"I learned so much about arms control and disarmament at ACA! I learned more about arms control here in four months than I had in all three years at my college."

– Alicia Sanders-Zakre
Intern, Fall 2016
December 16, 2016
China's Export Controls: Can Beijing's Actions Match Its Words?

Anupam Srivastava

At their September plenary in Madrid, members of the Missile Technology Control Regime (MTCR) decided not to take up the question of inviting China to join the group. China had applied to join the voluntary export control regime in July 2004, and that year’s October plenary in Seoul had “failed to reach a consensus” on Beijing’s bid. China’s failure to win consensus support underlines a more fundamental challenge Beijing poses to global nonproliferation efforts and institutions.

Recent interviews with U.S. and British officials reveal the reason for not formally considering Chinese membership again this year was continued concern over Beijing’s implementation of pledges to adhere to export control standards equivalent to the MCTR. Russia and the United Kingdom were more willing than the United States to acknowledge that China had made progress. But all of the other countries agreed that Beijing still needed to do much more to block certain weapons of mass destruction (WMD)-sensitive exports.

China has vastly improved its legal and procedural infrastructure to control trade in strategic goods and technologies.[1] Yet it has failed to block several instances of proliferation and lacks transparency in enforcement.[2] It is unclear whether the current gaps between policy pronouncements and actual behavior simply mark a transition period to its new responsibilities or if this mixed record is symptomatic of its continued perception of nonproliferation as a “selective, arbitrary tool” employed by Washington and its allies to maintain strategic and technological pre-eminence.

Most evidence indicates that China previously has followed a “bargain-embedded approach” in which its compliance with nonproliferation norms is legalistic, narrow, and largely tactical. U.S. and other Western policymakers have the opportunity to foster a broader, more strategic commitment to nonproliferation in China by demonstrating to Beijing how adhering to nonproliferation norms will serve some of its long-range foreign policy and economic interests.

Recent Changes

Recent years have marked several positive steps by Beijing and some setbacks.

Positive Steps

China has considerably improved the legal and procedural architecture governing its trade in dual-use goods and technologies. The improvements include new export control regulations regarding nuclear, chemical, biological, missile, and advanced conventional weapons and revised national control lists in the above spheres. Cumulatively, they have aligned China’s export control system more closely with the benchmarks established by the multilateral export control arrangements: MTCR; the Nuclear Suppliers Group (NSG), which aims to coordinate nuclear export policies to prevent countries from exploiting peaceful nuclear cooperation as a pathway to nuclear weapons; the Australia Group, which regulates exports that could contribute to chemical and biological weapons; and the Wassenaar Arrangement, which seeks to enhance cooperation in preventing sales of conventional arms and dual-use goods to countries or regions of concern.

In 2002, in an important nonproliferation signal, China became the first of the five de jure nuclear-weapon states to amend its domestic legal procedures to complete a voluntary additional protocol with the International Atomic Energy Agency (IAEA). Such agreements grant the IAEA greater authority to verify that non-nuclear-weapon states do not divert nuclear materials and technologies to weapons programs.

China’s 2003 White Paper on nonproliferation policy and associated measures provided additional evidence of growing domestic commitment. In 2004, China was formally invited to join the NSG, marking China’s membership into the first of the four regimes that it had long criticized as cartels designed to perpetuate the technology superiority of the advanced Western nations.


On the flip side, China’s nuclear and missile relations with Iran and Pakistan have raised questions about China’s commitment to global nonproliferation.[3] Ongoing U.S. and IAEA investigations into the clandestine network headed by Abdul Qadeer Khan, the “father” of Pakistan’s nuclear weapons program, have revealed the startling fact that China transferred a design for a 25-kiloton nuclear warhead and open test data to Pakistan in the mid-1980s.[4] This adds to well-known transfers of ring magnets and short-range missiles (M-9 and M-11) in the 1990s for which several Chinese and Pakistani entities were sanctioned by the United States.

In recent years, Chinese firms have been sanctioned many times for providing missile-related assistance to Iran in violation of the Iran Nonproliferation Act of 2000.[5] In the most recent episode late last year, the sanctioned entities included two of China’s largest companies: China North Industries Corp. (NORINCO) and China Great Wall Industry Corp. Both have been subject to repeated U.S. sanctions since the 1990s and described as part of China’s “serial proliferator” problem by senior officials in the Bush administration.[6]

