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"I really enjoyed the last phone conference. For those of us who support ACA but do not work in this field, these phone conferences are very educational."

– Maura Davenport
Member
December 12, 2017
China

Following Summit, Clinton Looks To Activate Sino-U.S. Nuclear Accord

CLAIMING THAT China has made a marked improvement in its non proliferation behavior, President Bill Clinton announced on October 29 during his summit meeting in Washington with Chinese President Jiang Zemin that he will soon submit to Congress the package of certifications needed to activate the never implemented 1985 Sino U.S. nuclear cooperation agreement. The president's announcement marked a milestone in the administration's much criticized policy of engagement with China, and capped two years of intense diplomatic efforts to improve China's non proliferation credentials. Once in effect, the bilateral nuclear accord could mean billions of dollars worth of new contracts to U.S. firms eager to enter China's potentially enormous nuclear market.

For the 1985 agreement to take effect, the president must make two certifications regarding the security and future use of U.S. origin materials and a third verifying that, on the basis of all available information, China is not assisting any non nuclear weapon state in acquiring nuclear weapons and that Beijing has provided "clear and unequivocal assurances" that it is not currently providing such assistance and will not do so in the future. Also required by law is a report to congressional leaders detailing the history and current developments in China's non proliferation policies and practices.

At a background briefing following Clinton's announcement, senior administration officials identified five areas where changes in Beijing's proliferation behavior justified the president's decision to provide the certifications. The most dramatic of these changes occurred during the summit when the two sides reached agreement on a document stating that China would not engage in new nuclear cooperation with Iran, and would end all such cooperation once it completes two nuclear projects now underway: the construction of a "zero power" research reactor at the Esfahan Nuclear Research Center and a plant that will produce the zirconium cladding used in nuclear fuel elements.

Even though Iran is a member of the nuclear Non Proliferation Treaty (NPT) and is entitled to peaceful nuclear cooperation, the Clinton administration has sought to prevent all international nuclear trade with Tehran on the grounds that even peaceful nuclear activities will aid Iran's clandestine efforts to acquire nuclear weapons in violation of the NPT. The summit pledge may finally put to rest fears that China would provide Iran with a uranium hexaflouride conversion facility, technology necessary to enrich uranium. However, the exact nature of Beijing's commitment regarding Iran is still unclear because China's "authoritative written communication" was provided on the condition it not be made public. U.S. officials said the secrecy was necessary to get the specific reference to Iran, but stated that members of Congress would be able to review the actual document.

Second, U.S. officials highlighted China's continued adherence to its May 1996 pledge not to provide assistance to nuclear facilities that operate without monitoring by the International Atomic Energy Agency (IAEA). Beijing made the pledge to avoid U.S. sanctions that could have resulted from its 1995 sale to Pakistan of 5,000 ring magnets, used in enrichment of uranium. At the summit, U.S. officials raised concerns about "contacts" occurring between certain Chinese and Pakistani individuals, but came away convinced that China had not violated its commitment.

Third, on October 16, Beijing joined the Zangger Committee, a 31 nation nuclear suppliers' arrangement whose members condition the supply of nuclear specific materials and technology on the presence of IAEA safeguards at the transferred items' destination. The Zangger Committee also provides NPT member states with the "trigger list" of materials and technologies requiring IAEA monitoring as a condition for supply.

Fourth, U.S. officials pointed to the adoption in September by China's State Council, or cabinet, of a set of comprehensive export control regulations for nuclear materials and technologies as well as a commitment by Beijing to add new regulations on dual use items by mid 1998. The new Chinese regulations follow months of vigorous diplomacy and working level meetings with U.S. officials who provided copies of U.S. laws and suggested approaches the Chinese might consider in creating an effective export control system that would meet the requirements for U.S. certification.

Finally, the Clinton administration argued that China's growing support for and participation in major multilateral arms control agreements deserves recognition. Since joining the NPT in 1992, Beijing has promised to adhere to the Missile Technology Control Regime (MTCR), supported the indefinite extension of the NPT, and signed the Comprehensive Test Ban (CTB) Treaty and the Chemical Weapons Convention (CWC). Beijing has also supported efforts to negotiate a fissile material cutoff treaty at the UN Conference on Disarmament, the recent strengthening of the IAEA's inspection authority, and the U.S. led effort to eliminate North Korea's nuclear weapons potential.

During the summit, U.S. officials also sought additional assurances from China that it would stop selling advanced anti ship cruise missiles to Iran. Since the mid 1980s, China has been Iran's principal supplier of such systems, reportedly providing Tehran with 25-50 C-802s, more than 200 C-801s, and 100 HY-2 "Silkworms" together with the technology to make more indigenously. Although they failed to gain such a pledge, a State Department official said, "We have reason to hope the last shipments have taken place." Chinese officials in the past have linked conventional weapons sales to Iran with U.S. arms sales to Taiwan, and Beijing's refusal to forswear such sales may allow Beijing to take credit for responsible behavior without giving up any of the diplomatic leverage provided by the potential sale of such weapons.

Opponents of the president's certification decision have drawn attention to China's refusal to end its peaceful nuclear trade with India and Pakistan and join the Nuclear Suppliers Group (NSG). A body similar to the Zangger Committee, the NSG requires "full scope" safeguards (monitoring of all of a nation's nuclear facilities), as a condition for supply, rather than the application of safeguards only at the particular facilities where nuclear items will be sent (as required by the Zangger Committee). Critics argue that even though U.S. laws do not require membership in the NSG as a condition for nuclear cooperation, the president should have insisted that China accept the more comprehensive NSG standard for nuclear trade to avoid tacit endorsement of a double standard among nuclear suppliers.

Congressional opponents of certification, which include three key committee chairmen—Senator Jesse Helms (R NC) of the Foreign Relations Committee, Senator Richard Shelby (R AL) of the Intelligence Committee and Representative Benjamin Gilman (R NY) of the International Relations Committee—have also asserted that China's checkered proliferation record makes its commitments unreliable, and that any U.S. nuclear contracts resulting from certification should be deferred at least a year to see if Beijing is standing by its promises.

In letters to the president, congressional opponents of certification noted that as recently as May the United States sanctioned Chinese companies for transferring chemical weapons precursors to Iran, and in June a CIA report named Beijing as "the most significant supplier" of proliferation technologies and advanced weapons in the last half of 1996.

