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93–775PDF 2004

SHOULD CHINA JOIN THE NUCLEAR SUPPLIERS

GROUP?

HEARING

BEFORE THE

COMMITTEE ON 

INTERNATIONAL RELATIONS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

MAY 18, 2004

Serial No. 108–111

Printed for the use of the Committee on International Relations

(

Available via the World Wide Web: http://www.house.gov/international—relations 

(II)

COMMITTEE ON INTERNATIONAL RELATIONS 

HENRY J. HYDE, Illinois, Chairman 

JAMES A. LEACH, Iowa 

DOUG BEREUTER, Nebraska 

CHRISTOPHER H. SMITH, New Jersey, 

Vice Chairman 

DAN BURTON, Indiana 

ELTON GALLEGLY, California 

ILEANA ROS-LEHTINEN, Florida 

CASS BALLENGER, North Carolina 

DANA ROHRABACHER, California 

EDWARD R. ROYCE, California 

PETER T. KING, New York 

STEVE CHABOT, Ohio 

AMO HOUGHTON, New York 

JOHN M. MCHUGH, New York 

ROY BLUNT, Missouri 

THOMAS G. TANCREDO, Colorado 

RON PAUL, Texas 

NICK SMITH, Michigan 

JOSEPH R. PITTS, Pennsylvania 

JEFF FLAKE, Arizona 

JO ANN DAVIS, Virginia 

MARK GREEN, Wisconsin 

JERRY WELLER, Illinois 

MIKE PENCE, Indiana 

THADDEUS G. MCCOTTER, Michigan 

KATHERINE HARRIS, Florida 

TOM LANTOS, California 

HOWARD L. BERMAN, California 

GARY L. ACKERMAN, New York 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

DONALD M. PAYNE, New Jersey 

ROBERT MENENDEZ, New Jersey 

SHERROD BROWN, Ohio 

BRAD SHERMAN, California 

ROBERT WEXLER, Florida 

ELIOT L. ENGEL, New York 

WILLIAM D. DELAHUNT, Massachusetts 

GREGORY W. MEEKS, New York 

BARBARA LEE, California 

JOSEPH CROWLEY, New York 

JOSEPH M. HOEFFEL, Pennsylvania 

EARL BLUMENAUER, Oregon 

SHELLEY BERKLEY, Nevada 

GRACE F. NAPOLITANO, California 

ADAM B. SCHIFF, California 

DIANE E. WATSON, California 

ADAM SMITH, Washington 

BETTY MCCOLLUM, Minnesota 

BEN CHANDLER, Kentucky 

THOMAS E. MOONEY, SR., Staff Director/General Counsel 

ROBERT R. KING, Democratic Staff Director 

DOUG SEAY, Professional Staff Member 

LIBERTY DUNN, Staff Associate 

(III)

C O N T E N T S 

Page

WITNESSES 

The Honorable John Wolf, Assistant Secretary, Bureau of Nonproliferation, 

U.S. Department of State .................................................................................... 6

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

The Honorable Henry J. Hyde, a Representative in Congress from the State 

of Illinois, and Chairman, Committee on International Relations: Prepared 

statement .............................................................................................................. 2

The Honorable John Wolf: Prepared statement .................................................... 9

APPENDIX 

The Honorable Nick Smith, a Representative in Congress from the State 

of Michigan ........................................................................................................... 23

(1)

SHOULD CHINA JOIN THE NUCLEAR 

SUPPLIERS GROUP? 

TUESDAY, MAY 18, 2004

HOUSE OF REPRESENTATIVES, COMMITTEE ON INTERNATIONAL RELATIONS, Washington, DC. 

The Committee met, pursuant to call, at 10:35 a.m. in Room 

2172, Rayburn House Office Building, Hon. Henry J. Hyde (Chairman of the Committee) presiding. 

Chairman HYDE. The Committee will come to order. Good morning, and welcome to the Committee on International Relations 

hearing, ‘‘Should China Join the Nuclear Suppliers Group?’’

Of the many sinister futures lying in wait for our country in the 

world, few equal in magnitude the threat posed by the continuing 

spread of nuclear weapons, be it the means to produce these weapons or the securing of a working device by theft or gift. 

The basic equation is clear, even if its terms as yet remain uncertain: As the number of possessors of these weapons grows, so does 

the risk of their eventual use. While it may be possible to deter rational actors governing stable states, no such security is possible in 

countries where central control over these weapons and materials 

could dissolve in chaos or where religious or ideological fanatics 

might eagerly provide to their acolytes the instruments of our destruction. In the end, even those supposed rational actors may 

present us with a new and more deadly definition of that comforting term. 

