China's Nuclear Exports and Assistance

Chinese nuclear exports have largely been driven by economic considerations. The reform in defense industries that began in the early 1980s called for conversion to production of more civilian consumer goods. While other defense industries have registered marked progress in converting a significant bulk of their production into civilian consumer goods, the nuclear industry has lagged behind.

In the early 1980s, China's nuclear trade began in earnest in order to generate foreign currency to purchase Western technology and assistance for the development of its civilian nuclear industry and its economy as a whole. To facilitate nuclear trade and other cooperation, China signed nuclear cooperation agreements with a number of countries in the 1980s. Since then, China has emerged as a major nuclear supplier, offering a wide range of nuclear-related products and services to a broad range of countries in North and South America, Europe, Africa, the Middle East, and South and East Asia. At the same time, a number of China's nuclear exports to non-nuclear states caused significant concern. Particularly worrisome during this period were reports that China had supplied a nuclear weapon design and weapons-grade nuclear materials directly to Pakistan and Iran.

China's nuclear exports have also been motivated by security concerns. China's nuclear exports to Pakistan in particular have raised serious concerns about China's commitment to nuclear nonproliferation. Pakistan has long been an ally of China and has been instrumental in China's rivalry with India. China-Pakistan nuclear cooperation began in the early 1980s. In 1983, US intelligence agencies reported that China had transferred a complete nuclear weapon design to Pakistan, along with enough weapons-grade uranium for two nuclear weapons. China also reportedly was helping Pakistan operate its Kahuta uranium enrichment plant.

In the mid-1980s, China's attitude toward the nuclear trade and nonproliferation in general did begin to shift. China became a member of the International Atomic Energy Agency (IAEA) in January 1984, and since then China has declared that it conducts its nuclear trade according to the following three principles:

All exports should be used exclusively for peaceful purposes
All exports should be subject to IAEA safeguards
No exports should re-transferred to a third country without prior Chinese approval

China states: "With regard to any nuclear export, the recipient government is always requested to provide to the Chinese side an assurance in writing to acknowledge the above three principles and the export can proceed only after approval by relevant Chinese authorities." [Statement by Ambassador Li Changhe of the Chinese Permanent Mission in Vienna at the Meeting of the Zangger Committee, 16 October 1997.] However, China did not commit itself to requiring full-scope safeguards in countries receiving its nuclear-related exports, especially since adopting full-scope safeguards would jeopardize its nuclear trade with Pakistan. China believes that applying full-scope safeguards unnecessarily restricts and denies the legitimate demands of developing countries for peaceful uses of nuclear energy.

In the mid- to late 1980s, China continued to criticize the Nuclear Nonproliferation Treaty (NPT) as being discriminatory, but also indicated that it accepted in principle the norm of nuclear nonproliferation. In 1991, shortly after France acceded to the NPT, China also declared its intention to join, though it again expressed its reservations about the treaty's discriminatory nature. China formally acceded to the treaty in 1992 as a nuclear weapon state. Since its accession, China has praised the NPT's role in preventing the proliferation of nuclear weapons, and China supported the indefinite and unconditional extension of the NPT at the 1995 Review and Extension Conference at the UN. However, China has continued to state that it does not view nonproliferation as an end in itself, but rather as a means to the ultimate objective of the complete prohibition and destruction of nuclear weapons.

Despite China's shift toward accepting the international norm of nonproliferation, significant concerns regarding China's nuclear trade with countries of proliferation concern continued into the 1990s. The most worrisome continued to be China's nuclear relationships with Pakistan and Iran. Some alleged nuclear deals have raised questions about China's compliance with its NPT obligations. In the mid-1980s China began training Iranian nuclear technicians in China under a secret nuclear cooperation agreement, assisted in the construction of Iran's primary research faciltiy at Isfahan and also agreed to supply Iran with subcritical or zero yield nuclear reactors both under IAEA safeguards. In September 1992, China and Iran signed a nuclear cooperation agreement to supply Iran with two 300 MW pressurized water reactors, but in October 1992 canceled a deal to supply Iran with a 20 MW reactor for "technical reasons" but many suspected that the cancellation had come in response to US pressure. The sale of the two 300 MW reactors was reportedly finalized in May 1995 but in September 1995 Chinese Foreign Minister Qian Qichen told US Secretary of State that China canceled the deal. Some sources indicate that the US placed the cancellation of the deal as a precondition for certifying the 1985 US-China Nuclear Cooperation Agreement (NCA). It has also been reported that the United States has made the cancellation of a uranium hexafluoride agreement with Iran an additional precondition of the US-China NCA. In October 1997, Qian Qichen sent a confidential letter to US Secretary of State Madeleine Albright which pledged that China would provide no new nuclear assistance to Iran. A February 2000 unclassified CIA report to Congress stated that China's October 1997 pledge not to engage in any new nuclear cooperation with Iran "appears to be holding."

