Does China Belong in the Missile Technology Control Regime?

Victor Zaborsky

The prospect that China might soon join a U.S.-initiated regime aimed at controlling ballistic missiles might seem laughable. After all, the United States has imposed sanctions on China for years for hawking missiles and missile technologies to dozens of countries scattered around the globe. Yet, this month a gathering of U.S. and other diplomats in Seoul could signal support for China’s bid to join the two-decades-old Missile Technology Control Regime (MTCR).

Although the effort is likely to spur opposition from defense hawks worried about the growth of China’s military power and those who oppose any cooperation with China because of trade or human rights disputes, backing China’s entry into the MTCR is the right call. China has recently improved its export controls and has adjusted other policies so as to play a more cooperative and active role in nonproliferation efforts. Allowing Beijing to join the regime will support these positive trends toward transparency and prevent backsliding, particularly as MTCR membership could grant the right to participate in cooperative projects with fellow members of interest to the Chinese government and key industries. Leaving China out of the MTCR, on the other hand, is only likely to encourage Beijing to continue selling missile technology to countries of concern.

China’s Spotty Record
Negotiations to create an MTCR began in 1983 and reached fruition in 1987. The initial membership consisted of seven economically developed, technically advanced, and largely Western states—Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. These founding countries viewed themselves as having a mission to control transfers of missile technology to the rest of the world, primarily to the Communist bloc and countries with nuclear weapons programs. Communist China with its ICBM force was viewed by the Western nations as a particular threat and as one of the “target” countries with which the MTCR members should strictly control their missile exports. The MTCR restricts exports of missiles and related technology capable of carrying a 500-kilogram payload at least 300 kilometers or delivering any type of weapon of mass destruction.

In the early 1990s, the proliferation concerns with respect to China became twofold. In addition to concerns about missile proliferation to China, there emerged a challenge of missile proliferation from China. Although it remained a targeted recipient of MTCR-controlled technologies, China became a supplier of MTCR-restricted missiles, components, and technologies to countries such as Pakistan, Iran, Saudi Arabia, and Syria.[1] In other words, it had become an exporter not bound by any missile nonproliferation export control obligations. During this period, the United States assumed the role of the principal “watchdog” over China’s alleged missile sales. U.S. officials sought to use sanctions as levers to encourage China to follow MTCR guidelines, even though Beijing was not a regime member. All told, Washington has imposed sanctions on China 10 times, including three times last year.

In response, Beijing has repeatedly assured Washington that it would end the sales and twice endorsed joint statements avowing that they would respect MTCR guidelines. Nevertheless, Beijing has been accused of adhering to an overly narrow interpretation of the MTCR restrictions and neglecting the nonproliferation spirit and standards set by the regime’s “founding fathers” (see sidebar). The limits of this approach have clearly frustrated U.S. policymakers. As Assistant Secretary of State for Verification and Compliance Paula DeSutter stated in July 2003, “At the highest levels, the Chinese government has claimed that it opposes missile proliferation…. Unfortunately, the reality has been quite different.”[2]

Whether China’s membership in the regime would lessen or exacerbate this frustration is not obvious and depends on the answer to three questions. First, will the MTCR membership criteria allow the regime to admit a country like China? Second, if the MTCR deems Chinese membership acceptable in principle, what will be the potential bargaining chips in negotiations between China and the regime and, most importantly, between China and the United States? Third, in the long run, will China be more of an asset or a burden to the MTCR once it is admitted?

Will China Satisfy Membership Criteria?
At its inception, the regime’s informal membership criteria emphasized like-mindedness, effective export control laws and enforcement, and a strong nonproliferation track record and counted only exporters as members. As the MTCR has expanded to 34 members, however, its standards have eased, allowing countries to be admitted which are not completely like-minded, do not completely share the same nonproliferation ideals as the original members, and are not even exporters. These have included EU and NATO members such as Norway and Iceland, but also former Soviet republics such as Russia and Ukraine.

Rather than the more standardized criteria of the past, admission of new members to the MTCR today has become a bargaining process involving political and commercial tradeoffs and side payments. So, whether or not China joins the organization is going to depend largely on what demands the current members and Beijing bring to any accession negotiation and the prospects that they can be realized or surrendered.

