China: Possible Missile Technology Transfers under U.S. Satellite Export Policy - Actions and Chronology

Publication Date: October 2003

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Military and defense; Trade

Type:

Coverage: China

Abstract:

Congress has been concerned about whether U.S. firms, in activities connected with exporting satellites, provided expertise to China for use in its ballistic missile and space programs and whether U.S. policy has facilitated transfers of military-related technology to China. This CRS Report discusses security concerns, policy changes, congressional action, and a chronology of major developments since 1988 under President Reagan. It is updated as warranted.

Some critics opposed satellite exports to China, while others were concerned that the Clinton Administration relaxed export controls and monitoring of commercial satellites in moving the licensing authority from the State Department to the Commerce Department in 1996. A range of concerns were prompted by New York Times reports in April 1998 that the Justice Department began a criminal investigation into whether Loral Space and Communications Ltd. and Hughes Electronics Corp. violated export control laws. The firms allegedly shared their findings with China on the cause of a rocket’s explosion while launching a U.S.-origin satellite in February 1996. The companies reportedly provided expertise that China could use to improve the accuracy and reliability of its future ballistic missiles, including their guidance systems. At least three classified studies reportedly found that U.S. national security was harmed. Congress and the Executive Branch also investigated Hughes’ review of China’s launch failure of January 1995. After failed satellite launches in 1992, 1995, and 1996, China has reported 28 consecutive, successful commercial and government/military space launches. In 2000, the State Department and Lockheed Martin agreed to a settlement with a fine of $13 million. In 2002, Loral announced a civil settlement with a fine of $20 million. In early 2003, Hughes and Boeing agreed to a civil penalty of $32 million.

In 1998, Congress passed the FY1999 National Defense Authorization Act (P.L. 105-261) that transferred licensing authority over satellites back to the State Department (effective March 15, 1999). On December 30, 1998, the Cox Committee unanimously approved a classified report said to conclude that China’s technology acquisitions over the past 20 years, not only that associated with satellite launches, harmed U.S. national security. The Senate Intelligence Committee released its unclassified report on May 7, and the Cox Committee issued a declassified report on May 25, 1999 (see CRS Report RL30220). Congress has debated whether to shift satellite export controls back to Commerce. Congress also oversees the Bush Administration’s actions, including any new Presidential waivers of post-Tiananmen sanctions (after the last waiver in 1998 for Loral’s Chinasat-8); export licenses; reviews of policy toward China on satellite exports or space cooperation; and weapons proliferation sanctions that have banned satellite exports to China since September 2001, with new sanctions imposed on September 19, 2003 (see CRS Report RL31555). China has had no commercial satellite launches since 2000. Legislation for State Department appropriations for FY2004 (H.R. 2799 and S. 1585) would continue to require State to notify the Committees on Appropriations at least 15 days in advance of obligating or expending funds for processing licenses to export U.S.-origin satellites to China.