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Issue Number 40, dated 11/10/1997

China backs off from Iran - maybe (Serial 4001)

President Clinton paved the way for the sale of civilian nuclearpower plants to China on Oct. 29, after receiving "writtenassurances" from the Chinese that they would scale back cooperationwith Iran in weapons of mass destruction.

But Chinese state-run weapons manufacturers and researchinstitutes have billions of dollars at stake in Iranian weaponsprograms, and may hesitate to cut off ties from one day to the next,despite the pledge apparently made by Chinese President Jiang Zeminduring the Washington summit.

China has repeatedly made such pledges in the past, and repeatedlybroken them. China pledged in 1988 to stop sales of Silkworm missilesto Iran, only to turn around and build a Silkworm fabrication plantin Iran, then sell more advanced C-801 and C-802 anti-shippingmissiles a few years later. In 1992, China pledged to abide by theguidelines of the Missile Technology Control Regime, only to sell M-9production technology and solid-fuel booster technology in ensuingyears, including technology now being incorporated into an entire newgeneration of Iranian ballistic missiles with ranges of up to 10,000kilometers, capable of reaching the east coast of the UnitedStates..

In May 1996, China made a bilateral pledge to the United States torefrain from providing technology or support to unsafeguarded nuclearfacilities. And yet, U.S. intelligence reporting shows that Iran hascontinued to provide support and technology for uranium conversionand enrichment plants in Iran, and to negotiate new reactor sales,while continuing nuclear cooperation with Pakistan, a nuclearthreshold state that has refused to sign the NPT.

The problem with this latest Chinese pledge revolves around thetechnical interpretation by the Chinese side of what constitutes anunsafeguarded facility. The Chinese argument, which is legallycorrect, is that uranium milling and even conversion plants are notsubject to IAEA safeguards, nor is the sale of technology that couldbe useful to an uranium enrichment program - unless it is actuallyinstalled in a declared enrichment facility. Obviously, if Iran hasembarked on a clandestine nuclear weapons program, as the UnitedStates, Israel, and European allies believe, then it is not going todeclare clandestine sites to the IAEA. Although an IAEA spokesmanlast week said the Agency has "no reason to complain" about Iran orChina's declarations to the Agency, "the legal situation is unclear"as to what constitutes facilities that must be declared.

Additionally, it remains unclear what exactly the Chinese pledgednot to do, since the White House has refused to release the text ofthe "written assurances" received from President Jiang. When a seniorWhite House official briefed reporters on the pledge, on Oct. 29, hestated when pressed that China "will complete a few existingprojects, and these are projects which are not of proliferationconcern." In his comments to reporters, National Security AdvisorSandy Berger spoke of "two projects in particular" that the Chinesewould complete, a turn-key facility to manufacture zirconium claddingfor nuclear fuel rods, and an unspecified uranium conversion plant.

An IAEA spokesman in Vienna told The Iran Brief that neitherproject was subject to IAEA safeguards, but would normally bedeclared to the Agency by members of the London Nuclear SuppliersGroup or members of the Zangger committee. Until now, China hasrefused to join either group, since they require prior notificationof nuclear exports.

In the beginning: Iran and China signed a major bilateralagreement on scientific and technical cooperation during Majlisspeaker Hashemi-Rafsanjani's state visit to Beijing in 1985, thatreportedly included a secret side agreement on nuclear cooperation.Evidence of nuclear cooperation between China and Iran began toemerge soon thereafter, with the delivery of a small calutron in 1987and the training of Iranian nuclear technicians in China as of1989.

Chinese nuclear assistance to Iran accelerated in 1991, afterOperation Desert Storm, when a second nuclear cooperation agreementbetween the two was signed. Iran sought to accelerate assistance fromChina when it became clear that its major nuclear suppliers at thetime - Argentina and India - were preparing to cancel a series ofcontracts to build nuclear facilities in Iran as a result of intenseU.S. pressure. Argentina was to assist Iran in uranium explorationand to build milling plants and a uranium conversion plant tomanufacture uranium hexafluoride gas for enrichment purposes. Indiawas to build a 10 MW research reactor, which would have served as asource of unsafeguarded plutonium.