Critics have also raised questions about a May 2004 Chinese agreement to build a second civilian nuclear reactor at Chasma in Pakistan. Although the agreement predates China’s NSG membership and the reactor will be placed under IAEA safeguards, questions remain about the merit of nuclear transfers to a country whose weak export controls permitted the Khan network to undermine global security and where risks of unauthorized diversion of Chinese technologies and materials to its weapons program remain high. Further, media reports following Chinese Premier Wen Jiabao’s April 2005 visit to Pakistan quote senior Pakistani atomic energy officials saying that China wants to build additional reactors, although doing so would violate its obligations under current NSG guidelines.[7]

If the United States seeks to curb such sales, it will face new challenges following a July 18 agreement with India in which it agreed to provide New Delhi with civilian nuclear assistance.[8] The United States will need to clarify to China and other NSG members that its deal with India is a special case, justified by India’s strong nonproliferation record and by particular commitments New Delhi has made to separate its civilian reactors from its weapons complex and place the former under IAEA safeguards and to align its dual-use control lists with those of the MTCR and the NSG. Such explicit clarification would also enable the United States to rebuff any Pakistani expectations that Islamabad can receive similar treatment from Washington unless its record on enforcement improves.

Legal Authorities

According to government officials, China is currently drafting a new, overarching export control law to bring its national export control authorities under one statutory umbrella and to provide additional legal force to the 2004 Foreign Trade Law.[9] The current law, which amended a decade-old statute, provides legal authority to administer export controls in China and has strengthened criminal and administrative sanctions against illegal trade operations, including potential cancellation of operators’ licenses.

Although no details about the draft law or the timeline for its promulgation are available, additional changes to Chinese export control laws are required following China’s entry into the NSG and as the country further integrates into the international nonproliferation regime.

Even before the Foreign Trade Law, China had already made significant changes in its export control laws and regulation in recent years.

In late 2002, China promulgated new munitions, chemical, biological, and missile-related export control measures. Together with revised regulations in the nuclear sphere in 2001 and in customs and criminal law in 2000 and 2001, respectively, the measures effectively harmonized China’s legal infrastructure of export controls with multilateral standards. The arms control measures also enabled the international community to better assess China’s export control performance.

Other official regulations promulgated over the last 10 years provide additional legal authority to administer export controls, including China’s obligations as a signatory to the nuclear Nonproliferation Treaty (NPT), Biological Weapons Convention, and Chemical Weapons Convention (CWC), and to carry out international trade sanctions mandated by relevant UN Security Council resolutions.


China’s entry into the IAEA in 1984 and the NPT in 1992 helped establish domestic legal authority in the nuclear sphere. Administrative circulars issued in May and September 1997 included control lists similar to those of the NSG and the Zangger Committee, a smaller 35-member group of nuclear suppliers that produces the so-called “trigger list” of nuclear materials, equipment and technology requiring IAEA safeguards. A June 1998 circular, which was amended in 2001, brought China’s nuclear and nuclear dual-use export control regulations into effective compliance with international standards. Following its NSG membership, China has said it plans to publish an amended nuclear dual-use control list and regulations in 2005 that will make them identical to the NSG, but it has not yet done so.


In the missile sector, China’s August 2002 regulations have harmonized its legal provisions with those of the MTCR. Further, the revised control list is virtually identical to the MTCR’s equipment, technology, and software annex. The real gap, however, lies in Beijing’s markedly slender technical interpretation of the military end uses of critical dual-use technologies in adjudicating license applications, especially when exporting to end users in countries of proliferation concern such as Iran.

Chemical Weapons and Technology

China approved chemical weapons and technology regulations in 1995 incorporating its CWC commitments into national law, and the appended control list contained four schedules that capture all items covered by the three CWC schedules and a fourth CWC category of unscheduled discrete organic chemicals. Its October 2002 regulations and the appended dual-use control list now cover all items on the Australia Group equipment and related technologies list as well as 20 dual-use items considered possible chemical weapons precursors, bringing China’s lists into effective compliance with CWC and Australia Group control lists.[10]

Biological Weapons and Technology

China published its first-ever export control statute in the biological weapons and technology realm in October 2002. Before this, dual-use biological items and technologies were regulated by an assortment of national laws, none of which specifically addressed dual-use biological export controls. This gap was closed with the control list appended to the 2002 regulations that is identical to the Australia Group control list.

Conventional Arms

China followed up its 1997 regulations by publishing a revised set of conventional arms regulations in October 2002 and a military products export control list a month later. Although this control list includes most items in the Wassenaar Arrangement’s control list, it provides far broader categories and vaguer definitions. This lack of specificity could be exploited by Chinese enterprises to evade responsibility for certain transfers.

China has in recent years also begun to incorporate provisions that relate to emerging issues of international concern. Thus, each set of the 2002 regulations explicitly covers not only traditional exports but also intangible technology transfers and the difficult issues of “deemed exports.” Such exports might occur, for example, if information that would require an export license is shared by a U.S. citizen with a foreign national on U.S. soil. In that case, information is “deemed” to have been exported to the home country of the foreign national and, as such, requires an export license.