Congress has also been troubled by Beijing's sales of anti ship cruise missiles to Iran and reports that Tehran's longer range missile programs are receiving technical assistance from Chinese entities, possibly in violation of the MTCR.

Nevertheless, Clinton administration officials, recalling their victory in June in the debate over China's most favored nation trading status, remain confident that Congress will not reverse the president's decision. Under the 1985 congressional legislation approving the Sino U.S. nuclear accord, Congress has 30 days (while in session) to review the president's certification before any licenses for exports can be issued. To reverse the president's decision, both houses would have to pass a joint resolution changing certification requirements by at least a two thirds majority, ensuring a sufficient margin to protect against a presidential veto.

Clinton Steps Up Effort To Enact 1985 Sino-U.S. Nuclear Agreement

IN ANTICIPATION of the October 29 summit in Washington between President Bill Clinton and Chinese President Jiang Zemin, U.S. and Chinese officials have been working to improve Beijing's non proliferation credentials, once again under attack in Congress and key to the long delayed implementation of a Sino U.S. nuclear cooperation agreement. The 1985 agreement, potentially worth billions of dollars to the U.S. nuclear industry in the coming years, has never been activated because successive administrations have been unable to certify to Congress that China is not assisting proliferant states in acquiring nuclear weapons.

With the Clinton administration apparently moving closer to making that determination, possibly as the centerpiece of the Washington summit, the Chinese government has sought in recent weeks to address U.S. concerns about its nuclear and ballistic missile cooperation with Iran and Pakistan, its weak export control system and its commitment to international non proliferation norms. In July, Beijing's proliferation record was called into question when an unclassified CIA report labeled China as "the most significant supplier of [weapons of mass destruction] related goods and technology to foreign countries" during the second half of 1996.

While it is unclear whether China's recent actions will finally open the door to Sino U.S. nuclear commerce or deflect congressional moves to change Beijing's behavior by threatening sanctions, the Sino U.S. non proliferation dialogue appears to be moving forward. In late July, Chinese Foreign Minister Qian Qichen told Secretary of State Madeleine Albright during a meeting in Kuala Lumpur, Malaysia, that China would formally join the Zangger Committee at its next meeting in mid October. China is the only declared nuclear weapon state that is not a member of the 31 nation exporters group, which provides a so called "trigger list" to the International Atomic Energy Agency (IAEA) of sensitive nuclear items that would require safeguards under the nuclear Non Proliferation Treaty (NPT) if transferred to a non nuclear weapon state.

Unlike the related Nuclear Suppliers Group (which China has refused to join), whose members require "full scope" safeguards (coverage of all of a nations nuclear facilities by the IAEA) as a condition for the transfer of nuclear materials or technology, Zangger Committee members may transfer trigger list items to safeguarded facilities in countries that also possess unsafeguarded facilities (for example, India, Israel and Pakistan). Beijing reportedly has conditioned its Zangger membership on the continuation of the committee's current export rules.

Some observers believe that China might use this more relaxed standard to assist unsafeguarded facilities—especially those in Pakistan—by using legitimate transfers as a cover and conduit for illicit sales. China's long standing nuclear supply relationship with Pakistan has been a significant impediment to the implementation of the Sino U.S. nuclear cooperation agreement.

U.S. officials have also been pressing China to end its nuclear cooperation with Tehran, as part of the Clinton administration's policy to prevent Iran from acquiring weapons by obstructing its civil nuclear commerce. Although Iran remains an NPT party in good standing, administration officials argue that even peaceful nuclear activities¾which Iran is entitled to pursue under the treaty¾provide skills and experience that aid Tehran in its drive to develop nuclear weapons. China has reportedly already cancelled plans to build a uranium conversion plant (for the production of uranium hexafluoride, a gas used in isotope separation processes) and a research reactor in Iran, though it is unclear whether Beijing's actions are due to U.S. pressure or Tehran's financial difficulties.

As part of China's effort to improve its non proliferation credentials, China's State Council, or cabinet, issued new rules on September 11 governing the sale of nuclear technology. The new export controls, which formalize a 1996 commitment to the United States to halt transfers to unsafeguarded facilities, mandate government review and licensing of all sales of nuclear technology and materials, and require end use guarantees from recipient countries.

China has also responded positively to Washington's concerns about the diversion of a U.S. supercomputer delivered in February to the China Scientific Institute in Beijing, but subsequently transferred to the Changsha Institute of Science and Technology, operated by the Chinese military. Beijing has agreed to return the computer, capable of 2,700 million theoretical operations per second, to the manufacturer, Sun Microsystems in California.

Despite the apparent upswing in Sino U.S. proliferation relations, congressional critics of the administration's "constructive engagement" policy continue to seek legislative means to change China's policies on proliferation and human rights.

Most recently, on September 12 Senator Spencer Abraham (R MI) and eight co sponsors, including Senate Foreign Relations Committee Chairman Jesse Helms (R NC), introduced the "China Policy Act of 1997." The legislation includes a number of provisions containing sanctions authority against Chinese officials and companies, and would tighten U.S. export controls on supercomputers that were relaxed by the administration in 1995.

Senate Calls for Sanctions on China

Following Iranian tests of a new air-launched anti-ship cruise missile acquired from China, the Senate, on June 18, approved a non-binding "sense-of-the-Senate" resolution offered by Senator Robert Bennett (RUT) urging the Clinton administration to enforce the Iran-Iraq Arms NonProliferation Act of 1992 and sanction China for selling the missiles to Iran.

Testifying in April, Deputy Assistant Secretary of State Robert Einhorn said the law "does provide for a substantial list of actions" against anyone providing Iran or Iraq with destabilizing numbers or types of conventional weapons, or assisting them in the acquisition of weapons of mass destruction. The administration has maintained since March 1996 that China's sale of the C802 Silkworm land and sea-launched anti-ship missile to Iran are not sufficiently destabilizing in numbers or type to trigger sanctions. That judgment, however, was called into question by the Senate after Defense Secretary William Cohen's June 17 announcement of Iran's successful tests of the C801 Sardine, a variant of the Silkworm.

According to a senior defense official, U.S. ships in the Persian Gulf now face "a 360degree threat which can . . . come up on you very, very quickly." Iran has deployed the C802 on its coast and on more than 20 patrol boats and frigates; the addition of the air-launched C801 variant provides Iran with an additional anti-ship capability that can be launched from any direction. The official pointed out, however, that the U.S. Navy "can certainly track and engage any cruise missile in the Gulf today."

