"No one can solve this problem alone, but together we can change things for the better." 

– Setsuko Thurlow
Hiroshima Survivor
June 6, 2016

Introductory Note From the Damage Assessment Review Panel

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This damage assessment was reviewed by a panel of independent, national security and weapons experts—Admiral David Jeremiah, General Brent Scowcroft, Dr. John Foster, Mr. Richard Kerr, Dr. Roland Herbst, and Mr. Howard Schue—prior to its publication. The panel members reviewed the report, held a question-and-answer session with the team, discussed the report amongst themselves, and concluded that they concurred with the report. The panel then worked with the team to develop a set of unclassified findings, which are completely consistent with the classified Key Findings in the damage assessment.

The panel would add the following observations:

• It is important to understand Chinese strategic objectives in assessing their efforts to acquire technical information on US nuclear weapons. The need to preserve their second strike capability, their regional concerns, and their perceptions of future national and regional ballistic defenses have driven collection efforts.

• The Chinese continue to have major gaps in their weapons program. We should seek to identify Chinese efforts to fill these gaps as indicators of future program direction and to provide insight into counterintelligence issues.

• The panel feels strongly that there is too little depth across the Intelligence Community's analytic elements and they are too frequently occupied with whatever current crisis takes front stage. The necessity to pull Intelligence Community analysts and linguists off other activities to assess the compromises to US nuclear weapons programs and their value to the Chinese further reinforces the panel's view that the depth of Intelligence Community technical and language expertise has eroded.

• A separate net assessment should be made of formal and informal US contacts with the Chinese (and Russian) nuclear weapons specialists. The value of these contacts to the US, including to address issues of concern-safety, command and control, and proliferation-should not be lost in our concern about protecting secrets.

• The panel recognizes that countries have gained access to classified US information on a variety of subjects for decades, through espionage, leaks, or other venues. While such losses were and continue to be unacceptable, our research and development efforts generally kept us technologically ahead of those who sought to emulate weapons systems using our information. However, decreases in research efforts have diminished the protective edge we could have over those using our information, making such losses much more significant in today's world.

Key Findings of the Intelligence Community Damage Assessment

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Chinese strategic nuclear efforts have focused on developing and deploying a survivable long-range missile force that can hold a significant portion of the U.S. and Russian populations at risk in a retaliatory strike. By at least the late 1970s the Chinese launched an ambitious collection program focused on the United States, including its national laboratories, to acquire nuclear weapons technologies. By the 1980s China recognized that its second strike capability might be in jeopardy unless its force became more survivable. This probably prompted the Chinese to heighten their interest in smaller and lighter nuclear weapon systems to permit a mobile force.

• China obtained by espionage classified U.S. nuclear weapons information that probably accelerated its program to develop future nuclear weapons. This collection program allowed China to focus successfully down critical paths and avoid less promising approaches to nuclear weapon designs.

• China obtained at least basic design information on several modern U.S. nuclear reentry vehicles, including the Trident II (W88).

• China also obtained information on a variety of U.S. weapon design concepts and weaponization features, including those of the neutron bomb.

• We cannot determine the full extent of weapon information obtained. For example, we do not know whether any weapon design documentation or blueprints were acquired.

• We believe it is more likely that the Chinese used U.S. design information to inform their own program than to replicate U.S. weapon designs.

China's technical advances have been made on the basis of classified and unclassified information derived from espionage, contact with U.S. and other countries' scientists, conferences and publications, unauthorized media disclosures, declassified U.S. weapons information, and Chinese indigenous development. The relative contribution of each cannot be determined.

Regardless of the source of the weapons information, it has made an important contribution to the Chinese objective to maintain a second strike capability and provided useful information for future designs.

Significant deficiencies remain in the Chinese weapons program. The Chinese almost certainly are using aggressive collection efforts to address deficiencies as well as to obtain manufacturing and production capabilities from both nuclear and nonnuclear sources.

To date, the aggressive Chinese collection effort has not resulted in any apparent modernization of their deployed strategic force or any new nuclear weapons deployment.

China has had the technical capability to develop a multiple independently targetable reentry vehicle (MIRV) system for its large, currently deployed ICBM for many years, but has not done so. U.S. information acquired by the Chinese could help the develop a MIRV for a future mobile missile.

We do not know if U.S. classified nuclear information acquired by the Chinese has been passed to other countries. Having obtained more modern U.S. nuclear technology, the Chinese might be less concerned about sharing their older technology.

Nuclear Weapons-Related Recommendations of the Cox Committee

Transmitted on January 3, 1999, to the President and Congress

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1. Semi-Annual Report by the President on PRC Espionage

The Select Committee recommends that the President report to the Speaker and Minority Leader of the House, and the Majority Leader and Minority Leader of the Senate, no less frequently than every six months on the steps, including preventive action, being taken by the Department of Energy, the Department of Defense, the Federal Bureau of Investigation, the Central Intelligence Agency, and all other relevant Executive departments and agencies to respond to espionage by the People's Republic of China (PRC) as typified by the theft of sophisticated U.S. nuclear weapons design information, and the targeting by the PRC of U.S. nuclear weapons codes and other national security information of strategic concern.

2. Urgent Priority to Department of Energy Counterintelligence Program

As a matter of urgent priority, the Select Committee believes the Department of Energy must implement as quickly as possible and then sustain an effective counter-intelligence program.

To this end, the Select Committee recommends the following:

3. Implementation and Adequacy of PDD-61

The appropriate congressional committees should review, as expeditiously as possible, the steps that the Executive branch is taking to implement Presidential Decision Directive 61 and determine whether the Administration is devoting, and Congress is providing, sufficient resources to such efforts and whether additional measures are to put an adequate counterintelligence program in place at the Department of Energy at the earliest possible date.

4. Comprehensive Damage Assessment

The appropriate Executive departments and agencies should conduct a comprehensive damage assessment of the strategic implications of the security breaches that have taken place at the National Laboratories since the late 1970s (or earlier if relevant) to the present and report the findings to the appropriate congressional committees.

5. Legislation to Implement Urgent and Effective Counterintelligence

The appropriate congressional committees should report legislation, if necessary, to facilitate accomplishment of the objectives set forth above.

6. Five-Agency Inspectors General Examination of Scientific Exchange Program Risks to National Security

The Select Committee recommends that the Secretaries of State, Defense, and Energy, the Attorney General, and the Director of Central Intelligence direct their respective Inspectors General and appropriate counterintelligence officials to examine the risks to U.S. national security of international scientific exchange programs between the United States and the PRC that involve the National Laboratories. Such Executive department and agency heads shall transmit the results of these examinations, together with their views and recommendations, to the Speaker and the Minority Leader of the House, the Majority and Minority Leaders of the Senate, and appropriate congressional committees no later than July 1, 1999.

