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Disarmament Diplomacy

Issue No. 35, March 1999

US-China Relations Dogged by Nuclear Espionage, Satellite & Missile Defence Controversies

US-China relations are becoming increasingly embroiled in interrelated disputes concerning China's credentials as a State sincerely committed to the methods and objectives of nuclear non-proliferation. In particular, a long-running controversy over China's alleged misuse of satellite cooperation with the US to derive ballistic missile information useful to its nuclear programme has been compounded by allegations that China placed spies within US nuclear laboratories. For its part, China not only rubbishes all these suggestions as political mischief generated by an anti-China media and Congress, but is characterising possible US support for a missile defence system in Asia involving America, Japan, South Korea and Taiwan as entirely irreconcilable with a viable non-proliferation strategy for the region.

Espionage Allegations

On 8 March, US Energy Secretary Bill Richardson announced he was recommending the dismissal of a worker at the Los Alamos National Laboratory (LANL) following a three-year investigation by the Federal Bureau of Investigation (FBI); the worker was later named as computer scientist Wen Ho Lee, American citizen born in Taiwan. The Energy Department released the following press release (8 March) on the dismissal:

"As the FBI investigation progressed, the Department of Energy (DOE) had previously taken other steps against the employee. As more information became known over the past several months, the DOE first transferred the employee from a classified workplace to a non-classified job. More recently, DOE suspended the employee's security clearance. DOE had kept the worker employed so that the FBI could more efficiently investigate the case. ...

After Secretary Richardson shared his termination recommendation with LANL officials, officials at LANL and the University of California reached their own conclusion and decided to issue the employee's immediate termination. ... In its cause for termination, LANL cited the following reasons for dismissal:

  • failing to properly inform the Laboratory and DOE about contact with people from a sensitive country;
  • specific instances of failing to properly safeguard classified material;
  • and, apparently attempting to deceive laboratory about security related issues. ..."
Speaking on NBC television on 9 March, Richardson stated bluntly: "We were concerned that the Chinese are conducting espionage. We make no illusions about Chinese behaviour... [Regarding the] actual extent of the damage, our CIA [Central Intelligence Agency] is assessing that now and is going to determine that soon. ... We fired him [Lee] because he had misused security. He had improper contact with foreign officials and he had violated a number of security measures..."

On 6 March, the New York Times reported that China had managed to steal classified information relating to miniaturised nuclear warheads; the report referred specifically to the W-88 warhead, several of which can be loaded into a missile and fired at separate targets.

On 9 March, Zhu Bangzao, a spokesperson at China's Foreign Ministry, told a news conference in Beijing that all allegations of Chinese espionage in America were "baseless, with vested interests" behind them. He went on: "Some people want to obstruct the United States from exporting normal high technology to China or some people want to impede Sino-US ties from improving and developing..." On 15 March, Chinese Premier Zhu Rongji described the controversy as a "tale from the Arabian nights."

Also on 9 March, Vice President Al Gore claimed that the Clinton Administration had inherited problems with nuclear-lab security, and had worked assiduously to improve matters: "This happened in the previous Administration, and the law enforcement agencies have pressed it, and pursued it vigorously with our full support. ... In the course of this, what developed was a brand new Presidential Directive [PDD-61, February 1998] that fixed problems we had inherited and vastly improved the security procedures..."

Needless to say, Republicans in Congress had a different view. Calling for a major, far-reaching Congressional inquiry into the issue, Senate Majority Leader Trent Lott (Mississippi) stated on 8 March: "[T]he Administration continues to resist really getting into what caused the problem and solving the problem... Congress is going to have to toughen up in dealing with the Administration, particularly when it comes to China." Two candidates for the US Presidential Election, Lamar Alexander and Pat Buchanan, called for National Security Advisor Sandy Berger to resign, a demand Berger stoutly resisted (15 March): "I think that we acted appropriately. I think we acted swiftly and I think we continue to impose on China the strictest of controls..."

On 15 March, the CIA announced it was establishing an independent panel of inquiry into the espionage allegations. According to CIA Director George Tenet, the panel would "provide an outside review of damage assessment which is now being completed." The panel is to be headed by retired Admiral David Jeremiah, former Vice Chair of the Joint Chiefs of Staff.

In a separate development, on 10 March a Federal Grand Jury in Boston indicted Collin Yu, a Canadian citizen, and Yi Yao, a Chinese citizen, of offences under the Arms Export Control Act. The offences are believed to refer to attempts by the two men to illegally export missile-guidance equipment to China.

Editor's note: On 18 March, President Clinton announced a further inquiry into lab-security, to be undertaken by his own Intelligence Advisory Board, a bipartisan and independent body chaired by Warren Rudman. See Documents and Sources for the President's announcement, plus statements and material on the issue provided by the National Security Council (NSC) and DOE.

