[Congressional Record Volume 146, Number 98 (Tuesday, July 25, 2000)]
[Senate]
[Pages S7511-S7514]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
A BIPARTISAN RESPONSE TO CHINESE PROLIFERATION
Mr. THOMPSON. Mr. President, today I want to talk about one of the
most serious issues facing the United States--the proliferation of
weapons of mass destruction and the means to deliver them. I also want
to talk about the legislation that Senator Torricelli and I have
introduced--the China Nonproliferation Act--to address this growing
threat.
The world is a more dangerous place today because key supplier
countries like the People's Republic of China [PRC] continue to
proliferate weapons of mass destruction to rogue states like North
Korea, Iran, and Libya.
China has sold nuclear components and missiles to Pakistan, missile
parts to Libya, cruise missiles to Iran, and shared a wide variety of
sensitive technologies with North Korea.
Russia has provided nuclear weapons assistance to Iran, and missile
technologies to North Korea.
North Korea has provided missile technologies to a variety of
countries in the Middle East and Africa, and openly acknowledges these
sales are one of its main sources of hard currency.
Many of these technologies are being used by rogue states to develop
weapons of mass destruction and the means to deliver them--capabilities
which are prompting many policymakers and defense experts in this
country to call for the immediate deployment of a multi-tiered national
missile defense system.
Two years ago,a bipartisan commission headed by former defense
secretary Don Rumsfeld challenged the administration by concluding that
rogue states like North Korea and Iran could develop an ICBM within 5
years of deciding to do so. In fact, the Commission reported that:
China also poses a threat to the U.S. as a significant
proliferator of ballistic missiles, weapons of mass
destruction and enabling technologies. It has carried out
extensive transfers to Iran's solid-fueled ballistic missile
program. It has supplied Pakistan with a design for a nuclear
weapon and additional nuclear weapons assistance. . . . The
behavior thus far of Russia and China makes it appear
unlikely . . . that either government will soon effectively
reduce its country's sizable transfers of critical
technologies, experts, or expertise to the emerging missile
powers.
Shortly thereafter, North Korea surprised our intelligence agencies
by successfully launching a three-stage rocket--the Taepo Dong I--over
Japan, demonstrating the technological know-how to hit the United
States with a small warhead, and essentially confirming the Rumsfeld
Commission's assertions.
In July 1999, the Deutch Commission, which was organized to assess
the federal government's ability to address WMD proliferation,
concluded that:
The U.S. Government is not effectively organized to combat
proliferation, despite the fact that ``Weapons of mass
destruction pose a grave threat to U.S. citizens and military
forces, to our allies, and to our vital interests in many
regions of the world.'' The report also confirmed that China
``is both a source and transfer agent for passing knowledge,
technology, sub-systems, and entire
[[Page S7512]]
systems to dangerous state and sub-national actors.
Last September the intelligence community released a new National
Intelligence Estimate of the ballistic missile threat. This report
asserted that ``during the next 15 years the United States most likely
will face ICBM threats from Russia, China and North Korea, probably
from Iran, and possibly from Iraq.'' North Korea could convert its
Taepo Dong-1 space launch vehicle to deliver a light payload--
sufficient for a biological or chemical--to the United States. And
Iran's missile program is not far behind. In short, some rogue states
may have ICBMs much sooner than previously thought, and those missiles
will be more sophisticated and dangerous than previously estimated.
An unclassified CIA report provided to Congress earlier this year
said that from January to June of last year ``firms in China provided
missile-related items, raw materials, and/or assistance to several
countries of proliferation concern,'' including Iran, North Korea, and
Pakistan.
The report also said that China has provided extensive support to
Pakistan's nuclear and missile programs in the past, and that ``some
ballistic missile assistance continues.''
Additionally, ``North Korea obtained raw materials for its ballistic
missile programs from various foreign sources, especially from firms in
China.''; and
``Russia and China continued to supply a considerable amount and a
wide variety of ballistic missile-related goods and technology to
Iran.''
Iran has ``manufactured and stockpiled chemical weapons, including
blister, blood, and choking agents and the bombs and artillery shells
for delivering them.'' The report adds that, during the first half of
1999, Iran sought production technology, expertise, and chemicals that
could be used for chemical warfare ``from entities in Russia and
China.''
``Throughout the first half of 1999, North Korea continued to export
ballistic missile-related equipment and missile components, materials
and technical expertise to countries in the Middle East and Africa.''