7. Congressional Examination of Whether Department of Energy Should Maintain U.S. Nuclear Weapons Responsibility

The Select Committee recommends that the appropriate congressional committees consider whether the current arrangements for controlling U.S. nuclear weapons development, testing, and maintenance within the Department of Energy are adequate to protect such weapons and related research and technology from theft and exploitation.

8. Intelligence Community Failure to Comply with National Security Act; Need for Congressional Oversight

In light of the fact that the heads of Executive departments and agencies of the intelligence community failed adequately to comply with congressional notification requirements of the National Security Act with respect to the theft of secrets from the National Laboratories, the Select Committee urges Congress to insist again on strict adherence to such legal obligations….

Keep the Facts of the Cox Report in Perspective

Representative John M. Spratt, Jr.

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The Select Committee on U.S. National Security and Military/Commercial Concerns with the People's Republic of China (PRC) was chartered in the wake of allegations about U.S. satellites launched on PRC rockets. Three rocket failures over 38 months were followed by accident investigations that were not licensed by the State Department and resulted in technology transfers to the PRC. It was initially alleged that U.S. encryption technology had been compromised when the Loral-built Intelsat 708 satellite crashed shortly after launch. This rumor turned out to be unfounded. It was also alleged that Motorola had helped the PRC design a platform for off-loading Iridium satellites that was a precursor to a post-boost vehicle for off-loading multiple independently targetable reentry vehicles (MIRVs). This too was unfounded. Finally, it was alleged that Hughes and Loral had helped the PRC improve the accuracy, range and payload capacity of its rockets and missiles. The committee investigated the launch failure investigations in detail, and concluded that China's rockets and missiles may have gained reliability as a result of transfers, but nothing to increase or improve range, payload capacity or accuracy.

If the committee had ended its work here, the report would have raised concerns about exports controls and technology transfer, but revealed nothing earthshaking. In mid-October, however, committee staff learned that design information about the W-88 warhead had been lost to Chinese espionage. The committee heard testimony about these losses at hearings on November 12 and December 16. Due to the shortness of time, the record on this subject is much thinner than the extensive record compiled on Loral and Hughes.

The committee reports that in 1995, the CIA learned from a PRC "walk-in" of nuclear secrets lost to Chinese espionage. The national security advisor, Samuel R. Berger, was informed of espionage at Los Alamos National Laboratory in April 1996, but the president was not briefed until early 1998, and Presidential Decision Directive 61 was not issued until February 1998. The administration is criticized for not acting quickly or vigorously. But in July 1996 the House and Senate Intelligence committees received a similar briefing, instigated by the national security advisor, and neither sounded an alarm nor took action. The lag seems to be due in part to fragmentary, uncertain facts and an inconclusive investigation. The select committee required three staff briefings, one from the FBI and two from the Department of Energy (DOE), two hearings, and multiple telephone calls to get the facts for this report, which was prepared two years after the national security advisor was first briefed.

One is still baffled by how this investigation has been handled, but security lapses and miscues between the FBI and the DOE date back to the early 1980s when information about the W-70 was lost from Livermore and red flags were raised but not heeded. The W-70 is an enhanced radiation warhead, sometimes called the "neutron bomb." The first clear call for beefed-up security and counter-intelligence against China came in the early 1980s when loss of W-70 design data was strongly suspected. When China tested a neutron bomb in 1988, the need for stronger security should have been unmistakable, yet nothing was done.

Among those beating the drum for tighter security were the General Accounting Office (GAO) and the House Energy and Commerce Committee. The Carter administration set up an interagency group reporting directly to DOE's inspector general on security at DOE facilities. This group engaged experts in anti-terrorism and protection of classified material. In 1981, the assistant secretary for defense programs was replaced by the Reagan administration with an appointee who disbanded the interagency group. The oversight subcommittee of Energy and Commerce, under Chairman John Dingell, kept up the drumbeat for an independent Office of Safeguards Evaluation, and was answered by Secretary of Energy John S. Herrington with assurances of "significant progress." In 1991 and 1992, the oversight Subcommittee received six GAO reports critical of DOE's safeguards and security. These reports cited lax internal controls and weak accountability for classified documents. It was during this period, between 1984 and 1992, that design information about the W-88 warhead was stolen by Chinese agents.

All of these facts raise serious concerns, but they need to be kept in perspective. There was too little time to conduct an independent investigation of this subject before the committee's charter expired. The committee relied heavily on a few witnesses, and did not substantiate their testimony with weapons experts at the national labs or interagency review. I do not fault the witnesses we heard from; they performed a valuable service by alerting us to serious failures in security. But they did not have the technical background to fully assess the nature or value of the information lost. The committee did not have time to call the senior statesmen of the nuclear labs, like Harold Agnew and Johnny Foster, for their perspective. Partly because of haste, there are statements in the report that will not stand scrutiny. I objected to a number of these in our mark-up of the "Overview," but not all were deleted or revised, and some of the revisions are still inadequate, in my opinion.

The first page of the "Overview," for example, makes one statement that is simply incorrect. It says that the United States has not deployed an enhanced radiation warhead or a neutron bomb. In fact, we have deployed three: the W-70 on the Lance tactical missile; the W-66 on the Sprint interceptor; and the W-79 on an 8-inch artillery round. This is not a serious mistake, but a report of this importance should not contain such mistakes. Two other sentences are much more serious. The opening sentence states that "The PRC has stolen design information on the United States' most advanced thermonuclear weapons." That is a sweeping charge. It is followed by the statement that "The stolen U.S. nuclear secrets give the PRC design information on thermonuclear weapons on a par with our own." That is even more alarming, but is it accurate?

Here is the intelligence community's best estimate of what the PRC has obtained:

• Late 1970s: Design information on the W-70 enhanced radiation warhead.

• 1984-1988: Design information on the W-88 warhead and its reentry vehicle.

• 1984-1988: Classified (but not design) information on reentry vehicles and weight-to-yield ratios of the W-62 (Minuteman II), W-76 (Trident C-4), W-78 (Minuteman III), and W-87 (Peacekeeper).

The only design data we know for sure to be lost is data on the W-70 and W-88, and it is hardly accurate to call the W-70 one of our "most advanced thermonuclear weapons." The W-88 is unquestionably one of our most advanced warheads, but a reader can come away from the report with the impression that China obtained design information on all of our most advanced nuclear weapons. The select committee did not find evidence of that.

The intelligence community simply does not know whether blueprints or design documents have been stolen. The W-88 has several thousand parts and a highly sophisticated arming and firing system. A full set of blueprints would be voluminous, and most of those who know find it hard to believe that China obtained all of this data. Still, the loss of any restricted data on nuclear weapons is serious and should not happen.

As for the loss of neutron or enhanced radiation technology in the mid-1990s, the evidence is limited. It is based on a single piece of intelligence, whose reliability has not been determined. There is no settled conclusion within the intelligence community that information was lost; but the information, if stolen, is esoteric physics that may have little military application.