Sino-U.S. Nuclear Cooperation at a Crossroads

 

Jennifer Weeks

Jennifer Weeks is executive director of the Project on Managing the Atom at Harvard University's John F. Kennedy School of Government. She worked as a congressional defense staffer and as an arms control lobbyist for the Union of Concerned Scientists from 1991-97.

High-level engagement with China has become a central element of the Clinton administration's foreign policy agenda. This "strategic dialogue," as officials describe it, seeks to promote China's emergence as a stable, non-aggressive state that plays a constructive role in the world community and participates in addressing a broad range of foreign policy issues, including arms control. As one step, the administration is considering implementing the bilateral nuclear cooperation agreement signed by the United States and China in 1985 and approved by Congress later that year.

Several provisions of the Sino-U.S. agreement differ significantly from other U.S. nuclear trade agreements, and were criticized when Congress considered the agreement. Opponents also argued that Beijing's non-proliferation guarantees were not credible, based on reports that China had exported unsafeguarded nuclear technology and materials to countries with clandestine nuclear weapons programs. As a result, Congress approved the agreement in a qualified form, requiring the president to make several certifications to Congress before export licenses can be issued for the transfer of major nuclear technology and materials. No administration to date has been able to do so.

Opening peaceful nuclear trade with China would further a number of the Clinton administration's foreign policy objectives. It would provide China with a positive incentive to continue tightening its nuclear non-proliferation policies and improving its export controls. Implementing the agreement would also allow U.S. companies to bid for contracts in China, one of the few strong growth markets worldwide for nuclear power. And if China takes certain steps to meet U.S. legal requirements for nuclear trade, such as joining the Zangger Committee for nuclear exports, it will become more tightly integrated into the international non-proliferation community.

However, any move to implement the Sino-U.S. agreement will raise major policy and political issues, and it could prove very difficult for the administration to win broad support. U.S. relations with China have been an issue of major contention between Congress and the executive branch since the Bush administration. Many current members of Congress are openly critical of the Clinton administration's efforts to engage China, and many view Beijing as an emerging challenger to U.S. economic and security interests. And China clearly has not yet tightened its nuclear exports sufficiently to meet the standards required under U.S. law for implementing the agreement.

If the Clinton administration acts prematurely to implement the 1985 accord, or fails to produce compelling evidence that China will adhere to its nuclear non-proliferation commitments, Congress could well reject its efforts. Such action would likely damage Sino-U.S. relations and further sour the domestic politics that surround this issue. In addition, if the administration is perceived to be downplaying concerns about China's nuclear, chemical and missile-related exports in order to win business for U.S. nuclear companies, the credibility of U.S. non-proliferation policy will be undercut. In sum, given the many controversial aspects of the issue, implementation of the agreement could become one of the most significant non-proliferation debates of President Clinton's second term.

 

The U.S.China Agreement

Under the 1954 Atomic Energy Act, as amended by the 1978 Nuclear Non-Proliferation Act, nuclear cooperation agreements are required before U.S. companies can export nuclear materials, technologies and services. Recipient countries must guarantee that U.S. exports will be used strictly for peaceful purposes, place transferred U.S. equipment and materials under safeguards, and maintain adequate physical security over imports and nuclear materials produced through their use. These countries must obtain prior U.S. consent to retransfer U.S.origin technology or materials, and to reprocess or enrich U.S.origin materials or materials produced in U.S.supplied facilities.

The 1985 Sino-U.S. agreement, negotiated by the Reagan administration between 1981 and 1984, authorizes sales of nuclear reactors, major reactor components and low-enriched uranium (LEU) fuel (enriched to less than 20 percent uranium235). The accord was the first U.S. nuclear trade pact with a communist country and the first bilateral agreement with another nuclear-weapon state.1 However, critics interpreted three sections of the agreement as qualifying U.S. control over China's use of U.S. nuclear exports.

 

Implementation Obligations

Article 2, Section 1, which describes the scope of Sino-U.S. nuclear cooperation, includes a statement that was not contained in prior agreements:

 

The parties recognize, with respect to the observance of this agreement, the principle of international law that provides that a party may not invoke the provisions of its internal law as justification for its failure to perform a treaty.

 

This sentence raised concern that Congress might not be able to pass laws affecting issues covered by the Sino-U.S. accord after the agreement was implemented. China reportedly asked for an explicit statement addressing this point in an effort to avoid future confrontations with Washington over possible revisions to U.S. export control standards. (Such disputes arose between the United States and other nuclear trade partners after passage of the Nuclear Non-Proliferation Act in 1978.)

Reagan administration officials maintained that the provision reiterated an established principle of international law that bound the United States whether or not it was explicitly stated, and that the president could not execute an international obligation if it was barred by passage of subsequent domestic legislation. Further, they noted that the Sino-U.S. agreement established a framework for U.S. nuclear exports to China, but did not commit the United States to make any transfers. Failure to allow an export, therefore, would not be a breach of the agreement.

According to a legal memorandum prepared by the State Department, nuclear exports were "a matter of implementation, not a matter of obligation," governed by the provision in Article 2 that "Each party shall implement this agreement in accordance with its respective applicable treaties, national laws, regulations and license requirements . . . ."2

 

Prior Consent

Article 5, Section 2 addresses the issue of U.S. prior consent for reprocessing or enrichment of U.S.supplied materials, or of materials produced using U.S.supplied materials or facilities. Nuclear cooperation agreements typically state that the recipient country cannot undertake such activities without U.S. approval. In contrast, the Sino-U.S. agreement pledges the parties to "promptly hold consultations to agree on a mutually acceptable arrangement" if China should seek to alter U.S.origin material. The language stipulates that "The parties undertake the obligation to consider such activities favorably," and that if Washington and Beijing cannot negotiate a long-term arrangement within six months, they will seek to negotiate measures for reprocessing or enrichment to proceed on an interim basis.

Opponents argued that the obligation to consider Chinese reprocessing requests "favorably" would make it nearly impossible for the United States to justify vetoing them. Because the agreement does not define what constitutes a "mutually acceptable arrangement," a "long-term arrangement," or an "interim basis," critics predicted that the vague measures prescribed for handling Chinese requests would undercut congressional review of U.S. decisions. Moreover, critics charged that approving a cooperation agreement with such loose consent requirements would undermine U.S. efforts to persuade other countries not to develop civilian plutonium stockpiles.

