China and Proliferation of Weapons of Mass Destruction and Missiles: Policy Issues Shirley A. Kan Specialist in Asian Security Affairs January 5, 2015 Congressional Research Service 7-5700 www.crs.gov RL31555 China and Proliferation of Weapons of Mass Destruction and Missiles: Policy Issues Summary Congress has long been concerned about whether policy advances the U.S. interest in reducing the role of the People’s Republic of China (PRC) in the proliferation of weapons of mass destruction (WMD) and missiles that could deliver them. Recipients of PRC technology included Pakistan, North Korea, and Iran. This CRS Report, updated through the 113th Congress, discusses the security problem of China’s role in weapons proliferation and issues related to the U.S. policy response since the mid-1990s. China has taken some steps to mollify U.S. and other foreign concerns about its role in weapons proliferation. Nonetheless, supplies from China have aggravated trends that result in ambiguous technical aid, more indigenous capabilities, longer- range missiles, and secondary (retransferred) proliferation. Unclassified intelligence reports told Congress that China was a “key supplier” of technology, particularly with PRC entities providing nuclear and missile-related technology to Pakistan and missile-related technology to Iran. Policy issues in seeking PRC cooperation have concerned summits, sanctions, and satellite and nuclear exports. PRC proliferation activities have continued to raise questions about China’s practices and policies in weapons nonproliferation. The United States has imposed sanctions on various PRC “entities” (including state-owned entities) for troublesome transfers related to missiles and chemical weapons to Pakistan, Iran, or perhaps another country, including repeated sanctions on some “serial proliferators.” Since 2009, the Obama Administration has imposed sanctions on 18 occasions on numerous entities in China for weapons proliferation. By 2014, the Administration started to negotiate a renewal of the U.S.-PRC nuclear cooperation agreement. President Obama’s summits with PRC leader Xi Jinping have not produced significant results. Skeptics question whether China’s roles in weapons nonproliferation warrant a closer relationship with China, even as sanctions were required on some PRC technology transfers. Some criticize the imposition of U.S. sanctions targeting PRC “entities” but not the government. Others doubt the effectiveness of any stress on sanctions over diplomacy or a comprehensive strategy. Concerns grew that China expanded nuclear cooperation with Pakistan, supported North Korea, and could undermine sanctions against Iran (including in the oil/gas energy sector). In 2002-2008, the U.S. approach relied on China’s influence on North Korea to dismantle its nuclear weapons. Beijing hosted the Six-Party Talks (last held in December 2008) with limited results. Since 2006, China’s balanced approach has evolved to vote for some U.N. Security Council (UNSC) sanctions against missile or nuclear proliferation in North Korea and Iran. Some called for engaging more with Beijing to use its leverage against Pyongyang and Tehran. However, North Korea’s nuclear tests in 2006, 2009, and 2013 prompted greater debate about how to change China’s calculus and the value of its cooperation. After negotiations, the PRC voted in June 2009 for UNSC Resolution 1874 to expand sanctions imposed under Resolution 1718 in 2006 against North Korea. The PRC voted in June 2010 for UNSC Resolution 1929 for the fourth set of sanctions against Iran. In 2013, the PRC voted for UNSC Resolutions 2087 and 2094 on North Korea for missile and nuclear tests. Still, China has continued its balanced approach that includes incremental implementation of UNSC sanctions. China’s approach has not shown fundamental changes toward Pakistan, Iran, and North Korea. China has called for resuming the Six-Party Talks, but the Administration says the goal is North Korea’s credible denuclearization. Legislation in the 113th Congress includes the FY2014 National Defense Authorization Act (NDAA) (P.L. 113-66) with Section 1248 to require a report on a plan to reduce missile proliferation in Iran, North Korea, and Syria, including how to secure the PRC’s cooperation. In its report on the FY2015 NDAA (H.R. 4435), the House Armed Services Committee required a report from the Defense Intelligence Agency on the PRC’s support for Karl Lee’s repeated transfers to Iran. The final FY2015 NDAA (H.R. 3979) became P.L. 113-291 on December 19, 2014. Congressional Research Service China and Proliferation of Weapons of Mass Destruction and Missiles: Policy Issues Contents Purpose and Scope ........................................................................................................................... 1 PRC Proliferation Challenges .......................................................................................................... 1 Partial Nonproliferation Commitments ..................................................................................... 1 Continuing Concerns and Intelligence Report ........................................................................... 2 Nuclear Technology Sales to Pakistan ....................................................................................... 3 Overview ............................................................................................................................. 3 Nuclear Cooperation ........................................................................................................... 3 A. Q. Khan’s Nuclear Network ........................................................................................... 5 Missile Technology Sales to Pakistan ........................................................................................ 6 Nuclear Technology Sales to Iran .............................................................................................. 6 Overview and Policy Approaches ....................................................................................... 6 Uranium Enrichment ........................................................................................................... 7 Dual Approach and Energy-related Oil and Gas Deals ....................................................... 8 UNSC Resolutions and Sanctions ..................................................................................... 13 Missile Technology Sales to Iran ............................................................................................. 18 Overview ........................................................................................................................... 18 Obama Administration ...................................................................................................... 18 North Korea’s Missile and Nuclear Weapons Programs.......................................................... 18 Suspected Missile Supplies ............................................................................................... 18 Secret Nuclear Programs ................................................................................................... 20 PRC Border, Ports, and Airspace ...................................................................................... 21 PRC-DPRK Military Relationship .................................................................................... 23 Trilateral and Six-Party Talks in Beijing ........................................................................... 25 Missile Technology Sales to Syria ........................................................................................... 49 Policy Issues and Options .............................................................................................................. 49 Issues for Policy ...................................................................................................................... 49 Debate ............................................................................................................................... 49 The PRC Government’s Role ............................................................................................ 50 Foreign and Defense Policies .................................................................................................. 51 Summits ............................................................................................................................. 51 Counter-Terrorism Campaign ............................................................................................ 52 Missile Defense ................................................................................................................. 52 Proliferation Security Initiative (PSI) and 9/11 Commission ............................................ 53 Export Control Assistance ................................................................................................. 53 Linkage to the Taiwan Question ........................................................................................ 53 Economic Controls .................................................................................................................. 54 Satellite Exports ................................................................................................................ 54 Sanctions and the “Helms Amendment” ........................................................................... 55 Capital Markets ................................................................................................................