The Argentine National Institute for Applied Research, INVAP beganwork on uranium mining and milling facilities as of 1989 which werevisited by an IAEA inspection team in 1992. China took over where theArgentineans left off, and sent teams of geologists to Iran toexplore for new uranium deposits. In June 1994, Iran's InteriorMinister Ali Besharati announced that a Chinese technician undercontract to Iran's Atomic Energy Organization at a previouslyundisclosed uranium plant in Rudan, near the town of Fasa in Shirazregion, had been kidnapped by "bandits." Subsequent reportingidentified Rudan as the potential site of a Chinese-built hex plant.[For a more complete account of Iran's uranium programs, see TIB6/1/95]

On Jan. 21, 1990, an agreement was signed between Minister ofDefense and Armed Forces Logistics, Ali Akbar Torkan, and GeneralJiang Xua, the Deputy Director of China's Commission on Science,Technology and Industry for National Defense (COSTIND), to build a 27Megawatt plutonium production reactor in Isfahan. The sale wasnegotiated by the China Nuclear Energy Industry Corporation (CNEIC),the export arm of China's Ministry of Energy Resources. U.S.satellite photographs, taken in September 1991, documented majorconstruction work at the site and the presence of large numbers ofChinese technicians. Press reports on these photographs triggeredpublic concern in Washington over Chinese-Iranian nuclearcooperation.

Experts now believe the earlier reports may have confused theplutonium production reactor with a 27 kW training reactor beingbuilt by the Chinese at the Isfahan Nuclear Technology Center atabout the same time, which was inaugurated by President Rafsanjani inJune 1994 and placed under IAEA supervision. Alternately, there issome speculation that the Chinese might have canceled work on thisreactor as a result of pressure from the Bush administration.

Missile projects: China was an early supplier of missiletechnology to Iran, with the first known transfers of solid fueltechnology dating from 1985. Iran built several families of artilleryrockets, including the 200-km range Zelzal-2 and the 150-km rangeNazeat-10, with Chinese assistance and using Chinese solid-fuelpropellant technology. During the 1980s, Iran purchased chemicals tomanufacture solid fuel (such as ammonium perchlorate) on theinternational market, including in the United States. To avoidincreasingly-intrusive Western Customs efforts to shut down thistrade, Iran asked China to build solid fuel propellant plants inIran, and today is believed to be self-sufficient in the basicchemicals needed for these propellants.

More recently, China has become a supplier of subsystems, guidancekits, and telemetry equipment for Iran's long-range missile projects,the Shahab-3 and Shahab-4. Both missiles use liquid-fuel and arebeing developed primarily with assistance from Russian state-ownedballistic missile plants and design institutes. These missiles haveranges of 1,300 km and 2,000 km respectively, bringing Israel intorange for the first time, along with NATO bases in Turkey and U.S.forces in Saudi Arabia.

A German intelligence report on Iran's unconventional weaponsprograms and ballistic missile programs dated April 1997 listed Chinaas a major supplier in all areas - nuclear, chemical, biological, andmissile. But it singled out China's support for long-range solid-fuelballistic missile projects in Iran which, "when completed, will becomparable to modern Western systems." Iranian purchases ofmanufacturing equipment in China "clearly demonstrate the intentionin the future to manufacture large quantities of solid rocket fuel,"the report states. China stands out as "Iran's most important partnerin this project." While China did not deliver complete weaponssystems, it "sold to Iran essential know-how for the manufacture ofsolid rocket fuel."

Using this technology, Iran is now developing an entire family oflong-range solid-fuel missiles, according to intelligence sources inEurope and Israel, capable of reaching targets in Europe and theEastern seacoast of the United States. The new missiles will haveranges respectively of 4,500 km and 10,000 kilometers, and willincorporate technologies and know-how purchased from Russia aswell.

Foreign suppliers: For these longer-range projects, Iran is likelyto depend more on Russia than China. U.S. intelligence experts arguethat China's solid-fuel technology "is not home-grown, but wasoriginally imported from the Soviet Union, Japan, and the West, andthey still depend on these suppliers for many components,machine-tools, and even specialty chemicals." A major Japanesechemical supply house, Sumitomo Chemicals, is believed by U.S.intelligence to have supplied chemical products used by China'ssolid-fuel propellants industry. The company thought it was supplyingchemicals to civilian end-users.