EFFECTS OF NEW MTCR GUIDELINES ON CHINESE MISSILE-RELATED EXPORTS

Created: 8/4/1992

OCR scan of the original document, errors are possible

MEMORANDUM

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SUBJECT: Effects of New MTCR Guidelines on Chinese Missile-Related Exports

he Missile Technology Control Regime (MTCR) plenary session ihat concluded in Oslouly expanded the scope of the regime in ways that could complicate the Chinese commitment to abide by die regime's guidelines and parameters:1

Although the regime's threshold for export of Category Iinclude complete systems and complete subsystems-remainsilogram-payloadew provision-the "belief" standard-callsupplier to deny the export of any system that is suspected of being usedelivery system for weapons of mass destructionhis includes any system that an MTCR member country believes will be equippeduclear, chemical, or biological warhead.

Two major changes will expand the scope of Category D. The first requires case-by-case evaluations for exporting complete unmanned delivery systems that do not meet thehresholdg but that can fly moreilometersayload. The second-yet to be defined-will cover subsystems used in the new Category II systems. The changes are scheduled to become effective this fall to allow MTCR partners rime io take implementing actions. v

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' Although China isember of the MTCR-esult of bilateral negotiations with the United States it agreed to begin abiding by MTCR guidelines and parameters onarch. Moreover, the US National Defense Authorization Act requires the imposition of sanctions against US and foreign persons that engage in the capon, transfer, or trade of MTCR-con trolledresidential waiver may be granted on the grounds of naiional security concerns. (U)

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hus, Beijing is likely io be critical of the new. tighter standards:

In announcing its intent to abide by the MTCR in March, the Chinese Foreign Ministry stated that China would set in accordance with existing MTCR guidelines and parameters.

inimum, Beijing is likely to ask for US concessions on other issues, particalarly the licensing of US-made satellites destined to be launched on Chinese space boosters, in return for any agreement to abide by the new guidelines. Chinese press statements linked adherence to the MTCR wiih the lifting of US sanctions against the transfer of satellite technology to China and conunercia] dealings with rwo Chinese aerospace companies implicated as missile proliferators.elated issue. Beijing could askaiver from any US sanctions resulting from its receipt last year of Sovietpace launch engines that exceed MTCR guidelines.

t is unclear how the new guidelines will effect Beijing's prospects of joining the MTCR. Requirements for member states to exchange information on annex items denied to prospective purchasers hasist showing which non-MTCR countries are interested in specific weapons and technology with WMD applications. This could nuke the regime more appealing to Beijing, but member states may be reluctant to share such information with the Chinese, because it could reveal new sales opportunities. Moreover, if itcmbej under the new standards. Beijing would need to show evidence that it has established export control rncasures that are able to track the transfer of technology, which it has been so far reluctant to do.

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The Chinese clearly oppose the notion that their behavior should conform to changing standards and probably will pointthey have done frequently in thethey have not participated in the MTCR process.

Original document.

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