Testimony: China’s Military Growth and Implications for the United States

Testimony of Gary Milhollin
by Gerard White

Assistant Director, Wisconsin Project on Nuclear Arms Control

Before the Senate Committee on Foreign Relations
Subcommittee on East Asian and Pacific Affairs

October 12, 1995

I am pleased to be able to address this distinguished subcommittee today on the subject of China’s military growth and the implications for Sino-U.S. relations.

I will cover three areas: First, China’s current status as a nuclear power; second, China’s record as a supplier of nuclear, chemical and missile technology to proliferant countries; and third, U.S. export policy toward China.

China’s status as a nuclear power

China is the only country in the world that is still thought to target American cities with nuclear missiles. And until France began its recent series of nuclear tests, China was the only country still testing thermonuclear warheads in order to make them light enough and small enough to fit on new missiles that will fly farther and be more accurate. China has an estimated 300-450 nuclear warheads today, though Chinese nuclear facilities have produced enough weapon-grade uranium and plutonium to build a nuclear arsenal at least three times that size. Chinese nuclear warheads can be delivered by aircraft or a series of medium to long-range missiles. China has been developing these missiles steadily since the 1960s, and is now using them to power its space launchers. China’s space launch program is the direct outgrowth of its missile program and is intimately linked to it. One cannot export to China’s space launcher program without aiding its long-range missile program.

Attached to my testimony are three pages from the May issue of the Risk Report, a monthly publication by the Wisconsin Project on Nuclear Arms Control. These pages contain photographs of China’s main rockets and missiles, together with their ranges, weights and payloads. Two Chinese missiles, the Dong Feng-5 ICBM and a submarine-launched ballistic missile, could hit targets in the United States. And I should add that both of these missiles are scheduled to be replaced with successors that will be more effective. Even the U.S. government analysts who do not believe China poses a direct threat to the United States acknowledge that there is a real possibility that the Chinese are developing their arsenal to keep the United States at bay as they work their will in East Asia.

China’s export record

During the 1980s, China secretly supplied nuclear and missile technology to South Asia, South America, South Africa and the Middle East. These exports persisted despite U.S. diplomatic protests and despite Chinese promises to stop. This secret flow of exports has continued during the 1990s, up to this very moment. In March, the State Department announced that three companies, Asian Ways Limited, WorldCo Limited and Mainway International, had been sanctioned for chemical weapon proliferation. The announcement barred the companies from selling goods in the United States or to the U.S. government but did not reveal where the companies were based or what they had done to merit punishment.

In fact, the companies were sending poison gas ingredients from China to Iran. And in a related case in 1994, an Austrian, a German, and an Australian were sanctioned for supplying Chinese chemicals to Iran. In July 1994, an Israeli used front companies in Britain and Poland to supply what U.S. officials strongly suspect were Chinese chemicals to Iran.

Most of the shipments were “precursor chemicals” used to produce mustard gas or nerve gas. All the chemicals are on export control lists maintained by the Australia Group, a consortium of countries that is trying to control the spread of chemical and biological weapons, but China is not a member of the group.

The pattern is the same with missile exports. Chinese companies were first caught secretly selling Pakistan M-11 missile components in 1991. The Bush administration banned U.S. missile-tech exports to the two offending Chinese entities and to Pakistan’s space agency SUPARCO. The punishment was imposed for at least two years, but the penalties against China were waived less than a year later in March 1992, after China promised it would abide by the guidelines of the Missile Technology Control Regime.

But by December 1992, the press was reporting that China had just shipped roughly two dozen M-11 missiles to Pakistan. The debate over what Pakistan got in late 1992 went on until August 1993, when the Clinton administration determined that China had shipped M-11 equipment and technology, but not necessarily complete missiles. The Administration banned the sale of U.S. missile-related technology to Pakistan’s Ministry of Defense and to ten Chinese companies.

The sanctions were to remain in force for two years. But in October 1994, China pledged once again to stop its missile sales. For the first time, China agreed that the MTCR covered missiles with an “inherent capability” to deliver a 500-kilogram payload 300 kilometers, which would include the M-I 1 missile. In exchange for these pledges, the United States lifted its sanctions against the ten Chinese companies.

The missile exports to Pakistan are, nevertheless, still going on. U.S. officials say that there is a continuous stream of compelling evidence to warrant the conclusion that M-11 missiles have been transferred. During the past year, satellites and human intelligence have watched Chinese and Pakistani missile technicians travel back and forth between Beijing and Islamabad and have revealed ongoing transfers of missile-related equipment. In the words of one U.S. official: “You haven’t got a confession, but you have so much evidence that reasonable people can judge that the missiles have been transferred.”

U.S. law provides ample room for President Clinton to penalize China for the sales. He can impose two-year trade sanctions on any foreign party that “conspires or attempts to engage in” the export of M-11- size missiles or the transfer of equipment or technology that “contributes to the design, development or production of missiles” in a country such as Pakistan. It doesn’t matter whether entire missiles have been shipped. If China has conspired to ship them–and many officials acknowledge that it has–Washington can take steps to penalize the exporters.

