PERHAPS THE MOST SERIOUS ARGUMENT the Clinton administration makes in favor of its “engagement” policy towards China is a strategic one: Beijing’s military capability requires it. We want to get China to stop selling strategic-weapons technology, and so we must offer Beijing some carrots — economic relationships with certain Chinese firms — to ensure a safer world. The policy sounds sensible. But it turns out that the carrots we offer are actually feeding firms that are responsible for the proliferation we want to end.
Indeed, the White House has not only held off penalizing these firms, as American law authorizes; it has actually rewarded them with U.S.-subsidized nuclear cooperation and sweetheart U.S. satellite transfers. The administration’s hope is that this will get China to buy American and behave. But if the last few years of such “engagement” are any guide, it’s not working. A brief look at just three of the Chinese firms benefiting from U.S. largesse tells the tale.
First, there is the case of a Chinese firm that is actively involved in the proliferation of facilities necessary to produce the raw materials for nuclear bombs.
The Chinese National Nuclear Corporation builds China’s nuclear plants. Six years ago, it was caught building a large research reactor and a laboratory suitable for making bomb material in a remote, defended location in Algeria.
And in 1994, two years after China signed the Nuclear Nonproliferation Treaty, press reports revealed that the Chinese National Nuclear Corporation was building a secret military reactor in Pakistan. Then, the firm signed a series of contracts to build two reactors and a uranium hexafiuoride plant in Iran for supposedly “peaceful” purposes. Finally, in the fall of 1995, a subsidiary of the firm shipped 5,000 ring magnets — components critical for making bomb-grade uranium — to Pakistan.
How did the White House respond? When asked about the production reactor, then-Pakistani president Benazir Bhutto professed no knowledge of it. For the White House, that was good enough. As for the ring magnets, the administration seemed oblivious. Indeed, just weeks before intelligence reports about the sale were leaked to the press, the White House gave its blessing to $ 800 million in loans guaranteed by the U.S. Import-Export Bank to help Bechtel and Westinghouse complete a reactor for the Chinese National Nuclear Corporation. And even after Congress complained about the loan, the administration strained to authorize visas for six of the firm’s nuclear engineers to work on Westinghouse’s AP-600 Program, a reactor-design project that has already cost taxpayers more than $ 64 million.
Taken aback by congressional objections, the White House did relent on the loans and visas for a short while. But the State Department came to China’s defense. Surely the firm and the Chinese leadership did not sell the ring magnets knowingly; after all, they denied they had ever made the sale. Thus, the Pakistan deal must have been the inadvertent act of an unwitting subordinate. Once the Chinese admitted that the sale had occurred and promised not to sell nuclear items to weapons programs again, the White House heralded the progress, approved the loans, and admitted the firm’s engineers to the United States.
The Iran deal is still an open case. Neither the reactors nor the uranium hexafloride plant has been built, leading the White House to claim success. But China has refused to void any of its contracts for these projects with Iran or to return any of Iran’s down payments. Moreover, both China and Iran have publicly affirmed their intention to build the hexafluoride plant — a facility that is inherently diffcult to safeguard against and that makes no economic or technical sense unless Tehran is trying to make bombs.
White House officials, however, remain confident. Why? As an administration official explained to the press, “The Chinese have told us that based on their expectations that we would be able to build on our nuclear cooperation program, they will not execute this contract.” The nuclear cooperation he is talking about was tentatively agreed to in 1985 but has been held up by Congress until the president can certify that China will not participate in nuclear proliferation. Now, officials at the State Department say they haven’t observed any Chinese nonproliferation violations in the last few months and hope the president will certify compliance this summer or fall.
We also have the cases of two firms owned by the Chinese military. The China Precision Machinery Import and Export Co. sells missiles. Its corporate twin, Chinese Great Wall Industry Corp., sells satellite launch services. As a result of their ties to the United States, China’s missile technology is getting increasingly sophisticated, and missiles are proliferating elsewhere.
In June 1991, the United States levied sanctions on both these firms for exporting nuclear-capable missile technology to Pakistan. After eight months in which the firms were denied critical U.S. high technology and capital, the Chinese relented and promised to adhere to the internationally agreed-to guidelines on missile-technology control. The State Department declared victory, the sanctions were lifted — and the China Precision Machinery Import and Export Co. continued to export M-11 missile items to Pakistan. In August 1993, after a year of lectures, the State Department again imposed sanctions.
But the newly installed Clinton White House was not fully on board. Sanctions had jeopardized the launch of three U.S.-made satellites by Chinese Great Wall Industries, and both the satellite manufacturers and their Asian customers were furious. The Chinese refused even to talk about missile nonproliferation unless the United States released the satellites and agreed to put U.S. arms sales to Taiwan on the table as well. Whereupon the White House delivered the satellites, agreed to China’s negotiating agenda, and lifted sanctions entirely after China again promised to adhere to the provisions of the international Missile Technology Control Regime.
But that was not enough; “engagement” required something more positive. So in March 1995, President Clinton announced a new agreement guaranteeing the bidding rights of Chinese Great Wall Industries to launch more U.S.-made satellites than ever before. At nearly $ 50 million a launch, the agreement was worth over $ 500 million — and came even after the firm suffered a series of launch failures.
More important, the new agreement meant that America would continue to help with Chinese development of long-range military rockets. How? Because the very motors and guidance sets that are used to position satellites in space can also be used to target warheads against Tel Aviv, Riyadh, Los Angeles, or Taiwan. The “peaceful” launching of U.S. satellites has inadvertently served as a test bed for China’s development of ever more precise and threatening missiles.
Only months after the White House dropped its sanctions against the two firms, U.S. intelligence determined that the China Precision Machinery Import and Export Co. had sent Pakistan 30 “complete” M-11s along with a rocket factory, and that the firm was selling Iran the missile production technology and advanced anti-shipping missiles necessary to target U.S. forces in the Gulf.
In December 1995, the People’s Liberation Army announced the completion of the Great Wall Project, a system of missile bases using technology marketed by the China Precision Machinery Import and Export Co. — and three months later aimed those missiles at Taiwan. And, while using satellite launchers owned by Chinese Great Wall Industries, the PLA has been working furiously to develop a variety of highly precise missiles with multiple warheads.
It’s easy to explain away these developments. State Department officials emphasize that some of these deals were made before China’s latest nonproliferation pledges. The White House has even denied that China’s missile sales to Iran are destabilizing.
But two things are clear. First, the United States can hardly be credible in opposing Chinese proliferation if its officials spend more time trying to waive sanctions against China than they do trying to deter its proliferating behavior. Second, whether sanctions are levied or not, we should not be subsidizing China’s nuclear and missile industries. Period.
by Henry Sokolski
