S. Hrg. 105-242
PROLIFERATION: CHINESE CASE STUDIES
=======================================================================
HEARING
before the
SUBCOMMITTEE ON INTERNATIONAL SECURITY,
PROLIFERATION, AND FEDERAL SERVICES
of the
COMMITTEE ON
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED FIFTH CONGRESS
FIRST SESSION
__________
APRIL 10, 1997
__________
Printed for the use of the Committee on Governmental Affairs
U.S. GOVERNMENT PRINTING OFFICE
39-940cc WASHINGTON : 1997
_______________________________________________________________________
For sale by the Superintendent of Documents, Congressional Sales Office
U.S. Government Printing Office, Washington, DC 20402
COMMITTEE ON GOVERNMENTAL AFFAIRS
FRED THOMPSON, Tennessee, Chairman
WILLIAM V. ROTH, Jr., Delaware JOHN GLENN, Ohio
TED STEVENS, Alaska CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine JOSEPH I. LIEBERMAN, Connecticut
SAM BROWNBACK, Kansas DANIEL K. AKAKA, Hawaii
PETE V. DOMENICI, New Mexico RICHARD J. DURBIN, Illinois
THAD COCHRAN, Mississippi ROBERT G. TORRICELLI, New Jersey
DON NICKLES, Oklahoma MAX CLELAND, Georgia
ARLEN SPECTER, Pennsylvania
Hannah S. Sistare, Staff Director and Counsel
Leonard Weiss, Minority Staff Director
Michal Sue Prosser, Chief Clerk
------
SUBCOMMITTEE ON INTERNATIONAL SECURITY, PROLIFERATION AND FEDERAL
SERVICES
THAD COCHRAN, Mississippi, Chairman
TED STEVENS, Alaska CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine DANIEL K. AKAKA, Hawaii
PETE V. DOMENICI, New Mexico RICHARD J. DURBIN, Illinois
DON NICKLES, Oklahoma ROBERT G. TORRICELLI, New Jersey
ARLEN SPECTER, Pennsylvania MAX CLELAND, Georgia
Mitchel B. Kugler, Staff Director
Linda Gustitus, Minority Staff Director
Julie Sander, Chief Clerk
C O N T E N T S
------
Opening statements:
Page
Senator Cochran.............................................. 1
WITNESSES
Thursday, April 10, 1997
Robert J. Einhorn, Deputy Assistant Secretary of State for
Nonproliferation, Bureau of Political-Military Affairs,
Department of State............................................ 2
James R. Lilley, Director, Institute for Global Chinese Affairs,
University of Maryland......................................... 23
Gary Milhollin, Professor, University of Wisconsin Law School,
and Director, Wisconsin Law School, and Director, Wisconsin
Project on Nuclear Arms Control................................ 29
Alphabetical List of Witnesses
Einhorn, Robert J.:
Testimony.................................................... 2
Prepared statement........................................... 5
Lilley, James R.:
Testimony.................................................... 23
Prepared statement........................................... 27
Milhollin, Gary:
Testimony.................................................... 29
Prepared statement........................................... 33
APPENDIX
Chinese Proliferation Cases and the U.S. Assessment and Responses 43
PROLIFERATION: CHINESE CASE STUDIES
----------
THURSDAY, APRIL 10, 1997
U.S. Senate,
Subcommittee on International Security,
Proliferation, and Federal Services,
of the Committee on Governmental Affairs,
Washington, DC.
The Subcommittee met, pursuant to notice, at 2:15 p.m., in
room SD-342, Dirksen Senate Office Building, Hon. Thad Cochran,
Chairman of the Subcommittee, presiding.
Present: Senators Cochran, Stevens, Cleland, Levin, and
Durbin.
OPENING STATEMENT OF SENATOR COCHRAN
Senator Cochran. The Subcommittee will please come to
order.
Today, we welcome you all to our hearing of this
Subcommittee on International Security, Proliferation, and
Federal Services. The topic of our hearing today is
``Proliferation: Chinese Case Studies.''
On November 14, 1994, President Clinton issued Executive
Order 12938, entitled the Emergency Regarding Weapons of Mass
Destruction, declaring, in part, that the proliferation of
weapons of mass destruction and the means of delivering them
constitutes ``an unusual and extraordinary threat to the
national security, foreign policy, and economy of the United
States,'' and that he had, therefore, decided to ``declare a
national emergency to deal with that threat.'' The President
reaffirmed this Executive Order on November 15, 1995, and again
on November 11, 1996. It is deeply troubling to me that there
has been no visibly effective action taken by this
administration in response to this emergency.
At our last hearing, Dr. Keith Payne testified that the key
lesson of the 1991 Gulf War ``for rogue military and political
leaders is that U.S. conventional power must be trumped by the
capability to deter and coerce the United States with weapons
of mass destruction and the ability to deliver those weapons
reliably.''
Nations have three options for obtaining these kinds of
weapons and delivery systems. They can develop them on their
own, obtain entire systems from external sources, or produce
some components internally while acquiring other components
externally. All too often, the People's Republic of China is
available as a convenient source of external assistance. While
some of the specific Chinese activities are classified, many of
the details are available in the open press and it is upon
these open sources that we have relied exclusively in preparing
for today's hearing.
China appears to be at the center of a worldwide
proliferation web. It is clear that China has sold weapons
technology to rogue nations despite the laws passed by Congress
and despite the discussions State Department officials have had
with the Chinese government aimed at persuading Beijing to halt
such sales.
At today's hearing, we will explore how our government has
approached this problem as well as how it may be better
attacked. Other questions will also be explored. Is new
legislation required? Has the administration adhered to and
implemented the laws currently in place? And, since the
administration's efforts have failed to moderate China's
behavior, is a new approach in order?
Our witnesses today are ideally suited to address these
issues. Robert Einhorn, Deputy Assistant Secretary of State for
Nonproliferation, will testify first about the administration's
approach to this problem. He will be followed by Ambassador
James Lilley, formerly the U.S. Ambassador to China and now the
Director of the Institute for Global Chinese Affairs at the
University of Maryland, and Mr. Gary Milhollin, Director of the
Wisconsin Project on Nuclear Arms Control.
Mr. Einhorn, we welcome you and thank you for your
assistance and your presence here today. We have a copy of your
testimony, which we will place in the record and have it
printed in its entirety and we encourage you to proceed to make
any comments or summary statements that you think are
appropriate.
Before you proceed, let me recognize my distinguished
colleague from Alaska, Senator Stevens, for any comments he
might have.
Senator Stevens. I do not have an opening statement. I
congratulate you, Senator, for proceeding with these hearings.
You are following the greatest traditions of this Subcommittee
of the Governmental Affairs Committee.
Senator Cochran. Thank you very much, Senator.
Mr. Einhorn, you may proceed.
TESTIMONY OF ROBERT J. EINHORN, DEPUTY ASSISTANT SECRETARY OF
STATE FOR NONPROLIFERATION, BUREAU OF POLITICAL-MILITARY
AFFAIRS, DEPARTMENT OF STATE
Mr. Einhorn. Thank you very much, Mr. Chairman, and thank
you for giving me the opportunity to appear before the
Subcommittee to testify on the subject of China and U.S.
administration efforts to engage China on nonproliferation.
Thank you for inserting my prepared remarks in the record. I
will just proceed with a much shorter version.
As you know, Mr. Chairman, the administration is trying to
build a constructive, stable, and mutually beneficial
relationship with China, one that is based on a shared respect
for international norms. One of these norms is
nonproliferation, and the administration places a critical
importance in our discussions with China on that
nonproliferation norm.
We raise nonproliferation at all levels, including when
President Clinton has met with President Jiang Zemin, most
recently last November in Manila. We press our case with the
Chinese vigorously and frankly. We make clear that failure to
resolve problems that have arisen will inevitably impede the
improvement in bilateral relations and failure to deal with
these problems effectively could also have consequences under
U.S. sanctions laws.
However, I do not wish to imply that the U.S.-China
nonproliferation agenda is monopolized by disagreements. China
has come a long way since the 1960s, when its declaratory
policy was supportive of nuclear proliferation as a way, to use
its term, as a way of breaking the hegemony of the superpowers.
Increasingly, China has recognized that its own security
interests are not served by the spread of sensitive
technologies and that acceptance of international norms is one
of the responsibilities of a great power. This evolving
attitude can be seen in a succession of Chinese actions during
the 1990s.
In 1992, China joined the Nonproliferation Treaty. In 1993,
it signed the Chemical Weapon Convention, which its National
People's Congress approved last December. In 1994, it pledged
not to export ground-to-ground missiles controlled by the
Missile Technology Control Regime. That same year, it played a
constructive role in promoting the agreed framework under which
the North Koreans agreed to eliminate their nuclear weapons
program. In 1995, it supported the successful effort to make
the NPT permanent. In 1996, it stopped testing nuclear weapons
and signed the Comprehensive Test Ban Treaty.
All of these steps were welcome and we hope that China will
build on these positive steps. For example, we would like China
to play a more active and committed role in promoting full
implementation of the U.S.-DPRK framework agreement, in
avoiding a nuclear and missile race in South Asia, as well as
in supporting the U.S. Special Commission's efforts in Iraq.
So there is a positive nonproliferation agenda with China
where our interests are largely convergent, where China has
already taken important steps, and where important benefits
would result if China assumed greater responsibility for
promoting progress.
