-------------------------Indexing Terms------------------------- 
REPORTNUM:   NSIAD-98-176						        

TITLE:     CHINA - MILITARY IMPORTS FROM THE
UNITED STATES AND THE EUROPEAN
UNION SINCE THE 1989 EMBARGOES

DATE:   06/16/1998 
				                                                                         
-----------------------------------------------------------------

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Cover
================================================================ COVER


Report to the Chairman, Joint Economic Committee, U.S.  Senate

June 1998

CHINA - MILITARY IMPORTS FROM THE
UNITED STATES AND THE EUROPEAN
UNION SINCE THE 1989 EMBARGOES

GAO/NSIAD-98-176

China

(711295)


Abbreviations
=============================================================== ABBREV

  DOD - Department of Defense
  EU - European Union

Letter
=============================================================== LETTER


B-279891

June 16, 1998

The Honorable James Saxton
Chairman, Joint Economic Committee
United States Senate

Dear Mr.  Chairman: 

In June 1989, the United States and the members of the European Union
\1 embargoed the sale of military items to China to protest China's
massacre of demonstrators in Beijing's Tiananmen Square.  You have
expressed concern regarding continued Chinese access to foreign
technology over the past decade, despite these embargoes.  As
requested, we identified (1) the terms of the EU embargo and the
extent of EU military sales to China since 1989, (2) the terms of the
U.S.  embargo and the extent of U.S.  military sales to China since
1989, and (3) the potential role that such EU and U.S.  sales could
play in addressing China's defense needs.  In conducting this review,
we focused on military items--items that would be included on the
U.S.  Munitions List.  This list includes both lethal items (such as
missiles) and nonlethal items (such as military radars) that cannot
be exported without a license.\2 Because the data in this report was
developed from unclassified sources, its completeness and accuracy
may be subject to some uncertainty. 


--------------------
\1 In 1989, the European Union--then known as the European
Community--consisted of Belgium, Denmark, France, Germany, Greece,
Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, and the
United Kingdom.  Austria, Finland, and Sweden became EU members in
1995. 

\2 We did not address exports of items with both civil and military
applications because the embargoes do not bar the export of dual-use
items.  Experts believe that such items are an important source of
high technology for China's military. 


   BACKGROUND
------------------------------------------------------------ Letter :1

The context for China's foreign military imports during the 1990s
lies in China's recent military modernization efforts.\3 Until the
mid-1980s, China's military doctrine focused on defeating
technologically superior invading forces by trading territory for
time and employing China's vast reserves of manpower.  In 1985, China
adopted a new military doctrine that emphasizes the use of modern
naval and air power in joint offensive operations against regional
opponents.  Lacking equipment needed to implement its new doctrine,
China began buying small amounts of military items from other
nations, including the United States and some European nations. 
However, the 1989 massacre of demonstrators in Tiananmen Square led
to the imposition of the U.S.  and EU arms embargoes--disrupting
China's access to these sources of modern military technology. 


--------------------
\3 This report does not assess China's military modernization
efforts.  For a fuller discussion of them, see our report entitled
National Security:  Impact of China's Military Modernization in the
Pacific Region (GAO/NSIAD-95-84, June 6, 1995). 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :2

The EU embargo is based on a 1989 political declaration that EU
members will embargo the "trade in arms" with China.  Each EU member
may interpret and implement the embargo's scope for itself.  We found
no cases of EU members entering into new agreements to sell China
lethal military items after 1989, although some members delivered
lethal and nonlethal military items to China during the
1990s--apparently in connection with preembargo agreements--and have
more recently agreed to deliver additional nonlethal military items. 
According to experts, the embargo is not legally binding and any EU
member could legally resume arms sales to China if it were willing to
bear the political consequences of doing so.  At least two EU members
are now considering whether the embargo should continue. 