Among this Administration’s most significant accomplishments, 

but one still denied wide recognition, is the dramatically energized 

and newly comprehensive approach to preventing the further proliferation of these weapons and their associated technologies. 

To rectify the laxity of the past decades, an expanding strategy 

that seeks to address all levels and components of this threat has 

been launched and accorded the highest priority. Early successes 

include the Proliferation Security Initiative, the dismantling of 

Libya’s WMD programs, and the disruption for the global nuclear 

black market, among many others. The groundwork for the next 

ambitious phase has already been laid with President Bush’s recent speech outlining a broad agenda of new initiatives. 

Despite the frequent parody of its supposed unilateralism and 

sidelining of the international community, from the outset, this Administration has consistently placed a heavy emphasis on enlisting 

the cooperation of all willing countries. The Proliferation Security 

Initiative is the most public of these endeavors, but many other initiatives are actively under way, such as a United Nations Security 

2

Council resolution that is aimed at significantly curtailing the sale 

or transfer of weapons—usable materials and technology. 

So much progress has been made quickly. So many problems 

have been tackled simultaneously. So much remains to be urgently 

addressed that it would be surprising indeed if perfection prevailed 

every act and decision. Given the rapid pace of change mandated 

by this new strategy, a useful contribution may be made by those 

with a broader perspective than is always available to those 

charged with the pressing responsibilities of operational decision 

making. 

As one of the principal sinners in the spread of nuclear technology, China’s public conversion to the gospel of nonproliferation 

is very good news, indeed. That is, if it is in fact a true conversion 

of the heart as well, with fidelity to the old gods definitely abandoned. 

The Administration’s support for China’s application to the Nuclear Suppliers Group, the cooperative association of countries 

aimed at controlling the export of nuclear materials, equipment, 

and technology, is long-standing and is perhaps to be commended. 

But several questions regarding worry and discrepancies in China’s 

intentions must be addressed before universal support can be forthcoming. 

I will mention a few of these concerns but without any intention 

of presenting an exhaustive list. These include the declared intention of China to equip Pakistan, whose record regarding nonproliferation is unparalleled in its recklessness, with yet another 

power installation; the current extent of Beijing’s cooperation to 

prevent Iran from acquiring nuclear weapons in light of its former 

assistance to Tehran for precisely that purpose; and how China’s 

accession to the Nuclear Suppliers Group might hinder the work of 

that body. 

To some, this may seem arcane concerns, locking the drama and 

urgency of an impending crisis. But given the stakes involved in 

this most fateful of subjects, no error is without potentially fatal 

consequences, and there can never be an excess of reassurance or 

faith in an unexamined confidence. 

I am certain the Members of this Committee will add to this 

brief list, and I look forward to being persuaded that the Administration’s policy in this regard remains as visionary and pragmatic 

as it has been in so many other areas of endeavor. 

I now yield to my distinguished colleague, the Democratic Ranking Member, Mr. Lantos, for such remarks as he may choose to 

make. 

[The prepared statement of Mr. Hyde follows:]

PREPARED STATEMENT OF THE HONORABLE HENRY J. HYDE, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF ILLINOIS, AND CHAIRMAN, COMMITTEE ON INTER- NATIONAL RELATIONS

Good morning, and welcome to the Committee on International Relations’ hearing, 

‘‘Should China Join the Nuclear Suppliers Group?’’

Of the many sinister futures lying in wait for our country and the world, few 

equal in magnitude the threat posed by the continuing spread of nuclear weapons, 

be it the means to produce these weapons or the securing of a working device by 

theft or gift. The basic equation is clear, even if its terms as yet remain uncertain: 

As the number of possessors of these weapons grows, so does the risk of their eventual use. While it may be possible to deter rational actors governing stable states, 

3

no such security is possible in countries where central control over these weapons 

and materials could dissolve in chaos or where religious or ideological fanatics might 

eagerly provide to their acolytes the instruments of our destruction. In the end, even 

those supposed ‘‘rational’’ actors may present us with a new and more deadly definition of that comforting term. 

Among this Administration’s most significant accomplishments, but one still denied wide recognition, is its dramatically energized and newly comprehensive approach to preventing the further proliferation of these weapons and their associated 

technologies. To rectify the inexcusable laxity of the past decades, an expanding 

strategy that seeks to address all levels and components of this threat has been 

launched and accorded the highest priority. Early successes include the Proliferation 

Security Initiative, the dismantling of Libya’s WMD programs, and the disruption 

of the global nuclear black market, among many others. The groundwork for the 

next ambitious phase has already been laid with President Bush’s recent speech 

outlining a broad agenda of new initiatives. 