The "legacy codes" downloaded from Los Alamos' classified computer, if they have been stolen, are an alarming loss. Just their transfer to an insecure computer raises serious questions about computer security in the national labs. A lot of what scientists know about nuclear materials is empirically based rather than scientifically understood. The legacy codes are mathematical equations that model physical phenomena observed in the explosion of a thermonuclear weapon. They record, for example, how neutrons and protons move through matter, how shock waves go through materials and how heat is transferred. This is a mother-lode of empirical data, and if the PRC has obtained these codes, their ability to model nuclear explosions will be enhanced.

But these legacy codes are not blueprints or three-dimensional models of bombs or warheads, and even if these codes have been lost to the Chinese, it is a reach to say that "stolen U.S. nuclear secrets give the PRC design information on thermonuclear weapons on a par with our own." The United States has conducted 1,045 nuclear tests and built more than 30,000 nuclear weapons. China has conducted fewer than 50 nuclear tests, and built a fraction of the weapons we have built. The PRC has tested a neutron bomb and a W-88 derivative, but the PRC has not replicated the W-70 or the W-88. In addition to a complex physics package, the W-88 has sophisticated electronics and thousands of parts, which the PRC would find hard to replicate. In view of the enormous differences in experience and capability, it is simply not accurate to say that China's design is on a "par" with our own. I disagreed when the witness said this before our committee; I disagreed when our committee marked up the report; and I disagree now.

Harold Agnew was director of Los Alamos Scientific Laboratory when the W-88 was developed. He offered his assessment of the potential loss in a letter to The Wall Street Journal on May 17, 1999:

The design of the W-88...is actually quite old. The basic test was done by Los Alamos Scientific Laboratory when I was director, and I retired 20 years ago. It is a 'delicate' and neat package. Having the computer printouts, as I remember them, gives a general idea, but actually being able to manufacture the total system from a computer code is a different matter. No nation would ever stockpile any device based on another nation's computer codes.

The committee surmises that China wanted W-88 design data to develop a small warhead with sizable yield for its a road-mobile missile which has been in development for years and is expected to be their next deployed ICBM. In addition to seeking our designs, the Chinese were apparently listening to our debate about the MX, and concluded that their large, liquid-fueled CSS-4s were vulnerable to a pre-emptive first strike. A road-mobile missile is a survivable alternative, and with a single warhead, it is essentially a second-strike retaliatory system.

Had the committee made time to hear from witnesses like Dr. Agnew, some of the statements cited above probably would not have survived the cut. There are, unfortunately, places where the report reaches to make a point and exaggerates. The report states, for example, that "the PRC has stolen a specific U.S. guidance technology used on current and past generations of U.S. weapons systems." The guidance component in question is employed on aircraft like the 747 and has been commercially available for years, though it does require an export license. I moved in mark-up to strike this reference, but to no avail.

The report also states that the PRC has stolen data about an electromagnetic gun, and that "such technology, once developed, can be used for space-based weapons to attack satellites and missiles." This program was started in the late 1970s by Defense Advanced Research Projects Agency, and funded for a while by Strategic Defense Initiative but dropped from its budget. It is in basic research today as an Army program, and is so experimental that the Army does not expect to have a weapon system using this technology before the second decade of the next century.

These exceptions do not alter the report's basic finding. The Chinese are seeking advanced technologies. They are doing it aggressively and by means that include espionage because they are not on par with us. But they are capable. The Chinese first developed and tested nuclear weapons in the 1960s and built missiles with megaton warheads that have been able to reach the U.S. since the early 1980s. And of 28 U.S. satellites launched on Chinese rockets, 25 have been placed in orbit.

Congressman Norm Dicks, the committee's ranking Democrat, calls the report "a worst case scenario." It assumes the worst to make its message clear: Our security and counter-intelligence systems have fallen short of the challenge and need to be strengthened, restructured from the bottom up. All members of the committee, five Republicans and four Democrats, reached that conclusion. Not only our national labs but satellite exporters and others have allowed security to lapse and sensitive technologies to be lost. The losses do not significantly shift the balance of power between the U.S. and China. We still have an overwhelming advantage in military technology in both nuclear and non-nuclear systems. But the transfers should not have occurred, and most probably would not have occurred if a stronger security and counter-intelligence system had been in place.

In the end, no security measures, counter-intelligence efforts, or export controls are likely to be totally foolproof or completely adequate. Their chief purpose is to limit and impede the pace at which China develops things like new warheads with higher yield-to-weight ratios. One means to this same end is the Comprehensive Test Ban Treaty (CTBT). I wanted to add to the report a few sentences observing that the CTBT would impose major impediments on China's development of new nuclear weapons, without seriously diminishing the reliability or safety of our nuclear weapons. The committee did not adopt that statement, but even without it, the report makes a case for the CTBT.


Representative John M. Spratt, Jr. (D-SC) was a member of the Cox Committee.

Cox Report Overview

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Important Note: This declassified report summarizes many important findings and judgments contained in the Select Committee's classified Report, issued January 3, 1999. U.S. intelligence and law enforcement agencies within the Clinton administration have determined that other significant findings and judgments contained in the Select Committee's classified Report cannot be publicly disclosed without affecting national security or ongoing criminal investigations.
• The People's Republic of China (PRC) has stolen design information on the United States' most advanced thermonuclear weapons.

• The Select Committee judges that the PRC's next generation of thermonuclear weapons, currently under development, will exploit elements of stolen U.S. design information.

• PRC penetration of our national weapons laboratories spans at least the past several decades and almost certainly continues today.

A. The People's Republic of China (PRC) has stolen design information on the United States' most advanced thermonuclear weapons.

The People's Republic of China (PRC) has stolen classified design information on the United States' most advanced thermonuclear weapons. These thefts of nuclear secrets from our national weapons laboratories enabled the PRC to design, develop, and successfully test modern strategic nuclear weapons sooner than would otherwise have been possible. The stolen U.S. nuclear secrets give the PRC design information on thermonuclear weapons on a par with our own.

The PRC thefts from our National Laboratories began at least as early as the late 1970s, and significant secrets are known to have been stolen as recently as the mid-1990s. Such thefts almost certainly continue to the present.

• The stolen information includes classified information on seven U.S. thermonuclear warheads, including every currently deployed thermonuclear warhead in the U.S. ballistic missile arsenal.

• The stolen information also includes classified design information for an enhanced radiation weapon (commonly known as the "neutron bomb"), which neither the United States, nor any other nation, has yet deployed.

• The PRC has obtained classified information on the following U.S. thermonuclear warheads, as well as a number of associated reentry vehicles (the hardened shell that protects the thermonuclear warhead during reentry).

