There are various strategic, commercial, and foreign policy rationales behind Chinese missile exports and assistance to Pakistan. China and Pakistan have enjoyed a solid strategic relationship since the 1960s.1 Over the years China has provided Pakistan with a wide range of major conventional weapons systems and the two countries have also developed a close partnership in various defense cooperation programs. While this strategic relationship initially grew out of the mutual needs of China and Pakistan in countering the Soviet and Indian security threats, respectively, it continues to serve the two countries' national security interests in the post-Cold War era. Pakistan relies on China as a trusted ally in dealing with India from a position of military weakness; Beijing values its close ties with Islamabad both to extend its influence to South Asia and to balance against India. Commercially, as China began its economic reform and opening up in the early 1980s, defense industries and arms exporting companies were under tremendous pressure to tap into the lucrative international arms market. Pakistan became a valued customer for Chinese arms. Finally, given US concern about and emphasis on missile proliferation issues, Beijing has also found it useful to exploit them as bargaining leverage in dealing with Washington on issues important to China: US arms sales to Taiwan, TMD deployment in East Asia, among others.

China reportedly began discussing possible sales to Pakistan of M-11 missiles and related technology in the late 1980s. The contract for the M-11 sale was reportedly signed in 1988. In April 1991, the United States announced that it had discovered the transfer of an M-11 missile even though China insisted it had never shipped the system to Pakistan.2 In May 1991, the US imposed sanctions against China. In November 1991, Secretary of State James Baker reached an agreement with then Chinese Foreign Minister Qian Qichen in which Beijing verbally agreed to abide by "the guidelines and parameters of the MTCR" in exchange for the lifting of the sanctions imposed earlier that year. (However, China's pledge said nothing about adhering to the MTCR's annex.) After China sent Washington a letter in February 1992 affirming its earlier MTCR assurance in writing, the sanctions were lifted in March 1992.3

However, this commitment did not end the controversy. The September 1992 US decision to sell 150 F-16 fighters to Taiwan led China to withdraw from P-5 talks on conventional arms transfers. In December 1992 reports surfaced that China had transferred 34 complete M-11 systems to Pakistan, in apparent violation of its earlier [1991] pledge.4 China and Pakistan both denied that the transfer had taken place. In August 1993, the Clinton Administration imposed MTCR related sanctions on China after determining that China had again engaged in missile trade with Pakistan.5 China denounced the sanctions, calling the US decision "a wrong judgment based on inaccurate intelligence" and threatened to scrap its promise to abide by the MTCR.

The impasse was finally in October 1994 when the two countries issued a joint statement on missile proliferation. In the joint statement, the United States agreed to lift sanctions and in return China promised to ban all exports of ground-to-ground missiles exceeding the primary parameters of the MTCR.6 (The MTCR only calls for a "strong presumption of denial" for such exports.) China also agreed to accept the concept of "inherent capability" which binds China from exporting any missile that is inherently capable of delivering a 500 kg payload over 300 km. This standard would prohibit future exports of the M-11 missile. The US waived the sanctions in November 1994.

Persistent US diplomatic efforts since 1994 have also led China to clarify its MTCR commitment. Beijing has both reaffirmed its obligations to permanently curtail its missile cooperation with Pakistan and indicated that it is actively studying joining the MTCR as a full member. However, serious questions about China's missile export controls remain. Although China promulgated regulations on conventional arms transfers in 1997, it is not clear if they cover missiles and missile-related technology transfers. While an internal control list restricting missile exports exists, Beijing has not revealed its scope, contents, and the extent to which it approximates that contained in the MTCR annex. Developments of the last few months have again derailed the meager progress that had been made between the two Sino-US summits. The release of the Cox Report, the US bombing of the Chinese embassy in Belgrade, and US intentions with regard to national missile defense (NMD) and theater missile defense (TMD) have effectively put any prospect of China's joining the MTCR on hold. Increasingly, Beijing is demanding a linkage between its MTCR membership and broader issues of US arms sales to Taiwan, and the development, and future deployment of TMD in Northeast Asia. China's continuing transfers of missile technology to Pakistan and Iran may be a means of gaining leverage over the US. However, if China concludes that its fundamental security interests are threatened, it might step up these activities.

Sino-US disagreements over Chinese missile-related activities and missile nonproliferation continue. China has not accepted the MTCR annex and US efforts to get China to adopt legally binding export controls on MTCR items have yet to lead to the publication of regulations on missile exports (although Chinese officials insist they have an internal control list). In addition, suspicion of continued Chinese assistance to the Pakistani missile production facility at Rawalpindi persists and this raises serious questions of Beijing's sincerity in abiding by its pledges. During and immediately after the Sino-US summit of June 1998, Beijing indicated that it was "actively studying" MTCR membership and renewed once more its missile nonproliferation pledge on curbing its missile technology transfers and assistance to South Asia in the Jiang-Clinton Joint Statement. However, given the recent negative developments in bilateral relations (e.g., the Cox Report, the embassy bombing, TMD), it is not clear that these disagreements will get resolved any time soon.7

Policy Issues
Chinese missile transfers to Pakistan raise a number of issues for US nonproliferation policy and Sino-US relations. First, China's missile exports and assistance can undermine international missile nonproliferation efforts, in particular the objectives of the MTCR. China's most serious confrontations with the United States over ballistic missile proliferation have involved Chinese transfers of complete M-11 missiles and missile-related technology to Pakistan. The M-11 is a single stage, solid fueled missile with a reported range of 290 km and a payload of 800 kg. While technically the M-11 missiles do not fall within the MTCR parameter, they have the inherent capability of being able to deliver a 500 kg payload over 300 km. The fact that China has resisted joining the MTCR as a formal member, coupled with its ambiguous interpretation and implementation of its bilateral commitments, raises questions as to the seriousness of Chinese commitment to arms control and nonproliferation.