At the same time, we have had serious difficulties with
China on nonproliferation. These difficulties have largely
involved Chinese exports of arms and sensitive technologies. It
is noteworthy, Mr. Chairman, that these exports have been
confined primarily to two recipient states, Iran and Pakistan,
but the situation is troublesome nonetheless.
China's problematic record on exports can largely be
attributed to conscious decisions by Chinese leaders to pursue
policies deemed to be in China's national interest. Examples of
such conscious policies are conventional arms sales to Iran and
support for Pakistan's missile program. But there is an
additional explanation, namely that China still does not have
an effective national export control system. Even when Beijing
is willing to exercise restraint, its ability to do so may be
inadequate.
China's current ability to control exports appears to vary
with the type of commodity exported. Exports of arms and of
specialized nuclear and missile equipment seem to be subject to
centralized governmental approval procedures. However, dual-use
items, that is, items that have legitimate civil applications
as well as sensitive applications, are not necessarily
controlled by centralized or senior-level approval mechanisms.
We must work with the Chinese on both problems, the need
for greater restraint in their policies and the need for
stronger export controls to implement policies of restraint
effectively.
We have made progress in the nuclear area. As part of the
resolution of the ring magnet controversy, China pledged last
May 11 not to provide assistance to unsafeguarded nuclear
facilities. In practice, this means no longer assisting
Pakistan's unsafeguarded nuclear program. Beijing appears so
far to be taking the May 11 commitment seriously. While we have
raised concerns about certain activities, we have no basis to
conclude that China has acted inconsistently with its May 11
undertaking.
We are also strongly urging China not to engage in nuclear
cooperation with Iran. Even though Chinese cooperation with
Iran is under IAEA safeguards, we believe Iran will misuse any
assistance to advance its nuclear weapons ambitions.
China has suspended its sale of two nuclear power reactors
to Iran, probably because of siting and financial difficulties.
Whatever the reason, it was a positive step. We will continue
to urge China to curtail its nuclear cooperation with Iran.
In another positive move, China told us it was developing
nuclear export control regulations that, for the first time,
would control both nuclear and nuclear-related dual-use items
on a nationwide basis.
In the area of chemical-related exports, we are pleased
that China's National People's Congress approved the Chemical
Weapon Convention late last year and we hope China will deposit
its instrument of ratification by April 29 in order to become
an original party.
However, we are deeply concerned by the disconnect we see
between China's Chemical Weapon Convention commitment and
information available to us that various Chinese entities have
transferred chemical precursors, chemical production equipment,
and production technology to Iran and we expect Iran will use
these items in its CW program.
At a minimum, these dual-use transfers indicate that
China's chemical export controls are not operating effectively
enough to ensure compliance with China's prospective CWC
obligation. We have raised our concerns frankly with the
Chinese and called on them to take steps to restrain Chinese
entities from assisting Iran's CW program. We have made clear
to the Chinese that no responsible party to the CWC can afford
to take a ``see no evil, hear no evil'' approach to export
controls.
Our concerns in the missile area apply mainly to Chinese
cooperation with Pakistan and Iran. Twice, we imposed sanctions
on China for transferring to Pakistan equipment and technology
for the M-11 missile system. In October 1994, we lifted
sanctions when China agreed to reaffirm its commitment to abide
by the Missile Technology Control Regime guidelines and
parameters and to ban the export of ground-to-ground missiles
controlled by the MTCR. Since then, we have no reason to
believe China has violated its pledge not to export such
missiles.
However, concerns about transfers of missile components and
missile technology persist, raising serious questions about the
nature of China's commitment to abide by the MTCR guidelines.
We regard this as a very important matter. We will press the
Chinese to live up to their 1994 commitment, to interpret that
commitment meaningfully, and to put in place the controls that
would enable them to implement it conscientiously.
We will also continue to raise the question of China's sale
of conventional arms to Iran. We are particularly concerned
about the transfer of C-802 anti-ship cruise missiles. Such
missiles increase China's maritime advantage over other Gulf
States, they put commercial shipping at risk, and they pose a
new threat to U.S. forces operating in the region.
We have concluded that C-802 transfers so far have not
triggered sanctions under the Iran-Iraq Arms Nonproliferation
Act, but we remain concerned about such transfers and will
monitor the situation carefully for any additional transfers
that might cross the threshold of sanctionability.
Mr. Chairman, the period ahead will be an active one for
U.S.-Chinese diplomacy. As we pursue our policy of engagement,
we will remind the Chinese that a key ingredient of a good
bilateral relationship is a shared respect for international
nonproliferation norms. We will explain that if we can resolve
the relatively few proliferation problems that exist, we can
give a significant boost to U.S.-China relations, but if we
fail to resolve these problems, they will inevitably come back
to haunt us and impede the improved bilateral relationship that
we believe that both sides seek.
Mr. Chairman, that concludes my introductory remarks. I
would be happy to respond to your questions. However, as you
are aware, classification rules will not make it possible for
me to be fully responsive in an open session to concerns you
may have, especially concerns about particular transactions.
That is why we requested that this hearing be held in closed
session.
We fully understand why the Subcommittee decided that it
would be impractical to close the session and we agreed to
participate nonetheless. But I respectfully request that the
Subcommittee be sensitive to our requirement to protect
classified information, and I would like to offer to testify at
a closed session at a later date, or alternatively, to hold
informal but classified briefings for you or for other members
of the Subcommittee at your convenience.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Einhorn follows:]
PREPARED STATEMENT OF MR. EINHORN
Senator Cochran. Thank you very much for your statement and
for your assistance that you are providing to our Committee's
effort to understand better what our administration's policies
are in this area and what your recommendations are for dealing
more effectively with the problem.
We certainly are aware of the rules regarding
classification. We do not intend to breach those rules. I made
a comment about that in my opening statement, as well.
The fact is, however, we legislate in a public arena and
there are statutes on the books relating to the authorities
and, even under some circumstances, the obligations of the
Executive Branch in dealing with acts of proliferation.
One specific example is the Gore-McCain Iran-Iraq
Nonproliferation Act of 1992. You mentioned China's transfer of
chemical weapons components to Iran. Why did the administration
decide that the sale you described did not fall within the
terms of that legislation requiring the imposition of sanctions
on China for that sale?
Mr. Einhorn. Mr. Chairman, the Congress has enacted
legislation that provides that a variety of criteria must be
met for sanctions to be imposed. They are quite specific.
You alluded to the chemical weapons situation. If you look
at the chemical-biological weapons sanctions law, there are a
variety of specific requirements that must be met. You have to
have a known exporting person or organization. The transaction
must make a material contribution to a chemical weapons
program. The contribution that it makes must be a knowing
contribution. That is to say, the sanctioned entity must
knowingly contribute to that program. The identity of the
recipient must, in this particular piece of legislation, be a
terrorist list country, and, of course, Iran is in this
particular case.
And also, the evidence we receive and evaluate has to be at
a very high level of certainty. It is one thing to make a
policy judgment or even an intelligence judgment on the basis
of a kind of preponderance of information, but we feel that the
evidence standard required to invoke legal sanctions has to be
very high, indeed, so that is a requirement, as well.
So are we concerned about Chinese entities' transfers of
chemical precursors or chemical-related dual-use items,
equipment, technology to Iran? Yes, we are, and we have
evaluated all of those transactions against these various
specific criteria. To this point, we have not made a
determination that all of those criteria have been met, but we
are actively engaged in looking at specifically a number of
cases that we could discuss in closed session, and it may well
be possible that these various criteria would be satisfied.
Senator Cochran. Which criteria were not satisfied in the
chemical weapons component sale to Iran?
Mr. Einhorn. Let me tell you, I cannot be too specific
about it, but what I can say is one of the hardest things to
demonstrate is that the exporting entity knowingly contributed
to a CW program. Why is it so difficult? It is because many
recipients use front organizations or they file false end-user
certificates. That is what proliferators usually do. Also, many
of these transactions involve several intermediaries, so you do
not know with whom you are dealing.
So you get some information that there is a particular
exporter. He makes a transaction. Did he knowingly contribute
to that CW program when he may be dealing with a cut-out or a
front organization and so forth. That is the kind of criterion
that may be difficult to meet to invoke the sanctions law.
But let me just make a distinction between invoking the
sanctions law and taking policy steps in response to this
transaction. Even if we are not in a position to invoke the
sanctions law, we are in a position to react to transactions
that trouble us and we have seen a variety of transactions that
are of concern and we have taken very vigorous actions in a
number of diplomatic and other respects.
Senator Cochran. In the experience that you have had in
using the authorities, and in some cases, the directives
contained in the statutes on this subject, do you have an
opinion as to whether or not there are more effective ways to
modify behavior of proliferators, and specifically as to China,
than in imposing sanctions? Are sanctions a less desirable or
less effective way of trying to modify behavior or of getting
cooperation in nonproliferation efforts from China?
Mr. Einhorn. I think the administration has engaged China
very assertively and, I think, successfully across the board--
in the nuclear area, in particular, but in other areas, as
well. It has been a very high priority. I think we have had
more engagement with China on the proliferation issue than any
previous administration, and we have used a variety of tools
and sanctions is one of them.
As I mentioned in my statement, we have invoked missile
sanctions twice with China. Recently, in the ring magnet
controversy, the threat of sanctions hung over the situation,
the threat of imposing Export-Import Bank sanctions, and I
think that contributed to a solution of the problem. Indeed,
for a 3-month period, the United States consciously acted as if
sanctions were in effect and did not approve any Export-Import
Bank loans to China. We are now in the process of considering
various chemical sanctions cases.