In contrast to the EU embargo, the U.S.  embargo is enacted in law
and bars the sale to China of all military items--lethal and
nonlethal--on the U.S.  Munitions List.  The President may waive this
ban if he believes that doing so is in the national interest.  Since
1989, he has issued waivers to (1) allow the delivery to China of
military items valued at $36.3 million to close out the U.S. 
government's pre-1989 defense agreements with China and (2) license
commercial military exports valued at about $313 million--primarily
commercial satellite and encryption items.  Recent U.S.  executive
branch actions suggest that its view of China's human rights
record--the basis for the embargo in the first place--may be
changing.  Erosion of the EU embargo may also raise questions
regarding the future of the U.S.  embargo. 

The rather small amount of EU and U.S.  sales of military items to
China since 1989 could help address some aspects of China's defense
needs; however, their importance to China's modernization goal may be
relatively limited because Russia and the Middle East have provided
almost 90 percent of China's imported military items during this
period.  According to experts with whom we spoke, China must overcome
obstacles posed by its military's command and control, training, and
maintenance processes before it can fully exploit such items. 


   EU MILITARY EXPORTS TO CHINA
   HAVE BEEN LIMITED
------------------------------------------------------------ Letter :3

In reaction to the Tiananmen Square massacre, the European
Council--an EU decision-making body comprised of ministers from EU
member countries--imposed several sanctions in June 1989, including
"an embargo on trade in arms with China." However, according to
experts, the Council's declaration was not legally binding.  It also
did not specify the embargo's scope.  For example, it did not state
whether the embargo covers all military articles, including weapons
platforms, nonlethal military items, or components. 


      INTERPRETATION OF EMBARGO
      LEFT TO MEMBERS
---------------------------------------------------------- Letter :3.1

EU and other European officials told us that the European Union has
left the interpretation and enforcement of the declaration to its
individual member states\4 and that the members have interpreted the
embargo's scope in different ways.  Officials in some EU nations
informed us that their nations have embargoed the sale of virtually
all military items to China.  In contrast, the United Kingdom's
interpretation of the EU embargo does not bar exports of nonlethal
military items, such as avionics and radars.  The UK embargo is
limited to lethal weapons (such as bombs and torpedoes), specially
designed components of lethal weapons, ammunition, military aircraft
and helicopters, warships, and equipment likely to be used for
internal repression.  European and EU officials told us that EU
members tried during the early 1990s to develop a detailed EU-wide
interpretation of the embargo's scope.  These attempts apparently
fell short and resulted only in the members' mutual recognition that
they were not selling China lethal weapons. 

According to EU and European officials, the EU embargo could be
formally ended by unanimous consent or informally eroded by
individual EU members' resumption of military trade with China.  EU
members, whose defense firms are faced with severe economic
pressures, could move to modify their participation in the embargo if
they believe China's human rights situation is improving.  A recent
EU report noted that human rights in China, while still far from
meeting international standards, had improved over the past 20 years. 
There have been signs that some EU members have sought to increase
military sales to China.  We found that at least two EU
members--Italy and Spain--are now reassessing whether the embargo
should be continued. 


--------------------
\4 EU officials informed us that this reliance on the EU members
reflects the members' independence in defense matters. 


      EU SALES OF MILITARY ITEMS
      TO CHINA SINCE 1989
---------------------------------------------------------- Letter :3.2

No EU members appear to have concluded new agreements to sell lethal
weapons to China since the imposition of the EU embargo.  As shown in
table 1, three EU members have delivered, or agreed to deliver,
military items to China since 1989.\5



                                Table 1
                
                 EU Military Items Delivered to China,
                                1990-97

                                                          Agreement
Country       System                        Lethal        date
------------  ----------------------------  ------------  ------------
France        Castor-2B naval fire control  No            Pre-1989
              radar                         Yes           Pre-1989
              Crotale ship-to-air missiles  No            Pre-1989
              and launcher                  No            Pre-1989
              TAVITAC naval combat          No            Pre-1989
              automation system             No            Pre-1989
              Sea Tiger naval surveillance
              radar
              AS-365N Dauphin-2 helicopter
              SA-321 Super Frelon
              helicopter

Italy         Aspide air-to-air missile     Yes           1989\a
              Electronic countermeasures    No            Pre-1989
              for A-5M aircraft
              Radar for F-7M and F-7MP      No            1993
              fighters

United        Avionics for F-7M fighter     No            1989\b
Kingdom       Searchwater airborne early    No            1996
              warning radar
              (no deliveries to date)
----------------------------------------------------------------------
\a According to the source of the information, this agreement's exact
date is unclear. 