The Reagan administration held that China could not alter U.S.origin materials unilaterally. In its 1985 Nuclear Proliferation Assessment Statement on the Sino-U.S. agreement, the Arms Control and Disarmament Agency (ACDA) emphasized the two-phased process for handling requests in the event China and the United States could not agree on a long-term prior consent arrangement.

 

During the second phase when the United States and China are seeking to make interim arrangements, the Chinese cannot undertake reprocessing, enrichment or alteration if the United States objects on grounds that such activity "would prejudge the long-term arrangements or adversely affect cooperation." Thus China cannot unilaterally proceed with reprocessing, enrichment or alteration in the face of U.S. objection.

 

Officials also noted that China had no plans at that time to reprocess or enrich U.S.origin material, and that even if U.S. companies quickly won contracts, it would be a decade or longer before China produced plutonium subject to U.S. controls. In the interim, they said, the United States would monitor China's nuclear fuel cycle plans and non-proliferation policy, and its observations would form a basis for future decisions.

 

Verification Issues

The third controversial provision of the Sino-U.S. agreement addresses safeguards. Article 8, Section 2 declares that because both parties are nuclear-weapon states, bilateral safeguards on transferred items are not required. It pledges the United States and China to "use diplomatic channels to establish mutually acceptable arrangements for exchanges of information and visits to material, facilities and components subject to this agreement."

Under Section 123 (a)(2) of the 1954 Atomic Energy Act, as amended, International Atomic Energy Agency (IAEA) full-scope safeguards are required on U.S. exports to non-nuclear-weapon states. However, Section 123 (a)(1), which does not distinguish between nuclear-weapon states and non-nuclear-weapon states, requires that nuclear cooperation agreements include:

 

[A] guaranty by the cooperating party that safeguards as set forth in the agreement for cooperation will be maintained with respect to all nuclear materials and equipment transferred pursuant thereto, and with respect to all special nuclear material used in or produced through the use of such nuclear materials and equipment . . . .

 

To critics, a pledge to negotiate reciprocal information exchanges and visits did not equal a full-fledged safeguards arrangement, and would not provide sufficient assurance that U.S. exports were being used solely for peaceful purposes. They noted that China had accepted reciprocal IAEA safeguards in nuclear cooperation agreements with Argentina, Brazil and Japan, and that the United States required its civilian nuclear exports to Britain and France (both nuclear-weapon states) to be subject to European Atomic Energy Community (EURATOM) safeguards.

The Reagan administration acknowledged that it had sought to persuade China to accept IAEA safeguards on U.S. exports, but that Beijing had refused on the grounds that it was a nuclear-weapon state and should be treated equally with the United States. However, administration officials testified that information exchanges and visits would be negotiated before any exports were approved.

 

China's Non-Proliferation Policy

Beyond these specific provisions loomed a larger question: How credible were China's non-proliferation commitments? Section 129(2)(B) of the Atomic Energy Act requires termination of U.S. nuclear exports to any country that assists non-nuclear-weapon states in developing nuclear weapons. Many critics of the Sino-U.S. agreement argued that China did not meet this standard.

Throughout the 1960s and 1970s, Chinese leaders had openly rejected international non-proliferation norms, and China was not a party to any major non-proliferation agreement when negotiations on the bilateral nuclear accord began in 1981. Over the next four years, a series of press reports described unsafeguarded Chinese nuclear exports to countries seeking to develop nuclear weapons. Chinese transfers reported during this period included:

 

  • Sixty tons of LEU to South Africa in 1981;
  • Heavy water and LEU to Argentina;
  • and Assistance with uranium enrichment and possibly a tested bomb design to Pakistan.3

As the Reagan administration sought to persuade Beijing to place its own nuclear exports and its nuclear imports from the United States under safeguards, U.S. intelligence produced a flow of information documenting Chinese unsafeguarded nuclear transfers. A classified 1983 State Department assessment of Pakistan's nuclear program bluntly stated China's role:

 

We have concluded that China has provided assistance to Pakistan's program to develop a nuclear weapons capability. Over the past several years, China and Pakistan have maintained contacts in the nuclear field. For some time, China's involvement was limited to operational aspects of the KANUPP power reactor at Karachi. We now believe cooperation has taken place in the area of fissile material production and possibly also nuclear device design.4

 

Nonetheless, the Reagan administration continued to pursue the nuclear cooperation agreement, which it viewed as an incentive for China to adopt stronger nuclear non-proliferation policies. In mid1983, Beijing indicated that it would join the IAEA. In January 1984, Chinese Premier Zhao Ziyang stated, "China does not advocate or encourage proliferation. We do not engage in proliferation ourselves, nor do we help other countries develop nuclear weapons." These developments paved the way for Reagan and Zhao to initial a draft agreement in April. Zhao repeated his declaration in May to the Sixth National People's Congress, which endorsed the statement and published it as official policy. China also notified the United States that it would begin requiring IAEA safeguards on its nuclear exports to non-nuclear-weapon states.

But shortly after the draft was initialed, U.S. intelligence reported that Chinese scientists had been sighted at Pakistan's unsafeguarded uranium enrichment plant at Kahuta, raising suspicions that China was still helping Pakistan in this vital area. The Reagan administration had hoped to submit the agreement to Congress promptly for approval, but was forced to seek new non-proliferation guarantees from Beijing.

Chinese officials adamantly rejected this demand, which they termed insulting and an infringement on Chinese sovereignty. The closest China came to offering a public guarantee was a January 1985 statement by Vice Premier Li Peng that "China has no present or future intention to help non-nuclear-weapons states develop nuclear weapons . . . . China's present or future cooperation with other countries is confined to peaceful purposes." In June 1985, the U.S. ambassador-at-large for non-proliferation, Richard Kennedy, presented Chinese officials with a memorandum summarizing U.S.Chinese discussions of what actions were barred by U.S. legal prohibitions against helping other countries to develop nuclear weapons. The Chinese verbally endorsed the document. Although it was not signed or incorporated into the bilateral accord, this joint statement provided sufficient assurance for the Reagan administration, which signed the agreement in July and transmitted it to Congress.