So we recognize the utility of sanctions but they are a
complementary tool. Sanctions are not synonymous with
nonproliferation policy. There are many other instruments of
policy we use that are effective. Sanctions do have an
appropriate role. They have played a useful role in our
dialogue with China and with several other countries, but it is
important not to rely on them too much.
Senator Cochran. Senator Stevens.
Senator Stevens. Thank you, Mr. Chairman.
Mr. Einhorn, I have not read a lot on this, but I have gone
over the papers that were presented by the Chairman and by you
and I have looked at Ambassador Lilley's statement. I have had
a long relationship with China and served there in World War
II. I do not see any reason to be hasty in imposing sanctions.
On the other hand, it seems to me that our relationships will
deteriorate if we are not very strong in expressing our
opinions and fulfilling our commitments to one another.
What bothers me is it appears that based upon Chinese
assurances they were unaware of the transactions with regard to
the ring magnets, and our relationship just moved on to another
level. We accepted that. It is my understanding you accepted
the Chinese assurances that they did not know of the transfer.
Knowing China, I do not know how that could have occurred. In
any event, Beijing then pledged not to assist unsafeguarded
nuclear facilities and yet they had already demonstrated that
that was their policy. Yet you said that was a step forward.
I think, somehow, as I see this continuum, that we are
constantly stepping back and saying, well, they tell us they
are doing nothing wrong and, therefore, we are not going to
react to what they are telling us, as compared to what we know
has happened.
Am I wrong that you are willing to ignore their actions and
their refusal to admit what we know is true and move on to the
next level and then, once again, let them tell us that they are
doing things right, although we know it is not true? Are we
going from just one level to another level of accepting their
assurance that they are living up to their commitments rather
than following what we know to be the case?
Mr. Einhorn. Senator, we are aware of a number of Chinese
actions in the past that clearly violated international
nonproliferation norms. We have been frank about that with the
Chinese. Before China joined the NPT in 1992, we believe that
there was very strong evidence that they had engaged in
assistance to a non-nuclear weapons state's unsafeguarded
nuclear program.
Similarly, in some of the other areas, for example, in the
missile area, where we sanctioned them twice, clearly, they had
engaged in actions inconsistent with international norms.
But we have achieved a number of commitments and we have
monitored those commitments very carefully. I alluded to the
May 11 commitment not to provide assistance to unsafeguarded
facilities. Before May 11, have they provided such assistance?
Yes. We are clear about that. They provided such assistance.
But we really do believe, and we have watched this very
carefully, that they have not acted inconsistently with that
commitment. We believe----
Senator Stevens. Did you really believe that they did not
have knowledge of the ring magnet?
Mr. Einhorn. The statute, it was----
Senator Stevens. I did not ask you that. You are involved
in this. Did you believe what they said, that they were unaware
of that transfer?
Mr. Einhorn. We believe it is credible that central,
senior-level Chinese authorities did not know of in advance and
did not approve of that transaction, and the reason why we
believe that is not just because senior Chinese officials told
us that. It is because of our understanding of the Chinese
system and how it operates.
This transaction was probably less than $70,000. Ring
magnets are very unsophisticated kinds of devices. They were
treated under their export control system as general commercial
goods and it is very plausible, in our view, that this
transaction would have been treated as a routine kind of
transaction. And the more we learn about the rudimentary State
of Chinese export controls on dual-use items, the more
plausible it becomes that this particular transaction would
have been made without high-level governmental knowledge, and
because of that, it did not trigger Section 825 of the Nuclear
Nonproliferation Act.
Senator Stevens. I have other responsibilities in the
Defense area and it does seem to me that if we look at the
threats to the world today, they are in the area of the ability
of a rogue nation to transport chemical and biological warfare
systems to another place in the world. Certainly, North Korea
and China are two countries that have indicated a willingness
to trade with rogue nations.
I do not like to see charts like the one we're looking at
that indicate that we have had a series of instances and we
have had no sanctions, no sanctions, no sanctions, no
sanctions. Then you had sanctions and you lifted them within 9
months. What does that say to China?
Mr. Einhorn. I think the Chinese----
Senator Stevens. It says that our laws are immaterial,
really, in terms of our relationships.
Mr. Einhorn. I do not think the Chinese, Senator, would
draw that conclusion, because what they see is a U.S.
administration that challenges them regularly and very
forcefully on any questionable actions in the proliferation
area, any questionable exports. They see that they have been
sanctioned by the U.S. They do not like it. They are a proud
country.
But what we see is they are taking concrete steps to
improve their behavior and we see that most significantly in
the nuclear field. We believe we have concrete evidence of
that, less in the chemical and in the missile area, but in the
chemical area, their willingness to join the Chemical Weapon
Convention is at least a good sign and we will continue to
press them to bring their declared policy into line, or to put
it the other way, to bring their behavior into line with the
declared policy, but they need a better export control system
in order to do that.
Senator Stevens. Mr. Chairman, I respect the witness and
what he is saying. I would hope that we would take up the
offer, though, that we have a little discussion in terms of the
classified aspects of some of these matters. I regret that,
because I think the public ought to know more about what is
going on and what we are and are not doing about the nations of
the world that are really trafficking in these weapons of mass
destruction.
Maybe we can combine your Subcommittee and our Defense
Subcommittee and go into this in depth, because we have some
processes of retaliation that are short of sanctions. I do not
see them here, either. I hope that we would be a little bit
more firm with China and find some ways to deter this trend of
dealing with rogue states and Iran, in particular.
Thank you, Mr. Chairman.
Senator Cochran. Thank you very much, Senator, for your
excellent contribution to this discussion.
Senator Cleland.
Senator Cleland. I would just like to pick up on the last
few comments there of Senator Stevens. One of the things that
troubles me is the sale of weapons and material to Iran. Is it
true that China sold cruise missiles to Iran without any
sanctions from our Government?
Mr. Einhorn. That is correct, Senator. The sanctions law
that is most directly applicable is the Iraq-Iran Arms
Nonproliferation Act of 1992, and that provides for imposing
sanctions when a foreign person or country transfers goods or
technology so as to contribute knowingly and materially to the
efforts by Iran or Iraq to acquire destabilizing numbers and
types of certain advanced conventional weapons.
Now, the question of whether China transferred the C-802
anti-ship cruise missiles to Iran is not in doubt. They tested
them. We know about it. The issue is whether transfers to date
meet this test of destabilizing numbers and types, and we
looked at this very seriously within the Government, including
our military officials who obviously had the greatest stake
because their forces would be at risk, and we concluded that,
at least so far, the transfers of the C-802 cruise missiles do
not meet the test of being destabilizing numbers and types.
But as I say, we are concerned by these transfers. We
continue to watch to see if the continued transactions will
cross the threshold of sanctionability.
Senator Cleland. Not to probe into secret matters or issues
of secrecy, but is there any expectation on your part that such
transfers of technology, particularly in terms of cruise
missiles to Iran, might occur in the future?
Mr. Einhorn. Senator Cleland, it is hard to predict the
future, but China has become the largest seller of conventional
arms to Iran. Russia had that distinction up until a few years
ago. The U.S. persuaded Russia to join the so-called Wassenaar
Arrangement under which Russia agreed not to enter into new
contracts for arms sales to Iran.
Because of that, China now exceeds Russia as a salesman to
Iran and we have public information about discussions in the
last half-year or so between Chinese and Iranian officials
about conventional arms transactions. So we would expect to see
more. We have registered our strong concern about that at the
highest levels, but so far, we have not seen a curtailment in
Chinese sales.
Senator Cleland. With China becoming the largest supplier
of conventional weapons to Iran, a rogue state that does not
have our interests at heart. Does that, then, give us pause in
transferring some sensitive technology to China ourselves?
Mr. Einhorn. Whenever we consider engaging in any kind of
technology transfer with China, we have to consider the
prospect of retransfer, and so in some cases, we may consider
the risk too great. In other cases, we would try to ensure that
the risks of any retransfer or diversion would be minimal and
we would insist upon appropriate assurances to try to ensure
that there would be no retransfer of U.S. technology.
Senator Cleland. If you were to conclude, or if the
military in consultation with you were to conclude that such
Chinese support for Iran's build-up militarily posed an
increased threat to U.S. forces in the region, what kind of
sanctions would you recommend?
Mr. Einhorn. If a build-up of Chinese forces constituted a
threat?
Senator Cleland. No. If increased or continued Chinese
sales to Iran were to occur and the military or the State
Department or both concluded ultimately that this did pose a
threat to U.S. forces in the region, that it was destabilizing,
what sanctions do you have at your disposal or would you
recommend?
Mr. Einhorn. If the Chinese-Iran transfer relationship
crossed that threshold of sanctionability, we would be obliged
to implement the law, and the Iraq-Iran Arms Nonproliferation
Act of 1992 does provide for a substantial list of action. I
think I have them here, Senator.
If it is a foreign government involved as opposed to a
foreign person, it provides for no U.S. Government assistance,
including under the Foreign Assistance Act and the Arms Export
Control Act. Any assistance under those Acts would be cut off.
Ex-Im financing, voting against the foreign government's loans
in multilateral development banks, and the list goes on and on.
The penalties for violating this Iraq-Iran Act are quite
severe.
Senator Cleland. You have been very patient with the
questions. Just one more point. Is this an executive decision
that the threshold or the thin red line has been crossed? Is it
a Presidential decision? Does it become a recommendation, say,
of the Secretary of Defense, the Secretary of State? Does the
President have to make a judgment? Or is the Congress involved
in some way?