In addition, in the mid-1990s the PRC stole, possibly from a U.S. national weapons laboratory, classified thermonuclear weapons information that cannot be identified in this unclassified Report. Because this recent espionage case is currently under investigation and involves sensitive intelligence sources and methods, the Clinton administration has determined that further information cannot be made public without affecting national security or ongoing criminal investigations.

The W-88, a miniaturized, tapered warhead, is the most sophisticated nuclear weapon the United States has ever built. In the U.S. arsenal, it is mated to the D-5 submarine-launched ballistic missile carried aboard the Trident nuclear submarine. The United States learned about the theft of the W-88 Trident D-5 warhead information, as well as about the theft of information regarding several other nuclear weapons, in 1995.

The PRC has stolen U.S. design information and other classified information for neutron bomb warheads. The PRC stole classified U.S. information about the neutron bomb from a U.S. national weapons laboratory. The U.S. learned of the theft of this classified information on the neutron bomb in 1996.

In the late 1970s, the PRC stole design information on the U.S. W-70 warhead from the Lawrence Livermore Laboratory. The U.S. government first learned of this theft several months after it took place. The W-70 warhead contains elements that may be used either as a strategic thermonuclear weapon, or as an enhanced weapon ("neutron bomb"). The PRC tested the neutron bomb in 1988.

The Select Committee is aware of other PRC thefts of U.S. thermonuclear weapons-related secrets. The Clinton administration has determined that further information about PRC thefts of U.S. thermonuclear weapons-related secrets cannot be publicly disclosed without affecting national security.

The PRC acquired this and other classified U.S. nuclear weapons information as the result of a 20-year intelligence collection program to develop modern thermonuclear weapons, continuing to this very day, that includes espionage, review of unclassified publications, and extensive interactions with scientists from the Department of Energy's national weapons laboratories.

The Select Committee has found that the primary focus of this long-term, ongoing PRC intelligence collection effort has been on the following national weapons laboratories: Los Alamos, Lawrence Livermore, OakRidge and Sandia.

The Select Committee judges that the PRC will exploit elements of the stolen design information on the PRC's next generation of thermonuclear weapons. The PRC plans to supplement its silo-based CSS-4 ICBMs targeted on U.S. cities with mobile ICBMs, which are more survivable because they are more difficult to find than silo-based missiles.

The PRC has three mobile ICBM programs currently underway—two road-mobile and one submarine-launched program—all of which will be able to strike the United States.

The first of these new People's Liberation Army (PLA) mobile ICBMs, the DF-31, may be tested in 1999, and could be deployed as soon as 2002. These mobile missiles require small warhead designs, of which the stolen U.S. design information is the most advanced in the world.

In addition, the PRC could choose to use elements of the stolen nuclear weapons design information—including the neutron bomb—on intermediate- and short-range ballistic missiles, such as its CSS-6 missiles.

The PRC has the infrastructure and technical ability to use elements of the stolen U.S. warhead design information in the PLA's next generation of thermonuclear weapons. The Select Committee concludes that the production tools and processes required by the PRC to produce small thermonuclear warheads based on the stolen U.S. design information, including the stolen W-88 information, would be similar to those developed or available in a modern aerospace or precision-guided munitions industry. The Select Committee judges that the PRC has such infrastructure and is capable of such production.

The Select Committee judges that the PRC is likely to continue its work on advanced thermonuclear weapons based on the stolen U.S. design information. The PRC could begin serial production of such weapons during the next decade in connection with the development of its next generation of intercontinental ballistic missiles.

A series of PRC nuclear weapons test explosions from 1992 to 1996 began a debate in the U.S. Government about whether the PRC's designs for its new generation of nuclear warheads were in fact based on stolen U.S. classified information. The apparent purpose of these PRC tests was to develop smaller, lighter thermonuclear warheads, with an increased yield-to-weight ratio.

The United States did not become fully aware of the magnitude of the counterintelligence problem at the Department of Energy national weapons laboratories until 1995. In 1995 the United States received a classified PRC document that demonstrated that the PRC had obtained U.S. design information on the W-88 warhead and technical information concerning approximately half a dozen other U.S. thermonuclear warheads and associated reentry vehicles.

The document was provided by a PRC national, unsolicited by the CIA—a "walk in." This individual approached the CIA outside the PRC, and turned over a number of documents. Among these was an official PRC document classified "Secret" by the PRC.

This PRC document included, among other matters, stolen U.S. design information on the W-88 thermonuclear warhead used on the Trident D-5 missile, as well as U.S. technical information on several other strategic U.S. nuclear warheads. The document recognized that the U.S. weapons represented the state-of-the-art against which PRC nuclear weapons should be measured.

By mid-1996 the CIA had determined that the individual who provided the information was secretly under the direction of the PRC intelligence services. The CIA and other U.S. intelligence community analysts have nevertheless concluded that the classified PRC document contained U.S. thermonuclear warhead design information and other technical information on U.S. nuclear weapons.

The stolen U.S. nuclear secrets give the PRC design information on thermonuclear weapons on a par with our own. Currently deployed PRC ICBMs targeted on U.S. cities are based on 1950s-era nuclear weapons designs. With the stolen U.S. technology, the PRC has leaped, in a handful of years, from 1950s-era strategic nuclear capabilities to the more modern thermonuclear weapons designs. These modern thermonuclear weapons took the United States decades of effort, hundreds of millions of dollars, and numerous nuclear tests to achieve.

Such small, modern warheads are necessary for all of the elements of a modern intercontinental nuclear force, including: road-mobile ICBMs, submarine-launched ICBMs and ICBMs with multiple warheads (MRVs or MIRVs).

The PRC has an ongoing program to use these modern thermonuclear warheads on its next generation of ICBMs, currently in development. Without the nuclear secrets stolen from the United States, it would have been virtually impossible for the PRC to fabricate and test successfully small nuclear warheads prior to its 1996 pledge to adhere to the Comprehensive Test Ban Treaty.

B. The Select Committee judges that elements of the stolen information on U.S. thermonuclear warhead designs will assist the PRC in building its next generation of mobile ICBMs, which may be tested this year.

The stolen U.S. design information will assist the PRC in building smaller nuclear warheads—vital to the success of the PRC's ongoing efforts to develop survivable, mobile missiles. Current PRC ICBMs, which are silo-based, are more vulnerable to attack than mobile missiles.

The PRC has currently underway three intercontinental mobile missile programs—two road-mobile, and one submarine-launched. All of these missiles are capable of targeting the United States.

The first of these, the road-mobile solid-propellant DF-31, may be tested in 1999. Given a successful flight-test program, the DF-31 could be ready for deployment in 2002.

The Select Committee judges that the PRC will in fact use a small nuclear warhead on its new generation ICBMs. The small, mobile missiles that the PRC is developing require smaller warheads than the large, heavy, 1950s-era warheads developed for the PRC's silo-based missiles. The main purpose of a series of nuclear tests conducted by the PRC between 1992 and 1996 was evidently to develop new smaller, lighter warheads with an increased yield-to-weight ratio for use with the PRC's new, mobile nuclear forces.