Despite the frequent parody of its supposed unilateralism and sidelining of the 

international community, from the outset, this Administration has consistently 

placed a heavy emphasis on enlisting the cooperation of all willing countries. The 

PSI is the most public of these endeavors, but many other initiatives are actively 

under way, such as a United Nations Security Council resolution that is aimed at 

significantly curtailing the sale or transfer of weapons-useable materials and technology. 

As one of the principal sinners in the spread of nuclear technology, China’s public 

conversion to the gospel of nonproliferation is very good news, indeed. That is, if 

it is in fact a true conversion of the heart as well, with fidelity to the old gods definitively abandoned. The Administration’s support for China’s application to the Nuclear Suppliers Group, the cooperative association of countries aimed at controlling 

the export of nuclear materials, equipment, and technology, is long-standing and is 

perhaps to be commended. But several questions regarding worrying discrepancies 

in China’s intentions must be addressed before universal support can be forthcoming. 

I will mention a few of these concerns but without any intention of presenting an 

exhaustive list. These include the declared intention of China to equip Pakistan, 

whose record regarding nonproliferation is unparalleled in its recklessness, with yet 

another nuclear power installation; the current extent of Beijing’s cooperation to 

prevent Iran from acquiring nuclear weapons in the light of its former assistance 

to Tehran for precisely that purpose; and how China’s accession to the Nuclear Suppliers Group might hinder the work of that body. 

To some, these may seem arcane concerns, lacking the drama and urgency of an 

impending crisis. But given the stakes involved in this most fateful of subjects, no 

error is without potentially fatal consequences, and there can never be an excess 

of reassurance or faith in an unexamined confidence. 

I am certain that the members of this Committee will add to this brief list. I look 

forward to being persuaded that the Administration’s policy in this regard remains 

as visionary and as pragmatic as it has been in so many other areas of endeavor.

Mr. LANTOS. Thank you very much, Mr. Chairman. 

Stopping the proliferation of weapons of mass destruction from 

China has been a top priority of the United States for many years 

during both Democratic and Republican Administrations. We have 

imposed tough sanctions on the Chinese to achieve our objectives, 

and we also have incentives to encourage responsible behavior on 

China’s part. 

Given the breadth of America’s economic security and political 

interests related to China, both carrots and sticks must be part of 

a complex but firm policy to stop the flow of nuclear missiles and 

technology and weapons from China. 

Mr. Chairman, I would like to commend you for calling today’s 

hearing on one element of our nation’s approach to the China proliferation threat: The recent decision by President Bush to support 

China’s entry into the Nuclear Suppliers Group, the nonproliferation regime designed to control exports of nuclear materials, equipment and technology. 

4

Mr. Chairman, I share your deep distrust of Chinese intentions 

related to the proliferation of weapons of mass destruction. I hope 

we can use today’s hearing, however, to explore whether China’s 

entry into the Nuclear Suppliers Group may just be the positive 

nonproliferation development that we have been seeking for nearly 

a decade with respect to China. 

While China continues to allow the export of chemical and biological weapons, the Chinese Government has recently had a positive record on the spread of nuclear technology. China’s participation in the Nuclear Suppliers Group may, therefore, be a good opportunity to test whether China can be a responsible player in 

international nonproliferation regimes. 

If we are confident that China will firmly adhere to the rules and 

guidelines of the Nuclear Suppliers Group, our support for China’s 

entry may further reduce the flow of nuclear technology to countries of concern. It may also foster more responsible behavior on 

the export of relevant items for chemical or biological weapons and 

ballistic missiles. 

However, before I can fully endorse China’s entry into the Nuclear Suppliers Group, I have some concerns which I hope can be 

addressed today by the Department of State. First, has the Administration received assurances from top Chinese leaders that China 

will play a positive and constructive role in the Nuclear Suppliers 

Group? 

Congress must know whether China has committed to the further toughening of international controls on the exports of nuclear 

technology or whether it is likely to stall and delay further improvements to the regime. 

Second, we need to be certain that the Chinese Government will 

fully comply with the Nuclear Suppliers Group tough requirements. 

As you know, Mr. Chairman, the Chinese Government seems to 

have insufficient control over Chinese firms trading in items of proliferation concern. There is little evidence that the Chinese Government has actively sought out and punished such proliferators. 

As the price for American support for China’s bid to join the Nuclear Suppliers Group, has our government insisted that China 

first demonstrate it has firm control over its nuclear related firms? 

Parenthetically I might mention, Mr. Chairman, that during my 

last meeting with the Minister for Atomic Energy in Russia he emphasized, as most Russian officials do, that the government is fully 

committed to controlling the export of dangerous technology, but he 

claimed that they really do not have control of every firm. They 

certainly do not have control of university scientists who hire themselves out to Iran and there pursue weapons of mass destruction 

development. 