China's nuclear cooperation with Pakistan has also continued to be controversial. In 1994 China reportedly turned down a Pakistani request to "correct" Pakistan's nuclear weapons by using the Lop Nur testing range, but the US remained concerned about Chinese assistance in the construction of a 40 MW reactor at Khushab, which, US officials feared, could provide Pakistan with plutonium for its weapons program. More controversial was the late 1995 export of about 5,000 ring magnets from the China Nuclear Energy Industry Corporation (CNEIC) to an unsafeguarded Pakistani nuclear laboratory. In February 2000 the CIA issued a report entitled "Unclassified Report to Congress on the Acquisition of Technology Relating to Weapons of Mass Destruction and Advanced Conventional Munitions, 1 January Through 30 June 1999," which stated, "China, which has provided extensive support in the past to Islamabad's WMD programs, in May 1996 promised to stop assistance to unsafeguarded nuclear facilities -- but we cannot rule out ongoing contacts."

Much of the concern regarding China's nuclear exports has to do with the perceived inadequacy of China's nuclear safeguards and export control system. In 1991, China declared that it would report to the IAEA any export or import of nuclear materials and all exports of nuclear equipment, but, although China has placed all of its nuclear exports under IAEA safeguards, it still does not require full-scope safeguards. China is not currently a member of the Nuclear Suppliers Group (NSG), which establishes comprehensive export control guidelines to ensure that nuclear cooperation does not contribute to proliferation, nor has China adopted the group's export policies, which include requiring full-scope safeguards. However, as of 27 January 2004 China filed a formal application to join the NSG.

Some theories hold that China has been an emerging supplier of nuclear technology for developing countries because it is the only supplier that has financing capabilities and does not require full-scope safeguards. Munir Ahmad Khan, former chairperson of the Pakistan Atomic Energy Commission (PAEC), supported this theory, saying that Pakistan is committed to developing nuclear power but could find no other suppliers besides China due to nonproliferation concerns. Many observers also doubted that China has sufficient capacity to monitor its exports, as illustrated by the 1996 controversy over the sale of ring magnets to Pakistan, which China insisted had taken place without the knowledge of the central government.

Since that episode the Chinese government has made a significant effort to improve its controls over nuclear exports. In May 1997 the State Council issued a Circular to government and non-government entities on what types of items could be exported. This Circular stated:

"The nuclear materials, nuclear equipment and related technology, as well as non-nuclear materials for reactors and nuclear
related dual use equipment, materials and relevant technologies on China's export list must not be supplied to or used in nuclear
facilities not under IAEA safeguards. No agency or company is allowed to conduct cooperation or exchange of personnel and
technological data with nuclear facilities not under IAEA safeguards." [Jiang Wandi, "Tighter Controls on Nuclear Exports," Beijing
Review, 1-7 December 1997, pp. 21-22.]

Later in October 1997 China joined the Zangger Committee, which had been preceeded in September by the issuing of the new export control regulations, which require State Council approval for all nuclear-related sales, and prohibit the export of nuclear equipment, personnel, and technology to unsafeguarded nuclear facilities. The list of controlled items was the same as the Nuclear Suppliers Group (NSG) control list, but the regulations still maintained China's practice of limited-scope, and not full-scope safeguards on its nuclear exports.