The Select Committee judges that the PRC will exploit elements of the stolen U.S. thermonuclear weapons designs on its new ICBMs currently under development. The advanced U.S. thermonuclear warheads for which the PRC has stolen U.S. design information are significantly smaller than those for which the PRC's silo-based missiles were designed. The U.S. designs, unlike those in the PRC's currently-deployed arsenal, can be used on smaller mobile missiles.

The Select Committee judges that:

The PRC is likely to continue to work on small thermonuclear warheads based on stolen U.S. design information;

• The PRC has the infrastructure and ability to produce such warheads, including warheads based on elements of the stolen U.S. W-88 Trident D5 design information;

• The PRC could begin serial production of small thermonuclear warheads during the next decade in conjunction with its new generation of road-mobile missiles;

• The introduction of small warheads into PLA service could coincide with the initial operational capability of the DF-31, which could be ready for deployment in 2002.

These small warhead designs will make it possible for the PRC to develop and deploy missiles with multiple reentry vehicles (MRVs or independently targetable MIRVs).

Multiple reentry vehicles increase the effectiveness of a ballistic missile force by multiplying the number of warheads a single missile can carry as many as ten-fold.

Multiple reentry vehicles also can help to counter missile defenses. For example, multiple reentry vehicles make it easier for the PRC to deploy penetration aids with its ICBM warheads in order to defeat anti-missile defenses.

The Select Committee is aware of reports that the PRC has in the past undertaken efforts related to technology with MIRV applications. Experts agree that the PRC now has the capability to develop and deploy silo-based intercontinental ballistic missiles with multiple reentry vehicles (MIRVs or MRVs).

Experts also agree that the PRC could have this capability for its new mobile intercontinental ballistic missiles within a reasonable period of years that is consistent with its plans to deploy these new mobile missiles. The PRC could pursue one or more penetration aids in connection with its new nuclear missiles.

If the PRC violates the Comprehensive Test Ban Treaty by testing surreptitiously, it could further accelerate its nuclear development.

The Select Committee judges that, if the PRC were successful in stealing nuclear test codes, computer models, and data from the United States, it could further accelerate its nuclear development. By using such stolen codes and data in conjunction with High Performance Computers (HPCs) already acquired by the PRC, the PRC could diminish its need for further nuclear testing to evaluate weapons and propose design changes.

The possession of the stolen U.S. test data could greatly reduce the level of HPC performance required for such tasks. For these reasons, the Select Committee judges that the PRC has and will continue to aggressively target for theft our nuclear test codes, computer models, and data.

Although the United States has been the victim of systematic espionage successfully targeted against our most advanced nuclear weapons designs—and although the Select Committee judges that the PRC will exploit elements of those designs for its new generation of ICBMs—the United States retains an overwhelming qualitative and quantitative advantage in deployed strategic nuclear forces. Nonetheless, in a crisis in which the United States confronts the PRC's conventional and nuclear forces at the regional level, a modernized PRC strategic nuclear ballistic missile force would pose a credible direct threat against the United States.

Neither the United States nor the PRC has a national ballistic missile defense system.

In the near term, a PRC deployment of mobile thermonuclear weapons, or neutron bombs, based on stolen U.S. design information, could have a significant effect on the regional balance of power, particularly with respect to Taiwan. PRC deployments of advanced nuclear weapons based on stolen U.S. design information would pose greater risks to U.S. troops and interests in Asia and the Pacific.

In addition, the PRC's theft of information on our most modern nuclear weapons designs enables the PRC to deploy modern forces much sooner than would otherwise be possible.

At the beginning of the l990s, the PRC had only one or two silo-based ICBMs capable of attacking the United States. Since then, the PRC has deployed up to two dozen additional silo-based ICBMs capable of attacking the United States; has upgraded its silo-based missiles; and has continued development of three mobile ICBM systems and associated modern thermonuclear warheads.

If the PRC is successful in developing modern nuclear forces, as seems likely, and chooses to deploy them in sufficient numbers, then the long-term balance of nuclear forces with the United States could be adversely affected.

C. Despite repeated PRC thefts of the most sophisticated U.S. nuclear weapons technology, security at our national nuclear weapons laboratories does not meet even minimal standards.

The PRC stole design information on the United States' most advanced thermonuclear weapons as a result of a sustained espionage effort targeted at the United States' nuclear weapons facilities, including our national weapons laboratories. The successful penetration by the PRC of our nuclear weapons laboratories has taken place over the last several decades, and almost certainly continues to the present.

More specifically, the Select Committee has concluded that the successful penetration of our National Laboratories by the PRC began as early as the late 1970s; the PRC had penetrated the Laboratories throughout the 1980s and 1990s; and our Laboratories almost certainly remain penetrated by the PRC today.

Our national weapons laboratories are responsible for, among other things, the design of thermonuclear warheads for our ballistic missiles. The information at our national weapons laboratories about our thermonuclear warheads is supposed to be among our nation's most closely guarded secrets.

Counterintelligence programs at the national weapons laboratories today fail to meet even minimal standards. Repeated efforts since the early 1980s have failed to solve the counterintelligence deficiencies at the National Laboratories. While one of the Laboratories has adopted better counterintelligence practices than the others, all remain inadequate.

Even though the United States discovered in 1995 that the PRC had stolen design information on the W-88 Trident D-5 warhead and technical information on a number of other U.S. thermonuclear warheads, the White House has informed the Select Committee, in response to specific interrogatories propounded by the Committee, that the President was not briefed about the counterintelligence failures until early 1998.

Moreover, given the great significance of the PRC thefts, the Select Committee is concerned that the appropriate committees of the Congress were not adequately briefed on the extent of the PRC's espionage efforts.

A counterintelligence and security plan adopted by the Department of Energy in late 1998 in response to Presidential Decision Directive 61 is a step toward establishing sound counterintelligence practices. However, according to the head of these efforts, significant time will be required to implement improved security procedures pursuant to the directive. Security at the national weapons laboratories will not be satisfactory until at least sometime in the year 2000.Selected Overview Findings On Missile and Space Technology


The PRC has stolen or otherwise illegally obtained U.S. missile and space technology that improves the PRC's military and intelligence capabilities.
A. The PRC has stolen U.S. missile technology and exploited it for the PRC's own ballistic missile applications.
The PRC has proliferated such military technology to a number of other countries, including regimes hostile to the United States.


B. In the late 1990s, the PRC stole or illegally obtained U.S. developmental and research technology that, if taken to successful conclusion, could be used to attack U.S. satellites and submarines.
C. Currently deployed PRC ICBMs targeted on the United States are based in significant part on U.S. technologies illegally obtained by the PRC in the 1950s.
This illustrates the potential long-term effects of technology loss.


