After experts' level talks between the US and China on US complaints of China's continued export of missiles and missile components to Pakistan, a spokesperson of the Chinese Ministry of Foreign Affairs issued the following statement at Beijing on November 21, 2000:
"China is opposed to the proliferation of weapons of mass destruction. As a State Party to the Treaty on the Non-Proliferation of Nuclear Weapons, Chemical Weapons Convention and Biological Weapons Convention, China fulfils its obligations under the above international legal instruments in letter and spirit. China has no intention to assist, in any way, any country in the development of ballistic missiles that can be used to deliver nuclear weapons (i.e., missiles capable of delivering a payload of at least 500 kilograms to a distance of at least 300 kilometers).
"China will, based on its own missile non-proliferation policy and export control practices, further improve and reinforce its export control system, including by publishing a comprehensive export control list of missile-related items including dual use items.
"Logically speaking, this control list will include equipment, material and technology that can be directly used in missiles, as well as missile-related dual use items. In establishing its control list, China will take into account the relevant practices of other countries in terms of scope and detail with a view to strengthening the effectiveness of its control system.
"As part and parcel of its efforts in enforcing missile-related export controls in accordance with this control list, the Chinese Government will naturally require all Chinese entities and individuals to obtain a government license for the export of items on this list. In making export licensing determination for items on the list, the Chinese Government will take into consideration the proposed end-use and end-user for the item and the risk that the item will be diverted to programs for the development of missiles capable of delivering nuclear weapons.
"In the case of transfers to countries that are developing ballistic missiles capable of delivering nuclear weapons, China will exercise special scrutiny and caution, even for items not specifically contained on the control list, so as to prevent significant contributions to those countries’ development of ballistic missiles capable of delivering nuclear weapons.
"The Chinese Government will work to publish the above missile-related export control list and related regulations at an early date. Pending that, China will continue to enforce its existing measures so as to ensure that the policy of not assisting, in any way, countries in the development of missiles that can be used to deliver nuclear weapons will be implemented.
"China stands ready to continue to cooperate and hold consultations with the US and other countries on the issue of non-proliferation with a view to strengthening their respective export control systems for missile related equipment and technology."
Simultaneously the same day, at Washington, Mr.Richard Boucher, the spokesman of the US State Department, held a briefing on the Chinese commitment. He made the following salient points:
"We welcome the People's Republic of China Foreign Ministry spokesperson's statement of November 21 regarding China's clear policy commitment not to assist in any way other countries to develop ballistic missiles that can be used to deliver nuclear weapons and to further improve and reinforce its export control system, including by publishing at an early date a comprehensive export control list of missile-related items, including dual-use items.
"This development can strengthen cooperation between the United States and China to achieve our common objective of preventing the spread of ballistic missiles that threaten regional and international security. In consideration of China's commitment to strengthen its missile-related export control system, we have decided to waive economic sanctions required by US law for past assistance by Chinese entities to missile programs in Pakistan and Iran.
"Given the relationship between missile nonproliferation and peaceful space cooperation, the United States will now resume the processing of licenses that are necessary for commercial space cooperation between US and Chinese companies, such as launching US satellites in China. In addition, the United States and China will resume discussions as soon as possible on extending the 1995 US-China agreement regarding international trade and commercial launch services.
"The US stands ready to continue to cooperate and hold consultations with China and other countries on the issues of nonproliferation with a view to strengthening their respective export control systems for missile-related equipment and technology.
"This has been a subject of ongoing discussion with the Chinese for quite some time, many years in fact. I know there have been reports about China's missile-related activities in the past. What we have done here is to work out an arrangement that commits China not to assist other countries in the development of Missile Technology Control Regime Class ballistic missiles in any way, and to put in place comprehensive missile-related export controls. In exchange, the US side has decided to waive sanctions under US law for past Chinese assistance to missile programs in Pakistan and Iran, and to resume certain commercial space interactions with China. Sanctions have been imposed upon Pakistani and Iranian recipients of the Chinese assistance.
"The effective implementation of China's new commitments would be another important step by China to join the international nonproliferation mainstream, and it would promote international security and further US-China cooperation.