Officials from the U.S. intelligence services and other U.S. agencies are convinced there is enough evidence to impose penalties, but the White House and State Department are resisting. The reason seems to be a fear of offending Beijing. The State Department seems to be demanding a level of proof that is nearly impossible to provide. It seems to be holding out for an actual photo showing a Chinese rocket in Pakistan marked “M-11 .” In the nuclear field, China continues to supply sensitive nuclear equipment to countries of proliferation concern, most notably Pakistan and Iran. In 1989, China broke the de facto nuclear supply embargo against Pakistan when it agreed to sell Islamabad a nuclear power reactor. This deal was followed by one with Iran for a 300-megawatt power reactor. In addition, there has been talk of a Chinese research reactor for Iran of roughly the same size that India and Israel have used to produce plutonium for atomic bombs.

Beijing is not a member of the Nuclear Suppliers Group, a 31-member consortium that has agreed to control nuclear-related exports to proliferant countries.

Last month, the Clinton administration announced that China had canceled its power reactor deal with Iran, but the Chinese Foreign Minister promptly termed the report inaccurate and said that the sale was only suspended.

U.S. Exports to China

In light of China’s strategic military buildup, and its ongoing nuclear, missile and chemical exports, it would be imprudent for the United States to actually help China advance its nuclear or rocket capability. Yet, this is exactly what seems to be happening. In 1994, the U.S. Commerce Department approved roughly one billion dollars’ worth of sensitive nuclear dual-use exports to China. I have attached a list of the most important exports to my testimony. They include items such as vacuum furnaces and isostatic presses, which can be used for nuclear weapon-making. Iraq diverted this type of equipment to bomb-making before the Gulf War. Also on the list are “crucibles resistant to liquid fissile metals,” items which seem to be specially designed to make nuclear weapons.

Under the Tiananmen Square sanctions imposed by Congress in 1990, China is not supposed to receive dual-use items for nuclear end-uses. It is possible that the end-uses for the equipment on this list are non-nuclear, and thus possible that the licenses were properly granted. However, China’s promises of nonproliferation cannot be trusted any more than China’s promises not to export missiles. Therefore, I recommend that this subcommittee request that the Commerce Department provide the actual export licenses, including the application files, for the items listed, so that Congress can be confident that the Tiananmen sanctions are being complied with. The data from the Commerce Department should include a full description of the end-use and end-user for each export.

In addition, I am attaching a list of the top 25 contributors to China’s rocket and missile program, which was published in the May issue of the Risk Report. In November, we will publish a list of China’s top nuclear end-users. To ensure that American products are not helping China build nuclear weapons and missiles that could be aimed at U.S. targets or sold to proliferant countries, Congress should periodically review U.S. dual-use exports to China and compare them to the list of end-users that I have attached. This oversight should reveal whether U.S. exports are going to suspect end-users and thus may be diverted to purposes that undermine U.S. national security.

Top 25 U.S. exports of nuclear dual-use equipment to China in 1994

The table below shows the most important nuclear-related sales approved by the U.S. Commerce Department last year for Chinese buyers. All of the exports are dual-use, meaning they can be used for nuclear weapon development as well as civilian purposes. The Commerce Department does not publish the names of the buyers or the sellers, or list the specifications of the equipment licensed. The information is derived from Commerce Department’s Export Administration Annual Report 1994.

Nuclear-related equipment (Commerce Control List #) Value
l) Digital computers/assemblies and related equipment (4A03) $921,793,659
2) Numerical control units/motion control boards (2B01) 11,537,050
3) Vacuum/controlled environment furnaces (1B50) 3,673,188
4) Dimensional inspection/measuring systems or equipment (2B06) 2,654,331
5) Cathode ray oscilloscopes and components (3A52) 1,137,550
6) Cameras (6A03) 1,117,458
7) Isostatic presses (2B44) 750,000
8) Electronic devices/components (3A01) 630,378
9) Isostatic presses not controlled by 2B04A (2B24) 408,423
10) Mass spectrometers (3A51) 349,429
11 ) Piping/fittings/valves made/lined with named alloy (2A51 ) 297,774
12) Specially designed pressure measuring instruments (1B51) 220,640
13) Optical equipment–lasers (6A05) 209,954
14) Filament winding machines (1B41) 177,770
15) Hybrid computers/assemblies (4A02) 110,000
16) Commodities on the International Atomic Energy list (2A19) 102,000
17) Vibration test equipment using digital control technology (9B26) 91,000
18) Technology for the “use” of hot isostatic presses (3A01) 80,000
19) Fibrous/filamentary materials used in matrix structures (1C10) 73,800
20) Switching devices (3A43) 39,850
21) Crucibles resistant to liquid fissile metals (1A44) 34,220
22) Items on the International Atomic Agency list (1C19) 27,930
23) Helium isotopically enriched in the Helium-3 isotope (1C55) 25,997
24) Cameras/components/photographic media not controlled (6A43) 23,625
25) Ruggedized electronic computers/related equipment (4A01 ) 19,585