D. In the aftermath of three failed satellite launches since 1992, U.S. satellite manufacturers transferred missile design information and know-how to the PRC without obtaining the legally required licenses.
This information has improved the reliability of PRC rockets useful for civilian and military purposes.

The illegally transmitted information is useful for the design and improved reliability of future PRC ballistic missiles, as well.


E. In light of the PRC's aggressive espionage campaign against U.S. technology, it would be surprising if the PRC has not exploited security lapses that have occurred in connection with launches of U.S. satellites in the PRC.
F. Foreign brokers and underwriters of satellite and space launch insurance have obtained controlled U.S. space and missile-related technology outside of the system of export controls that applies to U.S. satellite manufacturers.
While existing laws address such exports, U.S. export control authorities may not be adequately enforcing these laws in the space insurance industry context, nor paying sufficient attention to these practices.


G. The Strom Thurmond National Defense Authorization Act took important steps to correct deficiencies in the administration of U.S. export controls on commercial space launches in the PRC.
But the aggressive implementation of this law is vital, and other problems with launches in the PRC that the Act does not address require immediate attention.


H. It is in the national security interest of the United States to increase U.S. domestic launch capacity.
Selected Overview Findings on Export Controls


United States and international export control policies and practices have facilitated the PRC's efforts to obtain militarily useful technology.
A. Recent changes in international and domestic export control regimes have reduced the ability to control transfers of militarily useful technology.
i. The dissolution of COCOM in 1994 left the United States without an effective, multilateral means to control exports of militarily useful goods and technology.


ii. The expiration of the Export Administration Act in 1994 has left export controls under different legislative authority that, among other things, carries lesser penalties for export violations than those that can be imposed under the Act.


iii. U.S. policy changes announced in 1995 that reduced the time available for national security agencies to consider export licenses need to be reexamined in light of the volume and complexity of licensing activities.


B. Dividing the licensing responsibilities for satellites between the Departments of Commerce and State permitted the loss of U.S. technology to the PRC.
The 1996 decision to give Commerce the lead role in satellite exporting was properly reversed by the Congress.


C. U.S. policies relying on corporate self-policing to prevent technology loss have not worked.
Corporate self-policing does not sufficiently account for the risks posed by inherent conflicts of interest, and the lack of priority placed on security in comparison to other corporate objectives.


D. The PRC requires high performance computers (HPCs) for the design, modeling, testing, and maintenance of advanced nuclear weapons based on the nuclear weapons design information stolen from the United States.
The United States relaxed restrictions on HPC sales in 1996; and the United States has no effective way to verify that HPC purchases reportedly made for commercial purposes are not diverted to military uses.

The Select Committee judges that the PRC has in fact used HPCs to perform nuclear weapons applications.



E. The PRC has attempted to obtain U.S. machine tools and jet engine technologies through fraud and diversions from commercial end uses.
In one 1991 case studied by the Select Committee, the Department of Commerce decontrolled jet engines without consulting either the Defense Department or the State Department.

i. In 1994 and 1995 the PRC attempted to divert an export of machine tools by McDonnell Douglas to military uses.


ii. In 1991 the Commerce Department decontrolled Garrett jet engines without consulting either the Defense Department or the State Department. This led to a PRC effort to acquire related jet engine production technology. The Commerce Department was prepared to approve this transfer, which was only thwarted when the Defense Department was alerted by the U.S. embassy in Beijing.


Selected Overview Findings On Chinese Technology Acquisition


• The PRC seeks advanced military technology to achieve its long-term goals.

• To acquire U.S. technology the PRC uses a variety of techniques, including espionage, controlled commercial entities, and a network of individuals and organizations that engage in a vast array of contacts with scientists, business people and academics.



A. The PRC has mounted a widespread effort to obtain U.S. military technologies by any means—legal or illegal.
These pervasive efforts pose a particularly significant threat to U.S. export control and counterintelligence efforts.


B. Efforts to deny the PRC access to U.S. military technology are complicated by the broad range of items in which the PRC is interested, and by transfers to the PRC of Russian military and dual-use technologies, which may make the consequences of the PRC's thefts of U.S. technology more severe.
C. The PRC uses commercial and political contacts to advance its efforts to obtain U.S. military, as well as commercial, technology.
D. The PRC has proliferated nuclear, missile, and space-related technologies to a number of countries.

China Warns U.S. on East Asian Missile Defense Cooperation

Howard Diamond

AMID GROWING concern in Washington about missile proliferation in Asia and Chinese espionage in the United States, Secretary of State Madeleine Albright left on February 28 for two days of meetings with Chinese leaders in Beijing. Although her mission is primarily economic in nature, Albright is expected to try to reassure Beijing about the administration's missile defense plans and to press China to join the Missile Technology Control Regime (MTCR).

Senior Chinese officials, alarmed by the administration's interest in deploying theater missile defenses (TMD) in East Asia, have begun warning of profound strains in U.S.-Chinese relations if U.S. missile defense plans include Taiwan or undermine Beijing's own strategic deterrent. In an interview in the February 1 Defense News, Ambassador Sha Zukang, director-general of the Department of Arms Control and Disarmament in China's Ministry of Foreign Affairs, said that China was not concerned about "what we call genuine TMD." Rather, explained Sha, "What China is opposed to is the development, deployment and proliferation of antimissile systems with potential strategic defense capabilities in the name of TMD that violate the letter and spirit of [the Anti-Ballistic Missile Treaty] and go beyond the legitimate self-defense needs of relevant countries."

Since North Korea's launch of its three-stage Taepo Dong-1 missile in August 1998, Washington has talked with officials from South Korea, Japan and Taiwan about development of an East Asian missile defense capability. Sha warned that inclusion of Taiwan in a U.S. TMD system would constitute "a serious infringement of China's sovereignty and territorial integrity" and would lead to "severe consequences."

Further, on February 25 the Financial Times quoted an unnamed senior Chinese official who protested that creation of a U.S.-East Asian missile defense would be inconsistent with the MTCR and would thus entitle Beijing "not to follow the rules of this regime and undertake cooperation on missiles and missile technology with third countries." In a January 12 speech in Washington, Sha argued that "many of the technologies used in anti-missile systems are easily applicable in offensive missiles" and termed potential U.S. cooperation with Japan or Taiwan on TMD a form of missile proliferation.

During President Clinton's June 1998 trip to China, Beijing had said it would actively study joining the MTCR, which seeks to restrict the transfer of ballistic missiles and missile technology for systems capable of delivering a 500-kilogram payload 300 kilometers or more. Since 1994 China has partly adhered to MTCR requirements by refraining from selling so-called Category I items—whole missiles or their major subsystems. According to a February CIA assessment, however, Beijing continued to trade in missile components and technology (Category II items) in the first half of 1998.