\b This agreement appears to have been concluded prior to June 1989. 

Sources:  Stockholm International Peace Research Institute, other
public sources. 

Two EU member states delivered lethal weapons to China after the
embargo, according to publicly available sources of information. 
These deliveries--French Crotale ship-to-air missiles and Italian
Aspide air-to-air missiles--appear to have been made in connection
with preembargo agreements.  Similarly, French-licensed Chinese
helicopter production, which continued into the 1990s, began prior to
1989.  Also, the United Kingdom honored a preembargo agreement by
providing China with radars, displays, and other avionics for its
F-7M fighter aircraft. 

During the 1990s, Italy and the United Kingdom agreed to sell
nonlethal military items to China.  Italy agreed to sell fire control
radars for use on Chinese F-7M and F-7MP export fighters.  The United
Kingdom agreed to sell China the Searchwater airborne early warning
radar system.  UK officials informed us that the decision to do so is
consistent with the UK interpretation of the EU embargo, in that the
Searchwater is not a lethal weapon or a weapons platform. 


--------------------
\5 See appendix I for a brief description of these items. 


   WAIVERS HAVE ALLOWED EXPORTS OF
   SOME U.S.  MILITARY ITEMS TO
   CHINA
------------------------------------------------------------ Letter :4

On June 5, 1989, immediately after the massacre of prodemocracy
demonstrators at Tiananmen Square, the President announced sanctions
on China to protest its actions.  In February 1990, Congress codified
the sanctions' prohibition on weapon sales in Public Law 101-246. 
The law suspended the issuance of licenses for the export to China of
any defense article on the U.S.  Munitions List.  It exempted from
this prohibition U.S.  Munitions List items that are designed
specifically for use in civil products (such as internal navigation
equipment for commercial airliners) unless the President determines
the end user will be the Chinese military.  The law also specifically
barred the export of U.S.-origin satellites for launch on Chinese
launch vehicles.  Because the U.S.  Munitions List includes nonlethal
military equipment (for example, radios and radars) in addition to
lethal equipment (such as missiles), the U.S.  prohibition on arms
sales to China covers a broader range of items than the EU embargo,
as implemented.\6

Under the law, these items may be exported to China if the President
reports to Congress that it is in the national interest to terminate
a suspension.\7

Under this authority, Presidents Bush and Clinton have issued waivers
for exports of Munitions List and satellite equipment to China based
on determinations that doing so was in the national interest.\8

Recent U.S.  executive branch actions suggest that its position on
China's human rights record may be changing.  For the first time in
several years, the United States recently decided against sponsoring
a United Nations resolution condemning China's human rights.  Such a
shift could have an impact on implementation of the U.S.  embargo,
which resulted from China's human rights abuses.  According to press
reports, the executive branch has recently considered easing
restrictions on commercial satellite projects in China--in part
through the use of blanket waivers. 


--------------------
\6 The Munitions List can also include dual-use items if they are
specifically designed, developed, configured, adapted, or modified
for military application and have significant military or
intelligence applicability requiring that they be controlled as
munitions. 

\7 The law also allows the President to lift the sanctions if he
reports to Congress that China has made progress on a program of
political reform covering a range of issues, including human rights. 

\8 Since 1990, many items once controlled on the Munitions List have
been moved to Commerce Department control and are therefore no longer
subject to U.S.  sanctions barring their export to China.  In 1992,
many items were moved to Commerce's control as part of a larger
rationalization process. 


      SALES OF MUNITIONS LIST
      ITEMS TO CHINA SINCE 1989
---------------------------------------------------------- Letter :4.1

The United States has delivered or licensed for export to China
almost $350 million in Munitions List equipment since 1990.  These
exports were made through (1) government-to-government agreements
managed by the Department of Defense (DOD) under the Foreign Military
Sales Program and (2) commercial exports licensed by the State
Department, the majority of which were related to launches of
U.S.-origin satellites in China.  All were authorized under
presidential waivers declaring the export to be in the national
interest or were specifically exempted from the sanctions under the
law. 