In June 1998 the State Council passed Decree No. 245 called "Regulations of the People's Republic of China on Export Control of Dual-Use Nuclear Products and Related Technologies." The promulgation of these regulations closed a major loophole in China's export control laws on nuclear items. The regulations were drawn up for the purpose of " tightening control over the export of dual-purpose nuclear goods and correlated technologies, preventing the proliferation of nuclear weapons, promoting international cooperation on the peaceful use of nuclear energy, and safeguarding national security and public interests."

Despite the flurry of export regulations in the late 1990s, the US government still remains skeptical that these controls will be implemented effectively. On 2 February 1999 CIA director George Tenet in a prepared statement before the Senate Armed Services Committee hearing on Current and Projected National Security Threats stated:

"We cannot yet assure you, however, that the new export control mechanisms will be effective. Both the Chinese Government and Chinese firms have long-standing and deep relationships with proliferant countries, and we are not convinced that China's companies fully share the commitments undertaken by senior Chinese leaders. While all aspects of China's proliferation behavior bear continued watching, we see more signs of progress on nuclear matters than on missile assistance. Moreover, the restructuring of China's defense industrial bureaucracy - including entities charged with export oversight - holds the potential to create confusion and incentives that would impede the effectiveness of this system. In short, Mr. Chairman, our guard remains up on this question."

In spite of US skepticism, China has been strengthening its nuclear export control regulations and participation in multilateral export control regimes. China's current nuclear export controls consist of three main components: (1) a May 1997 State Council circular on nuclear and nuclear related dual use export controls, (2) the September 1997 nuclear export control regulations (with attached control list--same as the Nuclear Suppliers Group (NSG) control list on nuclear items (INFCIRC/254 Part I)) and (3) the June 1998 regulations covering dual use nuclear export which have an attached control list the same as the NSG's nuclear related dual use control list (INFCIRC/254 Part II). In March 2002, China completed the legal procedure for the entry into force of the Additional Protocol between China and the International Atomic Energy Agency, the first among five nuclear-weapon-States to do so. As of 26 January 2004, China's permanent representative to the United Nations and other international organizations in Vienna, Zhang Yan, filed a formal application to join the Nuclear Suppliers Group.

China's potential nuclear exports and services:

China's actual and potential nuclear-related exports and services include:

Dual-use technology, including vibration test equipment, high-strength aluminum, uranium isotope separation equipment, explosives, implosion systems, and heavy water production related equipment	Power reactors (Chinese-designed 300 MWe Qinshan-type); the China National Nuclear Corporation (CNNC) also reportedly plans to develop and export a family of 600, 900, and 1,200 MW power reactors
Electronic equipment	Reactor components
Natural uranium	Enriched uranium
Reprocessing services	Reprocessing technology
Fabricated fuel assemblies	Research reactors
Heavy water	Metal alloys
Spent fuel/nuclear waste services	Project construction
Technical assistance: prospecting, design, and construction	Training: nuclear physics, engineering, and operations

["China applies to join Nuclear Suppliers Group," Xinhua via China Daily, 27 January 2004, Michael Brenner, "The People's Republic of China," in William C. Potter, ed., International Nuclear Trade and Nonproliferation: The Challenge of the Emerging Suppliers (Lexington: Lexington Books, 1990), p. 266; Weixing Hu, "China's Nuclear Export Controls: Policy And Regulations," The Nonproliferation Review, Winter 1994, pp. 4, 6; The Risk Report, November 1995, p. 9.]

For additional in-depth information on open-source reports of Chinese exports and assistance, please consult the CNS Nuclear Abstracts database.

Key Statements/Documents on China and Nuclear Exports:

[Statement by Ambassador Li Changhe of the Chinese Permanent Mission in Vienna at the Meeting of the Zangger Committee, 16 October 1997.]
[Statement by Mr. Jiang Xinxiong, Head of the Chinese Delegation to the 41st Session of the IAEA General Conference, 30 September 1997.]
["China: Arms Control And Disarmament," Information Office of the State Council of the Peoples Republic of China, November 1995.] (China's white paper, which stated that the major nuclear powers "resort to discriminative anti-proliferation and arms control measures, directing the spearhead of arms control at the developing countries.")
[National Report of the People's Republic of China on the Implementation of the Treaty on the Non-Proliferation of Nuclear Weapons, April 1995.]