"China's statement includes broad new commitments of nonproliferation and security importance, but its value ultimately will depend on whether those commitments are implemented fully and conscientiously. In that connection, while the United States is waiving sanctions that would otherwise be imposed for past transfers to missile programs in Pakistan and Iran, the waiver does not apply to any transfers that might occur in the future. We are confident that the next Administration will follow this question closely.
"These discussions with China have been ongoing for some time. I think most recently we had a team go to Beijing after the talks with North Korea in Kuala Lumpur about a month ago. The team went up to Beijing and held some further discussions. This was certainly a topic of the Secretary's discussions and the President's discussions in Brunei, where they confirmed the understandings and emphasized the importance of full and complete implementation of the understandings that have been reached.
"We do have an ongoing process that reviews very carefully all the available information on potentially sanctionable activity. The missile sanctions law imposes a number of requirements that must be met with high confidence in order for the legal standard for sanctions determination to be met. Moreover, because we do take seriously our responsibility and because of the serious national security, foreign policy and economic consequences of imposing sanctions, we have always insisted on a high standard of evidence. These factors contributed to the amount of time necessary to make these sanctions determinations.
"On the activities itself, some Chinese entities and Pakistani entities were involved in transfers of Missile Technology Control Regime Category I items; that is, complete missiles, their major subsystems, or their production facilities, and of Missile Technology Control Regime Category II items, components and materials used to make Category I missiles and subsystems to Pakistani entities that contributed to Missile Technology Control Regime Class Missile Programs in Pakistan. With regard to Iran, some Chinese entities and Iranian entities were involved in transfers of Missile Technology Control Regime Category II items to Iranian entities that contributed to Missile Technology Control Regime Class Missile Programs in Iran.
"We determined under US law that a number of Chinese entities transferred missile-related equipment and technology to entities in Iran and Pakistan; that those transfers contributed to so-called Category I missile programs in Iran and Pakistan; and that all of the entities knew they were involved in Category I missile activities. Therefore, under our law, sanctions against these Chinese and Iranian and Pakistani entities are required to be either imposed or waived, as permitted by the sanctions law. In consideration of China's commitment not to assist the development of MTCR-class ballistic missiles in any way and to strengthen its missile-related export controls, we are waiving the sanctions required against the Chinese entities.
"We are imposing sanctions against the Iranian and Pakistani entities, and those sanctions will be announced in the Federal Register shortly. The sanctioned entities in Iran are the Defense Industries Organization, the Ministry of Defense and Armed Forces Logistics, and their sub-units and successors. The sanctioned entities in Pakistan are the Ministry of Defense and the Space and Upper Atmosphere Research Commission, and their sub-units and successors.
"For a two-year period, all new individual export licenses for Commerce- or State-controlled items and all new US Government contracts are denied to the Pakistani Ministry of Defense, Space and Upper Atmosphere Research Commission, and their sub-units and successors. In addition, for a two-year period, all imports into the US of products produced by the Pakistani Ministry of Defense and its sub-units and successors will be denied. Finally, for a two-year period, all new individual export licenses for Commerce- or State-controlled MTCR Annex items and all new US Government contracts related to MTCR Annex items are denied to the Iranian entities, the Defense Industry Organization, the Ministry of Defense, and their sub-units and successors.
"Because of the ongoing US embargo against Iran and preexisting US sanctions against Iran and Pakistan, the new sanctions will actually have very limited economic effect, but they do send a strong signal that the United States opposes these countries' missiles programs.
"There are Chinese entities that have close government connections, including being part of ministries and things like that. What happened was, because the Chinese Government itself committed to impose and publish a set of controls that were of the same sort as the Missile Technology Control Regime and agreed to implement these restrictions for the future, we were able to waive the sanctions that might be applied to Chinese entities generally.
"Membership in the Missile Technology Control Regime is taken by consensus of the members; there are currently 32 countries. China's new commitments, if they are implemented fully, certainly would constitute major steps towards Chinese membership in the regime in the future. But, at this point, what is important is getting control of the activities that might be considered proliferating, and for China to do this we think is a major step forward.
