- The Washington Times - Thursday, September 6, 2001

China yesterday rejected U.S. charges that a leading Chinese company had violated pledges not to supply nuclear-missile technology to Pakistan but added it hoped U.S. sanctions imposed over the weekend would not cloud the overall bilateral relationship.
"We were angry, we were stunned. This is not the way to do business between states," said a senior Chinese diplomat who spoke to reporters on the condition of anonymity yesterday.
Culminating a string of complaints about China's military export controls, the Bush administration last week slapped sanctions on the China Metallurgical Equipment Corp., a government-owned engineering company, accusing the firm of supplying missile-related parts to Pakistan.
For two years, the company will be denied all new U.S. licenses for production of electronics and military equipment and for material used to launch commercial satellites.
The senior Chinese diplomat in Washington and top Foreign Ministry officials in Beijing yesterday both said Beijing had conducted its own investigation of the company, inspecting invoices dating back to early 1999, and had found no violations of Chinese nonproliferation pledges.
The blowup comes a month before President Bush makes a brief but much-anticipated visit to China to attend an Asian-Pacific summit and hold talks with Chinese President Jiang Zemin.
The trip follows a rocky start to U.S.-China relations under Mr. Bush, with disputes over nonproliferation, human rights, a downed U.S. surveillance plane and Taiwan among the irritants.
But the diplomat said China's leaders hope Mr. Bush's visit will set the stage for better relations.
"What is needed now in the bilateral relationship is more impetus to move the relationship forward," the diplomat said.
The Chinese diplomat said Beijing will pursue the modernization of its military and nuclear arsenal, whether or not Mr. Bush proceeds with plans to build a missile-defense shield that China strongly opposes.
But he said China would be forced to consider a much larger expansion of its military assets beyond the modernization program if the American missile-defense program proceeds.
The White House announced Tuesday that it will brief China on the status of the missile-defense program and would also express its opposition to Beijing's offensive military buildup.
"No one should try to blame the modernization of China's offensive nuclear forces on our missile defense efforts," the White House said in a statement. China's military modernization effort "is unnecessary and it is not good for regional stability or for peace."
Analysts believe China has about two dozen nuclear missiles that can hit U.S. territory. Beijing fears that even a limited U.S. missile-defense shield could render its nuclear force irrelevant at current levels.
On Capitol Hill yesterday, Secretary of Defense Donald H. Rumsfeld emphatically rejected press accounts that the Bush administration is prepared to condone a Chinese effort to enhance its nuclear arsenal if Beijing steps off its opposition to the U.S. missile defense plan.
"The suggestion that the United States has or is poised to approve of China's military and nuclear buildup for some reason in exchange for something is simply not the case," Mr. Rumsfeld told a Senate Appropriations subcommittee hearing yesterday.
The Chinese diplomat said Beijing is still studying a U.S.-British plan to impose a refined set of "smart sanctions" on the Iraqi regime of Saddam Hussein.
U.S. diplomats had believed China was ready to vote in the United Nations in favor of the modified sanctions package, which has been shelved for now by Russian opposition.
The diplomat said Chinese experts are still combing through the proposed list of banned goods and services, but he said Beijing is more focused on keeping the U.N.'s five major powers — the United States, Britain, France, Russia and China united behind whatever sanctions program is adopted.

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