China admitted last week that in the past two years it has arranged to sell nuclear technology to Iran. It said the equipment-a small reactor and a separator used to produce radioactive isotopes–was intended for peaceful purposes, including “medical diagnosis and nuclear-physics research.” By itself, the equipment cannot produce nuclear material in sufficient quantities to make weapons, experts say. But if Iran wants to build bombs, all it has to do is reproduce the technology. U.S. officials now think Iran intends to make nuclear weapons. Two weeks ago, after a visit from Chinese President Yang Shangkun, the Iranians said Islamic countries should match Israel’s reputed nuclear arsenal. There is no proof that the Chinese are witting accomplices in a bomb-building program. But they must know that their technology could be turned to that purpose.
Meanwhile, Beijing is also supplying missiles to the same unstable part of the world. Western intelligence has spotted launchers for Chinese M-9 missiles in Syria. U.S. officials say the missiles themselves are not yet operational. Nor is it clear that the weapons violate the Missile Technology Control Regime, an international agreement (which China has not yet signed) that restricts sales of the most dangerous missiles. But with a range of 370 miles, the M-9s are capable of delivering nuclear warheads to targets anywhere in Israel. The Chinese also have sold shorter-range M-11 missiles to Pakistan, a country that has bought nuclear materials and equipment from Beijing.
China’s freewheeling arms bazaar poses a problem for George Bush, who keeps making concessions to the hard-line rulers in Beijing without getting much in return. This week Secretary of State James Baker will make the first official visit to China by a high-level American since the Tiananmen massacre of pro-democracy demonstrators in 1989. Baker will complain about China’s human-rights abuses, its trade practices–and its arms sales. “The Chinese understand that this is a relationship at risk,” says an administration official. Beijing’s spokesmen will promise to behave better, and they may even offer some formal undertaking, such as finally signing the Nuclear Non-Proliferation Treaty. But will they keep their promises? “Probably not,” says James Lilley, the former U.S. ambassador to China. “When it suits their purposes, they violate [agreements] all the way through.”
It still makes sense, Lilley and others argue, to keep pressing the Chinese on this issue. China is a major purveyor of arms to the Third World, ranking fourth after the Soviet Union, the United States and France. Many Chinese suspect that foreign efforts to restrain them are aimed only at cutting competition. “The U.S. sells advanced strike aircraft to the Middle East,” says Hua Di, a Chinese missile engineer now doing research at Stanford. “Why shouldn’t China be able to sell ballistic missiles?” The Chinese government shows signs of beginning to understand why not; it worries that Congress may cancel its most-favored-nation (MFN) trade status in the United States. But the firms that sell arms overseas are not entirely under the government’s control .
The military industry is dominated by the relatives of top Chinese officials, including the senior leader, Deng Xiaoping. “It’s driven by greed, and it’s run by high-level cadres’ kids who have clout and power,” says Lilley. “They like golden Rolls-Royces, wet T shirts and foreign bank accounts.” In theory, the firms are state agencies, but when the government tries to control them, it bogs down in corporate quicksand. “There are companies within companies within companies,” says a senior Western diplomat in Beijing. “The Foreign Ministry has no say in what they sell, or where, and it is impossible to track what they do.”
Apparently hoping to put pressure on the Chinese, Baker took an unusual swipe at them last week in the new issue of Foreign Affairs quarterly, complaining about the “anachronistic regime” in Beijing. Both houses of Congress have called for revocation of China’s MFN status unless there is better performance on human rights and arms sales. Such a measure might not be veto-proof. But while Bush wants to remain “engaged” with China, he is less inclined than he was in 1989 to take political heat on behalf of the hard-liners. “He has fought Congress just about as much as he can without some positive action by the Chinese,” says a senior administration official.
Some Chinese officials apparently want to cooperate. Western diplomats in Beijing say these moderates may have blocked sales of the M-9 to Libya and appear to have held up actual deliveries of the missile to Syria. China has repeatedly broken its promises that it will not promote nuclear proliferation, and if similar promises are made this week, Washington is entitled to treat them skeptically. But cracking down hard on China might give the entrepreneurial generals and their money-grubbing minions an argument against restraint. The trick will be to coax China into the kind of arms dealing routinely practiced by other big powers: a lucrative business that draws the line at selling nuclear capability or the missiles that can deliver it.
The Army’s commercial branch, selling weapons straight from government inventories. Deng’s son-in-law, He Ping, has been a key executive.
Makes and sells conventional weapons. Oversees up to 700 “suitcase companies” run by salesmen around the world.
A marketing concern. Products include the M-series ballistic missiles sold to Pakistan and Syria.
Oversees all non-Army defense companies. Led by Lt. Gen. Ding Henggao, son-in-law of China’s only living marshal, Nie Rongzhen.
Markets China’s spacelaunch services and surface-to-air missiles.