In February of this year, U.S. intelligence officials indirectly
confirmed press reports that North Korea has delivered to Iran 12
engines that would be critical to Iran's efforts to build extended-
range Shahab missiles.
The next report is due out any day now, and it isn't much different,
I am told.
In a hearing before the Governmental Affairs subcommittee on
International Security, Proliferation, and Federal Services last month,
Robert Walpole, National Intelligence Officer for Strategic and Nuclear
Programs, testified that the threats to our Nation's security are real
and increasing. He added that the major factors fueling this threat are
continued proliferation and ``increased trade and cooperation among
countries that have been recipients of missile technologies.'' Many of
the rogue states and other countries seeking these weapons of prestige,
coercive diplomacy, and deterrence are working hard to develop an
indigenous capability--which requires the acquisition of ``dual use''
items from the industrialized countries of the West.
The public press accounts are equally troubling:
New reports since 1997 have detailed how Russian entities have
provided Iran's missile programs with speciality steels and alloys,
tungsten coated graphite, wind tunnel testing facilities, gyroscopes
and other guidance technology, rocket engine and fuel technology, laser
equipment, machine tools, and maintenance manuals.
North Korea has provided missile technologies and assistance to Iran
and Libya, and is supposedly building a missile factory in Sudan for
Iraq.
All of these events lead to one bottom line: That dangers to the
United States exist and are increasing; that the unfettered sale of
``dual-use'' and military-related technologies are abetting those
threats; and that the problem is being fueled by a few key suppliers
like China.
Let me give a brief summary of the revised China Nonproliferation
Act. The U.S. walks a delicate tightrope as it balances national
security and trade with China. Free trade and open markets are
essential, but the federal government's first responsibility is the
protection of our national security. That's why Senator Torricelli and
I have introduced the China Nonproliferation Act, which requires an
annual review of proliferation, establishes clear standards, reasonable
penalties, adequate presidential waivers, congressional oversight, and
much-needed transparency.
The goal of this bill is to address the proliferation of key
suppliers like China, while minimizing any negative impact on United
States businesses or workers. We received a number of comments on the
original draft of this bill, and we have made substantial changes in
order to address concerns raised by the administration and others. I'd
like to take a moment now to set the record straight on what our bill
does and does not do.
The administration raised four concerns regarding the original draft
of our bill, all of which have been addressed in the revisions.
First, in response to the concern that the bill singled out China, we
have broadened the bill to apply to all key suppliers of weapons of
mass destruction as identified by the Director of Central Intelligence.
Rather than singling out certain suppliers, this bill applies equally
to all countries based on their proliferation activities. Those
determined to be key suppliers by the DCI will be subject to the act.
This mechanism allows countries to be added or dropped from the list
based on their behavior.
Second, in response to the concern that the original bill failed to
provide adequate flexibility for the President, we have made the
sanctions against supplier countries under the act discretionary, as
opposed to the mandatory sanctions contained in the original bill.
Third, in response to a concern that individual companies could face
mandatory sanctions based on insufficient evidence, we have raised the
evidentiary standard for imposing mandatory sanctions on companies
identified as proliferators to give the President complete discretion
in making a determination as to whether a company has engaged in
proliferation activities.
Finally, in response to a concern that the original bill captured
legal transactions and legitimate efforts by countries to pursue their
own defense needs, we have changed the language to make clear that only
actions that contribute to proliferation of weapons of mass destruction
will trigger penalties under the act.
Furthermore, the revised bill addresses additional concerns raised by
the U.S. business community that U.S. firms and workers could be
adversely impacted.
The bill now contains a blanket provision that protects the
agricultural community from any adverse impact.
In addition, the bill's penalties apply only to companies of key
supplier countries, not to U.S. companies and workers.
We have also made changes to the congressional review procedure to
ensure that Congress exercises adequate oversight without overburdening
the Congress. We have raised the bar with regard to the initiation of
expedited congressional review procedures. We did this by requiring at
least one-fifth of the Member of either House to sign onto a joint
resolution. We have also exempted the President's exercise of national
security waiver authority from this congressional review process.