Mr. Einhorn. What the law does is charges the Executive
Branch with making this determination. That determination
actually has been delegated to the Under Secretary of State for
International Security Affairs. But all of these issues are
discussed with other government agencies. The Under Secretary
will consult with her, in this case, or his colleagues
throughout the Government, and also, there is a substantial
amount of consultation with members of Congress and staff,
because in situations like this or in private briefings where
we can discuss classified information, we get your input, your
evaluation of the evidence.
So it is a very difficult judgment because, as I indicated,
the penalties can be quite severe. It is an important decision
and we want to get the best input we can.
Senator Cleland. One final question. I gather that that
determination has not been made as of yet, that the law has
been violated?
Mr. Einhorn. That is correct. We have come to a conclusion
based on the transaction so far that this threshold has not
been crossed, but we continue to evaluate as we collect more
information.
Senator Cleland. Thank you very much.
Thank you very much, Mr. Chairman.
Senator Cochran. Thank you.
Senator Durbin.
Senator Durbin. Thank you, Mr. Chairman.
Mr. Einhorn, I am sorry I was late. I had another meeting,
but I have reviewed your testimony and I just wanted to ask a
few questions.
Several years ago, I had my first chance to visit China and
it came at an opportune moment when we had felt that we had
detected shipment of objectionable material between China to
Pakistan. It involved the shipment on an ocean-going vessel
that was monitored by satellite tracking and the rest. The
Chinese invited us to inspect the ship all we wanted after it
arrived. To my knowledge, there was nothing found on board. I
do not know if you recall that particular incident. Do you?
Mr. Einhorn. Very well.
Senator Durbin. Can you explain what happened there?
Mr. Einhorn. The incident, we referred to it as the Yin He
incident. That was the name of the vessel. And actually,
Senator, it was destined to Iran rather than to Pakistan.
Senator Durbin. I am sorry.
Mr. Einhorn. We had information that certain goods were
intended to be loaded on board that ship and so we assumed that
they were and we vigorously demarched the Chinese government at
the time and at several ports of call and in the Persian Gulf,
there was somewhat of a standoff, actually, among U.S. and
Chinese vessels there in the Gulf. But finally, we worked out
diplomatically a procedure whereby the vessel would go to shore
and be inspected, and that is, in fact, what happened.
As it turned out, you are right, Senator, the goods were
not on board that ship. If we were in executive session, I
could give you our explanation for that. But we think our
initial information was correct, that the goods were intended
to be on board that ship. As it turned out, they were not, and
I think the Chinese scored what turned out to be a big
propaganda victory on this after the inspection.
But we think our intelligence community had done a good job
in that case and it is one of these cases where the Chinese
lucked out. But it shows, I think, that the U.S. is prepared to
take very vigorous steps to interdict supplies of sensitive
goods and to try to enforce as best as we can these
international norms.
Senator Durbin. Can I assume that, in other instances, we
have verified the shipment of such materials to Iran or
Pakistan?
Mr. Einhorn. Yes, Senator. We have verified a variety of
transactions, whether it is in the nuclear area, the chemical
area, or the missile area. We are convinced that these
transactions took place.
But going back to the Chairman's initial remarks, there is
a distinction between knowing that certain goods were shipped,
transactions did take place, and meeting all the various
specific requirements of the sanctions law, because they
require such factors as the exporter knowing the destination
was going to be a chemical weapons program or a missile program
or something like that. But the fact that we knew that these
transactions were taking place enabled us to react, to take
strong action in a number of cases, and to take either
diplomatic or other kinds of steps, which we do.
Senator Durbin. Is there any indication that the number of
shipments is on the increase or the decline?
Mr. Einhorn. I think one has to look from area to area. As
I mentioned in my statement, we have seen progress in the
nuclear area. We believe the Chinese are adopting nuclear
nonproliferation norms, policies, practices. We are concerned
by transactions of chemical-related items to Iran. We do not
see many transactions, by the way, elsewhere. Iran seems to be
the main recipient.
I remember a comment the Chairman made earlier about China
being at the center of a worldwide proliferation web. I do not
want to defend the Chinese case here, but I think one has to
realize that the number of recipients of these sensitive
technologies is relatively few, and in the chemical area, what
we are concerned about is Iran, and we have seen those
activities and it really is very troublesome to us, and in the
missile area, as well. The missile technology recipients of the
Chinese are really Pakistan and Iran.
Senator Durbin. In another unrelated area but dealing with
Chinese relations, we have seen a virtual disregard or at least
a callous attitude by the Chinese when it comes to intellectual
property rights and those who export from the United States,
making sales into China. You explain here that you think the
source of the problem is either a conscious decision by the
Chinese based on their own national policies or a virtually
unregulated area of export, where the Chinese government does
not step in.
Is this a situation of salutary neglect, where they
basically step aside knowing full well the outcome of their
lack of regulation, as they must when it comes to intellectual
property?
Mr. Einhorn. The failure to implement effective export
controls over a long period of time would actually become a
conscious act of neglect, if you understand what I am trying to
get at. That is why I mentioned before that no responsible
exporter can take a ``see no evil, hear no evil'' approach to
this problem and that is why we have pressed the Chinese so
hard.
It is one thing if we see a number of transactions
occurring, dual-use commodities, maybe items that would go way
below the threshold of senior-level approval, and if we bring
it to their attention, these transactions, enough and they
still do not take effective corrective action, then that is
almost a conscious policy of not-so-benign neglect and that is
what we continue to press them on.
Now they will soon, hopefully, become parties to the
Chemical Weapon Convention, and that will give us a stronger
basis to ask them to make sure that they are living up to their
obligations under the Chemical Weapon Convention not to assist
anyone in any way to acquire chemical weapons capability, and
that is what we will have to press them on.
Senator Durbin. Thank you, Mr. Einhorn. Each year or so,
Congress has a responsibility of issuing a report card on
China, a vote on MFN, and there are many, many areas of
concern, human rights, trade relations. This is one that means
a lot to me. Your testimony suggests that though we have made
some progress, there is still a great deal to be accomplished
before China has joined us in a mutual effort to reduce the
proliferation of damaging weapons around the world. Thank you
for your testimony.
Mr. Einhorn. Thank you, Senator.
Senator Durbin. Thank you, Mr. Chairman.
Senator Cochran. Thank you, Senator, for your contribution
to this hearing.
Mr. Secretary, you talked about the fact that in this case
of the sale of ring magnets to Pakistan by China, that this was
something that the central government might not have even known
about, that individuals who were involved in that transaction
might not have been known or might not have had any official
position in the Chinese government.
Do you know whether or not China has ever prosecuted any
individuals or disciplined them if they violated the Chinese
laws or regulations you've referred to today? Did they do so in
this instance, for example?
Mr. Einhorn. We are told by the Chinese that they have
disciplined their nationals in a number of these cases. In this
particular case, we were told that the official responsible for
that entity that made the transaction was removed from his
position and penalized. We are not sure what the penalties
were, but we are told that he was removed from his position.
Senator Cochran. What additional legislative tools or
authority would be helpful to the administration in dealing
with these proliferation issues, specifically with respect to
China? Do you have any recommendations to make to the Congress
on that subject?
Mr. Einhorn. Mr. Chairman, I am not prepared today with any
specific recommendations, only I would like to tell you that we
welcome the opportunity to consult with you and Subcommittee
staff on our nonproliferation legislation.
As I mentioned before, the legislation can be helpful. We
have seen the legislation as helpful tools. However, there are
certain aspects of the legislation that, in our view, are
insufficiently flexible. They do not, for example, always match
penalties with infractions or do not give the Executive Branch
and our diplomats enough flexibility to use the law as a
diplomatic tool. We have some ideas about that and would like
to consult you further on it.
Senator Cochran. You mentioned that we have imposed
sanctions against China on a couple of occasions, particularly
with the sale of missile technology or equipment by China, is
that right? Did I understand you correctly?
Mr. Einhorn. That is correct, once in 1991 and once in 1993
for China's sale of M-11-related equipment and technology to
Pakistan.
Senator Cochran. Yes. Were there any sanctions imposed in
connection with the Chinese sale of the missiles that you
described, the cruise missiles, to Iran?
Mr. Einhorn. No. As I indicated, though, we are continuing
to monitor the situation. Currently, the transactions we have
seen to date do not cross the threshold of sanctionability.
Senator Cochran. What is your evaluation of the
effectiveness of sanctions as a means of trying to influence
behavior by China in this area? Have the sanctions been
effective or have they not been effective? What is your view?
Mr. Einhorn. I think the results are mixed, Mr. Chairman.
Often, what happens is the threat of sanctions, especially if
implicit, will be more effective a means of inducing modified
behavior than the actual imposition of a sanction. We see that
in a number of cases, not just in China. But once you pull the
trigger, then you do not provide continuing incentives, whereas
if the threat of sanctions hangs over the situation and the
parties are aware of that situation, this can have a
restraining effect, and we have seen that in this case and in
other cases, as well.
Senator Cochran. I think Senator Stevens has made an
excellent suggestion, and that is that we should have a
classified hearing, which you also suggested when you heard
that we were planning to have this hearing. We will endeavor to
work that out and have that scheduled in the near future. We
would appreciate your continued cooperation with us as we look
at this issue in a lot more depth.
Senator Levin.
Senator Levin. Thank you, Mr. Chairman. I have just a few
questions.
First, on the M-11 sale, has the administration concluded
that there was a sale? Is this something that you are able to,
say publicly, yes or no?