 

The 1985 Congressional Debate

Reagan administration officials testified to Congress that China had substantially improved its nuclear export policy and could be relied on to fulfill its nonproliferation pledges. During a House Foreign Affairs Committee hearing on the proposed agreement, ACDA Director Kenneth Adelman stated: "In the short span of two years, China has embraced non-proliferation policies and practices, which it had eschewed so vigorously for a quarter of a century. This clearly is a turnabout of historic significance in our efforts to prevent the spread of nuclear weapons."

U.S. officials projected major economic benefits from nuclear trade with China. Citing Beijing's plans to install 10,000 megawatts (electric) of nuclear generating capacity between 1985 and 2000, they estimated the potential Chinese reactor market at $20 billion, with U.S. companies in position to win a share worth $3 billion to $7 billion. The administration also predicted that winning a share of China's nuclear energy business would enhance U.S. companies' chances of penetrating China's other energy sectors.

However, the Sino-U.S. agreement drew bipartisan criticism on Capitol Hill from liberal Democrats and conservative Republicans, who predicted that the loose provisions of Articles 2, 5 and 8 would not prevent China from retransferring U.S. technology and materials to non-nuclear-weapon states. The General Accounting Office (GAO) found the accord acceptable on balance, but noted that the agreement:

 

. . . does contain certain vague and unclear language which could lead to misinterpretations. In several respects the language in this agreement differs from that in other nuclear cooperative agreements, but for the most part these differences appear to have more symbolic than practical effects. Nevertheless, the changes represent a departure from the longstanding U.S. practice of encouraging more stringent controls on the use of U.S. nuclear exports.5

 

The Nuclear Regulatory Commission (NRC) echoed this view during Senate Foreign Relations Committee hearings in response to questions from Senator William Proxmire (D-WI). The NRC supported the agreement but stated concern that the language in Article 2 on compliance with international agreements might reduce future U.S. flexibility. The commission also said it would have preferred that the agreement "contain a clear statement of U.S. consent rights" over Chinese reprocessing.

Congressional skeptics argued that China's non-proliferation pledges could not be trusted, especially since Beijing had refused to provide any written guarantees beyond the bilateral agreement itself. (The June 1985 memorandum that Ambassador Kennedy had persuaded Chinese leaders to approve was provided to Congress in classified form, but was not made public.) Critics further contended that approving what they viewed as an overly permissive cooperation agreement would undercut the credibility of U.S. non-proliferation policy. The strongest critics asserted that China did not meet the standards required under the Atomic Energy Act for peaceful nuclear trade, and called for the administration to withdraw the agreement and resubmit it to Congress with a waiver of statutory requirements, thereby acknowledging that China did not meet U.S. nuclear non-proliferation criteria. (This route would have required an affirmative congressional vote for the agreement to take affect, rather than letting it automatically enter into force unless Congress passed a resolution of disapproval.) However, opponents were unable to secure majority support for this approach. Congress approved the agreement in December 1985.

As part of the legislation that authorized implementation of the accord (P.L. 99-183), Congress mandated that before any export licenses could be issued, the president had to certify to Congress that:

 

  • The visits and exchanges to be negotiated under Article 8 were "designed to be effective" in ensuring that U.S. exports would be used strictly for peaceful purposes;
  • Based on all information available to the U.S. government (including additional assurances from the Chinese government), China was not assisting any non-nuclear-weapon states to develop nuclear weapons;
  • and The obligation in Article 5 to consider favorably Chinese requests to alter U.S.origin materials would not prejudice U.S. decisions.

     

The resolution also required the president to submit a report on the history and current status of China's non-proliferation policies to Congress, and allowed 30 days of continuous legislative session to review this information before the agreement could enter into force.

 

Developments Since 1985

U.S.Chinese nuclear trade remained in limbo for the next several years, due to growing U.S. concern over China's nuclear and missile-related exports. Most significantly, Beijing continued to support Pakistan's nuclear weapons program despite its non-proliferation pledges. In addition, China sold CSS2 intermediate-range ballistic missiles to Saudi Arabia and began marketing M-series missiles to Iran and Syria.

After Beijing's violent suppression of pro-democracy demonstrators in Tiananmen Square in June 1989, President Bush imposed sanctions on China, including suspension of arms sales and military-to-military contacts. Congress subsequently wrote these and additional sanctions into law, including a ban on U.S. nuclear exports to China (P.L. 101-246). Subsequently, U.S.Chinese nuclear relations were subsumed in a broader debate between President Bush and Congress over China's most-favored-nation (MFN) trading status. Under the Jackson-Vanik Amendment to the Trade Act of 1974, MFN status can be granted to a "non-market economy" (communist country) only if the president certifies yearly to Congress that that nation does not restrict emigration. From 1990 through 1992, however, members of Congress who viewed the Bush administration as too deferential toward China passed annual bills conditioning extension of MFN status on presidential certifications that China had made "overall significant progress" on trade, human rights and weapons proliferation issues. Bush vetoed these bills and pressed for engagement with Beijing as the best way to achieve reforms, but mustered scant political support.

China's post-Tiananmen Square exports provoked further controversy. Notably, in November 1989, China announced that it planned to sell a 300-megawatt (electric) nuclear reactor to Pakistan. Although Chinese leaders pledged to require safeguards on the reactor, this action broke an international moratorium on major nuclear sales to Pakistan. In the spring of 1991, U.S. intelligence discovered that China was supplying a research reactor to Algeria, which then was not a member of the nuclear non-proliferation Treaty (NPT). Later that year, the Bush administration imposed sanctions on China for selling components for nuclear-capable M11 ballistic missiles to Pakistan. Nonetheless, U.S. diplomatic pressure arguably produced some results. In March 1992, Beijing signed the NPT and agreed to adhere to the guidelines of the Missile Technology Control Regime (MTCR). In response to the latter step, the Bush administration waived the 1991 missile sanctions and other high-technology export restrictions imposed after Tiananmen Square.

After strongly criticizing the Bush administration's China policy as too lenient during the 1992 presidential campaign, Clinton initiated a review of U.S. China policy upon entering office. In a May 1993 executive order, Clinton delinked China's MFN status from trade and arms control considerations, conditioning it solely on Beijing's human rights record. (Clinton later severed this link as well.) With this step, existing U.S. laws and international agreements once again became the venue for addressing proliferation concerns in U.S.Chinese relations.