"I think you have to ask China what their considerations are with joining or not joining (MTCR). What is important to us is that China control its missile-related exports, and what we have done here is reached agreement with the Chinese, through many months of very detailed discussion on the items and the controls and the publication of rules and the means of control, to make sure that China will impose a set of controls that are largely equivalent to the Missile Technology Control Regime ones.
"If the rules are applied, there won't be any leakage. How difficult is it to apply the rules? We believe that the Chinese Government is capable and indeed is committed to applying these new rules and to implementing thoroughly their decisions not to assist other countries in developing missile technology -- ballistic missiles of this class. And that is why, I think as I noted, the Secretary's discussions with the Chinese Foreign Minister or the Vice Premier, the President's discussions of this topic with the Chinese President in Brunei, focused on the issue of implementation and the need to thoroughly implement the commitments that China is making here.
"I think I put both Iran and Pakistan in the same sentence there; that because these duplicate other sanctions, the direct economic effect may not be large, but it certainly makes it very clear our position against the development of missiles in these places.
"Both China and the United States said that we would remain ready to continue to cooperate in consultations with each other on these matters, and therefore on the complete and full implementation of these restrictions. And obviously that is something that we have done all along, and now we will be continuing to do it in terms of the rules that China is putting in place.
"I think I mentioned in the statement that we will resume processing certain licenses and resume some discussions with the Chinese on missile launches. Let me go back to more detail. If the sanctions had been imposed upon the Chinese entities, one consequence would have been to preclude commercial space interactions, like launches of US satellites on Chinese rockets. We decided several months ago not to begin negotiations on a new US-China space launch agreement to replace the 1995 agreement that expires next year, and not to conduct normal processing of export licenses for commercial space interactions until the sanctions process has concluded.
"Now that the sanctions process has been concluded, and due to the fact that China is imposing its own set of controls on exports that contribute to ballistic missile programs, we have been able to make this decision to waive sanctions that otherwise would have been required against Chinese entities; therefore, we have decided to resume discussions on the launch agreement and to resume the normal processing of commercial space licenses involving China.
"Now, that doesn't require US approval for any specific exports to China. All applications for these export licenses continue to be subject to case-by-case review on the merits of the individual license. They also remain subject to normal requirements for technology transfer restrictions and other things like that. But we will simply be lifting the suspension that has been imposed and return to a case-by-case review.
"This has taken place in the past where US-made satellites have been launched on Chinese boosters subject to rigorous technology safeguards that are administered by the Department of Defense. And so companies can apply to us to have their satellites launched on Chinese rockets, basically.
"Chinese exports of missile technology is a problem that we've dealt with here. The relation to satellite launches, yes, there were, I think, several companies that were being looked at for the way they had handled the technology safeguards that are required. Those issues continue. Obviously our licensing takes into account any legal issues that are related to the specific companies. Those aspects are not affected by the new arrangements with China.
"Whether American companies will be allowed to deal with China again for satellite launches would depend on a specific case-by-case review. I don't have a blanket approval of all licenses or of any specific company's license. That will depend on the specific applications and how we see the situation. With regard to the company, it's the legal situation as well as its ability to apply the required technology safeguards.
"Proliferation is a broad area. But certainly on the missile issue we think that this takes care of the need for China to have a system to control exports that contribute to ballistic missile programs. They are instituting a comprehensive set of controls. We think that's important and we welcome that; and, in return, we're waiving sanctions. But as I've stressed, I think several times, the key to this is going to be implementation and making sure that implementation is thorough and that all Chinese entities, be they government-associated or not, adhere to this, and that the system works. So I'm sure there will be individual instances that we might raise from time to time in order to make sure that these rules are fully implemented.
"The goal here is not to put somebody on the hook or off the hook; the goal here is to end sales of missiles and missile-related components. If we can stop a program, if we can stop exports of missiles, technology, equipment, parts, whatever, that have been contributing to the development of ballistic missile capabilities around the world, and particularly in places like Iran and Pakistan which are dangerous enough already, it is very important to us to be able to stop those sales and stop that assistance.