Mr. Einhorn. We are confident that in November 1992, there
was a transaction, an M-11-related transaction between China
and Pakistan, and for that transaction, we imposed sanctions in
August 1993, because we knew that, at a minimum, M-11-related
equipment and technology were transferred. And there are those
in the government that have their own judgments of varying
levels of certainty about whether full missiles themselves were
transferred in November 1992.
Senator Levin. Has the administration concluded whether or
not, and can they publicly say whether or not full missiles or
what amount to full missiles--there may have been a few more
screws to be tightened or a few more little pieces to be added
on, but what amounts to full missiles, have you concluded
whether or not full missiles, in effect, were transferred?
Mr. Einhorn. We have not reached a conclusion based on the
high standard of evidence that we require that complete
missiles were transferred. Earlier, I pointed out that----
Senator Levin. Have you concluded that full missiles were
not transferred?
Mr. Einhorn. No, we have not.
Senator Levin. You have not concluded one way or the other?
Mr. Einhorn. That is correct.
Senator Levin. I am not asking you what the conclusion is,
but are you saying here that you have not concluded one way or
the other?
Mr. Einhorn. That is correct. We have not concluded one way
or another because our level of confidence is not sufficient to
take a decision that has very far-reaching consequences.
Senator Levin. And on the, was it the ring magnets where
the Chinese official was allegedly removed and disciplined?
Mr. Einhorn. That is correct.
Senator Levin. Was the reason that he was removed and
disciplined because that transfer violated Chinese domestic law
or it violated international agreement?
Mr. Einhorn. I think he was removed because China was
embarrassed by a transaction that caused a lot of publicity and
that demonstrated that Chinese controls in the nuclear export
area needed a lot of improvement.
Senator Levin. Have we concluded whether that transfer
violated our law?
Mr. Einhorn. We concluded that it did not violate Section
825 of the Nuclear Nonproliferation Act because it did not
constitute a willful aiding or abetting of Pakistan's
unsafeguarded nuclear program by the government of China.
Senator Levin. So we actually concluded that it did not
constitute a violation, or are we unable to conclude whether or
not it constituted a willful violation?
Mr. Einhorn. I stand corrected. We were not able to reach
the determination that the central Chinese government willfully
aided or abetted.
Senator Levin. So it is not that we concluded that it was
not willful. We have been unable to conclude whether or not it
was willful.
Mr. Einhorn. That is correct, Senator.
Senator Levin. And on the cruise missile technology, does
not the transfer of that, which I think the Chairman was just
asking about, to Iran, does that violate American domestic law
if it was destabilizing, in effect?
Mr. Einhorn. If it involved destabilizing numbers and types
of advanced cruise missiles, it would violate the Iraq-Iran
Arms Nonproliferation Act of 1992, but as I mentioned--you may
not have arrived--we analyzed this carefully and concluded that
the transactions so far did not cross the threshold of
sanctionability.
Senator Levin. So in that case, we have reached a
conclusion that it did not cross that threshold. It is not that
we are unable to determine in this case of the missiles going
to Iran, it is that we have reached a conclusion that it has
not crossed that destabilizing threshold, is that correct?
Mr. Einhorn. That is correct.
Senator Levin. Thank you, Mr. Chairman.
Senator Cochran. Thank you.
Senator Stevens.
Senator Stevens. I did not want to go into this, but I am
going to leave and I am interested in some of the statements of
the witnesses that come after you. Have you seen them?
Mr. Einhorn. Not yet, Senator. I plan to read them later
on.
Senator Stevens. Mr. Milhollin, I hope you will not mind if
I steal your thunder here a little bit, but he is going to tell
us that when he spoke to U.S. officials last week and asked
whether there was any change in China's export behavior on
poison gas, they said that poison gas sales had continued to
the present time unabated. Is that correct?
Mr. Einhorn. Senator, when you say poison gas sales, that
implies that China is shipping nerve agent, chemical weapons.
Senator Stevens. That is right.
Mr. Einhorn. We do not have any evidence of that. What we
do have evidence of are sales by Chinese entities of dual-use
precursors, dual-use equipment, production technology. These
are substances and equipment that have legitimate civil
applications but also can be diverted as ingredients in
chemical weapon programs. That is what we see happening and we
are examining whether these dual-use transactions meet the
various tests of sanctionability and we are investigating that
on a very active basis at the moment. But to say that China's
exports of poison gas continue unabated, that would be simply
incorrect.
Senator Stevens. I am coming to the conclusion that maybe
the administration is so narrowly interpreting our laws that we
could have the situation where if a country moved a missile or
a poison gas or bacterial warfare system piece by piece, grain
by grain, you could not do anything about it until all the
grains were there and then it would be a fait accompli. Am I
wrong? You are very narrowly interpreting what we thought was
very specific legislation.
Mr. Einhorn. I am sorry, Senator. We believe that a country
can commit sanctionable acts by selling precursors, dual-use
equipment and technology, if--and it would be sanctionable if
it made a material contribution and it was a knowing
contribution, the exporter knew that the destination was a
chemical weapons program.
So what we are saying is it does not have to be the
complete chemical weapon or the completed nerve agent for it to
be sanctionable. Dual-use goods----
Senator Stevens. Four hundred tons of chemicals that are
used in making nerve agents, would that be sanctionable?
Mr. Einhorn. I am sorry, Senator?
Senator Stevens. Four hundred tons of chemicals useful for
making nerve agents, would that be sanctionable?
Mr. Einhorn. Again, if the exporter knew that these
chemical precursors were going to a chemical weapon end use in
a terrorist-list country, because that would be the requirement
of the law, then it would be sanctionable.
Senator Stevens. I think the Chinese officials must have
rather large blinders on their eyes, then, because the reports
are that the material is getting to Iran and we are doing
nothing about it.
Mr. Einhorn. Well, yes, materials are getting to Iran, but
no, we are doing something about it. We over the last 2 years
have made the case very forcefully with Chinese authorities and
we are going to continue to hold them to their commitment under
the Chemical Weapon Convention that they soon will be bound by
not to assist anyone in any way, and in any way means not to
ship dual-use equipment or anything else that can contribute to
a chemical weapon capability and we are going to hold them to
that commitment.
Senator Stevens. Ambassador Lilley is going to tell us that
the former Commander of the Fifth Fleet held news conferences,
three of them, to complain about the sales of the missiles to
Iran and that former Director of the CIA, John Deutch, also
complained about the sales. Did they complain to you?
Mr. Einhorn. I have spoken to some of those individuals and
I have read what they have written about it, and we are
concerned, too, about these transactions for reasons that I
mentioned before. These C-802 cruise missiles increase Iran's
maritime advantage over other Gulf States. They pose a threat
to commercial shipping. And they also propose a threat to our
forces.
Senator Stevens. Well, they were anti-Aegis ship missiles.
They were missiles designed to destroy our capability to
protect our fleet. Did they not convey that to you?
Mr. Einhorn. Sure. We have assessed very carefully the
capabilities of the C-802 anti-ship cruise missile.
Senator Stevens. Thank you very much. I do look forward to
further discussions.
Senator Cochran. Senator Levin.
Senator Levin. One additional question, and that has to do
with these precursor chemicals. Are you saying that even though
we are unable to determine whether or not the sale of those
chemicals to Iran violated our law, because we cannot determine
the end use, that if the CWC is ratified by Chinese, that the
sale of those chemicals would be prohibited by the CWC? Did I
understand you correctly?
Mr. Einhorn. Senator, Article I of the CWC says a party
cannot assist anyone in any way to have a chemical weapon
capability and we would regard a knowing sale of dual-use
chemicals or equipment to a chemical weapon program as a
violation of the CWC Article I commitment.
Senator Levin. But does that not also violate our existing
domestic law, a knowing sale of a precursor chemical to a
chemical weapons program? Does that not violate our current
law?
Mr. Einhorn. That is right, and as I indicated earlier----
Senator Levin. But I thought you suggested the CWC was
broader in some way than our current law, in terms of its
coverage.
Mr. Einhorn. What I indicated before was that there are
four or five requirements that have to be fulfilled for our
domestic law, four or five requirements that must be fulfilled
for our domestic law to be triggered, including that the
exporter, the foreign person or institution, must have
knowledge that this sale is contributing to the program. Now--
--
Senator Levin. That is exactly what you just said is going
to be true under the CWC. Is it a different standard under the
CWC than under current domestic law?
Mr. Einhorn. I would have to kind of look at the difference
between a nation's CWC obligation and the penalties that might
apply to an individual exporter or an individual person to see
whether there was any difference. But, in essence, the
commitment is not to contribute to chemical weapons programs.
In the sanctions law, we are only talking about the recipient
being a terrorist-list country, so----
Senator Levin. I understand that the countries are
narrower. That is not the question. Is the standard different
in terms of knowledge, intent? Are those any different under
CWC than they are under current domestic law? That is my
question.
Mr. Einhorn. The CWC may even be broader because Article I
is a very sweeping commitment not to assist anyone in any way.
Senator Levin. But that is the implication in your
testimony, that somehow or other, it is broader. Now, you are
saying it may or may not be broader, you are not sure. It is OK
if you are not sure. You can just say that. I just want to
know, do you know whether or not the CWC is broader than the
current domestic law relative to the sale of precursor
chemicals to Iran?
Mr. Einhorn. It seems to be broader. If you would like me
to get a legal analysis, I will do that and supply it.
