U.S. Exports to China 1988-1998: Fueling Proliferation

A Report by the Wisconsin Project on Nuclear Arms Control

Table of Contents

Executive Summary
Section I, Part A 
Dual-use American Equipment
Licensed for Export to China, 1988 – 1998
Section I, Part B 
U.S. Equipment Approved for Chinese
Nuclear, Missile or Military Sites, 1989 – 1993
Section II 
Espionage and Diversions
Section III 
China: The Strategic Outlook
Section IV 
China’s Dangerous Exports

To view the complete report, click here: U.S. Exports to China 1988-1998: Fueling Proliferation 

Introduction and Summary

Since early this year, Washington has been in a state of shock over Chinese espionage — especially the theft of information about one of America’s most advanced nuclear warheads. China is also suspected of stealing the secrets of the U.S. neutron bomb and of penetrating other top secret U.S. military programs.

As important as these strategic losses are, they are still small when compared to the nuclear, missile and military technology that China has bought with America’s blessing.

During the past decade, the U.S. Commerce Department approved more than $15 billion worth of strategically sensitive U.S. exports to the People’s Republic of China. The exports included equipment that can be used to design nuclear weapons, process nuclear material, machine nuclear weapon components, improve missile designs, build missile components and transmit data from missile tests.

The equipment, by definition, is of great strategic value. Only the highest performing machine tools, instruments, computers and other such items require a Commerce Department export license. This equipment has been placed on the U.S. export control list by U.S. experts who have judged that special care — and government review — is needed before releasing it to foreign countries.

Nevertheless, some of this “dual-use” equipment went directly to leading nuclear, missile and military sites — the main vertebrae of China’s strategic backbone. And several of these Chinese buyers later supplied nuclear, missile and military equipment to Iran and Pakistan.

This study, which is based on official U.S. Commerce Department records, reveals that from 1988 to 1998, a large, steady flow of strategic equipment went to China with the U.S. Commerce Department’s blessing. It also shows that the military and strategic value of these legal imports exceeded by many times what China obtained by illegal means. What China got from the Commerce Department dwarfed what it got from spies. Even after purloining the design of a nuclear weapon, China still needed a large array of high-precision equipment to manufacture and test it. Commerce Department records show that it got that equipment too from the United States.

The approvals included the following:

  • The China National Nuclear Corporation was licensed to receive American computer and imaging equipment for uranium prospecting. This company then helped Iran prospect for uranium that U.S. intelligence believes will be used to make nuclear weapons.
  • The China Precision Machinery Import-Export Corporation was licensed to receive American equipment useful for building China’s new C-801 and C-802 anti-ship cruise missiles. This company then exported the missiles to Iran where, according to the U.S. naval commander in the Persian Gulf, they threaten U.S. ships and personnel.
  • The China National Electronics Import-Export Corporation was licensed to receive American equipment useful for developing radar. This company later sold Iran a powerful military radar that could someday threaten American pilots.
  • The Chinese Academy of Sciences was licensed to receive American computer equipment to help develop a nuclear fusion reactor. The Academy then exported the reactor to Iran, which U.S. intelligence believes is developing nuclear weapons.

American equipment was also approved for the National University of Defense Technology, which trains personnel from the People’s Liberation Army in the design of advanced weapon systems; the University of Electronic Science and Technology, which develops advanced military radar and technology for stealth aircraft; and the Beijing University of Aeronautics and Astronautics, which develops systems for simulating the flight conditions of missiles and specializes in guidance, navigation, and flight dynamics. The licensing data does not reveal whether all the items approved were actually shipped, but it is safe to assume that virtually all of them were, otherwise it would not have been appropriate to apply for a license.

More than half of the $15 billion was for computers. Until 1993, however, China was effectively denied access to high-performance computers. In that year President Clinton began to loosen export controls. In early 1996 computer export controls were slashed dramatically. Under these relaxed rules, China has imported approximately 400 high-performance computers, the great majority of which were sold without an export license. Such machines can be used to encode and decode secret messages, design and test nuclear warheads and to simulate the performance of a missile from launch to impact. China has refused to allow the United States to verify that these computers are being used for civilian purposes, so it must be assumed that China’s weapon scientists have access to them.

China was also allowed to buy other American equipment especially useful for developing nuclear weapons and long-range missiles. The approvals included the following:

  • Equipment to manufacture and test semiconductors: 593 approvals worth $241.8 million. Used to produce a wide variety of militarily critical components for avionics, missiles, torpedoes, smart munitions, fuses and secure communications equipment.
  • High-speed oscilloscopes: 1,653 approvals worth $131.3 million. Used to record data from nuclear weapon tests, to design nuclear weapon firing circuits, and to develop missile guidance, control and tracking systems.
  • Equipment for controlling high-accuracy machine tools: 294 approvals worth $111.9 million. Used to produce the precision parts needed for nuclear weapons and long-range missiles.
  • Vibration testing equipment: 14 approvals worth $5.4 million. Used to test nuclear weapons, missiles, and a variety of military equipment to ensure combat reliability in situations of sudden shock, impact or rapid acceleration.

In addition to these legal American exports, the study summarizes known cases of Chinese espionage, diversions, and violations of U.S. export control laws. China benefitted from these illicit transfers, but, as stated above, to a lesser degree than from over-the-counter trade. The study also catalogues China’s exports. While American exports flowed to China, Chinese exports fueled the proliferation of weapons of mass destruction in Algeria, India, Iran, Iraq, Pakistan and Syria.

Although China is not an enemy of the United States, it is not an ally. China and the United States still disagree on fundamental issues. Human rights, trade, and the spread of weapons of mass destruction are among them. “Engagement,” the current U.S. policy toward China, is an abstraction connoting friendly visits by scholars. But the reality of this policy includes a deadly trade in the means to make weapons of mass destruction, as this study shows. American exports have provided the key equipment China needs to build a potent nuclear arsenal and a modern missile force to deliver it. Unless the policy is changed, American equipment will continue to increase China’s military strength into the next century.