A tale of three firms
SOKOLSKI, HENRY
A Tale of Three Firms by Henry Sokolski Perhaps the most serious argument the Clinton administration makes in favor of its "engagement" policy towards China is a strategic one: Beijing's military...
...Sanctions had jeopardized the launch of three U.S.-made satellites by Chinese Great Wall Industries, and both the satellite manufacturers and their Asian customers were furious...
...it has actually rewarded them with U.S.-subsidized nuclear cooperation and sweetheart U.S...
...Once the Chinese admitted that the sale had occurred and promised not to sell nuclear items to weapons programs again, the White House heralded the progress, approved the loans, and admitted the firm's engineers to the United States...
...The administration's hope is that this will get China to buy American and behave...
...Whereupon the White House delivered the satellites, agreed to China's negotiating agenda, and lifted sanctions entirely after China again promised to adhere to the provisions of the international Missile Technology Control Regime...
...largesse tells the tale...
...intelligence determined that the China Precision Machinery Import and Export Co...
...First, there is the case of a Chinese firm that is actively involved in the proliferation of facilities necessary to produce the raw materials for nuclear bombs...
...Indeed, just weeks before intelligence reports about the sale were leaked to the press, the White House gave its blessing to $800 million in loans guaranteed by the U.S...
...But if the last few years of such "engagement" are any guide, it's not working...
...The policy sounds sensible...
...As an administration official explained to the press, "The Chinese have told us that based on their expectations that we would be able to build on our nuclear cooperation program, they will not execute this contract...
...Six years ago, it was caught building a large research reactor and a laboratory suitable for making bomb material in a remote, defended location in Algeria...
...But two things are clear...
...Indeed, the White House has not only held off penalizing these firms, as American law authorizes...
...forces in the Gulf...
...had sent Pakistan 30 "complete" M-11s along with a rocket factory, and that the firm was selling Iran the missile production technology and advanced anti-shipping missiles necessary to target U.S...
...White House officials, however, remain confident...
...Only months after the White House dropped its sanctions against the two firms, U.S...
...continued to export M-11 missile items to Pakistan...
...But that was not enough...
...satellite transfers...
...State Department officials emphasize that some of these deals were made before China's latest nonproliferation pledges...
...We want to get China to stop selling strategic-weapons technology, and so we must offer Beijing some carrots —economic relationships with certain Chinese firms—to ensure a safer world...
...But the newly installed Clinton White House was not fully on board...
...But the State Department came to China's defense...
...During the Bush administration, he served as deputy for nonproliferation policy in the Department of Defense...
...In August 1993, after a year of lectures, the State Department again imposed sanctions...
...And, while using satellite launchers owned by Chinese Great Wall Industries, the PLA has been working furiously to develop a variety of highly precise missiles with multiple warheads...
...When asked about the production reactor, then-Pakistani president Benazir Bhutto professed no knowledge of it...
...After eight months in which the firms were denied critical U.S...
...But China has refused to void any of its contracts for these projects with Iran or to return any of Iran's down payments...
...First, the United States can hardly be credible in opposing Chinese proliferation if its officials spend more time trying to waive sanctions against China than they do trying to deter its proliferating behavior...
...after all, they denied they had ever made the sale...
...But it turns out that the carrots we offer are actually feeding firms that are responsible for the proliferation we want to end...
...Moreover, both China and Iran have publicly affirmed their intention to build the hexafluoride plant—a facility that is inherently difficult to safeguard against and that makes no economic or technical sense unless Tehran is trying to make bombs...
...Then, the firm signed a series of contracts to build two reactors and a uranium hexafluoride plant in Iran for supposedly "peaceful" purposes...
...Surely the firm and the Chinese leadership did not sell the ring magnets knowingly...
...And in 1994, two years after China signed the Nuclear Nonproliferation Treaty, press reports revealed that the Chinese National Nuclear Corporation was building a secret military reactor in Pakistan...
...So in March 1995, President Clinton announced a new agreement guaranteeing the bidding rights of Chinese Great Wall Industries to launch more U.S.-made satellites than ever before...
...The "peaceful" launching of U.S...
...We also have the cases of two firms owned by the Chinese military...
...Now, officials at the State Department say they haven't observed any Chinese nonproliferation violations in the last few months and hope the president will certify compliance this summer or fall...
...And even after Congress complained about the loan, the administration strained to authorize visas for six of the firm's nuclear engineers to work on Westinghouse's AP-600 Program, a reactor-design project that has already cost taxpayers more than $64 million...
...At nearly $50 million a launch, the agreement was worth over $500 million—and came even after the firm suffered a series of launch failures...
...The China Precision Machinery Import and Export Co...
...high technology and capital, the Chinese relented and promised to adhere to the internationally agreed-to guidelines on missile-technology control...
...For the White House, that was good enough...
...engagement" required something more positive...
...The State Department declared victory, the sanctions were lifted—and the China Precision Machinery Import and Export Co...
...Period...
...In December 1995, the People's Liberation Army announced the completion of the Great Wall Project, a system of missile bases using technology marketed by the China Precision Machinery Import and Export Co.—and three months later aimed those missiles at Taiwan...
...More important, the new agreement meant that America would continue to help with Chinese development of long-range military rockets...
...The White House has even denied that China's missile sales to Iran are destabilizing...
...In June 1991, the United States levied sanctions on both these firms for exporting nuclear-capable missile technology to Pakistan...
...The nuclear cooperation he is talking about was tentatively agreed to in 1985 but has been held up by Congress until the president can certify that China will not participate in nuclear proliferation...
...As a result of their ties to the United States, China's missile technology is getting increasingly sophisticated, and missiles are proliferating elsewhere...
...Taken aback by congressional objections, the White House did relent on the loans and visas for a short while...
...Finally, in the fall of 1995, a subsidiary of the firm shipped 5,000 ring magnets—components critical for making bomb-grade uranium—to Pakistan...
...The Iran deal is still an open case...
...A Tale of Three Firms by Henry Sokolski Perhaps the most serious argument the Clinton administration makes in favor of its "engagement" policy towards China is a strategic one: Beijing's military capability requires it...
...Thus, the Pakistan deal must have been the inadvertent act of an unwitting subordinate...
...Because the very motors and guidance sets that are used to position satellites in space can also be used to target warheads against Tel Aviv, Riyadh, Los Angeles, or Taiwan...
...Second, whether sanctions are levied or not, we should not be subsidizing China's nuclear and missile industries...
...arms sales to Taiwan on the table as well...
...Import-Export Bank to help Bechtel and West-inghouse complete a reactor for the Chinese National Nuclear Corporation...
...The Chinese refused even to talk about missile nonproliferation unless the United States released the satellites and agreed to put U.S...
...The Chinese National Nuclear Corporation builds China's nuclear plants...
...As for the ring magnets, the administration seemed oblivious...
...satellites has inadvertently served as a test bed for China's development of ever more precise and threatening missiles...
...Its corporate twin, Chinese Great Wall Industry Corp., sells satellite launch services...
...Neither the reactors nor the uranium hexafluoride plant has been built, leading the White House to claim success...
...It's easy to explain away these developments...
...Henry Sokolski is executive director of the Nonprolifera-tion Policy Education Center...
...sells missiles...
...A brief look at just three of the Chinese firms benefiting from U.S...
...How did the White House respond...
Vol. 2 • February 1997 • No. 23