Senator Levin. All right. I thank you, Mr. Chairman. I want
to commend you for holding these hearings, as well. These are
really important hearings. They get to an area where I think we
have not lived up fully to our own domestic requirements in
terms of the imposition of sanctions where evidence is plenty
clear, or clear enough for me, at least, and I am glad that
there is going to be a classified session. I think that may be
helpful. But in any event, it is a very, very important subject
you are on. Thank you.
Senator Cochran. Thank you. Thank you very much, Senator,
for your comments and for your participation in the hearing.
Let me say that I am serious about the suggestion that we
have the classified hearing. Getting into the details of these
issues in a classified forum will be helpful to our
understanding of what the options are to do a better job of
dealing with these issues.
But let me thank you again sincerely for your participation
in our hearing today and your assistance in the way that you
have provided your testimony and answered the questions that
our Committee members have put to you, and we will have more
for the record. So thank you very much.
Mr. Einhorn. Thank you, Mr. Chairman.
Senator Cochran. Our next witnesses are Ambassador James R.
Lilley and Professor Gary Milhollin. Ambassador Lilley was
Ambassador to China, as we stated earlier. Gary Milhollin is
Professor at the University of Wisconsin Law School and is
Director of the Wisconsin Project on Nuclear Arms Control.
We would invite both of you to come forward and take your
places at the witness table. We would remind you that we do
have your statements that you have prepared for our use. We
appreciate that very much. We are going to print them in the
record in their entirety. We would encourage you to make
whatever summary comments or statements you think would be
helpful to our understanding of this issue and then we will
have an opportunity to ask each of you some questions.
Ambassador Lilley, you may proceed. Welcome.
TESTIMONY OF JAMES R. LILLEY, DIRECTOR, INSTITUTE FOR GLOBAL
CHINESE AFFAIRS, UNIVERSITY OF MARYLAND
Mr. Lilley. Thank you, Mr. Chairman.
First, I want to second in my own feeble way your desire
for a classified briefing. You have to get to the bottom of
this. It is deadly serious and I have suggested in my testimony
that the first issue you should focus on is Russia-China
exchange of weapons of mass destruction.
I have put into my testimony some questionable areas where
we see some possibilities of transfer, backfire bombers, SS-
18s, upper-stage rockets. I cannot say that these exchanges are
definitively true, but CIA and others have to get to the bottom
of this because it tells you about intentions, it tells you
about strategy, it tells you about capabilities. So I would
say, by all means, do it.
The intelligence community has a major problem here because
the proliferation of Chinese companies makes them hard to
track. If you are looking for work for a CIA case officer who
is currently on other targets, I would say, put him right on
this. Find out what those myriad companies are and what is
happening. Get through this facade of deception that is being
thrown up and find out what is really happening.
Third, I would like to make the point that recently in
China, the Chinese stressed to us, not to me but to others, a
clear strategy of pressing forward towards the sea and while
solidifying their land borders. This is a strategy they have
devised in reaching out towards the Taiwan Strait, East China
Sea, South China Sea, and solidifying their borders with Russia
and various other island countries. This is a strategy that
could involve, perhaps, arming Iran. This is justified as part
of a long-range strategy.
This is basically a flawed strategy which plays to our
strength, our comparative advantage on the ocean, and goes
against the long-tested Chinese strategy of going for the
opposition's weak points. Also supporting Moslem countries with
weapons which are the same countries engaged in hostile
activities in Northwest China involving the Chinese-Moslem
minorities does not make sense. It does not seem to me it is in
China's national interest to support countries who, in turn,
support dissident elements in one's own country.
I stress these two points. The Russia-China weapons of mass
destruction, get to the bottom of this. Gary Milhollin will
deal with the other aspects of weapons of mass destruction.
First, I want to focus today on what I believe is a clear
and present danger to the United States fleet. I am talking
about the Chinese advanced conventional cruise missile sales to
Iran.
These slides tell you about the C-802, what its
capabilities are. I would add to this that it can be put into
action in 25 minutes, whereas the Silkworm, which was sold
earlier, is a question of hours.
Second, there is this solid evidence of a Chinese ship
taking Hudong class missile boats with C-802s to Iran. This
tells you a couple of things. One, the evidence of the transfer
is there. Two, the central knows about it. What else does it
tell you? This significantly helps Iran deal with the American
Fifth Fleet, 15,000 officers and men of the Fifth Fleet.
Admiral Scott Redd has laid this out to us three times. ``My
men are in greater danger by these missiles.'' Director Deutch
also complained about it. It clearly violates our law, the
McCain-Gore law, written by then-Senator Gore and John McCain.
This is the lesson of the Gulf War. Do you remember the
trouble we had finding those launchers for scuds on land? We
did not really find many at all. What they have here is this
TEL, transport erector launching capability, and we have a
photo here by the Office of Naval Intelligence that transport
erector launching capability is in Iran. These TEL's with
missiles can be moved very quickly, and the missiles can be
hidden in caves.
There are anywhere from 60 to 100 of those missiles there
now, and the numbers are going up. Our ships are in the Gulf. I
call that a danger, aimed right at us.
The other disturbing factor is we see in the pipeline
another missile, and this is something we have to follow
closely, the C-301. It has a much larger payload, it has a
longer range, it has four solid rocket boosters on it and
ramjet engines. That is one heck of a weapon, and it seems to
me we have to pin down very carefully whether Iran is going to
get that weapon in addition to this one, already on their small
missile boats. We can sink the boats quickly. But new what they
can do is to put them in caves with TELs, and you cannot locate
them.
That is what I believe concerned Admiral Scott Redd and
Director Deutch. If one says that 60 or 100 of these missiles
do not threaten the United States Fifth Fleet, then tell that
to the officers and men of the Fifth Fleet. I would not like to
be in that position.
There is no question that sale of these missiles is under
central control and it violates our law. Is it destabilizing?
But even stabilizing missiles can kill. They are in the hands
of the Iranian Revolutionary Guard navy. It is not a comforting
thought.
As you know, the U.S.S. Stark was hit in 1987 by Iraqi
missiles, Exocets, on which these are based. Thirty-seven
Americans died.
Let us move on. Were sanctions invented by this
administration? I do not think so. In 1989, we imposed strict
sanctions on China, and also in 1991. In 1989 the Bush
administration had a whole list of sanctions on China,
including military exchanges, World Bank loans, transfer of
military equipment. All the military programs were suspended.
Our first well-tailored sanctions in 1991 were designed to deal
with sales to Pakistan of the M-11 because it was at that time
that our administration thought through carefully exactly what
the Chinese key vulnerabilities were. We then applied
sanctions. Sales were stopped not for long, about 11 months,
until November 1992, when we were in no position, having just
been defeated in the election, to renew after these sanctions.
We used Hughes satellites and the super Cray computers. These
were areas of special interest to China and sanctions were
tailored to deprive China of there. This would give the message
to China that selling M-11s was not in its interests.
As for our law, the Chinese, of course, make the
explanation that Gore-McCain is passed by the United States
without consulting with China. It imposes severe penalties on
China but with no international standards involved. The Chinese
say the United States cannot draft laws to change Chinia's
behavior. It has to be internationalized. This is their
argument.
The second argument China makes is that the United States,
in fact, sell weapons to Taiwan, weapons that threaten China.
The United States says, no, they are only defensive and in
response to what China does. The Chinese make the linkage and
make it constantly. We have never accepted that linkage. The
Chinese insist that some kind of a tradeoff exits between what
they do in the Persian Gulf and what we do in the Taiwan
Strait.
In addition, the kinds of legal entities we use to get at
the Chinese, are not well tailored to deal with proliferation
infrastructure. Ex-Im Bank loans worth $10 or $20 billion are
used on a $50,000 transaction. It does not make sense in terms
of our commitment to China trade, investment, commerce. The
sanction is not tailored to the infraction. Satellites, super
Crays, were. Ex-Im loans are not. That is one of the
legislative problems we have.
But, we have to deal with this strategically with China. We
have to get on the same wavelength with them in terms of the
problems in the Moslem areas in the Middle East, and this
serves both our interests. We did this in Afghanistan against
the Russians and we had a successful operation in war. The
peace was not so good, but the war actually worked, the Saudis,
Paks, ourselves, and Chinese cooperated. We had common
interests in blocking Soviet expansion and the Soviets were
defeated, probably leading to the fall of the Soviet empire.
We now have to find similar strategic causes with China in
the Middle East. One is, of course, oil and other related areas
where we have common interests in free flow if oil. Checking
Moslem radical states could then also be a common interest.
The Chinese have acquired the Sovremeny class destroyer
with the Sunburn missiles which is designed to blow up our
Aegis class frigates. The missile comes in low, goes up and
then drops right on the ship. We do not have any real
protection against that yet.
The Sun-tau strategy calls for looking for the enemy's weak
points. But despite the Sovremeny destroyers, this is not in
the oceans. It is not new and it will not be for the
foreseeable future. Russian Kilo class submarines are not the
answer in dealing with us, perhaps in dealing with Indonesia or
with other Southeast Asian countries, but not in dealing with
us. Neither are the surface-to-air SA-10 missiles or the other
acquisitions.
What does concern us is the weapons of mass destruction, of
these links between Russia and China. As I again say, the
outlines come through the fog of obfuscation. It is for
instance important to know if that man from Russia, the best
MIRV expert they have, did actually go to China for 18 months.
Is that true or not? I cannot say at this point.
So I would suggest that we move ahead on this. We have
certain good cards to play in East Asia. We are in a strong
position and we have the critical North Korean problem that we
have to work with China on. This is important to their security
and our security. The North Koreans and their weapons of mass
destruction are a terrible problem. As you remember, sir, it
was Ronald Reagan and George Bush that opened up this issue. We
were the ones that got the first inspection teams in there. We
were the ones that got the inventories of their weapons of
their nuclear facilities.