US concerns over Chinese missile exports to Pakistan focus mainly on regional stability and the potential of further proliferation to other regions where the US has important strategic interests, including the Middle East and the Persian Gulf. The introduction and improvement of ballistic missiles into South Asia could result in a fierce arms race between India and Pakistan, which in turn could be highly destabilizing given the perennial animosity between the two countries; the recent conflicts in Kargil only heightens such concerns. Given the short distances between major population centers of the two countries, poor intelligence, and short warning time, there would be great temptation to launch preemptive strikes in crisis situations. A more serious concern is the mating of nuclear warheads and other WMD with missiles. The further proliferation of ballistic (and cruise) missiles to countries such as Iran, Syria, and Libya could enable these countries to seriously threaten US interests in the Middle East and the Persian Gulf.

Furthermore, China's missile exports and assistance to Pakistan represent a major bone of contention in Sino-US bilateral relations and has the potential to limit and undermine bilateral cooperation in other areas. Over the last decade, Chinese proliferation behavior, bilateral trade issues, Taiwan and human rights controversies have been the four key obstacles to better US-China relations. US efforts to change Chinese behavior through both economic incentives and sanctions have achieved noticeable but limited results. While the US has made strong efforts to persuade China to join the MTCR, China continues to resist and remains critical of the regime, in particular its charge that the regime is discriminatory in nature and its exclusion of high-performance aircraft. Continued controversy over Chinese missile-related transfers and assistance to Pakistan points to serious differences between Washington and Beijing with regard to regional security. While the US tends to compartmentalize nonproliferation issues on their own merits, the Chinese have insisted that proliferation issues cannot be separated from underlying security causes.

Finally, differences in interests exist and this may account for the difficulty for a final resolution of the issue. Washington seeks to stem proliferation of WMDs and their delivery systems to the Middle East, the Persian Gulf, and South Asia out of its interests for secure supplies of oil, the security of Israel, and stability on the subcontinent. Beijing, on the other hand, regards its nuclear and missile exports as an important source of foreign exchange as well as a means of gaining influence in these regions. China's refusal to adopt IAEA full-scope safeguards (FSS) may be due to concerns that such measures would deprive it of potential nuclear markets. Regarding continued missile technology transfers and assistance to Pakistan, Beijing's motive may be more strategic than commercial. Islamabad has remained an important factor in Beijing's strategic calculations regarding South Asia and a useful counterweight to India.

Three issues confront the Clinton administration: the credibility of Chinese commitments to missile nonproliferation; whether the US should impose sanctions on China as required by domestic laws; and balancing the management of bilateral relations and the enforcement of nonproliferation legislation. The charges about renewed Chinese missile technology cooperation with Pakistan occurred at a particularly sensitive moment as Beijing and Washington are resuming both the security and arms control dialogues; as the Senate is to begin debates on PNTR on China, with some senators proposing the "China Nonproliferation Law" bill and seeking to amend the bill with provisions requesting annual review of Chinese missile proliferation activities; and as the deadline of a task force investigation of the 1992 Chinese sale of 34 M-11 missiles is approaching or may have already been passed. While both China and the Clinton administration have the incentives to reach a compromise to avoid sanctions, the room for such an outcome remains limited.

New Developments
Suspicions persist regarding China's continued missile cooperation with Pakistan. It has been speculated that the Shaheen-1 IRBM, which Pakistan tested in April 1999, is actually modeled on Chinese M-9 missiles. A February 1999 CIA report stated that "Chinese and North Korean entities continued to provide assistance to Pakistan's ballistic missile program during the first half of 1998. Such assistance is critical for Islamabad's efforts to produce ballistic missiles...China's involvement with Pakistan will continue to be monitored closely." A September 1999 National Intelligence Council (NIC) report stated that "Pakistan has Chinese supplied M-11 short-range ballistic missiles..." This is the first time that the US government has publicly verified that China actually supplied Pakistan with these missiles. The NIC report referred to the transfer of 34 M-11 missiles delivered in November 1992, but there is no evidence that China has resumed the transfer of complete missile systems to Pakistan. However, an unclassified CIA report to Congress released in February 2000 suggests that "some [Chinese] ballistic missile assistance [to Pakistan] continues."

Following the September 1999 NIC Report Republican Senator Jesse Helms, chairman of the Senate Foreign Relations Committee, threatened to block the appointment of Acting Assistant Secretary of State for Nonproliferation Affairs Robert Einhorn to a permanent position unless the Clinton administration formed a task force to impose sanctions on China. A task force was formed and given a six month deadline to make a determination, which is expected to be in late May or June 2000. US and Chinese reportedly have been meeting to reach a compromise to avoid sanctions. China is unlikely to become a full member of the MTCR, but a compromise on strengthening China's nuclear export controls may be possible.8

The recent US intelligence reports suggest that despite Chinese pledges to the contrary, it has continued to provide Pakistan with specialty steels, guidance systems and technical expertise in the latter's effort to develop long-range ballistic missiles. These and other allegations have apparently led to the proposal by Republican Senator Fred Thompson and Democratic Senator Robert G. Torricelli of legislation aimed at monitoring Chinese missile proliferation activities and mandating automatic sanctions should "credible evidence" indicates that specific Chinese exports and transfers have taken place.9 US Assistant Secretary of State for Nonproliferation Robert Einhorn traveled to Beijing in early June to seek commitment from China not to export missiles and missile technology to Iran and Pakistan. The July meetings in Beijing between Chinese officials and John Holum, Undersecretary of State for Security and Arms Control, and Secretary of Defense William Cohen are expected to focus heavily on China's alleged missile assistance to Pakistan.10

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