         GOVERNMENT-TO-GOVERNMENT
         SALES
-------------------------------------------------------- Letter :4.1.1

In December 1992, President Bush issued a waiver stating that it was
in the national interest to allow the export of military equipment in
order to close out four government-to-government military assistance
programs that had been suspended by the sanctions.  The waiver stated
that these deliveries would not significantly contribute to China's
military capability and closing these cases would improve the
prospects for gaining further cooperation from China on
nonproliferation issues.  The total value of these exports, shown in
table 2, was about $36.3 million. 



                                Table 2
                
                  U.S. Government Exports of Munitions
                        Items to China, 1990-97

                         (Dollars in millions)

Program                 Purpose                 Deliveries
----------------------  ----------------------  ----------------------
Peace Pearl (F-8        Provide modern          Two modified F-8
modernization)          avionics for China's    fuselages, four
                        F-8 fighters            avionics kits, and
                                                related equipment

MK 46 Mod 2 torpedoes   Provide four torpedoes  Four torpedoes
                        for test and            including spares and
                        evaluation purposes     related test and
                        with ultimate           maintenance equipment
                        deployment on Chinese
                        Navy ships and
                        helicopters

Artillery locating      Provide four AN/TPQ-    Two AN/TPQ-37 radars,
radars                  37 Firefinder counter-  including parts and
                        artillery radar         support equipment\a
                        systems

Large-caliber           Provide production      Miscellaneous
artillery plant         capability for large-   components\b
                        caliber artillery
                        munitions
----------------------------------------------------------------------
\a Two of these radars had been shipped before the sanctions. 

\b Major equipment was shipped prior to the sanctions. 

Source:  DOD. 

These programs were in various states of completion when U.S. 
sanctions were imposed.  No new government-to-government agreements
have been opened since 1990.  No open or unfulfilled agreements are
now pending between the U.S.  government and China under the Foreign
Military Sales Program.  The equipment ending these programs was
delivered to China between 1993 and 1995.  It included four MK-46 Mod
2 torpedoes, spare parts, maintenance, and test equipment.  China's
Navy was to test the torpedoes for use on its ships and helicopters. 


      COMMERCIAL EXPORTS OF
      MUNITIONS LIST ITEMS
---------------------------------------------------------- Letter :4.2

The Department of State has approved for export to China about $313
million in Munitions List items since 1990.  As shown in table 3,
$237 million of these exports involved launches of U.S.-origin
satellites from China. 



                                Table 3
                
                Approved U.S. Commercial Export License
                    Applications for Munitions List
                 Equipment to China, January 1990-April
                                  1998

                         (Dollars in millions)

                        Munitions List items            Value
Waiver requirement      ----------------------  ----------------------
Approved export         Satellites and related          $237.0
 licenses for            equipment
 Munitions List items                                    63.1
 requiring a             Encryption for civil
 presidential waiver     applications or
 for export to China     satellites
Approved export         Munitions List                   12.7
 licenses for items      equipment for
 exempted from U.S.      inclusion in civil
 sanctions               products (e.g.,
                         inertial navigation
                         gear for civil
                         airliners)
======================================================================
Total                                                   $312.8
----------------------------------------------------------------------
Note:  Values represent figures provided on the export applications,
not the value of actual shipments.  In practice, the value of actual
exports is often less. 

Source:  U.S.  Department of State. 

The President determined that allowing these exports was in the
national interest.  According to State officials, since 1990 11
presidential waivers have removed export restrictions on 21 satellite
projects.\9 Waivers were also granted to permit the export of
encryption equipment controlled on the Munitions List.  One case
involved a $4.3-million communications export to China's Air Force. 

Since 1990, over $12 million in export licenses have been approved
for Munitions List equipment designed for inclusion in civil
products.  These exports are not prohibited under U.S.  sanctions and
therefore do not require a presidential waiver.  The majority of
these exports involve navigational electronics used in commercial
airliners operated in China. 