China’s Goals
What benefits might China gain by joining the MTCR? For China, the most obvious advantages of joining the MTCR would be access to new technology and participation in new space-related projects that are not available to regime outsiders. Beijing is also looking for trade and concessions not directly related to space and missile activities.

Resuming Satellite Launches
Resuming the launching of U.S. satellites aboard Chinese rockets would pay immediate dividends for China. In January 1995, the United States and China signed the Agreement Regarding International Trade in Commercial Launch Services that gave Beijing the right to launch 15 U.S.-built satellites into geosynchronous orbit through 2001. The downturn in U.S.-China relations in the last years of the Clinton administration, however, rendered the agreement moot and darkened its prospects for extension.

In November 2000, the Department of State pledged to discuss an extension and provide China with a new satellite launch quota after China issued its most stringent and specific policy statement on missile nonproliferation to date, but the imposition of missile proliferation sanctions in September 2001 nullified that pledge. Presently, the negotiations are in limbo, although there is reason to believe that both sides will use the issue as a major bargaining chip while negotiating the terms of China’s accession to the MTCR.

Participation in the International Space Station
Another bargaining chip could be China’s participation in building the International Space Station (ISS). In October 2003, China launched its Shenzhou-5 spacecraft into orbit with taikonaut Yang Liwei on board, becoming the third nation to launch a man into space. The Chinese space program is ambitious, calling for the construction of a space station and a space shuttle, as well as lunar exploration, by 2010. China’s budding space effort would surely benefit by gaining a role in these prestigious and lucrative space endeavors and by learning from countries such as the United States and Russia.

The ISS, a 16-nation, $95 billion endeavor, could surely use the potential of China’s space program. It could also use China’s financial support. Yet, the notion of Chinese participation in the ISS has met with a tepid response from U.S. officials. For the record, they say that Chinese “technology is not mature” compared to the technology of the leading ISS partners.

The real reason behind Washington’s uncooperative reaction may be a suspicion that Beijing’s space effort is less a civilian program than a military endeavor that could eventually threaten the United States. Some experts contend that it is possible to develop military space technology through a manned program and that China’s piloted Shenzhou spacecraft could serve as a reconnaissance platform.[3] In such a case, bringing China into an ISS partnership that involves sharing information and technology would risk proliferating military technology to China. Moreover, given China’s proliferation record, that could further equate to the proliferation of missile technology from China to countries of concern.

Yet, some outside experts contend that allowing China to become an active ISS participant would bring significant nonproliferation advantages, by increasing transparency about its programs and capabilities.[4] By engaging China in joint space projects, the United States would have a better appreciation of how the military and civilian arms of the integrated Chinese rocket-science program interact and how the decision-making mechanism works. It would also provide Washington with much-needed leverage to persuade Beijing to stay in compliance with MTCR export control norms. U.S. law allows the United States to impose certain sanctions against individual companies in MTCR member states if they violate regime provisions. Until now, the dozens of sanctions imposed on Chinese companies have had a rather limited effect because most of these firms do no business with U.S. partners anyway.[5] (See ACT, September 2003.) Engaging Chinese firms in U.S.-led space projects would put Beijing in a position where it has much to lose if slapped with sanctions for inappropriate missile sales.

Full Market Economy Status
A non-space-related bargain between China and the United States could center around granting China full market economy status, which would effectively lower tariffs on Chinese imports and allow Beijing to better defend itself against charges that it dumps its goods by selling them abroad at below-production prices.[6] This issue has become more pressing due to recent trade spats between China and the United States and as China comes under increasing U.S. criticism for allegedly engaging in trade practices that hurt U.S. industry.[7]

The prospect of granting China full market economy status and providing it with nuclear reactor technology was among the major themes of the talks between U.S. Vice President Dick Cheney and Chinese officials in Beijing in mid-April 2004. China is soon expected to solicit bids from foreign partners to build new nuclear reactors, and U.S. companies will compete against other bidders for lucrative contracts.

U.S. May Not Deliver Its Part of the Bargain
China may receive less than it expects from entry into the MTCR. As the previous experience of other space powers such as Brazil, Russia, and Ukraine illustrate, MTCR membership does not guarantee equal treatment by Washington in civilian space programs or technology-sharing.

