GlobalSecurity.org In the News

Los Angeles Times

September 1, 2001

By Robin Wright

WASHINGTON -- The Bush administration has decided to impose new economic sanctions on a major Chinese arms producer it says sold missile parts and technology to Pakistan, U.S. officials said Friday.

Such trade is a violation of a U.S.-China accord that calls on Beijing to halt all missile exports, which for two decades has been one of the most troublesome issues between the two countries.

The decision comes just seven weeks before President Bush is scheduled to make his first official visit to China.

The Bush administration feels compelled to act because, according to a senior U.S. official, "substantial amounts" of missile parts, technology and know-how have been sold to Pakistan since the pact was signed in November.

The United States also will reverse its offer, as stipulated in the agreement, to issue licenses for U.S. companies to launch satellites on Chinese rockets. And it will become illegal to provide U.S. technology to China's growing satellite industry.

Both moves will be a major blow to China's commercial industry and to a much lesser extent its technological capabilities, according to U.S. officials.

The arms producer, the China Metallurgical Equipment Corp., is technically a private company but is a virtual front for the Beijing government and does nothing without its approval, U.S. officials say.

The decision on sanctions will be formalized by John R. Bolton, undersecretary of State for arms control and international security affairs as early as Saturday. It follows months of intensive but failed U.S. diplomacy with the Chinese government. During a visit to Beijing last month, U.S. Secretary of State Colin L. Powell warned China that it would face a new round of sanctions if sales continued.

But Beijing has denied that the weaponry sales are occurring.

In an anxious bid to avoid another confrontation just five months after a showdown over the landing of a U.S. spy plane in China, U.S. officials met twice this week with Chinese diplomats, in Washington, D.C., and Beijing, to warn them that punitive action was imminent if their government did not act. The State Department gave China a couple of days to come back with an explanation for recent sales but did not receive a response.

"They think they can get away with it. And they don't know how, once caught, to get out of it gracefully," the senior administration official said.

U.S. officials willing to discuss the sanctions requested anonymity, a common practice among diplomats.

Although Powell had hoped to be able to cut back on the number of sanctions imposed by the United States, the administration felt it had no alternative in light of the gravity of the alleged violations -- and the potential dangers down the road in volatile South Asia, where rivals Pakistan and India are engaged in an arms race to acquire weapons of mass destruction.

They are the first new sanctions imposed by the Bush administration.

"We want to have a constructive relationship with China. But we also have to impress on the Chinese that they have to do what's right. So we decided now is the time to go forward," a senior State Department official said Friday. "Sanctions are a measure of how important an issue this is to us."

U.S. officials concede that the sanctions also will be a blow to the U.S. satellite industry because China provided the least expensive and most available launch services in the world market.

"It'd be a setback for the Chinese because most commercial satellites are made in U.S. and are less expensive and more capable than those made in other countries. Given a choice, satellite operations prefer American satellites," said John E. Pike, director of GlobalSecurity.org, a nonprofit U.S. organization specializing in space, defense and intelligence. "But it might turn out to be just as serious a setback to America's communications satellite industry. The U.S. satellite industry could find itself losing an edge to the competition -- for instance, more French satellites going up on Chinese rockets."

Missile technology is divided into categories. Category 1 is whole missiles. According to U.S. officials, China has been exporting Category 2 equipment and technology to Pakistan, its largest customer. Pakistan is developing missiles capable of carrying nuclear warheads.

"China is helping Pakistan quite a bit, which is the problem," the senior administration official said. "The November 2000 arrangement was intended to be a major transition point between past behavior and future cooperation. But instead China has engaged in repeated violations."

Although U.S. law mandates action in missile trade violations, the issue has been debated intensely within the administration. East Asian specialists argued that the move would make Bush's trip to China next month more difficult, while arms proliferation experts warned of the dangers of not halting the flow of weapons of mass destruction to unstable Pakistan, according to U.S. officials. Not enforcing the November pact would also leave the U.S. vulnerable on other agreements.

The Bush administration hopes imposing sanctions will force Beijing to begin complying by mid-October.