of many U.S. sanctions. Finally, in September 2003, Chinese Foreign Minister Li Zhaoxing wrote MTCR Chairman Mariusz Handzlik that Beijing was “ready to positively consider membership in the MTCR.” The first round of negotiations between Chinese officials and an MTCR delegation headed by the new chairman, Carlos Sersale di Cerisano, was held in Paris in mid-February 2004. The discussions focused on comparing Chinese law, particularly the missile-related control list, with the MTCR Annex. A second round of technical exchanges on the expert level was held in Beijing in June and centered around missile export control enforcement issues. Eventually, Beijing moved even further, and in July 2004, at the Fifth Sino-U.S. Conference on Arms Control, Disarmament and Non-Proliferation, Vice Foreign Minister Zhang Yesui clearly stated that “we are willing to sign up” to the MTCR.[3]

The U.S.-Chinese nonproliferation negotiations, however, have been clouded recently by sanctions that the State Department imposed Sept. 20 on the Chinese company Xinshidai, which markets equipment for many of the country’s top state-owned firms. Under the two-year sanctions, the United States will ban imports of Xinshidai goods, contracts with the firm, and U.S. assistance. The sanctions came on the heels of press reports that Beijing had supplied missile technologies to Iran. In leaks to the press, some members of the U.S. intelligence community alleged that the transfers took place earlier this year as Beijing was negotiating its prospective membership in the MTCR.[4]

China has not yet officially applied for the MTCR membership, but most experts believe that it is just a matter of time before it does. Either President George W. Bush or Sen. John Kerry (Mass.), the Democratic presidential nominee, will soon have to decide what serves the U.S. interests the best: having China in the MTCR or out.

ENDNOTES

1. Philip Saunders, Jing-dong Yuan, and Gaurav Kampani, “How and Why China Proliferates Ballistic Missiles to Pakistan,” Rediff.com, August 22, 2000.

2. Nuclear Threat Initiative Database, available at http://www.nti.org/db/china/engdocs/mtcrusch.htm.

3. Vice Foreign Minister Zhang Yesui, speech at the Fifth Sino-U.S. Conference on Arms Control, Disarmament and Non-Proliferation, July 20, 2004.

4. Bill Gertz, “China Breaks Vow on Halting Arms Transfers,” The Washington Times, August 23, 2004.

 

 


Victor Zaborsky is a senior research associate at the Center for International Trade and Security at the University of Georgia in Athens. He specializes in missile nonproliferation and export control issues.

 

 

 

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