I commend the administration for its follow-on activities.
I think there were certain flaws in this agreed framework,
namely we needed challenge inspections and North-South
dialogue. But this North Korean problem is so serious--I am
sorry Senator Stevens is not here because he was just up there
and saw it for himself.
Senator Cochran. Yes. I went with him.
Mr. Lilley. Well, you then know. I am preaching to the
choir.
Senator Cochran. We were together. There were five of us
who were a part of that delegation, and Senator Stevens was our
leader and he is the one who decided that we ought to go.
Mr. Lilley. You know how high the stakes are and you know
how tough these people in North Korea are, we believe they have
hidden nuclear weapons and missiles away in the hills. They
have tested their Nodong and Taepodong missiles. There are
recent threats that their military--I believe you may have
heard this while you were there, that the North Korean military
would be very disappointed if food did not come and it might be
difficult to control them. I am paraphrasing what was said, but
it was rather ominous. It is a form of blackmail.
The Chinese are the key to some sort of resolution of this
dangerous problem. We need to tie it into other areas where we
have common interests with China and there are some important
ones such as entry into the World Trade Organization, access to
high technology, all critical to China. This would include Ex-
Im loans, World Bank loans, Japanese loan packages.
Economics is becoming the name of the game, so we cannot
allow the hard line military to push the envelope, change the
rules while working with people like the Iranians.
[The prepared statement of Mr. Lilley follows:]
PREPARED STATEMENT OF MR. LILLEY
Senator Cochran. Thank you very much, Ambassador Lilley,
for your excellent statement and the perspective that you bring
to this discussion. We appreciate your being here.
Professor Milhollin, welcome. Thank you for being here, as
well.
TESTIMONY OF GARY MILHOLLIN, PROFESSOR, UNIVERSITY OF WISCONSIN
LAW SCHOOL, AND DIRECTOR, WISCONSIN PROJECT ON NUCLEAR ARMS
CONTROL
Mr. Milhollin. Thank you very much, Senator. Since my
statement will be put into the record in its entirety, I will
just summarize it, and some of it has already come out
previously.
I think that the Committee has asked me to answer two very
important questions. One is whether our engagement policy is
working with respect to China, and second, whether the
Executive Branch is really implementing the U.S. law concerning
sanctions in good faith.
I think the answer to both of those questions is fairly
clear. At this time, our engagement policy is basically out of
gas. It is no longer achieving anything significant. Since
1994, our ambassadors have been going to China, holding out the
engagement ring, and the Chinese have been closing the door in
their faces. This happened most recently to Mr. Einhorn last
month. His trip produced essentially nothing.
The Chinese are now refusing even to talk to us about their
chemical and missile exports. Mr. Einhorn basically admitted
that during his testimony. There is no longer any dialogue, so
our engagement policy is not working on those two subjects. It
is working a little bit on nuclear, but we are not sure how
much it is working.
The second question is, is the administration complying
with the sanctions law? I am told that last fall, the Executive
Branch finished a number of studies on China's missile and
chemical exports to both Iran and Pakistan. The studies
contained the legal and factual analysis necessary to apply
sanctions, but the studies have lain dormant since then. The
State Department is now, in effect, choosing not to complete
the administrative process. So the result is that the sanctions
law is not achieving either deterrence or punishment as
Congress intended.
Before I go into the details of those things, I would like
to make just a few comments in perspective about China's
proliferation behavior in the past. 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. To my testimony, I have attached a table at the
end showing the pattern of Chinese exports since 1980. The
table only shows Islamic countries. I have not shown South
Africa, Brazil, Argentina, and India. All of those countries
got significant secret Chinese exports during the 1980s and
even the 1990s--I am sorry, during the 1980s.
Also, by way of perspective, I think it is important to
realize that we sanctioned China twice for exporting M-11
missile components to Pakistan, and each time we lifted the
sanctions early, and each time, it was a mistake, because each
time the Chinese exports continued. The most recent promise the
Chinese made was in October of 1994. The Chinese promised us
once again that they would comply with the Missile Technology
Control Regime. That is an international agreement to restrict
missile sales.
Since 1994, the Chinese have not complied with the Regime.
The State Department, in effect, is admitting that fact when it
says in its testimony, as it just did, that there is no
evidence that China is breaking its promise. The problem is
with the promise. The promise was an illusory promise and if
the State Department is asked now, and I hope you will ask
them, whether the current Chinese behavior complies with the
MTCR, the honest answer is that it does not.
What we now realize is that when we were promised in 1992
and 1994 that China would clean up its act, the Chinese in
their minds were making such a narrow promise that it is
essentially meaningless. So the fact is that today, Chinese
missile exports to Pakistan are violating the MTCR and the
State Department knows it, the case is well documented, the
legal analysis has been done, and sanctions should be applied.
The latest venture in this sad process is a missile plant
in Pakistan to produce M-11 missiles domestically. China is
supplying the plant. I am told that the plant is proceeding
very rapidly and that it could start producing finished M-11
missiles in a year. If that happens, it will be basically a
diplomatic and a national security disaster which has been, in
my opinion, facilitated by the refusal of the United States to
intervene. That is, we have ignored this export behavior to the
point where it is going to produce a new missile factory and
unless we do something about it, the result will have been that
we, in effect, gave it a green light.
The second thing I would like to talk about is poison gas.
In 1995, I discovered and wrote in the New York Times that we,
the United States, had caught China exporting poison gas to
Iran, poison gas ingredients, I should say, and that is what my
testimony says, is poison gas ingredients to Iran, and that the
sales had been going on for at least 3 years. Since then, as
members of the Subcommittee have pointed out, the exports have
continued and so the result is that by 1997, China has been
outfitting Iran with poison gas precursors, ingredients,
equipment, and so forth, and technology for at least 5 years.
These shipments have been going on unabated.
I called the intelligence officials in our government last
week and they say that there has been no change up until the
present moment. So what we are looking at is a 5-year history
of equipping Iran with the means to make poison gas, which has
not been affected by anything we have done.
The current situation is that we are not even talking about
it. So I guess I would have to say that there is very strong
evidence that our engagement policy simply has not worked and
is not working.
Finally, nuclear weapons. We have already discussed the
sale of ring magnets by China to Pakistan. These are
specialized items. We are not talking about dual-use equipment.
We are talking about magnets that are made specifically to go
into centrifuges that make enriched uranium for bombs. Those
were sold by an arm of the China National Nuclear Corporation,
which is an arm of the Chinese government. This was a sale by a
Chinese government organization directly to a secret nuclear
weapon-making facility in Pakistan of items that were
specifically designed to help make nuclear weapon material.
In my opinion, it violated China's pledge under the Nuclear
Nonproliferation Treaty, which China signed in 1992. The treaty
says that if you export something like that, you have to export
it with international inspection. China did not. So far as I
know, the State Department has never said that that sale did
not violate the treaty, and I think you should pin the State
Department down on that. In my opinion, it did violate the
treaty.
The next candidate for China's nuclear help is Iran. China
has two very dangerous deals hanging over our heads with
respect to Iran. The first one is a small, not so small,
actually, about a 25- to 30-megawatt nuclear reactor which will
make one or two bombs' worth of plutonium a year.
The second deal is a plant to make uranium hexafluoride,
which is essential to enriched uranium for use in nuclear
weapons. There is no peaceful use for this uranium hexafluoride
plant in Iran, so that China is really willing to put nuclear
weapon-making capability in the hands of what we consider to be
a terrorist nation with really no plausible excuse.
What China seems to be telling us is that unless we start
cooperating more with China in the nuclear area, that is, to
resuscitate our dormant nuclear cooperation agreement with
China, then these two deals will go forward. This seems to me
to be pretty close to nuclear blackmail. So the result is that
we are watching exports go out and we do not really have much
prospect of stopping them and the Chinese are telling us that
unless we stop complaining, the exports could increase.
I think that our strategy of delinkage, that is, delinking
China's export behavior with U.S. relations, and our strategy
of engagement is not working and we should replace it with a
new strategy of what I call linkage. If China wants to have
good, normal relations with us, then we have to expect China to
operate according to the rules of the international game. If
China wants to become a responsible member of the world
community, then we can have normal relationships with China.
Otherwise, we will not.
The specific question of sanctions, I have already talked
about. I have said that these studies have been completed. I
think the State Department, in effect, is admitting that there
is enough evidence to apply sanctions. The State Department is
no longer saying it does not have enough evidence. It is just
saying it has not made a determination.
I think the State Department just continues to raise the
level over which you have to jump higher and higher as the
evidence comes in so that sanctions will never have to be
applied and the engagement policy can simply be continued. The
effect is to really nullify the act of Congress that imposes
sanctions, because unless the State Department is willing to go
forward in good faith and complete the administrative process,
then the law cannot have any effect.
To conclude, I think what we are doing with respect to
China is making the same mistake we made with respect to Iraq
before the Gulf War. I testified before the Senate just before
the invasion of Kuwait and I was calling for sanctions against
Iraq because of its violation of the Nonproliferation Treaty
and I was warning that the Iraqis were buying all sorts of very
dangerous nuclear dual-use equipment and the State Department
was saying that it would be a mistake to try to isolate Saddam,
that what we should do is engage him, bring him into the
mainstream, and make him a member of the international
community by continuing trade.