Satellite Policy

On 23 February, the Clinton Administration rejected a request for a license permitting the export of a $450 million telecommunications satellite to China. The request was made by the Hughes Space & Communications Corporation, which, together with Loral Space and Communications, has been at the centre of a long-running controversy about the export of US satellites for launch in China and the possible ballistic-missile intelligence information accruing to China as the result of failed launches (for coverage, see Disarmament Diplomacy No. 24, Disarmament Diplomacy No. 25, Disarmament Diplomacy No. 27, and Disarmament Diplomacy No. 33). It was reported that the US Commerce Department argued in favour of a license being granted, but was opposed by other Departments.

China reacted angrily to the news. Foreign Ministry spokesperson Zhang Qiyue claimed on 24 February that the decision was "groundless" and would have "a negative effect on normal China-US economic and trade exchanges and cooperation. ... [This was] a normal international business transaction...in accord with the interests of both China and the United States." And according to Trade Minister Shi Guangsheng on 12 March:

"I hope the US will carefully reconsider this mistaken decision... I was shocked and strongly dissatisfied because the decision to block the export of a normal commercial satellite on security grounds was a mistake... On the surface, it looks like a control [measure] against China, but in reality it is against US interests. US firms will suffer the most from such measures..."

US Missile Defence Plans in Asia

As reported in the last issue, there is growing discussion between the US, Japan, North Korea and Taiwan on the possibilities of cooperatively developing a regional theatre ballistic missile defence (TMD) system to protect particularly against North Korean missiles, and, in the case of Taiwan, against what it claims is a substantial increase in the missile threat from China. There are also increasing counter-discussions between China, North Korea and Russia about these TMD plans.

China has been making it plain that any US support for Taiwanese TMD deployments would have grave consequences. Among many pronouncements on the issue, Foreign Minister Tang Jiaxuan told a 7 March news conference:

"If some people intend to include Taiwan under theatre missile defence, that would amount to an encroachment on China's sovereignty and territorial integrity and also be an obstruction to the great cause of reunification of the motherland... The development and research of TMD does not go with the trend of the times, nor is it conducive to international disarmament efforts. It will also exert a negative impact on the global and regional strategic balance and stability into the next century."

China also argues that the deployment of interceptor missiles in Taiwan would shatter the Missile Technology Control Regime (MTCR). According to an unnamed Chinese official on 26 February: "Since the US can lead the way in breaking this [MTCR] regime, other countries have an absolute right not to follow the rules of this regime and undertake cooperation on missiles and missile technology with third countries..."

On 8 March, US State Department spokesperson James Rubin argued that China was misreading the situation: "Instead of worrying about a decision that has not been made to deploy defensive technologies that do not yet exist, the Chinese should focus on the regional and global proliferation of missiles..."

On 11 March, Chinese Foreign Ministry spokesperson Zhu Bangzao told reporters of recent Sino-Russian discussions on the issue: "Both China and Russia have expressed their respective stands on the issue of TMD. On this issue, both sides have held talks... On this issue, the stand of the two sides is unanimous." On 14 March, the RIA Novosti news agency reported that the TMD issue would be discussed between Russian and North Korean officials during a visit to Pyongyang by Deputy Foreign Minister Grigory Karasin due to begin on 15 March.

Reports: US rejects Hughes deal with China, Reuters, 23 February; Hughes satellite export rejected, Associated Press, 23 February; US satellite ban to hurt ties, says China, Reuters, 25 February; China issues veiled threat on missile dispute - FT, Reuters, 26 February; Beijing blasts Washington over Pentagon missile report, Reuters, 1 March; China may have stolen nuke secrets, Associated Press, 6 March; Clinton acts after possible nuclear theft by China, Reuters, 6 March; China warns against missile defense, Associated Press, 7 March; US nixes China warning on Taiwan, Associated Press, 8 March; Beijing presses its case against missile shield, Washington Post, 8 March; Secretary Richardson recommends dismissal of Los Alamos worker, US Department of Energy Press Release R-99-040, 8 March; GOP calls for hill probe of Chinese nuclear spying, Washington Post, 8 March; US scientist accused of passing data to China fired, Reuters, 8 March; China slams US nuclear theft charge as baseless, Reuters, 8 March; US admits Chinese nuclear spying did damage, Reuters, 9 March; China dismisses US nuclear theft charge, Reuters, 9 March; Chinese-American scientist fired, Associated Press, 9 March; Gore blames prior administration for China spying, Reuters, 9 March; Two charged in arms export attempt, Associated Press, 10 March; Republican White House hopefuls urge Berger to quit, Reuters, 10 March; Berger acknowledges lab problems, Associated Press, 10 March; China, Russia discuss missile plan, Associated Press, 11 March; China says in talks with Russia on US TMD plan, Reuters, 11 March; Berger has no plans to resign over China scandal, Reuters, 11 March; Russia, N. Korea to discuss TMD - report, Kyodo, 14 March; China asks US to reconsider satellite ban, Reuters, 15 March; CIA to probe China spy allegations, Associated Press, 15 March; CIA to assess damage from China nuclear spying, Reuters, 15 March.

© 1999 The Acronym Institute.

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