Testimony of Gary Milhollin
Professor, University of Wisconsin Law School and
Director, Wisconsin Project on Nuclear Arms Control
Before the Senate Committee on Governmental Affairs
Subcommittee on International Security, Proliferation and Federal Services
April 10, 1997
I am pleased to appear today before this distinguished Subcommittee, which has asked me to discuss China’s role in the spread of weapons of mass destruction. I have been asked to respond to two questions: First, how effective is our present “engagement” policy toward China; second, is the executive branch implementing the U.S. law concerning sanctions?
I think that the evidence is now clear on both questions. The administration’s engagement policy has run out of gas–it is no longer achieving anything significant. The process is essentially dead. Since 1994, our ambassadors have gone to China, they have held out engagement rings, and the Chinese have shut the door in their faces. This happened most recently to Mr. Einhorn last month, whose trip produced nothing. The Chinese are now refusing even to talk to us seriously about the impact of their missile and chemical exports. There is no longer any dialogue on these points. The State Department has a policy of engaging the Chinese, but the Chinese do not have a policy of engaging the State Department.
Nor is the administration complying with the sanctions law. Last fall, the executive branch finished a number of studies on China’s missile and chemical exports to Iran and Pakistan. The studies contained the legal and factual analysis necessary to apply sanctions, but they have lain dormant since then. The State Department has chosen not to complete the administrative process because if it did, it would have to apply sanctions and give up its engagement policy. The sanctions law is not achieving either deterrence or punishment, as Congress intended.
Today, China’s exports are the most serious proliferation threat in the world, and China has held that title for the past decade and a half. Since 1980, China has supplied billions of dollars’ worth of nuclear and missile technology to South Asia, South Africa, South America and the Middle East. It has done so in the teeth of U.S. protests, and despite repeated promises to stop. The exports are still going on, and while they do, they make it impossible for the United States and the West to halt the spread of weapons of mass destruction–a trend that endangers everyone.
Chinese companies were caught selling Pakistan M-11 missile components in 1991. The M-11 is an accurate, solid-fuel missile that can carry a nuclear warhead about 300 kilometers. In June 1991, the Bush administration sanctioned the two offending Chinese sellers and Pakistan’s space agency, SUPARCO. The sanctions were supposed to last for at least two years, but they were waived less than a year later, in March 1992, when China promised to abide by the guidelines of the Missile Technology Control Regime, a multinational agreement to restrict missile sales.
But by December 1992, China had shipped roughly two dozen M-11 missiles to Pakistan. It had been a mistake to waive the sanctions.
In August 1993, the Clinton administration applied sanctions again for two years, after determining that the Chinese had violated the U.S. missile sanctions law a second time. But in October 1994, the United States lifted the sanctions early again, when China pledged once more to stop its missile sales and comply with the Missile Technology Control Regime.
But since 1994, the stream of missile exports has continued. U.S. satellites and human intelligence have watched missile technicians travel back and forth between Beijing and Islamabad and have watched steady transfers of missile-related equipment. When I queried U.S. officials last week, they said that China’s missile exports have continued up until the present moment, unabated.
In fact, our officials have learned that they were duped in 1992 and 1994. What we thought China was promising is not what China was really promising. Our officials now realize that China interprets its promises in 1992 and 1994 so narrowly as to make them practically meaningless. That is how the Chinese have justified their continuing missile exports. Because of this interpretation, China should no longer be considered as complying with the Missile Technology Control Regime.
In addition to its sales to Pakistan, China has also sold Saudi Arabia medium-range, nuclear-capable missiles, sold Syria components needed to improve Syria’s missile arsenal, sold Iran missile guidance components, and sold Pakistan complete M-11 missiles.
I have attached a table to my testimony that shows China’s mass destruction exports since 1980.
In its latest venture, China is helping Pakistan build a plant to produce M-11 missiles in Pakistan. U.S. officials said last week that activity at the plant is “very high.” If the Chinese continue to help at their present rate, the plant could be ready for missile production within a year.
This activity, combined with the State Department’s refusal to apply sanctions, means that the State Department is now giving a green light to one of the most dangerous missile plants in the world.
In addition to missiles, China has been selling the means to make poison gas. In 1995 I discovered, and wrote in the New York Times, that the United States had caught China exporting poison gas ingredients to Iran, and that the sales had been going on for at least three years. The State Department sanctioned the front companies that handled the paperwork, but did nothing to the Chinese sellers for fear of hurting U.S. trade relations.
China’s poison gas shipments have only become worse since then. In 1996, the press reported that China was sending entire factories for making poison gas to Iran, including special glass-lined vessels for mixing precursor chemicals. The shipments also included 400 tons of chemicals useful for making nerve agents.
The result is that by now, in 1997, China has been outfitting Iran with ingredients and equipment to make poison gas for at least five years. When I spoke to U.S. officials last week, I asked them whether there was any change in China’s export behavior on poison gas. They said that the poison gas sales had continued to the present time, unabated.
