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July 14, 2011
Notes from the Pentagon

Newly released classified documents reveal China's continued violations of the Missile Technology Control Regime (MTCR) with sales of missiles and parts to Iran, Syria and Pakistan.

A Sept. 18, 2009, State Department cable on the issue was prepared for an international meeting of the MTCR that year in Rio de Janeiro. The MTCR is an informal association of 34 states that seeks to limit exports of missiles with ranges greater than 185 miles and warheads heavier than 1,000 pounds.

Sent under Secretary of State Hillary Rodham Clinton's signature, the cable included a report on Chinese missile proliferation that on three occasions referred to a "lack of political will" by China to stop missile transfers.

"Chinese authorities and firms fail to conduct sufficient evaluations of missile-applicable transactions or to take steps to know their customers," the report said.

Several cables, labelled "secret," were made public on Monday by the anti-secrecy site WikiLeaks, showing Chinese violations or circumventions of the accord.

"Other firms that are aware of the vulnerabilities in China's export-control system take steps to conceal sensitive transactions and avoid detection, including by adopting new names and falsifying shipping documentation. Additionally, some firms may take advantage of government connections to skirt Chinese regulations," the cable said.

Among the violations were sales to Iran by China's Dalian Sunny Industries, also known as LIMMT; sales of ballistic-missile goods to Syria; and transfers by Shanghai Technical By-Products International Corp. to Iran of ballistic-missile items.

Sanctions were imposed on two Chinese firms in 2009: LIMMT for sales of graphite, tungsten, gyroscopes and accelerometers; and Bellamax for steel alloys, gyroscopes and ball bearings.

Chinese authorities apparently do not control missile exports because of too much reliance on "foreign tips" and a reluctance to impose "catch-all" controls, the cable said.

One Chinese official was quoted as saying such controls are "not meant to catch everything." Another Chinese official was quoted as warning U.S. officials to back off pressuring Beijing because "China's business is its own business."

John Tkacik, a former State Department intelligence specialist, said claims that Beijing lacked political will to halt missile proliferation is absurd.

"In fact, the Chinese government is aiding and abetting the proliferation," he said.

Mr. Tkacik said the cables reveal that Chinese diplomats lied to U.S. Embassy officials in Beijing.

"They told the embassy that companies had been 'closed down,' yet our intelligence collection shows those companies continue to function unimpeded," he said.

The report concluded that "until China addresses the persistent shortfalls in its export-control enforcement, ballistic-missile programs in countries of concern probably will continue to seek and receive MTCR-controlled ... items from Chinese firms."

A second cable from 2009 said Iran uses automotive factories as "a procurement cover for its missile programs," something Mr. Tkacik said is highlighted by the 2007 deal between China's Chery Automobile to set up a factory in Iran to make cars.

"Stating that commodities are intended for automobile manufacturing allows Iran a means of purchasing a variety of dual-use goods, particularly specialty metals and industrial machine tools, which could have utility in the automobile sector, but which also often are diverted to support its missile production and development efforts," the second cable on missile trends stated.

A third cable said North Korea developed its missile industry with critically needed parts from foreign suppliers, "most-commonly China-based, given their proximity and access to technology that would be beneficial to North Korea's missile program."

China has been violating the MTCR for decades and first sold DF-11 short-range missiles to Pakistan, while claiming it followed MTCR guidelines. The DF-11 sales were covered up by U.S. intelligence agencies during the Clinton administration to prevent the imposition of sanctions under U.S. law. CIA arms-proliferation analyst Gordon Oehler exposed the cover-up after he was forced into retirement for refusing to go along.

People's Liberation Army Gen. Chen Bingde, chief of the general staff, spoke publicly for the first time this week about China's new aircraft carrier-killing anti-ship ballistic missile, the DF-21D, and played down its development.

Gen. Chen said during a press conference Monday that the missile was discussed during talks with Joint Chiefs Chairman Adm. Mike Mullen. He claimed the missile is "still under research-and-development process. It is not equipped yet."

Gen. Chen then sought to minimize the significance of a missile the Pentagon has called a game-changing "area-denial" weapon designed to keep U.S. ships out of Asian waters. Hitting a ship at sea with a ballistic missile requires precise accuracy.

"Even though if, in the future, we are successful in research and development of this kind of weapons system, it will be a system for defense," he said. His statements contradict those of Adm. Robert Willard, commander of U.S. forces in the Pacific, who said in December that the DF-21D was in the early stages of deployment after extensive testing.

Gen. Chen next criticized the Pentagon for "spending so much money on the military," asking if it wasn't "placing too much pressure on the taxpayers" during the recession.

"If U.S. could reduce a bit military spending to spend more on the improvement of livelihood of the American people and also do more good things for world people, wouldn't it be a better scenario?" Gen. Chen said, echoing similar calls from liberal-left congressional Democrats and other progressives.

To further play down China's military, Gen. Chen said: "We are aware of the fact that what we lack most is the capability of long-distance [power] projection."

A defense official said Gen. Chen is on the leading edge of a new PLA propaganda campaign, what the Pentagon calls "denial and deception."

Gen. Chen's comments were likely intended to prompt a re-evaluation of China's DF-21D by U.S. intelligence agencies that studies have shown were chronically wrong or had underestimated China's military for at least the past two decades, caused in part by accepting disinformation aimed at fooling analysts, according to the official.

Ellen Tauscher, undersecretary of state for arms control and international security, reacted harshly to a report in this space June 16 on the draft missile-defense agreement with the Russians that was rejected by the White House amid concerns it would limit U.S. missile defenses.

Ms. Tauscher was asked about the Inside the Ring report following a speech in London and told the questioner the report was "fiction."

The draft Tauscher agreement the White House rejected included four elements, including two noncontroversial provisions on confidence-building and transparency. The two show-stoppers were provisions Moscow likely would view as legally binding limits on pointing interceptors at Russia, and other limits on numbers and capabilities of missile defenses.

Confirmation of the scrapped June agreement that was prepared for signing by President Obama at the Group of Eight summit in Deauville, France, came from an unlikely source: Russian Foreign Minister Sergey Lavrov, Ms. Tauscher's main missile-defense interlocutor.

Mr. Lavrov told Russia's state-run Rossiya 24 television on July 7 that during the Deauville summit, "We discussed, at the suggestion of the Americans, the possibility of adopting a statement in which instructions would be given regarding a number of important issues that need to be settled prior to practical cooperation [on missile defense], but then, at the request of Americans, their own initiative was recalled. Well, things like this do happen."

Asked if she would like to revise and extend her remarks in light of the Russian minister's statement, a State Department official said what Ms. Tauscher really meant by "fiction" were assertions that she was working on an agreement to limit missile defenses.

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