Moreover, Article 16 in each of these regulations contains a catch-all clause that instructs the exporting entity not to export an item if “it knows or should know…that the [item] will be used by the receiving party directly for the purpose of [WMD programs], whether included in the control list or not.” Article 6 of the December 2003 White Paper further amplifies this new legal responsibility of the domestic exporter. China is reportedly working to introduce this clause in the revised nuclear guidelines that will be published to incorporate changes necessitated by its NSG membership. However, implementation of catchall controls might violate China’s 2004 Administrative Law, which stipulates that mere suspicion of diversion or proliferation is not sufficient grounds to block the export or import of goods or technology.

Brokering, transit, and transshipment controls represent areas of remaining weakness in the legal system. According to the Ministry of Commerce, China does not recognize the status of brokers in export transactions. This makes it unclear whether China disallows brokering activities or they simply remain unregulated. Also, no provisions are specifically designed to control the transit or transshipment of strategic goods and technologies. Article 24 of the amended Customs Law does require all transits, transshipments, and through-shipments of sensitive items to be declared to customs authorities, but it does not provide the legal basis to regulate their movement through Chinese territory.

Export Licensing Process

The publication of comprehensive licensing regulations for all strategic commodity classes by late 2003 has opened China’s export control system to an unprecedented degree of regulatory transparency, although in some areas, the military in particular, responsibility remains unclear. Licensing regulations are publicly accessible, and the December 2003 White Paper provides details of how China’s dual-use export licenses are processed.

China’s licensing and regulatory institutions also have been restructured in a process that began in 1998. The Export Control Division of the Science and Technology Department in the Ministry of Commerce is the main licensing and regulatory body for dual-use export controls, but a number of Chinese agencies are tasked to participate in the interagency review of licenses:

  • The Ministry of Foreign Affairs principally evaluates the foreign policy or national security implication of a proposed export or whether it might violate China’s international treaty obligations.


  • The National CWC Implementation Office is charged with regulating the domestic dual-use chemical sector and implementing China’s CWC commitments.


  • The China Atomic Energy Authority licenses nuclear trade and issues governmental assurances to foreign regulatory bodies.


  • The Ministries of Health and Agriculture participate in the review process in their relevant domains. The Ministry of Commerce also can call on a cadre of 200 experts from diverse technical fields as required.

The main licensing body to administer controls on advanced conventional weapons exports is the Commission on Science, Technology and Industry for National Defense (COSTIND). Prior to the 1998 restructuring, it reported both to the State Council and the Central Military Commission of the People’s Liberation Army (PLA). The 1998 restructuring wrested the arms export control agenda away from the PLA. Now under civilian control, COSTIND generally reports to the State Council, but its arms trade division receives and vets licenses for conventional and certain missile-related items. However, the vetting and eventual approval of export licenses also requires extensive consultation with the PLA’s General Armaments Department, with oversight from the Central Military Commission. As a result, there is continued ambiguity about controls on conventional arms exports and regulations governing export behavior of the reorganized defense industrial enterprises of China that have resulted in several questionable exports to Iran, Iraq, and North Korea in recent years.

Enforcement as the Litmus Test

Enforcement is presently the weakest link in China’s export control system. A wide disparity exists between the dictates of established Chinese law and the capacity of the Chinese state to consistently enforce them. For China, this is a significant challenge. Overcoming it will require both political will and a massive injection of physical, technical, and financial resources. Given China’s checkered track record of controlling trade in sensitive goods and technologies, the international community is likely to use effective enforcement as the ultimate criterion for assessing Beijing’s commitment to nonproliferation.

In recent years, China has sought to close the long-standing gap between official pronouncements and actual behavior by strengthening and clarifying the criminal and civil penalties incurred for export control-related violations. The Customs Laws of the People’s Republic of China, originally promulgated in 1987 and amended in 2000, provides the General Administration of Customs enhanced legal authority to control cross-border traffic, including the right to search, detain, and seize cargo leaving China. The Ministry of Commerce has provided additional authorization and guidelines to General Administration of Customs to inspect any cargo suspected to be an illegal export. China’s recent decision to join the U.S.-led Container Security Initiative (CSI) and to make Hong Kong and Shanghai CSI-compliant ports will require additional provisions and capacity for real-time coordination among intelligence agencies, customs officials, and border guards for search and seizure of WMD-sensitive cargo in domestic ports or territorial waters.