Throughout Clinton's first term, the United States and China swung between cooperation and confrontation over arms control issues. On the positive side, China signed the Chemical Weapons Convention in 1993; agreed to adhere to revised MTCR guidelines and endorsed the negotiation of a treaty banning production of fissile material for weapons in 1994; supported unconditional extension of the NPT in 1995; and stopped testing nuclear weapons and signed the Comprehensive Test Ban Treaty in 1996. China also played a positive role in promoting the 1994 U.S.North Korea agreement under which Pyongyang agreed to freeze and eventually eliminate its nuclear weapons program.

On the other hand, China continued to make controversial exports, often in contravention of its non-proliferation commitments. The Clinton administration imposed sanctions on various Chinese agencies, firms and front companies in 1993 for missile technology transfers to Pakistan and in 1995 for sales of chemical weapon precursors to Iran. In 1996, it threatened to impose sanctions for China's export of custom-built ring magnets (a component of gas centrifuges used to enrich uranium) to Pakistan. However, the administration concluded that there was insufficient evidence to determine that Chinese officials had known about or approved the transfer. Critics called this decision an overly narrow reading of U.S. law, and argued that the sale violated China's NPT commitments not to help other countries develop nuclear weapons or to transfer such items outside of international safeguards.

Today, further improvement in China's export control system and adherence to international non-proliferation norms are central issues in U.S.Chinese relations. U.S. officials categorize China's non-proliferation record as mixed; they stress the degree to which Chinese policies have improved over the past five years, especially in the nuclear area, while acknowledging continued concerns about Beijing's export policies. Chinese transfers to Iran and Pakistan are of particular concern.

China has suspended a planned sale to Iran of two 300-megawatt (electric) nuclear reactors, which were to be placed under safeguards but which the United States argued would support Iran's nuclear weapons ambitions. U.S. officials remain strongly concerned about Chinese conventional arms sales and missile technology exports to Iran. In May 1997, the Clinton administration imposed sanctions on seven Chinese entities for exporting dual-use items with chemical weapons applications to Iran.

With respect to Pakistan, China agreed in October 1994 that transfers of M-11 missiles were barred under MTCR guidelines. However, according to subsequent press reports citing U.S. intelligence officials, China continued to transfer M-11 technology and is helping Pakistan to build a factory that will manufacture M-11s or a similar missile. China also is reportedly helping Pakistan to build a plutonium production reactor outside of safeguards, a potential violation of Beijing's NPT commitments.6

It is important to note that from China's perspective, international arms control regimes often impose major costs on Beijing and are invoked selectively by Western countries, especially the United States. Chinese leaders frequently contend that they are accused of violating imprecise standards which they were not involved in negotiating. Moreover, they accuse the United States of flouting its own arms control commitments—most significantly, by selling advanced conventional weapons to Taiwan. An analysis of Chinese perspectives on arms control compliance issues is beyond the scope of this article, but two points bear emphasis. First, China has deeply held concerns about issues such as sovereignty that rightly or wrongly shape its behavior in relation to arms control treaties and agreements. Second, China's views of what it can legitimately be asked to do to fulfill its non-proliferation commitments are an important constraint on U.S. negotiators. At some point, Chinese leaders could simply refuse to take all of the steps that the Clinton administration sees as necessary to enable it to ask Congress to allow the nuclear cooperation agreement to be fully implemented.

 

Engaging Through Nuclear Trade

Notwithstanding these controversies, the Clinton administration appears optimistic that China will improve its non-proliferation record sufficiently in the near future to allow implementation of the 1985 nuclear accord. U.S. officials involved in this issue give several reasons for the administration's interest in implementing the agreement.

First, China wants access to U.S. nuclear technology to help meet its rapidly growing electricity needs. Currently, China operates three nuclear plants that generate a total of 2,167 megawatts (electric). In 1996, China's three reactors supplied less than 2 percent of the country's total electricity needs. Last year Beijing announced plans to add 20 gigawatts of new capacity by the year 2010, a tenfold increase. The Sino-U.S. nuclear agreement thus offers a positive incentive for China to improve its nuclear non-proliferation credentials.

Second, implementing the 1985 nuclear accord exemplifies the Clinton administration's broader strategy of expanding areas of U.S.Chinese cooperation at the same time that it addresses areas of contention. According to Gary Samore, National Security Council senior director, "We are trying to demonstrate that the U.S. and China can produce concrete results in areas that have been contentious." Administration officials present U.S. policy toward China on non-proliferation issues as a mix of cooperation, high-level diplomatic engagement and targeted sanctions, aimed at integrating China into the international order rather than isolating it.

Third, the administration views China as indispensable to international efforts to control the proliferation of weapons of mass destruction by virtue of its status as a nuclear-weapon state, its standing as a permanent member of the UN Security Council, its role as a major nuclear supplier and its diplomatic influence. U.S. officials emphasize the importance of persuading China that it shares a common interest with other world powers in curbing the spread of weapons of mass destruction.

Finally, expanding peaceful nuclear trade with China promotes a major element of the Clinton administration's international economic strategy. China is the biggest of the so-called "big emerging markets," a concept developed during Clinton's first term to describe 10 countries and regions whose high-growth-rate economic plans make them the largest potential markets for U.S. exports in the coming decades. The administration's strategy calls for sustained U.S. commercial diplomacy and engagement with these countries, and asserts that the United States can pursue these emerging trade opportunities at the same time that it addresses problematic issues such as human rights, intellectual piracy and weapons proliferation.

Not only is China a "big emerging market," energy is a "big emerging sector" in China, according to the Commerce Department, which predicts that China will spend as much as $65 billion between 1995 and 2000 on energy and power projects, including eight nuclear plants. One nuclear industry estimate suggests that U.S. companies could earn as much as $55 billion from the Chinese market over the next 30 years.7

 

Prospects for Implementation U.S.

officials are reluctant to predict how soon the administration may attempt to implement the Sino-U.S. nuclear agreement. President Clinton and Chinese President Jiang Zemin have agreed to conduct reciprocal state visits in 1997 and 1998, with Zemin scheduled to arrive in Washington in late October. These meetings may lend momentum to U.S. implementation efforts so that the full implementation of the nuclear accord can be celebrated at the summit level. China has indicated that it expects the Washington summit to yield "concrete results," and the 1985 agreement will no doubt be high on the agenda. During a joint news conference with Secretary of State Madeleine Albright in Kuala Lumpur, Malaysia, in late July, Chinese Foreign Minister Qian Qichen said "early implementation" of the agreement would benefit both countries. "On this matter," he said, "the two sides have held positive and productive consultations and made some progress." Nevertheless, the timing will depend on Chinese actions and on how Congress evaluates the case for nuclear cooperation.

