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China Still Poses Proliferation Concern, Could Do More to End N.K. Nuclear Crisis, U.S. Commission Finds By Mike Nartker WASHINGTON — China continues to allow some entities to engage in WMD and ballistic missile-related proliferation, and may not be fully engaged in multilateral efforts to resolve the nuclear crisis on the Korean Peninsula, a U.S. congressionally mandated commission warned yesterday (see GSN, June 15). In its latest annual report, the U.S.-China Economic and Security Review Commission said that China continues to engage in proliferation, despite repeated pledges to the contrary and the imposition of U.S. sanctions. In addition, while Beijing has aided multilateral talks intended to resolve the North Korean nuclear crisis, China has also not fully used its leverage with Pyongyang to resolve the situation, according to the report. “Unfortunately, even in light of overwhelming evidence of the increased threat to global security, Chinese entities continue to proliferate. This activity calls into question the effectiveness of the U.S. government’s pursuit of a partnership with Beijing in … resolving the crisis on the Korean Peninsula,” the commission said. According to the report, Chinese entities remain engaged in exports of WMD- and missile-related dual-use items, and have aided Iran and Pakistan’s ballistic missile programs. An “integral element” of China’s foreign policy, the report warns, is continued cooperation with Iran and Pakistan. Over the past year, the United States has repeatedly imposed sanctions on multiple Chinese entities for proliferation activities, in April placing sanctions against five Chinese entities for sending prohibited equipment to Iran (see GSN, April 5). While noting the progress China has made in developing national export control regulations, the report also says that there are concerns over the level of collusion between the Chinese government and Chinese entities engaged in proliferation activities. For example, the oft-sanctioned China North Industries Corp. (NORINCO), which U.S. officials have labeled a “serial proliferator” is a state-owned company. “Beijing’s failure to control such transfers gives the appearance that these are allowed in accordance with an unstated national policy,” the report says. There have been some recent indications, however, that China may be improving enforcement of its export control system. Last month, the Chinese Commerce Ministry announced that two companies had been fined for violating missile-related export control laws. A U.S. State Department official said then that the announcement was the first time that China had publicized punishing companies engaged in proliferation (see GSN, May 25). The report also warns that China’s “growing dependence” on oil from the Middle East may lead to increased proliferation activities with countries such as Iran. According to the report, China has transferred weapons-related materials and technologies for both hard currency and favorable oil concessions. For example, a NORINCO spin-off company agreed to purchase $20 billion of liquefied natural gas from Iran over 25 years and is expected to complete negotiations on agreements to develop three Iranian oil fields. In a separate report recently released by the Rand think-tank, analyst Ian Lesser said that increasing energy ties between China and energy-rich countries such as Iran may not result in Chinese proliferation in exchange for energy supplies. Instead, according to Lesser, such energy ties may lead to increased political and economic ties, which in turn could lead to an increase in defense-related trade. The U.S. commission also warned that China’s growing “oil diplomacy” may help Beijing gain an international diplomatic advantage over the United States. “Over time, Beijing’s relationship-building may counter U.S. power and enhance Beijing’s ability to influence political and military outcomes,” the commission’s report says. North KoreaIn its report, the commission also criticized China’s efforts to help resolve the crisis surrounding North Korea’s suspected nuclear weapons program. Noting China’s role in the six-nation talks to resolve the crisis, which also involve Japan, North Korea, Russia, South Korea and the United States, the commission said that Beijing has failed to use “in a significant way” its leverage over Pyongyang, which includes millions of dollars worth of food and energy assistance (see related GSN story, today). While China does have some degree of leverage over Pyongyang by threatening to cut off oil supplies, Beijing also wants to avoid a complete collapse of the North Korean regime, Chinese policy expert Eric Heginbotham of the Council on Foreign Relations said today in a telephone interview with Global Security Newswire. In addition, while China is often criticized in the United States for failing to fully use its leverage, North Korea now has a higher rate of trade with South Korea, Heginbotham said. The commission also noted China’s opposition to the imposition of sanctions against North Korea and to the transferring of the nuclear issue to the U.N. Security Council. In addition, China has continued to allow North Korea the use of its air, rail and seaports to engage in WMD- and missile-related proliferation, which provides Pyongyang with a crucial source of hard currency, the report says. It also recommends that the Bush administration encourage China to help end such exports by agreeing to provide North Korea with economic alternatives. During a press conference yesterday announcing the release of the report, commission Chairman Roger Robinson called on China to increase its efforts to convince North Korea to end its nuclear program. “Time is decidedly not on our side in this crisis. We believe China must step up to this crucial task and quickly,” Robinson said. Members of the commission are scheduled to testify today about their findings before the House Armed Services Committee.
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