Between 1992 and 1996, control over exports of commercial encryption
equipment and commercial satellites was moved from the Munitions List
to the Commerce Department's Commodity Control List.  Since U.S. 
sanctions restrict Munitions List exports and do not prohibit the
export of dual-use items, commercial encryption equipment can now be
exported to China without a presidential waiver.  U.S.-origin
commercial satellites, however, though no longer on the Munitions
List, are covered by the law, and exports still require a
presidential waiver.\10


--------------------
\9 Export licenses for many of these satellite projects were issued
by the Department of Commerce, rather than the Department of State,
and are therefore not included in table 3. 

\10 Other items moved from the Munitions List to Commerce
jurisdiction since 1990 include jet engine hot-section technology,
commercial global positioning system equipment, and some night vision
equipment.  See our reports entitled Export Controls:  Issues in
Removing Militarily Sensitive Items From the Munitions List
(GAO/NSIAD-93-67, May 31, 1993) and Export Controls:  Change in
Export Licensing Jurisdiction for Two Sensitive Dual-Use Items
(GAO/NSIAD-97-24, Jan.  14, 1997). 


   CHINA'S EU AND U.S.  MILITARY
   IMPORTS COULD HELP ADDRESS SOME
   DEFENSE NEEDS
------------------------------------------------------------ Letter :5

The small amount of EU and U.S.  military item sales to China since
1989 could help address some of China's defense needs.  However,
their importance to China's modernization goal is overshadowed by the
much larger amounts of military equipment provided by Russia and the
Middle East.  Moreover, before China can fully exploit such items, it
must overcome obstacles in its military's command and control,
training, and maintenance systems. 


      CHINESE USE OF EU AND U.S. 
      MILITARY ITEMS
---------------------------------------------------------- Letter :5.1

China has used French helicopters to reinforce its weak antisubmarine
warfare capabilities.  According to open sources, China has imported
or built under license between 65 and 105 modern French
turbine-powered helicopters, including about 40 after 1989.  The
helicopters include the SA-321 Super Frelon (built as the Z-8) and
the AS-365 Dauphin-2 (built as the Z-9).  China's Navy has adapted 25
of these helicopters to serve as its antisubmarine warfare helicopter
force and equipped some with antisubmarine torpedoes.  The Z-9 is
carried aboard several Chinese naval vessels.  It has also been
tested by China's Army with ground-attack equipment, including
antitank missiles. 

According to experts, China's only effective ship-to-air missile is
the French Crotale missile system.  China has deployed the Crotale on
four ships, including its two most modern destroyers.\11 Also, China
has reverse-engineered the Crotale--reducing China's dependence on
foreign suppliers.  Similarly, China has reportedly
reverse-engineered Italy's Aspide air-to-air missile for use as a
ship-to-air missile. 

China's planned purchase of six to eight British Searchwater airborne
radar systems would provide China with some degree of warning against
low-flying air attacks as well as help it direct fighter aircraft,
detect small vessels, and augment over-the-horizon targeting.\12
China may mount the radars on converted Y-8 transports. 

China could possibly use its four U.S.  Mod 2 version MK-46 torpedoes
to improve its copy of the Mod 1 version, which China has already
deployed on its French helicopters.  In contrast with the Mod 1, the
early-1970s era Mod 2 has an improved computer that provides a
re-attack capability.  The MK-46 torpedo's range and speed exceed
that of China's other western air-launched, antisubmarine
torpedo--the mid-1970s era Italian Whitehead 244S.\13

We do not know whether China has benefited from U.S.  commercial
satellite transfers.  State officials told us that export licenses
for satellite projects in China contain provisos intended to minimize
the risk of any unauthorized transfer of sensitive technology. 
However, not all Commerce Department licenses for exports of
commercial satellites to China include such provisos.  Recent press
reports have asserted that, despite these controls, U.S.  technology
has been transferred to China and has improved the reliability of
China's missiles.  We have not evaluated the implementation of the
security guidelines and control procedures on satellite launches. 


--------------------
\11 These ships, however, still lack long-range, ship-to-air
missiles. 