There is no reason to think that this pattern will change as long as the United States follows its current policy. If anything, China’s position seems to be hardening. China is now saying, explicitly, that it will not even talk to us about missile and chemical proliferation unless we are willing, at the same time, to discuss restraints on our arms sales to Taiwan. The arms sales, of course, are caused by China’s threat to Taiwan. And to make matters worse, the Chinese are beginning to complain about our policy of providing theater missile defenses to countries like Japan that might be vulnerable to Chinese missile attacks. The Chinese say that this is another form of missile proliferation.
China has also been the leading proliferator of nuclear weapons in the world. China gave Pakistan nearly everything it needed to make its first atomic bomb. In the early 1980s, China gave Pakistan a tested nuclear weapon design and enough high-enriched uranium to fuel it. This has to be one of the most egregious acts of nuclear proliferation in history. Then, China helped Pakistan produce high-enriched uranium with gas centrifuges. Now, it is helping Pakistan build a reactor to produce plutonium and tritium for nuclear weapons, and helping Pakistan increase the number of its centrifuges so it can boost its production of high-enriched uranium.
In January of 1984, Chinese Premier Zhao Ziyang made his famous White House toast saying, “we do not engage in nuclear proliferation ourselves, nor do we help other countries to develop nuclear weapons.” The United States relied on that promise in making its agreement for nuclear cooperation with China in 1985. But we caught the Chinese breaking the promise immediately afterward, so the agreement never came into effect. China’s habit of making and breaking promises is not new.
China’s most recent export was of specialized ring magnets, which are used in the suspension bearings of gas centrifuge rotors. The sale was revealed in early 1996. The magnets were shipped directly to a secret nuclear weapon production site in Pakistan, and were sent without requiring international inspection. The seller was a subsidiary of the China National Nuclear Corporation, an arm of the Chinese government. In my opinion, this export violated China’s pledge under the Nuclear Nonproliferation Treaty, which it joined in 1992. Article III of the Treaty forbids the sale of such items without requiring international inspection. The sale also violated China’s pledge under the Article I of the Treaty not to help other countries make nuclear weapons. Yet, the State Department has not sanctioned China for this sale, or even complained about it publicly.
Iran is the next candidate for China’s nuclear help. China has agreed to sell Iran a 25 to 30 megawatt nuclear reactor, which is an ideal size for making a few nuclear weapons per year. And China has also agreed to sell Iran a plant to produce uranium hexaflouride from uranium concentrate.
The hexaflouride plant is essential to enrich uranium for use in atomic bombs. Bombs fueled by enriched uranium have become the holy grail of developing countries trying to join the nuclear club. Such bombs are easier to make than those fueled by plutonium because uranium is easier to work with, less toxic, and easier to detonate with confidence that a substantial nuclear yield will result. Iraq was close to making a uranium bomb when the Gulf War began. The first bomb ever dropped was a uranium bomb. The United States released it over Hiroshima without having to test it.
There is no peaceful use for enriched uranium in Iran. Enriched uranium is used to fuel reactors, but the only reactors in Iran that could use such fuel are being supplied by Russia, which is also supplying their fuel. The conclusion has to be that Iran wants to use this plant to make atomic bombs. The fact that China is even considering this deal shows that China is quite ready to put nuclear weapon-making capability into the hands of what the United States regards as a terrorist nation.
These two sales have not been finalized. In effect, they are being held over our heads like swords. If we don’t start cooperating more with China in the nuclear area, then China can simply complete these two dangerous export deals with Iran. This is fairly close to nuclear blackmail.
To sum up, I think the conclusion has to be that our engagement policy has failed and has been failing for some years. The policy is not producing any change in China’s behavior, and is not even producing engagement. The negotiation process is effectively dead. The Chinese are not even talking to us about their exports. We are just watching the shipments go out, without any hope of stopping them. All our present policy has produced is a new missile factory in Pakistan, an upgraded nuclear weapon factory in Pakistan, new chemical weapon plants in Iran, and possibly a nuclear weapon factory in Iran.
When you are losing the game, it is time for a new strategy. We need to replace our current strategy with a strategy based on linkage. We should link our cooperation with China to its export behavior. We will cooperate with China if and when China becomes a responsible member of the world community.
The Subcommittee has asked me specifically to discuss sanctions. It is clear that the administration is not implementing the present U.S. sanctions law. The missile sanctions law does not require evidence that an entire missile or missile components have been shipped. The law says that sanctions are to be applied whenever a foreign company “conspires or attempts to engage in” the export of missile technology to a country like Pakistan.
As I have said, the executive branch has done a legal study to determine what this language means. That study has been completed for more than a year. There has also been a factual documentation of the conspiracy. The factual study has been completed for at least six months. These studies covered China’s missile exports to both Iran and Pakistan. Thus, there is no longer any legal or factual basis for not applying missile sanctions to China as Congress intended.
The State Department has admitted this fact by implication. The State Department is no longer saying that there is “not enough evidence” to apply sanctions to China. It is now saying that it has “not yet made a determination” to apply sanctions, which is quite different. In effect, the State Department is saying that it has not applied sanctions because it has chosen not to complete the administrative process.