Given the Sino-U.S. agreement's lack of explicit safeguards over U.S. exports, congressional skeptics will look closely at how the administration plans to verify that China is using U.S.supplied technologies and materials for peaceful purposes. This issue has caused problems recently between the United States and China. In 1995, the GAO reported that the United States could not ensure that U.S. missile technology-related exports to China were being kept away from sensitive end-users, in part because the Chinese government resisted U.S. end-use checks.8 In 1995 and 1997, respectively, China diverted advanced machine tools and a supercomputer from their authorized users to military facilities.9

Congress can also be expected to scrutinize China's relationships with proliferant countries such as Pakistan and Iran. Administration officials assert that China is living up to its most recent pledge—made in the context of the May 1996 ring magnet controversy—not to provide assistance to unsafeguarded nuclear facilities. Testifying before a subcommittee of the Senate Governmental Affairs Committee in April, Deputy Assistant Secretary of State Robert Einhorn said, "While we have raised concerns with Beijing about certain activities and incidents, we have no basis to conclude that China has acted inconsistently with its May commitment."

However, the administration is not speaking with one voice on this question. In a June 1997 report on the spread of technologies related to weapons of mass destruction, the CIA stated that China was "the primary source of nuclear-related equipment and technology to Pakistan, and a key supplier to Iran during [the second half of 1996]." Overall, the report termed China "the most significant supplier of [weapons of mass destruction]related goods and technology to foreign countries," including "a tremendous variety of assistance to both Iran's and Pakistan's ballistic missile programs" and exports of chemical weapons production equipment and technology to Iran.10

In order for Sino-U.S. nuclear cooperation to go forward, President Clinton must certify not only that China is committed to its non-assistance pledge, but that it can enforce it. Currently, China is just developing an export control system. According to Einhorn, while the Chinese government appears to have centralized procedures for controlling specialized technologies for weapons of mass destruction:

 

. . . dual-use items in the nuclear, chemical, biological and missile areas . . . are not necessarily controlled by centralized or senior-level review and approval mechanisms. Indeed, we have considerable evidence that decisions to export potentially sensitive dual-use nuclear, chemical and missile items are often taken by Chinese manufacturing or exporting entities—even government-owned or government-operated entities—without referral to central or high-level authorities.11

 

An analysis of Chinese export controls by the University of Georgia's Center for International Trade and Security scores China's current system at 50 on a scale of 1 to 100. (The score indicates the status of elements that typically make up an effective export control system, but does not measure that system's effectiveness.) In comparison, the center scores Japan's export controls at 97, Russia at 82 and Kazakstan at 69. According to this assessment, the most problematic aspects of China's export control system are relatively low levels of verification, both in China and in recipient countries; Chinese officials' reluctance to share information with foreign observers and businesses and with Chinese non-proliferation experts; and little evidence that licensing and enforcement personnel are trained to execute non-proliferation export controls. The report points out that there is great potential for cooperation between China and other governments to address some of these gaps.12

U.S. officials note that China is developing nuclear export control regulations that will establish a legal and regulatory basis for carrying out its non-proliferation commitment. At the conclusion of a meeting of the Executive Committee of the State Council August 1, a draft regulation on the control of nuclear exports was reportedly approved, indicating China's interest in the early implementation of the 1985 agreement. In addition to putting these controls in place, the Clinton administration is urging China to take the following steps:

 

  • Continuing to uphold its May 1996 commitment not to help other countries develop nuclear weapons, and amplifying on that commitment. (During his March 1997 trip to Beijing, Vice President Al Gore was reportedly unable to persuade Chinese leaders to make additional assurances)13;
  • Joining the Zangger Committee, through which nuclear supplier countries coordinate their export procedures and standards (China attended the May 1997 Zangger Committee meeting as an observer, and is actively considering joining the committee, according to U.S. officials);
  • and Curtailing its nuclear trade with Iran, in response to the current U.S. policy not to carry on nuclear cooperation with countries that conduct nuclear commerce with Iran.

     

Significant progress on these issues would clearly benefit Chinese and U.S. interests, and would further China's evolution from a holdout to a supporter of arms control. However, a congressional debate over nuclear trade with China could still prove extremely difficult, and potentially even harmful to Sino-U.S. relations. Clearly, the administration must resolve any internal conflicts over China's compliance with its non-proliferation commitments, such as the contrasting statements cited above on Beijing's current relationship with Pakistan. Congress will not overlook such differing assessments, nor should it.

More broadly, the administration should take the domestic politics of this issue very seriously. Proliferation and China are highly charged issues on Capitol Hill, and legislators will bring up other policy questions when they review the Sino-U.S. nuclear accord. China's missile and chemical exports will certainly be considered. Administration officials assert that they are handling those issues through appropriate channels, but Congress is unlikely to draw fine distinctions between China's nuclear, missile and chemical sales as it assesses China's arms control commitments, especially since the report to Congress on China's non-proliferation record required under the 1985 legislation is not limited to nuclear issues.

Many members of Congress see China as an increasingly assertive power in Asia that is expanding its military reach. For example, some interpreted the 1995 remark by a Chinese official (in the context of the United States defending Taiwan in a conflict between Taiwan and China) that Washington would not sacrifice Los Angeles to defend Taipei as an overt threat. This year, Congress has passed measures requiring the U.S. intelligence community to track Chinese espionage activities against U.S. citizens and establishing a new center for analysis of China at the National Defense University. Members of Congress who see China in this light as an aggressive military power may argue that U.S. exports could be used to enhance China's nuclear arsenal, or that China might use U.S.origin plutonium for weapons. These concerns are debatable because China has already produced several hundred weapons and a stockpile of weapons-grade plutonium, but they may well come up nonetheless during congressional consideration of the nuclear accord.