\12 The United Kingdom has been reported as offering its Argus
airborne warning system to China, but China appears to have chosen an
Israeli system. 

\13 China acquired the Whitehead in the mid-1980s and has deployed it
on helicopters. 


      RUSSIA AND MIDDLE EAST
      PROVIDE MOST OF CHINA'S
      MODERN MILITARY ITEMS
---------------------------------------------------------- Letter :5.2

While these EU and U.S.  military items could be used to address some
defense needs, they constitute only a small part of the range of
military items that China has imported from foreign suppliers since
1989.  As shown in figure 1, total EU and U.S.  exports constituted
less than 9 percent of the military items imported by China during
the embargoes' first 7 years.  Without U.S.  commercial satellites
and encryption exports, this share falls to less than 3.4 percent. 

   Figure 1:  Deliveries of
   Foreign Military Items to
   China, 1990-96

   (See figure in printed
   edition.)

Total value:  $5.3 billion (current-year dollars). 

Note:  The U.S.  commercial share depicted above is based on the
value of export licenses granted since 1990, rather than on the value
of actual deliveries. 

Sources:  U.S.  Arms Control and Disarmament Agency; the Departments
of State and Defense. 

Moreover, Russia and Israel have sold or agreed to sell to China
items that are far more lethal than those sold by EU members, as well
as items similar to those obtained from EU members.  For example,
reported Russian agreements include

  -- two Sovremenniy destroyers, which are more modern than China's
     domestically produced destroyers and which typically carry
     advanced supersonic antiship missiles, ship-to-air missiles with
     a much greater range than the Crotale, and antisubmarine
     helicopters that are considerably larger than the Z-9
     helicopter;

  -- about 50 Su-27 fighter aircraft--similar to U.S.  F-15s--armed
     with potent air-to-air missiles and licensed Chinese Su-27
     production;

  -- about 25 Mi-17 transport assault helicopters; and

  -- four Kilo diesel electric submarines (including two of a very
     quiet class that Russia has never before exported) and homing
     torpedoes. 

Israel has helped China with its development of (1) the F-10 fighter
aircraft (similar to the U.S.  F-16) by providing technology
developed for the aborted Israeli Lavi fighter project and (2)
various missiles.  It has also agreed to sell to China its Phalcon
airborne phased array surveillance radar, which, if fitted to a
Russian airframe, would provide China an airborne warning and command
system. 


      CHINA FACES DIFFICULTIES IN
      INCORPORATING MODERN ARMS
---------------------------------------------------------- Letter :5.3

According to experts, China will have to overcome several persistent
problems before it can effectively use its imported arms to support
its new military doctrine and help reinvigorate its domestic defense
industry. 

China lacks command and control capabilities needed to effectively
integrate its armed forces in the fast-moving joint offensive
operations called for by its new doctrine.  China's air force units
are hampered in their ability to communicate with air defense, naval,
and ground units.  China also lacks a reliable air defense
intelligence system.  While its future airborne early warning systems
will help address this problem, China will still have to learn how to
integrate such systems into its air defense system.  Experts informed
us that military systems integration remains a weakness for China. 

China's acquisition of new and advanced military systems will also
test its training and maintenance processes.  China may have to
significantly enhance the training, quality, and education level of
its military personnel to use increasingly advanced equipment. 
Moreover, according to experts, China's Air Force has not yet
considered the training implications of its new offensive joint
operations doctrine.  Chinese pilots fly fewer hours than their
western counterparts and tend to fly less demanding training missions
that do not emphasize joint operations.  Experts informed us that
China's preference for buying relatively small numbers of foreign
military systems and skimping on training and maintenance support
packages reduces opportunities for its military personnel to become
familiar with their new equipment and to augment China's weak
maintenance efforts. 

This practice of buying limited numbers of foreign systems may
reflect China's interest in obtaining foreign arms for
reverse-engineering purposes.  China has long stressed its need to
become self-sufficient in weapons development and less dependent on
foreign suppliers.  However, despite some successes, China has had a
mixed record in reverse-engineering foreign systems.  Its efforts to
do so are hampered by an inefficient defense sector and by the
increasing complexity of modern military systems. 