The policy that we followed with respect to Saddam would
have produced an Iraqi bomb had Saddam not been foolish enough
to invade Kuwait. As it was, when the Gulf War started, one of
our main missions was to destroy the factories full of
equipment that the West had provided. We lost pilots doing
that. So I think the lesson is that you should not make a rogue
stronger while he is still a rogue and you do not stop a rogue
from being a rogue by treating him like a non-rogue.
The Chinese understand the message we are giving them very
well. They know that, despite what we say, they can supply the
means to make weapons of mass destruction around the world
without facing any penalties. I think this goes in the face of
history. As Mr. Einhorn has said and, I think, as Jim has said,
sanctions do get the attention of the Chinese. When we show
them that we are serious, they react.
It seems to me that one of the most interesting recent
demonstrations of that was on intellectual property. We
threatened to impose 100 percent tariffs on about $1 billion
worth of Chinese imports if they did not stop looting our
inventions, and they backed down. We did not get everything we
wanted, but we got a lot.
I think we have to take the spread of weapons of mass
destruction as seriously as we take protection of Hollywood
videos. The day when we start showing China we are serious, I
think we will get somewhere, but I do not think that day has
come.
I have some recommendations at the end of my testimony
which I will not repeat, but I urge the Committee to consider
them carefully. In particular, I think the Committee should
exercise oversight concerning our licensing behavior now with
respect to China. The Committee already has the legislative
power to do that and I think the Committee should do it. Thank
you very much.
[The prepared statement of Mr. Milhollin follows:]
PREPARED STATEMENT OF MR. MILHOLLIN
Senator Cochran. Thank you, Professor Milhollin.
I noticed that you have tables and recommendations attached
to your statement and some of those recommendations are to
strengthen sanctions and to impose sanctions. Mr. Einhorn
suggested the administration should have more flexibility
regarding the imposition of sanctions under existing laws, but
you are arguing just the opposite, that we put more mandates
and not just suggestions in the statute books.
Mr. Milhollin. It seems to me that the administration has
ample power now to impose sanctions. The problem is that they
are using the flexibility that does exist not to impose them.
Senator Cochran. You seem to put a great deal of stock in
the imposition of sanctions as modifying behavior and having
the capacity to do that. Is there any evidence to support that?
Mr. Milhollin. As I said, I think that when we did threaten
sanctions and when we did impose sanctions, the Chinese
reacted, and in particular, as Jim has said, the Chinese need
high technology from us. That is an indispensable ingredient in
their plan for the future. I think that that is a tremendous
lever that we have.
The second lever we have is our market. They have to have
that, too, and if you look at it from their point of view, they
are getting, essentially, nickels and dimes out of these
dangerous sales compared to the value of our market, what they
are exporting to us, and compared to the value to their
infrastructure of U.S. products they are importing.
Senator Cochran. So they are not motivated just by the
profit potential of these weapons sales. That is not it.
Mr. Milhollin. If they can make a little money for free,
they will make a little money. But if it costs them a lot of
money to make a little money, they will not make that little
money. They will say to themselves, the U.S. market is a lot
more important to us than the small amount of money we are
making from weapon of mass destruction sales.
You know, we told the Argentines and the Brazilians that
unless they were willing to join our side in this struggle and
become part of the solution rather than part of the problem,
they were never going to be able to get the computers and other
things they needed from us, and they both turned around and
went the other direction.
I think, although in South Africa there were other special
circumstances, the sanctions on South Africa that we imposed
and the message we gave South Africa, which was, look, if you
want to join up and be a member of the world community, you
have to get rid of all this stuff, they got that message and
they did it. So there are three cases where--I think there are
three success stories where we were tough over a long period of
time and we got the result we wanted.
Senator Cochran. Ambassador Lilley, is it too late now to
undo the super Cray computers and the satellites? You mentioned
both of those as technologies that China now has access to from
the United States.
Mr. Lilley. Yes, I think it is. They can get the satellites
elsewhere and the computers elsewhere. We, at that time, had a
virtual monopoly on the satellites. They could not get them
elsewhere then.
But let me mention one thing, Mr. Chairman, that I think we
should think about carefully that usually gets China's
attention: Theater Missile Defense (TMD). When you talk about
theater high-altitude missile defense, you get their attention
quickly. They consider it a first strike, and they have turned
tremendous pressure on Japan, Korea, other places not to deploy
theater missile defense.
As you know, we have our own debate on that. I happen to
think it is rather important, especially mobile theater missile
defense mounted on Aegis class frigates and destroyers. I
notice that the Chinese have just bought a couple of Soviet
destroyers to deal with Aegis class vessels that could carry
theater high-altitude defense. So they are thinking about this,
too.
It is an area that we should look at closely which might
give us considerable leverage. It is not that you have to rush
into it; but it should be there to use.
Senator Cochran. Are there other sanctions besides economic
sanctions that you think we should consider authorizing or
directing the administration impose on China?
Mr. Lilley. This gets into what sort of the strategic
leverage do you have. There are certain areas that they are
very sensitive to but you have got to handle these carefully.
One is, as I have said, theater missile defense, and another is
the development and strong training of the Japanese-U.S.
security treaty. They are sensitive to that and have launched a
full-scale attack on it. What happened between President
Clinton and Prime Minister Hashimoto 1 month after the Taiwan
missile diplomacy exercise on March 1996, where we broadened
the agreement. They have been working against this ever since,
to undermine it.
Certainly, Japan would have to be a partner with us if you
wanted to limit technology sales, and Europe would, too. It is
a harder to bring them now. They certainly were helpful after
Tiananmen. We had about 1 year where they were cooperative, and
then it broke up. Now, of course, the trade competition looms
large.
There may be areas where you can get cooperation, when
there is a clear infraction of international law, the Chemical
Weapon Convention, Nuclear Nonproliferation Treaty, Missile
Technology Control Regime. We also have to try to encourage
China to join into these other regimes, the Nuclear Suppliers
Group, the Wassenaar Convention----
Senator Cochran. Has China given any indication that it is
willing to participate in any of these successors to COCOM?
Mr. Lilley. Originally, when we proposed it and the Chinese
eventually signed onto the Missile Technology Control Regime
and the Nuclear Nonproliferation Treaty, the State Department
had said, the Chinese will never do it as. It is a matter of
sovereignty. They were wrong. It happened because it was in
their own interest to do it.
Senator Cochran. You suggested that World Trade
Organization membership is something that you think China
should have.
Mr. Lilley. Under the right conditions, and I think you are
fortunate in having had a first-class negotiator, Lee Sands of
USTR, handling this for us, who has mapped out a program of
careful negotiation, compromised, mutual concessions on a whole
series of issues that deal with World Trade Organization. This
separates the negotiations from the Chinese complaint that we
are trying to contain China, or trying to subvert China.
We say we want China in. Now, let us talk about what you do
with hidden subsidies, non-tariff barriers, monopoly of import
corporations, national treatment, a step by step approach, and
we find this is moving ahead quite well. If we tend to get
tough and deal with it on a realistic basis, results come.
Senator Cochran. Professor Milhollin, do you have any
problem with that?
Mr. Milhollin. Again, I think my point was that if China is
willing to be a good world citizen, then it should be treated
as one, but I think, given its behavior in the past, that maybe
a probationary period would be prudent, especially with respect
to nuclear cooperation. The administration has been lobbied
very hard by our industry to enter into, or to, I guess, put
into effect our nuclear cooperation agreement with China, which
has been languishing since 1985 because we could not certify
that China was not doing bad things.
I think that if we do get to the point where we regularize
our nuclear arrangements with China, we ought to have a
probationary period, more than just, say, a year, to make sure
that China really has changed its ways.
I noticed in Mr. Einhorn's testimony that he said that
there have been incidents--I have forgotten his words--
incidents and things that have happened in the nuclear area
since China's promise to clean up its act. He did not say what
those were. I urge you very strongly that if you go into this
on a classified basis, that you should get from the State
Department a clear description of just what the Chinese think
is OK to do after they promise not to help unsafeguarded
nuclear programs.
Senator Cochran. Do you think their behavior has improved
insofar as nuclear weapons proliferation is concerned?
Mr. Milhollin. I think we do not know. Nothing big has hit
the papers, but that does not mean it has not happened and it
does not mean that other small things, when added up, have not
been enough to be a big thing if they were all put together.
There is a suggestion that they might be, but the answer is, I
do not know, but I think you should find out.
Senator Cochran. Let me say how much I appreciate your
participation in our hearing today. This has been a very
illuminating and frightening, at the same time, look at the
situation and what is going on with respect to China's behavior
on proliferation. I think we have learned a lot and we have
also learned that we need to work harder to deal with this in a
more effective way.
It is clear to me, and troubling at the same time, that the
administration's efforts have been ineffective. I think the
evidence is pretty clear that the exports of weapons
components, design technology, and a wide assortment of other
items that has enabled states like Iran and Pakistan and
probably others, although we did not get into all the details
today and we could not because of classification, to acquire
technology that can put American lives and interests at risk.
China's actions have made this a more dangerous world for us,
particularly, and is a threat to the security of the United
States. So we need to get together with the administration and
work harder to do a better job of trying to make a bigger
impact and be a greater influence to modify this type of
behavior by the Chinese government.
We are going to continue these hearings and we will have a
classified hearing, as we said.
We thank you both very much for being here and for your
excellent contribution to our effort.
The hearing is adjourned.
[Whereupon, at 4:11 pm., the Subcommittee was adjourned.]
A P P E N D I X
CHINESE PROLIFERATION CASES
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