China’s Deadly Trade in the Mideast

By Mark Yost
The Wall Street Journal, 04 December 1996

Chinese Defense Minister Chi Haotian is scheduled to begin a much
delayed visit to the U.S. tomorrow. China has already announced that
high on his agenda will be the usual complaints about American arms
sales to Taiwan. But what about China’s own arms sales, particularly to
the Middle East? Don’t expect to hear much from the Clinton
administration about this threat to the national interest.

Just how dangerous this threat is can be seen by a review of recent
Chinese arms deals with three Mideast countries — all of which are, to
put it mildly, unfriendly to the U.S., and suspected of supporting
international terrorism:

Iran: China has been a major supplier of arms to Iran since the
1980-’88 Iran-Iraq war. In September, the two countries reached an
agreement valued at $4.5 billion in Chinese combat aircraft, missiles
and warships. According to Asharq al-Awsat, a London-based Arabic daily,
the agreement is expected to be finalized this month. According to the
newspaper, China has sold Iran approximately $3 billion in weapons over
the past few years and has transferred weapons technologies as well,
helping Iran to build domestic industries for producing missiles,
helicopters and artillery. This assessment is confirmed by Western
military and intelligence sources.

China exports the majority of these weapons through its state-owned
China Precision Machinery Import-Export Corp. Iran almost always pays
with oil, supplemented by a small amount of cash.

In addition to arms sales, China has agreed to build two 300-megawatt
nuclear power reactors in Iran. Reza Amrollahi, the director of Iran’s
Atomic Energy Agency, recently said in a public statement that the
plants are expected to be operational in seven to nine years. The U.S.
has objected to the power plant construction, saying that the reactors
can be used for an Iranian nuclear weapons program. Both China and Iran
claim that the plants will not be used to produce bomb-grade nuclear
material.

According to U.S. Navy sources, China has also sold Iran 400 tons of
chemical agents, giving it the largest chemical weapons stockpile of any
Third World country. These chemical agents, according to the U.S. Navy,
could be placed in warheads atop Chinese-made surface-to-surface
missiles that Iran has placed along the Strait of Hormuz, through which
one-fifth of the world’s oil supply flows.

Iraq: Western intelligence agencies believe that China — along with
Germany and Russia — supplied Saddam Hussein with technology to develop
the chemical and biological weapons that threatened the Allies during
the Gulf War. Iraq was also helped during the war by Chinese-supplied
antiaircraft and air defense systems. It’s believed in the U.S.
intelligence community that thanks to technical assistance from China,
Iraq was able to briefly track the U.S.’s F-117 stealth fighter,
although it was never able to target the aircraft.

With the imposition of the U.N. embargo, China has not traded
contraband materials openly with Iraq. But within the past few weeks,
according to reports in the Iraqi media, China has signed an agreement
to develop oil fields in southern Iraq. The agreement was approved Nov.
17 by the Iraqi National Assembly. The Associated Press reports that
Munthir al-Alusi, chairman of the assembly’s oil and energy committee,
said that the assembly “reviewed the positive aspects and merits of the
negotiations . . . [and] considered them a step toward breaking the
oppressive embargo imposed on Iraq.” Whatever the Iraqi interpretation,
it must be said that Italy, France, Russia and Ukraine all have similar
agreements with Iraq, contingent on the lifting of the embargo. There’s
no evidence that China would act otherwise.

Syria: A U.S. intelligence source told the Journal that Syria now
buys a steady stream of Chinese arms. The source says that the CIA
discovered a Chinese shipment of military material bound for Syria in
June that is believed to have contained sensitive guidance equipment for
the Chinese-made M-11 surface-to-surface missile. The cargo was
reportedly bound for the Scientific Studies and Research Center, a
Syrian government agency that oversees missile development.

Such a missile sale would contravene Beijing’s agreement with
Washington to abide by the Missile Technology Control Regime, which bars
the sale of missiles or related technology that can deliver a warhead
heavier than 500 kilograms and has a range greater than 300 kilometers.
Under that agreement, the U.S. had already imposed sanctions against
China Precision Machinery Import-Export Corp. because of M-11 sales to
Pakistan. They were dropped after China promised not to further violate
the accord.

Although there is less evidence available, U.S. intelligence sources
fear that Chinese equipment may be involved in what they think is an
underground chemical/biological weapons factory outside Damascus, much
like the ones Libya is said to be building near Tarhuna. Their belief
that such a project exists is based on documents seized last summer from
two Germans arrested in Germany and charged with illegal equipment
sales. The documents showed that both Libya and Syria had received
sensitive computer equipment that could be used to mix chemical and
biological agents. Although these sources had not seen evidence that the
equipment came from China, China’s expertise in biological and chemical
weapons manufacture gave rise to their suspicions.

Why is China so interested in the Middle East? The singlemost
important answer is that it needs Mideast oil and gas to fuel its
rapidly expanding economy. It has had difficulty exploiting its own oil
reserves, making it increasingly dependent on foreign oil and gas
suppliers. According to Princeton Prof. Kent Calder, China currently
uses about 600,000 barrels of oil per day. That is expected to increase
to one million by 2000 and to three million by 2010 if the economy
continues its present rate of growth.

At a conference in Beijing in August, Chinese geologist Li Desheng
said that China’s proven oil reserves will last only another 20 years.
He estimated that 2.8 billion tons of China’s proven five billion ton
oil reserves have already been extracted. Of course, exploration may
well turn up additional reserves. Some oil analysts estimate that the
potential reserves of the Tarim Basin in the northwestern province of
Xinjiang may be as big as Saudi Arabia’s. But due to a lack of technical
expertise and the sheer remoteness of the province, China hasn’t been
able to fully exploit these deposits. In the meantime, its dependence on
Mideast oil will continue.

China’s rising arms sales in the Middle East and its violation of
international arms accords pose a direct challenge to U.S. interests.
But the response of the Clinton administration has been low-key. During
Secretary of State Warren Christopher’s recent visit to China, in
response to press reports that detailed the arms shipments from China to
Iran and Syria, State Department spokesman Nicholas Burns said, “We
cannot allow single issues to torpedo the relationship and we cannot
allow disagreements on single issues to cancel diplomatic contacts.”

During last week’s APEC meeting in Manila, President Clinton and
Chinese President Jiang Zemin agreed to exchange state visits within the
next two years. This agreement took place even though China rejected a
U.S. proposal that the two countries refrain from targeting each other
with intercontinental ballistic missiles (as the U.S. and Russia have
agreed). Then, earlier this week, China said it would not stop helping
Pakistan develop its nuclear “energy” program, and denied that the
technology was being used for military purposes.

In short, there is plenty for the U.S. and China to talk about during
Defense Minister Chi’s visit this week. An all too likely prospect,
however, is that the subject of China’s weapons and technology sales to
the Middle East will never come up.

Mr. Yost is an editorial page writer for The Wall Street Journal
Europe.