   CONCLUSION
------------------------------------------------------------ Letter :6

Recent U.S.  executive branch actions suggest that its view of
China's human rights record--the original basis for the embargo--may
be changing.  In light of these actions and the possible weakening of
support for the EU embargo by some European governments, one question
facing the United States appears to be how it would respond if the EU
embargo were to erode significantly in the future. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :7

DOD concurred with a draft of this report and provided written
technical comments, which we incorporated where appropriate.  The
Department of State provided oral comments and stated that the draft
report was just and reasonable.  DOD's written comments are reprinted
in their entirety in appendix II. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :8

To identify the terms of the EU embargo and EU military sales to
China, we interviewed officials and reviewed documents at EU offices
in Washington, D.C., and Brussels, Belgium; foreign and/or defense
ministries in Belgium, France, Germany, Sweden, and the United
Kingdom; and the Departments of State and Defense and the U.S.  Arms
Control and Disarmament Agency.  We also contacted the governments of
other EU members regarding their interpretation and implementation of
the EU embargo. 

We obtained data on EU military sales to China from numerous experts,
including those at the National Defense University, the Monterey
Institute for International Studies' Center for Non-Proliferation
Studies, the Stockholm International Peace Research Institute, the
Heritage Foundation, the RAND Corporation, and the International
Institute for Strategic Studies.  We based our depiction of EU sales
to China on data developed by these experts and from a variety of
public sources. 

To identify the terms of the U.S embargo and U.S.  military sales to
China, we reviewed Public Law 101-246 and its legislative history. 
We also interviewed officials and reviewed documents at the
Departments of Commerce, Defense, and State.  We developed our
depiction of U.S.  sales primarily from information taken from
databases at the Department of State's Office of Defense Trade
Controls and DOD's Defense Security Assistance Agency.  We did not
validate the accuracy of these databases. 

To identify the potential role of EU and U.S.  military items in
addressing Chinese defense needs, we consulted numerous experts,
including those at the National Defense University, the Monterey
Institute of International Studies' Center for Non-Proliferation
Studies, the Stockholm International Peace Research Institute, the
Heritage Foundation, the RAND Corporation, and the International
Institute for Strategic Studies.  We also attended symposiums on
Chinese security issues that were sponsored by the National Defense
University, the University of Maryland's Institute for Global Chinese
Affairs, and the American Enterprise Institute.  We used these
experts' analyses of Chinese military requirements and shortcomings
as a framework for our assessments of the potential role that EU
military items could play in meeting Chinese military needs. 

To determine the magnitude and sources of China's post-1989 arms
imports, we drew on data from the U.S.  Arms Control and Disarmament
Agency's unclassified World Military Expenditures and Arms Transfers
database, which is based on delivery data.  Because this data
significantly underreports U.S.  deliveries, we supplemented it with
(1) U.S.  government to government delivery data obtained from the
Defense Security Assistance Agency and (2) commercial export
licensing data obtained from the Department of State's Office of
Defense Trade Controls. 


---------------------------------------------------------- Letter :8.1

We are providing copies of this report to other congressional
committees and the Secretaries of State and Defense.  Copies will
also be provided to others upon request. 

Please contact me on (202) 512-4128 if you or your staff have any
questions concerning this report.  Major contributors to this report
are listed in appendix III. 

Sincerely yours,

Harold J.  Johnson, Associate Director
International Relations and Trade Issues


DESCRIPTION OF SELECTED EUROPEAN
UNION MILITARY ITEMS PROVIDED TO
CHINA, 1990-97
=========================================================== Appendix I

According to various public sources, European Union (EU) member
states have delivered, or agreed to deliver, the following items to
China since 1989. 


   NAVAL SYSTEMS FOR THE LUHU
   DESTROYERS
--------------------------------------------------------- Appendix I:1

France has provided several systems for China's Luhu destroyers,
including the Crotale missile system.  France first installed the
Crotale on its ships in the late 1970s.  In 1982, it developed the
Crotale variant later provided to China.  According to public
sources, the Crotale is a short-range (up to 13 kilometers),
ship-to-air point defense missile that can travel at more than twice
the speed of sound.  The system also includes a missile director, a
missile launcher mounting, a fire control room with supporting
electronics, and a console in a combat information center.  The
missile director uses a Castor radar and infrared and television
tracking systems. 