For now, export control enforcement remains opaque and susceptible to jurisdictional turf-battles, with prosecution dependent on the type of violation. Customs-related violations are presumably enforced by customs, CWC-related violations by local government bodies, criminal law-related violations by the Public Security Bureau and the General Attorney for the Prosecution Office, and Administrative Law-related violations by local government offices. The Ministry of Commerce also reportedly handles certain aspects of export control enforcement. China’s export control enforcement is weakened by overlapping jurisdictional claims, unclear designation of lead agencies to prosecute violations, and bureaucratic wrangling.

A persistent problem in ascertaining the scale of illicit dual-use proliferation from China results from its lack of transparency. China does not make publicly available such data as the number of license applications, number of license approvals and denials, reasons for denial, instances where catch-all controls were employed, and number of violations prosecuted annually. In 2004, Beijing for the first time announced that two chemical companies in China were found guilty of export control violations. However, no specific information is available about the precise nature of violations and the type of penalties imposed on them.

In addition, Beijing still relies mainly on foreign intelligence to unearth illicit transactions.[11] China’s very limited use of pre-license checks and post-shipment verification increases the risk of unauthorized diversion of an export to prohibited end uses or its re-export to prohibited end users. These problems are exacerbated by widespread corruption and the lack of an independent judiciary.

It is important to recognize, however, the enormity of the challenge that China confronts, given that it has one of the longest land-air-sea borders in the world. The General Administration of Customs, in charge of all cargo clearing China’s borders, employs 46,000 officials stationed in 41 customhouses across the country. In addition, it oversees 300 affiliated customhouses and 245 ports, while the Public Security Bureau and the People’s Armed Police secure the areas immediately outside of customs surveillance zones. Customs officials possess specialized equipment to detect nuclear, biological, chemical, and dual-use items, although the quality of the equipment, the familiarity of the staff with the equipment, and the motivation to monitor illicit transactions rigorously varies markedly from one border post to another. Many customhouses are equipped with large-scale X-ray machines, electronic platform balances, plate identification systems, electronic gates, and container number identification systems. Several others lack even rudimentary equipment and training for its staff. A good case in point is Dandong, located on China’s border with North Korea. According to unnamed Chinese government officials, it lacks basic equipment to scan vehicles and large containers and adequate space for on-site inspections. Effective enforcement efforts at China’s border posts and custom houses, especially in the southern and western provinces, are routinely undermined by seasoned smugglers.

A New Export Control Dynamic

With the enactment of the 2002 laws and regulations, a new dynamic is apparent within China’s official export control community.[12] One school of thought views the new laws and regulations as sufficiently detailed and easily accessible so that companies have no excuse for ignorance. As such, if domestic companies are now found in violation, stiff penalties and prosecutions should deter future offenders as well as send the message for industry to comply with its new and increased export control obligations.

Another school of thought recognizes industry as the “first line of defense” to prevent unauthorized exports, as well as the need for increasing outreach to the industry. To this group, improved interaction with the industry is crucial because most advanced technologies are dual-use in nature and increasingly fungible within and across civilian and military sectors. This problem gets compounded in a continent-sized country with extensive and often undermanned or under-equipped borders.

Further, the post-World Trade Organization economic landscape of China has seen a steady growth in the number of dual-use producing industries basing manufacturing and trading operations in China to serve markets in the country and abroad. Yet, even those government officials who recognize the critical need for more outreach to the industry are often unwilling to cooperate with other departments in organizing outreach workshops or are lukewarm in supporting domestic or foreign nongovernmental entities in such endeavors.

In a broader context, China’s “mixed record” in the multilateral arena underscores the difficulty in ascertaining the degree to which its policy elite and industry managers have imbibed the normative and practical components of export controls and the overarching nonproliferation “security culture.” China’s agreement to build additional nuclear reactors in Pakistan while its application to the NSG was pending and its missile-related transfers to Iran while its MTCR application is still pending points to a continued bargain-embedded approach toward its nonproliferation obligations. Similarly, following the December 2004 sanctions, NORINCO offered to develop an internal compliance program in return for the lifting of U.S. sanctions—an offer that was rejected—instead of abjuring such transfers in order to end sanctions and facilitate its goal of doing business in the United States.

In framing future nonproliferation negotiations with China, a critical issue to bear in mind is the pivotal role of high technology in China’s economic and security priorities. China has emerged as the global manufacturing hub for low-technology products but recognizes that its cost advantages are fleeting and that, in order to attract foreign investments in advanced technology, it needs to improve the state of technology security and build up its high-technology sectors. Viewed from this perspective, export controls can be a tool to help China achieve its strategic objectives and by extension can provide important leverage for securing greater Chinese cooperation on nonproliferation.

