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TIME: Almanac 1995
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TIME Almanac 1995.iso
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1994-05-26
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<text id=94TT0450>
<title>
Apr. 25, 1994: Confounded By The Chinese Puzzle
</title>
<history>
TIME--The Weekly Newsmagazine--1994
Apr. 25, 1994 Hope in the War against Cancer
</history>
<article>
<source>Time Magazine</source>
<hdr>
TRADE, Page 39
Confounded By The Chinese Puzzle
</hdr>
<body>
<p>A prospective arms sale leaves Beijing--and much of Washington--mystified about U.S. policy
</p>
<p>By Kevin Fedarko--Reported by Elaine Shannon and Kenneth R. Timmerman/Washington
and Mia Turner/Beijing
</p>
<p> Little wonder no one knows what U.S. policy toward China is
these days. At the same time that Clinton Administration officials
are threatening to curtail trade by revoking Beijing's most-favored-nation
status because of China's dismal human-rights record, the Administration
is quietly poised to approve one of the largest sales of U.S.
military hardware and technology ever to the People's Liberation
Army. The deal, which could be worth as much as $2 billion,
involves gas turbine engines. The Chinese say they want to use
them for jets, but some nuclear nonproliferation experts insist
that Beijing has more sinister plans.
</p>
<p> While the transaction involves neither military secrets nor
cutting-edge American technology, it has nevertheless become
a symbol of confusion within the Administration. The deal circumvents
trade sanctions on military equipment enacted after the 1989
Tiananmen Square massacre and appears to contravene Defense
Department efforts to engage China in defense conversion, not
modernization. To benefit an American company, the U.S. may
allow the transfer of equipment that some experts say could
enable China to develop a longer-range cruise missile, capable
of lofting nuclear warheads as far as Japan and India. If approved,
the sale would provide a graphic demonstration of the constant
collision of competing goals in Bill Clinton's foreign policy:
protecting human rights, controlling proliferation of weapons
of mass destruction and nurturing American trade.
</p>
<p> The deal began in 1987, when Garrett, an engine company based
in Phoenix, Arizona, beat out rivals from France, Britain and
Canada for a contract to supply engines to Nanchang Aircraft,
a Chinese government-owned manufacturer. Nanchang said it needed
the engines for a light military jet trainer, the K-8, that
was destined to be sold abroad. In November 1991, the U.S. Commerce
Department, which had been moving aggressively to promote American
trade by cutting through export barriers, quietly dropped national
security controls originally imposed during the cold war, allowing
the engines to be shipped to China without an export license.
</p>
<p> As the first order of goods was being shipped, however, the
picture changed again. Officials at the Defense Technology Security
Administration learned about the deal after they read a wire
between the U.S. embassy in Beijing and the State Department.
Fearing that China intended to use the Garrett engine to extend
the range and payload capacity of its Silkworm missile, the
agency raised furious objections.
</p>
<p> Garrett's parent company, AlliedSignal, had no intention of
abandoning the sale--especially since the Chinese by then
had expressed interest in purchasing as many as 500 engines
over 20 years. Including service and peripherals, the company
estimated the deal could gross $500 million and support 440
jobs at Garrett and its subcontractors. AlliedSignal's lobbyists
began pressing the Pentagon to drop its opposition. To dispel
fears that the engines might be used for missiles, AlliedSignal's
spokesman Arch Niesmith told congressional investigators not
to worry. "Our engine has a diameter of nearly three feet,"
he said, "whereas a cruise missile is roughly one-third that
size." Assistant Secretary of Defense Ashton Carter and his
deputy Mitch Wallerstein signed off on the deal. Wallerstein
circulated a memo predicting that AlliedSignal's sales to China
might soar to 2,000 engines. The company quickly disavowed Wallerstein's
numbers as unrealistic after critics within the Department of
Defense began questioning China's need for so many jet trainers.
</p>
<p> Some nonproliferation experts take issue with AlliedSignal's
claim that the engines cannot be adapted to an improved Chinese
cruise missile. Within the Defense Technology Security Administration,
specialists are worried that the engine is perfectly suited
to powering a long-range cruise missile. CIA studies have warned
that if AlliedSignal sells not just the engine but the technology
to build it, China will gain high-quality military technology,
which could be used for a new generation of cruise missiles.
Even more disturbing is the conclusion of an internal Defense
Department study. A missile such as this, say the authors, would
put most of the rest of Asia within range of a Chinese nuclear
attack.
</p>
<p> No less worrisome is the possibility that unless China curbs
its profligacy in peddling weapons to virtually anyone with
the cash to pay for them, the improved missiles could wind up
in the hands of countries like Syria, Iran and Pakistan--all
three of which have long bought missiles from Beijing.
</p>
<p> But other experts say such analysis is unnecessarily alarmist
and damaging to American business. "I think those engines don't
mean squat," says Charles Bernard, a former Pentagon official.
"The French make an engine that size, as well as the Brits and
the Germans. A lot of people would sell them an engine. There
are mysterious, scary transactions, but this ain't one."
</p>
<p> Regardless of whether the engine eventually becomes the centerpiece
of a Chinese cruise missile, the Garrett deal undermines the
noisy debate over whether the U.S. should extend China's most-favored-nation
status. Viewed against the backdrop of assurances by Secretary
of State Warren Christopher that the Clinton Administration
will cut off MFN unless China improves its human-rights behavior,
the Garrett sale only reinforces Beijing's impression that U.S.
demands are a charade.
</p>
</body>
</article>
</text>