Other French equipment on the Luhu destroyers includes the Sea Tiger
naval surveillance radar, the Dauphin-2 (Z-9) helicopter (described
later), and the TAVITAC combat data system (which is used to
integrate the Luhus' various onboard systems). 


   DAUPHIN-2 (Z-9) HELICOPTER
--------------------------------------------------------- Appendix I:2

In 1980, France agreed to allow China to build the AS-365 Dauphin-2
in China as the Z-9 helicopter.  The Chinese Navy has equipped
Dauphin-2s with sensors, torpedoes, and missiles for use aboard its
vessels.  The Dauphin-2 is a medium-weight multirole helicopter that
is powered by two turbine engines.  Capable of carrying 11 passengers
and 2 pilots, the Dauphin-2 has a top speed of 140 nautical miles per
hour and a range of 410 nautical miles.  Composite materials are used
in its main and rear rotor blades, and its tail rotor is built into
the vertical fin. 


   SUPER FRELON (Z-8) HELICOPTER
--------------------------------------------------------- Appendix I:3

France delivered the SA-321 Super Frelon helicopter to China in 1977
and 1978 and agreed to allow China to build the Super Frelon, under
the designation of Z-8, in 1981.  The Chinese Navy has used Super
Frelons for antisubmarine missions and has equipped them with
sensors, torpedoes, and antiship missiles.  A heavy shipboard
helicopter that is powered by two turbine engines, the Super Frelon
has a top speed of 134 nautical miles per hour and a range of 440
nautical miles.  It can carry 27 fully armed troops or 39 unequipped
troops. 


   ASPIDE MISSILE
--------------------------------------------------------- Appendix I:4

According to a public source, Italy developed the Aspide from the
U.S.  Sparrow air-to-air missile and began producing it in 1977.  The
semi-active radar-guided Aspide has a top speed of over twice the
speed of sound and a range of about 7 nautical miles. 


   SEARCHWATER AIRBORNE EARLY
   WARNING RADAR
--------------------------------------------------------- Appendix I:5

The United Kingdom first deployed the Searchwater aboard its Nimrod
aircraft in 1979 and adapted it for use aboard Sea King helicopters
during its 1982 war with Argentina over the Falkland Islands.  It
later developed the Skymaster version of the Searchwater, which it
subsequently incorporated into the Searchwater 2 system.  According
to a public source, the airborne Skymaster uses an I-band transmitter
that can operate in
(1) a pulse Doppler mode to provide look-down detection of airborne
targets and (2) a frequency agile conventional mode to detect ships
as well as aircraft flying above the Skymaster.  When operating at
10,000 feet, it is capable of detecting (1) fighters and small boats
below it at ranges of about 70 nautical miles, (2) bombers flying
below it about 100 nautical miles away, and (3) larger vessels about
130 nautical miles away.  The radar can store and update data on 100
airborne and 32 surface targets simultaneously. 


   F-7M/F-7MP AVIONICS
--------------------------------------------------------- Appendix I:6

The United Kingdom and Italy have provided avionics for the F-7M and
MP fighters.  The Soviet Union first allowed China to build the
F-7--a variation of the MiG-21--in 1961.  China later developed the M
and MP versions for export to other nations, including Pakistan. 
According to public sources, the United Kingdom provided China with
heads-up displays, weapon-aiming computers, and fire control radars
for the F-7M.  Italy later provided a new fire control radar for the
F-7M and MP. 




(See figure in printed edition.)Appendix II
COMMENTS FROM THE DEPARTMENT OF
DEFENSE
=========================================================== Appendix I


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================= Appendix III

NATIONAL SECURITY AND
INTERNATIONAL AFFAIRS DIVISION,
WASHINGTON, D.C. 

James Shafer
Pierre Toureille
David Trimble
Anne Marie Lasowski


*** End of document. ***