As the MTCR has grown, the United States has demonstrated a tendency to categorize MTCR members as more trusted and less trusted. The less trusted partners get less privileged treatment from Washington when it comes to sharing of technology or help in developing civilian space programs. For instance, Brazil entered the MTCR in hopes of gaining access to space technology unavailable to outsiders to the regime. In the bargain, Brasilia hoped to modernize its failure-plagued program. U.S. policy, however, has been to press Brazil to curb its space-launch development efforts, not improve them.[8]

The sometimes bumpy implementation of the Sea Launch venture also exemplifies the lack of “nonproliferation trust” extended by the United States to its partners in space exploration projects. Sea Launch is a U.S.-Russian-Ukrainian-Norwegian endeavor to launch payloads from a floating platform stationed in the equatorial waters south of Hawaii. The Ukrainian company Yuzhmash supplies Zenith rockets, Russian company Energia provides upper-stage engines for these rockets, the Norwegian firm Kvaerner modified the 30,000-ton oil rig into a launch platform and built a command ship, and Boeing is the lead investment partner and serves as overall system integrator. In 1998 the State Department put the Sea Launch project on hold for a couple of months and fined Boeing $10 million for allegedly violating Cold War-era export control procedures in transferring sensitive technology to its partners in the project—and fellow MTCR members—Russia and Ukraine.

In the case of China, it is more than likely that cooperative space projects with the United States and possibly some other Western nations will experience similar difficulties arising from a lack of trust about Beijing’s nonproliferation declarations and MTCR commitments. Concerns about the possibility of space cooperation between the United States and China turning into proliferation of missile technology was set in the mid-1990s, when U.S. satellite manufacturers improved the reliability of China’s Long March space launchers. In the aftermath of three failed launches that destroyed satellites built by Hughes and Loral, the two companies transferred rocket design information to China without obtaining the legally required licenses.

Congress’s controversial Cox report, issued in May 1999, blamed the two U.S. satellite manufacturers for improving China’s ballistic missile capabilities because the technology they had transferred could be used for both commercial and military purposes. The Cox report argued that, “[t]o the extent any valuable information was transferred to the [People’s Republic of China’s (PRC)] space program, such information would likely find its way into the PRC’s ballistic missile program. The ballistic missile and space-launch programs have long been intertwined and subordinate to the same ministry and state-owned corporation in the PRC.”[9]

Many in the U.S. government and Congress still argue that transferring dual-use technology to China for joint space projects would contribute to China’s effort to refine its ballistic missile capabilities or that China would secretly re-export technology it obtained from joint space projects to third parties. A long-time tradition of viewing China as a cheater will not vanish overnight, even if China acceeds formally to the MTCR.

China’s Likely Behavior as an MTCR Member
Still, a decision about admitting China to the MTCR ultimately involves a judgment by the United States and current MTCR members about China’s likely behavior once it becomes a member.

One concern stems from China’s impact on efforts to reach consensus on key decisions within the MTCR. Some argue that having a powerful member likely to have a “special opinion” on key issues would be destructive for a consensus-based regime. When making a decision on whether to bring China into the MTCR, the regime members will attempt to ensure that the new participant will contribute to constructive decision-making within the institution. A number of concerns will have to be addressed: Will China share the common perception of the rules and norms in the regime, or will it opt for a narrow interpretation of compliance? Will China facilitate more stringent control measures within the regime, or will it obstruct the introduction of such measures? Will China actively share information with other regime members, or will it be reluctant to do so? Will other members trust China enough to share sensitive information? Beijing has definitely come a long way from condemning the MTCR to considering full-fledged membership in the regime, but it remains unclear whether Beijing has come far enough to become a really valuable addition.

Most importantly, however, Beijing will have to persuade the MTCR that its days of spreading missiles and missile technology around the globe are over. After all, what current members would hope to gain from China’s entry into the MTCR is an end to this behavior and its assistance in deterring others from following the same path. Notwithstanding China’s numerous nonproliferation pledges and export control improvements, many administration officials fear that China might cheat on its obligations if it becomes a full member of the regime, undermining the integrity of the MTCR. Some argue that the right way to persuade China to comply with MTCR norms would be to continue the carrot-and-stick policy Washington has applied toward Beijing since the early 1990s. Getting them to end this policy requires them to feel confident that China will act as a responsible global citizen as part of the MTCR.