The recent debate over renewing China's MFN status offers some signs of how Congress might treat a proposal to implement the 1985 cooperation agreement. While efforts to deny MFN were defeated relatively easily (by a vote of 259173 in the House), many legislators expressed concern over China's arms control record and frustration with U.S. handling of this issue. For example, Representative Howard Berman (D-CA) said:

 

. . . what I want is for this administration to scream as loudly about the proliferation of weapons of mass destruction as it has about the manufacturing of counterfeit CDs and stolen computer software and video games. I want this administration to threaten the import controls and higher tariffs on key products imported here from China as forcefully and effectively as it has waved and wielded that weapon to remedy violations of intellectual property agreements.14

 

Many congressional advocates of a tough policy toward China are looking for a better forum than the MFN-trade-status debate to voice their concerns. In the wake of this year's vote, a number of bills have been introduced that address other aspects of Sino-U.S. relations, including proposals to deny visas to Chinese officials responsible for illicit arms sales and to withhold MFN treatment from products of commercial suppliers operated by Chinese military companies.

If the administration cannot satisfy critics of its overall China policy, the 1985 nuclear cooperation agreement will become a vehicle for Congress to address its trade and security concerns. Opponents probably cannot muster a two-thirds majority of both houses of Congress for a resolution of disapproval, but they might repeat the 1985 scenario by passing legislation that would impose further conditions on nuclear cooperation with China. Congress could link implementation of the accord with progress on other issues, such as missile and chemical exports, or bar the use of any U.S. funds for activities in support of nuclear exports to China, such as trade promotion. Congress might also require certifications from China in a form that Chinese leaders are certain to reject.

A likely best-case scenario for the administration would be for Congress to let the 1985 agreement be fully implemented, but to put its concerns on record (possibly through a non-binding resolution) and require additional subsequent reports from the administration on China's compliance with its nuclear non-proliferation pledges. The Clinton administration will need to hold extensive consultations with Congress if it hopes to win certification while avoiding legislation that invokes other issues on the U.S.Chinese agenda.

One potential administration strategy may be to make some kind of partial certification that would allow U.S. companies to negotiate with China for nuclear contracts, although they would have to wait for full certification to proceed with exports.15 This approach could allow the administration to reward China for some improvements, while demonstrating to Congress that it will not accept less than full Chinese adherence to the standards required to implement nuclear trade.

Using peaceful nuclear cooperation as an incentive to improve China's non-proliferation behavior makes sense in many respects, but it is far from guaranteed to succeed. China has greatly improved its arms control policies over the past decade, but major non-proliferation concerns persist. The Clinton administration will bear a heavy burden of proof in certifying that China meets the conditions for implementing the 1985 nuclear cooperation agreement. And given the high level of political feeling surrounding issues related to China and proliferation in Congress, the administration should consider very carefully whether the potential economic benefits of nuclear trade with China will outweigh the political costs and possible collateral damage to Sino-U.S. relations.

Gaining access to the Chinese market clearly would benefit U.S. nuclear companies, but its impact on the U.S. trade deficit with China should not be exaggerated. Nuclear power will only meet a fraction of China's energy requirements in the next several decades, and other avenues such as natural gas and renewable energy sources also offer major export opportunities. non-proliferation, not trade, should be the determining factor in the administration's calculus of whether and when to implement the 1985 agreement. In light of the many controversies between the United States and China since 1985, and of repeated U.S. failures to extract leakproof commitments from China in this area, close congressional review is appropriate and justified.

Most importantly, nuclear trade should not be implemented unless and until every problematic aspect of China's nuclear non-proliferation behavior is resolved to U.S. satisfaction. China is moving toward full adherence to international non-proliferation regimes, but a premature certification effort by the Clinton administration will convey the impression that the United States is bending its non-proliferation standards. Today, U.S. leaders have an opportunity to achieve major new nuclear arms control commitments from China. Now is precisely the wrong time to settle for less.

 


NOTES

 

  • 1. U.S. nuclear trade with Britain and France is regulated through a nuclear cooperation agreement negotiated with the European Atomic Energy Community (EURATOM), of which they are members.
  • 2. Legal Memorandum prepared by the Department of State, in United States-People's Republic of China Nuclear Agreement, hearing, Senate Foreign Relations Committee, October 9, 1985, p. 159.
  • 3. Summarized in Leonard S. Spector, Nuclear Ambitions, Boulder, CO: Westview Press, 1990, pp. 38-39, 42-43 and 274.
  • 4. U.S. Department of State, "The Pakistani Nuclear Program," June 23, 1983, SECRET/NOFORN/ORCON, released under the Freedom of Information Act to the National Security Archive, January 17, 1991.
  • 5. General Accounting Office, Nuclear Agreement: Cooperation Between the United States and the People's Republic of China, NSIAD-86-21BR, November 1985.
  • 6. Leonard S. Spector, et. al., Tracking Nuclear Proliferation, Washington, DC: Carnegie Endowment for International Peace, 1995, pp. 97-99.
  • 7. Nucleonics Week, March 23, 1995, p. 2.
  • 8. General Accounting Office, Export Controls: Some Controls Over missile-related Technology Exports to China are Too Weak, NSIAD-95-82, April 1995.
  • 9. General Accounting Office, Export Controls: Sensitive Machine Tool Exports to China, NSIAD-97-4, November 1996; and "Albright Says China Broke Export Rules by Using U.S. Computer at Military Site," Wall Street Journal, July 1, 1997.
  • 10. Director of Central Intelligence, "The Acquisition of Technology Relating to Weapons of Mass Destruction and Advanced Conventional Munitions, July-December 1996," June 1997.
  • 11. Testimony before the Subcommittee on International Security, Proliferation, and Federal Service, Senate Governmental Affairs Committee, April 10, 1997.
  • 12. Richard T. Cupitt and Yuzo Murayama, Export Controls in the People's Republic of China: Status Report—1997, University of Georgia, 1997.
  • 13. Programme for Promoting Nuclear non-proliferation Newsbrief, Number 38, p. 6.
  • 14. Congressional Record, June 24, 1997.
  • 15. Joshua Michael Boehm and Zachary S. Davis, "The U.S.China Agreement for Nuclear Cooperation: Moving Towards Implementation?" Congressional Research Service, April 10, 1997.

U.S. Moving Toward Implementation of 1985 Sino-U.S. Nuclear Accord

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Search for Common Ground: Breaking the Sino-U.S. Non-Proliferation Stalemate

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