In short, the key features of our bill are now consistent with
current law and similar to the Iran Nonproliferation Act of 2000, which
passed the Senate 98-0 in February. These two laws are structured in
much the same way, with the difference being that our bill addresses
the supplier of the weapons, and the Iran Act addressed a user. Under
both bills, the President is required to supply a report, based on
``credible information,'' on foreign entities transferring WMD and
missile items. The activities covered in these reports are the same,
except that the Iran Act covers transfers of these items into Iran and
this bill covers transfers of these items out of key supplier
countries--the international equivalent of going after the drug dealers
to get to the root of a pervasive drug problem. Under both the Iran Act
and our legislation, the President is authorized, but not required, to
impose sanctions against countries violating the act. The principal
difference between our bill and the Iran Act is that our bill requires
sanctions against the individual,
[[Page S7513]]
company, or government entity, identified as a proliferator, whereas
the Iran Act made these sanctions discretionary; however, our bill
requires a Presidential determination that the proliferation activities
have occurred prior to triggering these sanctions, leaving the
President with substantial discretion.
In response to the critics, we are confident that these changes will
still fulfill our goal of halting proliferation from key suppliers like
China and sending the right message abroad, while removing any
unintended consequences. But despite our efforts, opponents of the bill
continue to contend that current nonproliferation laws are sufficient
and effective, that Chinese proliferation is under control, and that
sanctions never work. They add that diplomacy and ``engagement'' will
bring the world's key suppliers around. I ask these critics, where is
your evidence?
All we need to do is look at the evidence to realize that existing
legislation has clearly not been effective, because we continue to
receive alarming reports of China's proliferation activities. In a
report issued in July of 1998, the Rumsfeld Commission called China a
``significant proliferator of ballistic missiles, weapons of mass
destruction and enabling technologies.'' Recent reports indicate that
Chinese proliferation behavior has worsened over the past year, and
North Korean activities remain intolerable, demonstrating the
inadequacy of our nonproliferation laws.
In the last several weeks, on the eve of the Senate's consideration
of PNTR for China, and after the House had already voted, it was
revealed that China was assisting Libyan experts with that country's
missile program, illegally diverting United States supercomputers for
use in the PRC's nuclear weapons program, and helping build a second M-
11 missile plant in Pakistan. And just last week, Iran successfully
test-fired its Shahab-3 missile, which is capable of striking Israel,
American troops in Saudi Arabia, or American bases located within the
borders of our NATO ally, Turkey. This missile was developed and built
with significant assistance by the PRC.
The classified reports of Chinese proliferation are even more
disturbing.
And all we need to do is look at the events of recent weeks to see
that diplomacy alone will not resolve the serious threat to our
national security posed by proliferation. In the last few weeks, three
senior United States delegations traveled to Beijing to discuss these
issues. Each was sent back to Washington empty-handed, under the
explicit threat that if the United States continues to assist Taiwan
with its defensive needs or proceed with our own National Missile
Defense, the PRC will continue to proliferate offensive weapons and
technologies to whomever it pleases.
Opponents also argue that we don't need more laws--current laws are
sufficient and effective. If this is the case, then why is China's
proliferation problem not improving? Moreover, why was it okay to pass
the Iran Nonproliferation Act of 2000, by a vote of 98-0, less than 6
months ago, and it's not okay to do so now? That legislation was
designed to address a serious problem: The development of a credible
nuclear weapons and missile program thanks to the direct assistance of
the Russians, Chinese, and North Koreans. Weren't there enough laws on
the books then also? Or does the potential to make a buck off the
Chinese make it all different?
Our bill recognizes the value of a multilateral approach to the
problem and encourages the President to pursue a multilateral solution.
But at the same time, we must act. Over the years, when the United
States has been serious about implementing measures to signal our
displeasure with a foreign government's action, these measures have had
an effect. For example, United States economic pressure in the late
1980s and early 1990s led to China's accession to the Nuclear
Nonproliferation Treaty in 1992. In June 1991, the Bush administration
applied sanctions against the PRC for missile technology transfers to
Pakistan. These measures led to China's commitment five months later to
abide by the Missile Technology Control Regime [MTCR]. In August 1993,
the Clinton administration imposed sanctions on the PRC for the sale of
M-11 missile equipment to Pakistan in violation of the MTCR. Over a
year later, Beijing backed down by agreeing not to export ``ground to
ground'' missiles if sanctions were lifted, which occurred in November
1994.