The sanctions law does not allow this kind of discretion. The executive branch has an obligation to weigh the evidence and apply the law in good faith. Otherwise, the law is meaningless. As things stand now, the State Department has nullified the sanctions law by refusing to carry out the administrative process that allows the law to take effect.
The status of chemical sanctions against China is similar to the status of missile sanctions. Chemical sanctions apply to any foreign person who knowingly and materially contributes to the development of a chemical weapon in a country like Iran. The evidence of China’s poison gas-related exports to Iran during the past five years is overwhelming, and the sales are still going on. The case is clear. All the analysis and documentation has been finished. The State Department is simply standing in the courthouse door, preventing justice from being done, in the same way it is doing for missile sanctions.
For nuclear-related transfers, the law is more complex. Under Section 821 of the Nuclear Proliferation Prevention Act of 1994, if the seller knowingly and materially helps a country like Pakistan obtain enriched uranium, then the seller cannot sell anything to the United States Government. In addition, under the Export-Import Bank Act, if the seller is a country, the country is not eligible for U.S. Export-Import Bank financing.
The transfer of the ring magnets to Pakistan was done by an arm of the Chinese government, and thus with the knowledge of Chinese government officials. The administration said that it did not impose sanctions because it was unclear whether high Chinese officials knew about the sale. But at least mid-level Chinese officials knew, so it is difficult to see why the Chinese government was not held responsible. Governments are routinely held liable for the actions of their agencies and employees. Indeed, governments, like corporations, can only act through their employees. This seems to be another case where the State Department was unwilling to implement the law.
We are following essentially the same policy toward China now that we followed toward Iraq before the Gulf War. When Iraq was caught smuggling nuclear weapon triggers out of the United States before the Gulf War, that act violated Iraq’s pledge under the Nuclear Nonproliferation Treaty not to try to make nuclear weapons. But the United States was silent. Rather than apply sanctions, or even complain publicly about Iraq’s violation, the State Department chose “constructive engagement.” It would be better to maintain our influence with Saddam Hussein through trade, the State Department said. By selling Saddam what he wanted, and by not complaining about his behavior, we would bring him into the mainstream of nations. Sanctions would only isolate Saddam, hurt American exporters and allow the Europeans and the Japanese to get all the petrodollars.
We now know what that policy produced. If Saddam had not been foolish enough to invade Kuwait, we would be facing a nuclear-armed Iraq today. And the Iraqi bomb would have been built with exports from America and its allies. To stop Saddam’s bomb, American pilots had to risk their lives to destroy factories full of equipment that the West had provided.
The lesson is that you should not make a rogue stronger while he is still a rogue. And, you don’t stop a rogue from being a rogue by treating him like a non-rogue. The message we gave Saddam Hussein was that nothing bad would happen to him as long as he bought our products. We followed a policy of “constructive engagement” and of “de-linkage.” We are giving China the same message now.
The numerous high-level visits to China by U.S. officials over the past year have produced nothing. In recognition of that, we are not even making non-proliferation a big issue in our high-level meetings. The Chinese understand this message very well. They know that even if they supply weapons of mass destruction around the world, they won’t face any penalty from us. We are acting like a paper tiger, and being treated like one. Until we put some teeth into our sanctions policy, we will just rub our gums together.
History shows that sanctions work. The only time we have managed to get any progress on proliferation out of China is when we either applied sanctions or threatened to apply them. In the face of sanctions the Chinese have an incentive to talk to us. An example is intellectual property rights. In 1994, when we threatened to impose 100 percent tariffs on more than a billion dollars’ worth of Chinese imports if China didn’t stop looting our inventions, the Chinese backed down. So far, the Clinton administration has done more to protect Hollywood videos than to stop the spread of weapons of mass destruction.
When we get serious about proliferation, the Chinese will get serious. Now, there is nothing to talk about because the Chinese don’t see any risks. If we really want to engage the Chinese, we have to show that we are willing to punish them when they break the rules. So far, we haven’t done that.
1. The Subcommittee should require the State Department to provide all the legal and factual analysis that has been done by the executive branch on the sanctions issue concerning China. The Subcommittee should also require the State Department to explain why it has chosen not to complete the administrative process on sanctions.
2. The Subcommittee should consider strengthening existing sanctions laws to accomplish the following:
a. Prohibit the export of U.S. commodities controlled for non-proliferation reasons for one year to all Chinese government-controlled companies if any Chinese government-controlled company contributes to proliferation through its exports. If the Chinese government is willing to proliferate, China should not be able to import American technology that could contribute to proliferation. Except for sales to Iran and Iraq, present law is confined to punishing only the company making the export, which is not a sufficient deterrent.
b. Prohibit the import into the United States of any product produced by a foreign entity whose exports contribute to nuclear arms proliferation. This would bring the nuclear sanctions law up to the level of the chemical/biological and missile sanction laws.
3. The Subcommittee should obtain and review the U.S. export licenses approved for China by the Departments of Commerce and State during the past five years. The Subcommittee would discover that both the Commerce and State Departments have allowed sensitive U.S. technology to go to the very Chinese companies that are making mass destruction exports to Pakistan. Some of the munitions exports to these companies were authorized by express Presidential waivers. Congressional oversight of our exports to China is long overdue.