Sino-U.S. relations have chilled since Clinton's trip, with two recently issued reports highlighting the concerns of critics of the administration's engagement policy. On February 25, the Defense Department presented Congress with a report claiming that China has built up its M-9 and M-11 short-range missiles opposite Taiwan for the past five to six years and may deploy as many as 650 missiles by 2005. China currently has deployed about 150 missiles, up from about 60 in the early 1990s.

The second report, an unclassified version of which was released by the administration on February 2, came from a special House panel created in June 1998 to determine whether launching U.S. satellites on Chinese rockets had provided China with unauthorized information that could aid the development of its strategic nuclear arsenal. Led by Representative Christopher Cox (R-CA), the bipartisan panel unanimously concluded that space-related trade with Beijing, as well as Chinese espionage directed at U.S. nuclear laboratories, had harmed U.S. security over the past two decades. The panel called for a tightening of U.S. export controls and increased efforts to prevent Chinese espionage.

The administration disputed the panel's recommendation on export controls. On February 23, however, the administration rejected a proposed $450 million communications satellite deal between Hughes Electronics Corporation and a Chinese consortium with strong ties to the Chinese military. According to Aviation Week & Space Technology, the United States had never previously blocked the sale of a commercial satellite.

Congress Returns Export Control Over Satellites to State Department

PRIMARY CONTROL over the export of commercial satellites will return from the Commerce Department to the State Department under a provision in the fiscal year 1999 defense bill signed by President Bill Clinton on October 17. The president had shifted control over commercial satellite exports from State to Commerce in March 1996 following an interagency review. Though the move was made for chiefly commercial reasons, the Clinton administration has sought to use the lucrative "carrot" of commercial space cooperation as an incentive for China to tighten its controls on missile technology exports.

The legislative reversal was prompted in part by revelations over the summer that two U.S. space firms—Loral Space & Communications and Hughes Electronics—may have provided unauthorized assistance to China in the reconstruction and analysis of a failed satellite launch. (See ACT, May 1998.) Although the Loral-Hughes incident occurred before the transfer of commercial satellite exports to the Commerce Department, critics of the administration's engagement policy with China have used the satellite export issue to attack the administration as being soft on China. Critics contend that U.S. involvement in China's commercial space sector benefits Beijing's military space and missile development efforts.

The effect of the new law, which reclassifies commercial satellites as Munitions List items rather than dual-use items, will be felt chiefly by domestic space firms accustomed to the Commerce Department's faster, more business-friendly review process. Commerce reviews of dual-use items consider economic and trade interests as well as U.S. national security concerns, proceed on the basis of published regulations and have a 90-day timeline for action. State Department reviews of Munitions List items primarily consider the proposed sale's effect on national security and foreign policy, are open ended and tend to take longer since State assigns fewer people to the process.

The shift in satellite jurisdiction marks the second time that Congress has used the annual defense spending bill to roll back a liberalization by the Clinton administration of U.S. high-tech export controls. In 1998, Congress tightened controls on exports of high-performance computers, which the Clinton administration had eased in 1996, following the discovery of U.S. supercomputers in Russian and Chinese military labs.

Although Commerce Department officials had warned of a presidential veto of the defense bill over the satellite issue, the White House chose to accept the bill after a House-Senate conference committee weakened the satellite provisions. Initially, for example, the House wanted to ban all satellite exports to China. The new legislation, however, only requires the president to certify, 15 days before a commercial satellite export is made to China, that the sale will neither hurt the U.S. space launch industry nor "measurably improve the missile or space launch capabilities" of China.

In a statement accompanying his signature of the legislation, President Clinton objected that the change in jurisdiction for satellite export controls "is not necessary… and could hamper the U.S. satellite industry." Referring to the effective date of March 15, 1999, for the transfer of export control authority, the president urged the Congress to pass "remedial legislation" before the change in jurisdiction is made effective.

Taiwan Arms Sale Proposed to Congress

In a move that could complicate Sino-U.S. relations, the Department of Defense notified Congress on August 27 of a proposed $350 million package of arms sales to Taiwan, including 728 Stinger surface-to-air missiles, 131 MK-46 torpedoes and 58 Harpoon anti-ship missiles. A Chinese Foreign Ministry spokesman condemned the proposed sale, claiming that it violates a 1982 Sino-U.S. joint communique in which Washington promised "gradually to reduce" its sale of arms to Taipei, and that it "infringes on China's sovereignty and damages China's peaceful reunification."

U.S. arms deals with Taiwan have long been a stumbling block to closer relations between Washington and Beijing. In 1992, the U.S. sale of 150 F-16A/B fighters to Taipei prompted China to end its participation in conventional arms talks among the permanent members of the UN Security Council and, according to some analysts, to pursue sales of proliferation concern with Iran and Pakistan.

In fiscal year 1997, Taiwan received $5.69 billion worth of arms and military assistance from the United States, more than any other country. With the August 27 announcement, the Pentagon has proposed $810 million in Foreign Military Sales to Taiwan in 1998, nearly 20 percent more than during the same period last year. American policy, as outlined in the 1979 Taiwan Relations Act, is to transfer defense articles and services necessary to maintain Taiwan's "sufficient self-defense capability."

Under the 1976 Arms Export Control Act, Congress must act within 30 calendar days of its August 27 notification if it wishes to block the proposed sale to Taiwan. Congress, however, has never blocked a proposed arms transfer following notice by the Defense Department.

Sino-U.S. Summit Yields Modest Advances in Arms Control Agenda

Howard Diamond

PRESIDENT BILL CLINTON traveled to China for a state visit June 25 to July 3 that produced several modest achievements in arms control and non-proliferation. At a joint press conference on June 27, Clinton and Chinese President Jiang Zemin announced the two sides had reached agreements on the detargeting of strategic nuclear weapons, a Chinese commitment to "actively study joining" the Missile Technology Control Regime (MTCR), Beijing's announcement of additional controls on chemical precursors, and a new arrangement for end-use verification of U.S. high-technology exports to China.

Clinton said the detargeting agreement "would completely eliminate" the prospect of an accidental nuclear launch, show "mutual confidence and trust," and would be "a helpful counterweight" to the recent nuclear tests in South Asia. Critics of such detargeting agreements have argued that the arrangements are not verifiable and are largely symbolic because the missiles can be retargeted in a matter of minutes. China had previously resisted the U.S. detargeting proposal, insisting it should be linked to the United States adopting a "no-first-use" policy for nuclear weapons. When asked if the United States had made any concessions to get the detargeting agreement, Clinton said, "[W]e have not changed our position [on no first use], nor are we prepared to do so on that."