Critics of our legislation also say that the problem is not with the
laws, it is with the President's willingness--or unwillingness--to
enforce them. On this point I would certainly agree. In the case of
Chinese proliferation, the Clinton administration has too often put
``good relations'' and commerce before national security. Time and time
again this administration has jumped through hoops to whitewash or make
the problems with China go away. The President himself acknowledged
that he has avoided complying with current laws. In April 1998, while
speaking to a group of visitors, he complained about legislation that
forces his administration to penalize other nations for behavior that
falls short of our expectations. He went on to say that this creates
pressure for the administration to ``fudge the facts.'' I have no
trouble believing this is true. A prime example is when the
intelligence community discovered a shipment of Chinese M-11 missile
canisters on a dock in Pakistan. The President failed to take action.
His justification? He couldn't prove that there are missiles actually
in the canisters. This of course only emboldened the PRC, as evidenced
by their recent substantial assistance to the Pakistani missile
program.
The Clinton administration has never made nonproliferation a policy
priority. We've never acted aggressively in the face of these
violations, and have never treated nonproliferation as a serious agenda
item in our official dealings with the PRC.
It is not surprising, then, that the White House does not want to see
any legislation considered by the Congress which might reflect
negatively on its stewardship of the proliferation problem. But that is
precisely why this legislation is needed. This legislation attempts to
enhance congressional oversight by requiring reports from the President
on proliferation activities and his response to those activities, and
by creating expedited procedures for the Congress to consider a joint
resolution of disapproval of the President's actions where that is
warranted.
Opponents argue that the congressional review procedures in our bill
are also unwarranted and infringe on the rights of the President.
However, Congress has a responsibility here. We do not have the luxury
of sitting back and avoiding a matter that involves our national
security when we see that things are going in the wrong direction. Our
goal is not to tie up the Senate with annual votes on China's
proliferation activities, but it is to provide a procedure for Congress
to exercise its oversight role when the President has truly failed to
respond to these threats. In response to concerns raised by other
Members that the original review procedure would allow individual
Senators to disrupt the business of the Senate, we have raised the
standard to initiate the expedited procedures to one-fifth of the
Members of either House, more than that required to initiate a cloture
petition in the Senate. And regardless of how the Senate votes, the
President can still veto the measure. All this provision does is ensure
that Congress' legitimate role in foreign policy is preserved, that we
are made aware of the proliferation activities of key suppliers
countries and what actions the President is taking to deal with this
threat, and Members have the means to fulfill our constitutional duties
to ensure that America's security is safeguarded.
Other critics of my bill have argued that we need to hold hearings
and subject the bill to committee review. Over the past four years, the
Governmental Affairs Committee alone has held 15 hearings on
proliferation. Over 30 hearings have been held by my committee, the
Armed Services Committee, and the Foreign Relations Committee.
Furthermore, this legislation has the full support of the chairman of
the committee of jurisdiction, the Foreign Relations Committee. The
issue of proliferation has received a full hearing and it is time to
act. In the past, the Senate has not hesitated to act in an expedited
fashion where a serious threat to U.S. interests was involved.
I find it ironic that some of those members who so eagerly call for
hearings are the same ones that voted last year for the Food and
Medicine for the World Act--a sanctions relief bill
[[Page S7514]]
which was offered to the Agriculture Appropriations bill without prior
hearings, and was voted for by 70 Members of this body. This bill
significantly affected our relations with several states, most notably
Cuba and the other state sponsors of terrorism. This bill would have
changed U.S. policy that had been in place for decades, through several
administrations, and tightly bound the President's ability to initiate
sanctions against a country. Moreover, the bill required congressional
approval to implement sanctions, and did so through the same expedited
procedures found in our original bill. Again, I ask what is different
here?
Some have even raised the argument that the transparency provision in
our bill is bad and will do great harm to our capital markets. Why is
that transparency fine everywhere but in this bill. Whether it be
within the government, campaign finance reform, you name, it,
transparency is fine. But not when we want to let U.S. investors know
when a foreign company that they have invested in, or are considering
investing in, has been reported by the intelligence community as a
proliferator of weapons of mass destruction and the means to deliver
them. Is it so bad to let American investors know that their hard-
earned dollars might be providing the capital to support a weapons
proliferation program for North Korea or Libya that might one day
threaten their hometown? We warn Americans that cigarette smoking might
be hazardous to their health, that cholesterol might cause heart
failure, and that driving without a seat belt on could result in
serious injuries in an accident, but we're unwilling to tell them that
their pension fund might be helping China ship chemical weapons to
Iran? Do we think Americans aren't smart enough to make responsible
decisions, or are we actually afraid that they might do just that?
