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Clinton Administration Places Economic Sanctions on China

By Daniel Williams
The Washington Post

WASHINGTON

The Clinton administration Wednesday barred the export of some high-technology goods to China and Pakistan for two years as punishment for the sale of Chinese missile equipment to Pakistan.

The primary effect of the ban will be to block the anticipated sale of U.S. satellites to China, according to the State Department, which estimated the sanctions would cost American firms up to $500 million a year in sales, or about 7 percent of the current level of U.S. exports to China.

The sanctions do not apply to imports of Chinese products, and the effect on trade with Pakistan is expected to be negligible because of previous bans related to the country's nuclear weapons program.

While the Clinton administration had been reluctant to restrict U.S. business opportunities in China because of the potential job loss here, State Department officials stressed Wednesday that the United States had no choice under current law but to impose the sanctions after confirming the missile-related sale.

The sanctions decision was made after months of intelligence gathering and consultations with Beijing and Islamabad over the suspected sale last year of equipment that U.S. officials say included launchers for M-11 missiles. The sale falls under prohibitions of the Missile Technology Control Regime (MTCR), an arrangement among 23 of the world's most advanced industrialized nations to limit the spread of missiles that can carry nuclear and other weapons of mass destruction.

But among the MTCR signatories, only the United States is committed by law to impose sanctions on violators of MTCR guidelines.

While China has not signed the MTCR, it agreed two years ago to adhere to the agreement and told U.S. officials that the sale to Pakistan in no way breached the guidelines. China is aggressively pursuing the Third World arms market to finance its own defense industries and gather currency for purchases of advanced weaponry.

McCurry said there was "unambiguous evidence" that China had delivered missile-related technology and components to Pakistan last year, but added that U.S. officials were still uncertain whether China had also sold Pakistan any whole missiles, rocket engines or guidance systems covered by the MTCR, which applies to missiles with ranges greater than 186 miles. The sale of such whole systems would trigger even stiffer U.S. sanctions.

As things now stand, the sanctions encompass exports of U.S. goods that can be used in military applications as well as electronics, military aircraft and space systems and equipment. A proposed sale of a high-powered American computer, controversial because the equipment might have military value, is not prohibited and still under review, said Lynn Davis, the undersecretary of state for international security affairs.

and Pakistani ambassadors Wednesday morning and offered to negotiate with Chinese officials in hopes of persuading them to adhere more closely to the MTCR. "We wish to work together," she told reporters.

In recent months, senior U.S. officials had peppered Chinese and Pakistani authorities with repeated inquiries about the missile-related deal, but McCurry said the responses were "unsatisfactory."

It was not clear Wednesday how the other MTCR signatories, including Britain, France and other European allies, will respond to the American decision. McCurry said only that they would be informed of the U.S. action and the findings on which it was based.

U.S. leverage over China is limited because Beijing already is subject to American bans on acquiring many high-tech and military-related goods, legislated in the wake of the slaughter of pro-democracy demonstrators during the 1989 Tiananmen Square protests. In May, President Clinton resisted political pressure to impose higher tariffs on Chinese imports and instead extended China's preferred trade status for another year. But he warned that renewal next year would depend on improvements in China's human rights performance.<\