Prior to Clinton's visit, China had also rejected a U.S. proposal made in March to exchange Beijing's full membership in the MTCR and a cutoff of all missile cooperation with Iran for additional opportunities to launch U.S. satellites. Jiang's announcement that China will "actively study joining" the missile export regime may signal a shift in Beijing's position. But according to Bates Gill, a China specialist at the Center for Nonproliferation Studies in Monterey, California, while the new Chinese position "tends to suggest a favorable conclusion… there's a greater degree of disagreement in China than meets the eye. We shouldn't be too optimistic about China joining the MTCR."

Beijing's current policy on missile exports is ambiguous. At a June 27 press conference, national security advisor Samuel R. Berger said, "The Chinese in the past have said unilaterally that they would adhere to the MTCR guidelines. That is a kind of a general commitment and it doesn't necessarily include all of the technology and components that are part of the annex of the MTCR." A semi-annual CIA report to Congress published after the summit noted that "During 1997, Chinese entities provided a variety of missile-related items and assistance to countries of proliferation concern."

The Clinton administration imposed MTCR-related sanctions on China in August 1993 for selling M-11 missile components to Pakistan. But in October 1994, Beijing pledged to abide by the "guidelines and parameters" of the MTCR so the sanctions could be lifted. Subsequently, U.S. officials have acknowledged that China has stopped selling whole ground-to-ground missiles and major sub-systems (so-called Category I items), but has continued to sell missile components and technology (so-called Category II items), notably to Pakistan and Iran.

During the summit, however, Beijing offered an additional pledge on missile exports. In the Sino-U.S. joint statement on South Asia, the United States and China pledged to "prevent the export of equipment, materials or technology that could in any way assist programs in India or Pakistan for nuclear weapons or for ballistic missiles capable of delivering such weapons."

Prior to the summit, many observers predicted that Clinton's visit would not result in significant progress in arms control because China had already offered several concessions before and during the last Sino-U.S. summit in Washington in October 1997. At that summit, Clinton announced that improvements in China's nuclear non-proliferation policies and practices, together with its written pledge to end all cooperation with Iran's civil nuclear program, would allow him to put into effect the never-implemented 1985 Sino-U.S. nuclear cooperation agreement. Chinese officials promised the administration that they would supplement the nuclear export guidelines they promulgated in August 1997 with new additional regulations covering dual-use nuclear items. On June 17, China's official English-language news agency, Xinhua, published the promised regulations.

Sino-U.S. Summit Yields Modest Advances in Arms Control Agenda

House Seeks to Limit Space Cooperation with China

May 1998

By Howard Diamond

With President Bill Clinton preparing for a late-June summit in China with President Jiang Zemin, the House of Representatives on May 22 passed a series of amendments that would cut off peaceful U.S. space cooperation with Beijing. The explosion of political interest in U.S. satellite exports to China, which motivated the House action, threatens the administration's strategy of leveraging improvement in Beijing's missile proliferation behavior with commercial incentives. Washington has been trying to persuade China to end its sales of missile components and technology controlled by the Missile Technology Control Regime (MTCR) by offering Beijing additional opportunities to launch U.S. satellites.

Amid consideration of the fiscal year (FY) 1999 National Defense Authorization Act, the House overwhelmingly adopted four amendments relating to the satellite issue. The first, a non-binding resolution offered by National Security Committee Chairman Floyd Spence (R-SC), urged the administration to freeze U.S. space cooperation with China and to not use space cooperation as an incentive for changing China's proliferation practices. The other three amendments, introduced by Representatives Duncan Hunter (R-CA), Douglas Bereuter (R-NE) and Joel Hefley (R-CO), would, respectively, forbid U.S. commercial satellite exports to China, prohibit U.S. citizens from participating in technical reviews of failed Chinese satellite launches, and preclude all U.S. exports of MTCR-controlled technology to China.

The House action came in the wake of a flurry of news reports alleging first, that China may be gaining militarily valuable information simply from launching U.S. commercial satellites; second, that two U.S. satellite makers may have made an unauthorized transfer of technical information during a review of a Chinese launch failure; and third, that the Clinton administration's policy on the satellite issue may have been influenced by six-figure campaign contributions by U.S. satellite firms, and possibly even by a Chinese military-owned aerospace conglomerate. Adding to the furor around the satellite launch issue is President Clinton's 1996 decision to classify commercial communications satellites as dual-use items rather than munitions list items. The change in classification was urged by the U.S. satellite industry, and shifted primary export control responsibility from the State Department to the Commerce Department.

Currently, space cooperation between the United States and China is limited by sanctions passed by Congress after the 1989 Tiananmen Square massacre. Each launch of a U.S. satellite on a Chinese rocket must be cleared with a presidential waiver. The Bush administration issued nine such waivers in three years; the Clinton administration has granted 11 in five years. U.S. officials have argued that space launch opportunities have been a key incentive in getting China to control its missile technology exports. To avoid U.S. sanctions imposed in August 1993, China pledged in October 1994 to abide by the guidelines of the MTCR. Created in 1987, the MTCR is an international suppliers regime that controls missiles capable of delivering a 500-kilogram payload 300 kilometers or more, as well as their associated components and technologies.

How well China has lived up to its October 1994 commitment is in dispute, however, and the debate has contributed to the current controversy over satellite exports. U.S. officials agree that since making its pledge, China has not sold "Category I" MTCR items, such as complete ground-to-ground missiles or major sub-systems like engines or guidance systems. But Beijing has reportedly continued to transfer components and technology—"Category II" items—controlled by the MTCR's technical annex to both Iran and Pakistan. U.S. laws call for the imposition of sanctions for both Category I and Category II transfers, but the Clinton administration has been hesitant to impose sanctions or use its waiver authority for fear of upsetting what it believes is an improving Chinese proliferation record.

In late-March, acting Undersecretary of State John Holum and Assistant Deputy Secretary of State Robert Einhorn traveled to China to see if a deal on the missile proliferation issue could be reached in time for the June summit. The terms of Holum and Einhorn's package were laid out in a National Security Council memo that was leaked to The Washington Times. In exchange for full adoption of the MTCR's controls over missile technology and a complete ban on all forms of missile cooperation with Iran, the administration was prepared to issue a blanket waiver of the Tiananmen sanctions on satellite launches and increase the quota of U.S. satellites that could be launched by China. Each satellite launch can be worth between $40 million and $100 million.

China refused the administration's offer, according to a U.S. official, because of the continued political value of its missile trade and a long-standing objection to suppliers cartels like the MTCR. The official said Beijing also protested that the United States sells both ballistic missiles and long range fighter-bombers to countries it wishes to, but wants to end similar Chinese sales under the rubric of non-proliferation. Other U.S. officials, including Secretary of State Madeleine Albright, have raised the missile proliferation issue in their pre-summit dialogues with Beijing, however, no agreement or statement on the issue is expected to come from the June presidential meeting. Clinton is expected to raise the missile proliferation issue during his meetings with Jiang.

House Seeks to Limit Space Cooperation with China


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