This is not some stretch of the imagination. A few months ago,
PetroChina attempted to raise $10 billion through an IPO to finance its
operations in Sudan, a country that has been listed as a state-sponsor
of terrorism. While this case raised the level of public attention on
this issue, the problem started before PetroChina. The California
Public Employees' Retirement System (or Calpers) has invested millions
of dollars of employee pension funds in companies with close ties to
the Chinese government and the Chinese People's Liberation Army.
Calpers has invested in four companies linked to the Chinese military
or Chinese espionage: Cosco Pacific, China Resources Enterprise, Citic
Pacific, and Citic Ka Wah Bank. According to the Wall Street Journal,
American workers own $430 billion worth of foreign equities through
pension funds.
Congressionally mandated commissions studying the issue of
proliferation have concluded both that the Chinese government is using
the United States capital markets to fund its proliferation activities
and that the United States needs to address this issue as part of a
solution to proliferation. The Deutch Commission study of the threat
posed by proliferation stated that ``the Commission is concerned that
known proliferators may be raising funds in the U.S. capital markets''
and concluded, ``It is clear that the United States is not making
optimal use of its economic leverage in combating proliferators . . .
Access to U.S. capital markets . . . [is] among the wide range of
economic levers that could be used as carrots or sticks as part of an
overall strategy to combat proliferation. Given the increasing tendency
to turn to economic sanctions rather than military action in response
to proliferation activity, it is essential that we begin to treat this
economic warfare with the same level of sophistication and planning we
devote to military options.''
The Cox Commission review of United States national security concerns
with China also concluded that ``increasingly, the PRC is using United
States capital markets as a source of central government funding for
military and commercial development and as a means of cloaking
technology acquisition by its front companies.'' The committee also
concluded that most American investors don't know that they are
contributing to the proliferation threat saying, ``Because there is
currently no national security-based review of entities seeking to gain
access to our capital markets, investors are unlikely to know that they
may be assisting in the proliferation of weapons of mass destruction by
providing funds to known proliferators.''
It is clear that China has been using United States capital to fiance
its military and proliferation activities, and it seems that this
activity will only increase in the future. At least 10 Chinese
companies are currently listed on United States stock exchanges, and
the PetroChina initial public offering was a test case designed to pave
the way for additional offerings. China Unicom, the second largest
telecommunications operator in China, was recently listed on the New
York Stock Exchange, and has already raised approximately $5 billion in
its initial public offering, and total proceeds of the IPO are expected
to exceed $6.3 billion.
These problems have gone unaddressed for too long. That is why we
have included a provision regarding capital market transparency in the
China Nonproliferation Act. However, even in light of all of the above,
the capital market response is optional. It is merely one of several
responses available to the president if a foreign company is determined
to be a persistent proliferator.
In conclusion, let me end by reiterating that our bill is not an
attempt to derail the vote on permanent normal trade relations [PNTR]
for China. I have long been a strong supporter of free trade. That is
why we have asked for a vote separate from, but in the context of, the
China-PNTR debate all along. We want Members to vote based on their
conscience and the right solution to this serious national security
issue, not based on parliamentary concerns or on how such a vote might
affect the pending trade bill.
But it is essential to address this issue now. At a time of
monumental change in our relationship with Beijing--when China is
asking to become a member in good standing of the global trading
community--is it asking too much for a fellow permanent member of the
U.N. Security Council to obey international rules and norms with regard
to the proliferation of weapons of mass destruction?
The United States cannot continue this charade of confronting Chinese
proliferation by establishing more commissions, holding more hearings,
passing more ineffective legislation, or seeking more empty promises
from Beijing. We are confident that our bipartisan approach to this
serious threat addresses the problem in a firm, responsible, and
balanced manner. The United States must send the right message abroad,
and as strong proponents of free trade, we believe that requires
engaging and trading, while establishing a framework for appropriate
United States response to China's actions that threaten this country.
We cannot take one approach without the other--not when our national
security is at stake.
The PRESIDING OFFICER. The Chair recognizes the Senator from Wyoming.
Mr. THOMAS. Mr. President, it is my understanding we go in recess at
12:30.
The PRESIDING OFFICER. The Senator is correct.
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