McNair Paper 36, Explaining and Influencing Chinese Arms Transfers, February 1995

In July 1987, the United States began Persian Gulf escort operations for reflagged Kuwaiti tankers to guarantee safe passage through vital international shipping lanes threatened by the escalating Iran-Iraq War. The task was complicated for the American Navy by Iran's deployment of shore batteries of Chinese-manufactured HY-2 Silkworm antiship missiles (AShMs). Washington negotiated with Beijing, seeking to deny further antiship missile deliveries to Teheran. Although an understanding was reached in March of the next year, the "Silkworm controversy" marked a watershed in Sino-American relations. (Note 1) Henceforth, disagreements over arms transfer issues were to prove a recurring source of bilateral friction. In 1992, a U.S. Congressional research analyst noted:

China's role in missile and nuclear weapons proliferation has become one of three issuesCalong with human rights and tradeCupon which Congress has focused its reassessment of U.S. policy toward China, especially whether to attach conditions to the renewal of China's Most-Favored Nation (MFN) trade benefits. . . . China has a track record as a clandestine, renegade arms supplier that transferred CSS-2 intermediate range ballistic missiles to Saudi Arabia, Silkworm antiship missiles to Iran and Iraq, and missile technology to Pakistan. (Note 2)

PRC leaders, of course, disagree with this assessment. Their basic position was stated by then Chinese President Yang Shangkun:

American opinion censures us for selling weapons. Yet the U.S. also sells weapons. Why does it not censure itself? . . . So there is a question of fairness here. . . . China has a saying, "Only magistrates are allowed to set fires. Ordinary people are not allowed to light lamps." You [the U.S.] are strong, so you can sell without constraint. We are not strong, and so we sell very much less. Yet you denounce us every day. We feel uncomfortable. (Note 3)

The global significance of China's arms sales was implicitly recognized when the PRC, as one of the five major suppliers of conventional weapons in the world (the others being the United States, Russia, France, and the U.K.), was invited to participate in discussions deriving from President Bush's Middle East arms control initiative announced in May 1991. (Note 4) The following year, the difficulties in finding common ground between the United States and China on weapons transfers policies became even more apparent when Beijing, responding to Washington's decision to sell the F-16 jet fighter to Taiwan, declared it would not attend the next round of the "Big Five's" Middle East arms control talks. (Note 5) Given the PRC's great power aspirations and growing military strength, its arms sales activities are likely to remain an area of Sino-American contention and to be increasingly scrutinized in world disarmament forums.

Anticipating the subject's continuing relevance to international security affairs, this paper addresses the factors motivating Chinese conventional arms sales and speculates on means to influence them.* We start by describing the history of PRC weapons exports, then examine various supply- and demand-side reasons for these transfers. In developing both explanations, we will identify recurring patterns in the global arms trade to put our study of China's into perspective. Such an approach should help distinguish between those phenomena whose origins are best attributed to the nature of the international political system, and those more properly ascribed to the specifics of the Chinese case. Such distinctions become crucial in assessing options for modifying Beijing's behavior, the topic with which we will conclude this analysis.

* In this paper, conventional arms refer to all weapons except nuclear, biological, and chemical.