Conclusion
Such a judgment should not be impossible. In fact, the international community has already made a similar judgment in permitting China to join the Nuclear Suppliers Group (NSG) (see sidebar). China is clearly trying to assume a prominent role in the international arena, and the most effective way to do so is through integration into current economic, political, and security institutions and initiatives. Today’s war against terrorism and weapons of mass destruction (WMD) proliferation could serve as a vehicle driving China to a new level of trust and a new level of technological cooperation with the United States and other Western nations. For export control regimes such as the MTCR and NSG, China has been a target country for a long time. Its decision to apply for membership in these regimes—its apparent turn from being a part of the “problem” to being a part of the “solution”—marks a significant shift in China’s attitude toward nonproliferation policies and practices, toward the “discriminatory,” U.S.-led export control arrangements, and toward the United States itself.

As a part of its overall policy shift, China earlier this year voted for UN Security Council Resolution 1540, intended to strengthen nonproliferation measures. Under the six-party negotiations framework, Beijing is actively participating in the effort to resolve the North Korean nuclear crisis. On a national level, China has also made dramatic improvements to its nonproliferation export control infrastructure. As a follow-up to November 2000 and August 2002 statements imposing stringent missile nonproliferation measures, the Chinese government in December 2003 released a “White Paper on China’s Nonproliferation Policy,” which significantly upgraded the elements of China’s national export control mechanism.[10] (See ACT, January/February 2004.)

As far as the MTCR’s membership philosophy is concerned, embracing China seems to be a development in the right direction. One has to remember that the MTCR is the missile nonproliferation export control regime that strives mainly to combat the proliferation of WMD delivery systems, using controls on exports of WMD-relevant technology. Today, it seems that the political reasons for joining the MTCR appear to be much more important than those related to the ability to supply this technology. Although Romania, Malta, and Cyprus—other countries currently in line for MTCR membership—could be viewed as a valuable addition to the regime in terms of political support, they are nonexporting states and present rather limited, if any, proliferation risk. Instead, the major focus of MTCR activities should be to engage active exporters, such as China, within the control framework. It makes far more sense to bring China in and give it a chance to improve its image and practices than to keep it on the sidelines with no international constraints on its enormous missile export capabilities. ACT

ENDNOTES

1. “China Denies Missile Sales to Iran, S. Arabia,” Middle East Newsline, August 8, 2001.

2. U.S.-China Economic and Security Review Commission, “China’s Proliferation Practices and the North Korean Nuclear Crisis,” 108th Cong., 1st sess., July 24, 2003, p. 7.

3. Tariq Malik, “U.S. Snubbed China’s Offer for Space Cooperation: ‘Technology Not Mature,’” SPACE.com, April 28, 2004.

4. Jeff Foust, “China, Shenzhou, and the ISS,” Space Review, October 20, 2003.

5. See Jonathan Yang, “U.S. Imposes Sanctions on China, North Korea,” Arms Control Today, September 2003, p. 35.

6. Market economy status is usually used for anti-dumping cases. If the United States grants China full market economy status, the domestic price of a certain good and relevant cost calculation provided by Chinese enterprises can be applicable in the anti-dumping cases. Otherwise, prices and cost calculation of the same goods in the United States will be applied in the anti-dumping cases, and Chinese enterprises would be in a disadvantageous position when involved in anti-dumping cases.

7. “China Urges U.S. to Ease Tech Export Restrictions, Grant Full Market Status,” Agence France-Presse, April 14, 2004.

8. Frank Braun, “Brazilian Congress Criticizes Bilateral Agreement with U.S.,” Space News, May 14, 2001, p. 28.

9. The Cox report is the informal name for a report issued by a committee headed by Rep. Christopher Cox (R-Calif.) that investigated the transfers. See House Select Committee on U.S. National Security and Military/Commercial Concerns with the People’s Republic of China, 105th Cong., 2d sess., H. Rep. 851.

10. “Romania to Join Missile Technology Control Organization,” BBC Monitoring International Reports, February 14, 2003; “Weapons Control: Poland Presiding,” Warsaw Voice, February 23, 2003.

Victor Zaborsky is a senior research associate at the Center for International Trade and Security at the University of Georgia in Athens. He specializes in missile nonproliferation and export control issues.

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