Similarly, Beijing’s developmental imperatives have prompted the doctrine of “peaceful rise of China” (heping jueqi) and a dedicated pursuit to increase its comprehensive national power.[13] Its recent, energetic diplomacy with its neighbors in Southeast Asia and Central Asia, many of whom are battling rising Islamic militancy and terrorism, reveals its desire to assure them that China would be a factor of stability in Asia. Lack of adequate safeguards on China’s own strategic arsenal would undermine their confidence in China’s leadership credentials within the evolving security architecture of Asia. This represents another important avenue for calibrating U.S. and multilateral negotiations to secure greater Chinese cooperation on nonproliferation.

Finally, the European Union is currently debating whether to lift its arms embargo stemming from China’s Tiananmen Square incident of 1989. Lifting the embargo could give China access to EU arms and technologies that are superior to those it is currently acquiring from Russia and Israel. The EU, under the United Kingdom’s current presidential term, is unlikely to lift the embargo, but the issue might be revisited in the spring of 2006 during the Austrian presidency of the EU.

If and when it tackles the issue again, one useful condition that the EU could tacitly impose for lifting the embargo—although it was imposed for human rights violations—would be to require China first to demonstrate a practical improvement in its export control implementation and safeguarding of sensitive technologies. Indeed, U.S. and EU officials confirm that this factor has featured prominently in their deliberations. Further, the Pentagon’s July 2005 report to Congress on Chinese military power warns that lifting the embargo could lead to greater proliferation from China:

Beijing ’s track record in transfers of conventional arms and military suggests EU or other third-party sales to China could lead to improvements in the systems that Chinese companies market abroad, including to countries of concern, such as Iran. Of note, some of China’s major recipients of military assistance— Burma, Sudan, and Zimbabwe—all are subject to EU arms embargoes.[14]

In sum, China’s economic priorities and foreign policy goals stress a growing need to improve export controls and strengthen technology security in its civilian and military enterprises. A wise policy for the United States and its allies to follow would be to leverage China’s growing self-interest in stronger adherence to global nonproliferation regimes and practice to push Beijing to improve the transparency and enforcement of its export control obligations and to help it meet its growing international responsibilities.

Anupam Srivastava is director of the Asia Program at the Center for International Trade and Security at the University of Georgia.


1. “PRC White Paper: China Adheres to Enforcing Nonproliferation Export Control,” Xinhua, September 1, 2005.

2. Evan S. Medeiros, “Chasing the Dragon: Assessing China’s System of Export Controls for WMD-Related Goods and Technologies,” RAND, 2005.

3. Stephen Rademaker, Remarks to the U.S.-China Economic and Security Review Commission, March 10, 2005.

4. See William Burr, ed., “ China, Pakistan, and the Bomb: The Declassified File on U.S. Policy, 1977-1997,” National Security Archive Electronic Briefing Book No. 114, March 5, 2004.

5. The Iran Nonproliferation Act of 2000 authorizes the president to penalize any foreign entity that transfers items to Iran that could aid its pursuit of dangerous weapons.

6. David Sanger , “ U.S. Is Punishing 8 Chinese Firms for Aiding Iran,” New York Times, January 18, 2005.

7. “ Pakistan to Build More Nuclear Power Plants With Chinese Help,” News ( Islamabad), April 9, 2005.

8. “ Pakistan Wants Civilian Nuclear Deal,” Associated Press, September 8, 2005; Wade Boese, “Bush Promises India Nuclear Cooperation,” Arms Control Today, September 2005, pp. 23-25. See Harold Bengelsdorf, Fred McGoldrick, and Lawrence Scheinman, “India-U.S. Nuclear Deal: Taking Stock,” Arms Control Today, October 2005, pp. 6-12.

9. The Standing Committee of the 10th National People’s Congress of the PRC, Foreign Trade Law of the People’s Republic of China, April 6, 2004.

10. The measures were promulgated by Decree No. 33, dated October 18, 2002, of the then-Ministry of Foreign Trade and Economic Cooperation (now the Ministry of Commerce), the then-State Economic and Trade Commission (now the National Development and Reform Commission), and the General Custom Authority (also known as the General Administration of Customs), and went into effect November 19, 2002.

11. Interviews with author, Shanghai, September 2005; interviews with author, Beijing, June 2004.

12. This assessment is based on diverse communications with members of the export control community in China, the United States, and Europe.

13. Kurt M. Campbell, Testimony before the House Permanent Select Committee on Intelligence, February 2, 2005.

14. Office of the Secretary of Defense, “Annual Report to Congress: The Military Power of the People’s Republic of China, 2005,” p. 25.