We do not want to go through the same pattern in China. It is 

not enough for the Chinese Government to say they share our objective They must provide us with foolproof evidence that every 

Chinese company, whether owned by private entities, the Chinese 

military or whatever organization, is fully under control of the central Government of China when it comes to the issue of nuclear 

proliferation. 

Finally, Mr. Chairman, China, in joining the Nuclear Suppliers 

Group, with a contract in hand to provide a nuclear power reactor 

5

to Pakistan, is a very serious issue. Is the Administration confident 

that this nuclear assistance to Pakistan does not cause a proliferation threat? 

Since Islamabad does not allow international inspection of all of 

its nuclear activities, Nuclear Suppliers Group members are forbidden to engage in new nuclear cooperation with Pakistan. China’s 

Pakistan contract will be grandfathered and exempt from that prohibition. 

We must be leery of the Chinese fine print. Months and years 

from now we cannot allow additional Chinese cooperation with 

Pakistan or other countries to be justified as alleged ‘‘follow on contracts.’’ I expect the United States to receive in writing specific and 

exclusive detail of the scope of this Pakistan contract and Chinese 

acknowledgement that past projects in other countries have been 

fully completed before admitting China to the Nuclear Suppliers 

Group. 

Mr. Chairman, I believe my concerns regarding China’s participation in the Nuclear Suppliers Group potentially can be addressed, but in dealing with China on nonproliferation matters we 

must proceed cautiously, and we must ensure that everything that 

is agreed to can be verified. 

With that, I look forward to hearing from our witness, and I 

thank you, Mr. Chairman. 

Chairman HYDE. Thank you, Mr. Lantos. 

Mr. Berman? I am sorry. Mr. Ackerman, do you have an opening 

statement? 

Mr. ACKERMAN. I do not, Mr. Chairman. I would like to associate 

myself with the remarks that both you and Mr. Lantos have made. 

I am a little skeptical also, agreeing with what you said, and look 

forward to hearing whether the Administration’s policy with regard 

to this issue will be as visionary as it was in other areas. 

Chairman HYDE. Thank you. 

John Wolf was sworn in as Assistant Secretary of State for Nonproliferation on October 2, 2001. He entered duty as a Foreign 

Service office with the Department of State in 1970. Since then, he 

has served as Principal Deputy Assistant Secretary for International Organization Affairs, Ambassador to Malaysia, Ambassador to Asia-Pacific Economic Cooperation, and, from 1999 to 

2000, as Special Adviser to the President and Secretary of State for 

Caspian Basin Energy Diplomacy. 

Welcome, Ambassador Wolf. We are honored to have you appear 

before us today. We ask you to proceed with a 5-minute, give or 

take liberally construed, summary of your statement. Your full 

statement will be made a part of the record. 

I understand, if I may mention, that you are going to be leaving 

government very shortly after 34 years of serving our country. I 

want to thank you on behalf of the Committee for that service and 

wish you well in your new capacity as head of the Eisenhower Fellowship Program, an excellent program for which Congress has 

long been in support. 

With that remark, the floor is yours. 

6

STATEMENT OF THE HONORABLE JOHN WOLF, ASSISTANT 

SECRETARY, BUREAU OF NONPROLIFERATION, U.S. DEPARTMENT OF STATE 

Mr. WOLF. Thank you very much, Mr. Chairman, for the invitation to appear today, and thank you for including my prepared 

statement in the record. 

I will give a brief summary that will focus on the status and 

overall direction of our relationship with China, our efforts to bring 

China into the international nuclear nonproliferation regime and 

the progress we have made and why we think it is now the appropriate time. I think in doing this, I will be able to answer at least 

most of the questions that you and Mr. Lantos just posed. 

I want to thank you as well for the comments that you have 

made about the President’s energized approach for combating proliferation. It has been an important objective of this Administration, and we think, consistent with the remarks that you have 

made, that we have made a good deal of progress. 

Similarly with China, United States-China relations have improved enormously from a low point in April 2001, and our policy 

is to continue efforts in that direction. The President said at the 

Heritage Foundation in February that it is America’s policy to integrate China into Asian and global institutions, and to do that we 

pursue a candid, a constructive and cooperative relationship with 

China in all spheres. 

We have followed certain complementary and sometimes common 

policies with China, particularly in the war against terrorism. 

China supported U.N. resolutions in both Afghanistan and Iraq, 

and it has provides bilateral assistance to both countries, and it is 

playing a leading role in the six party talks on North Korea. 

At the same time, I would be the first to admit that we have differences with China, and we speak candidly to them. We make 

clear our concerns about trade issues, human rights and nonproliferation, as well as our commitment to the Taiwan Relations 

Act. We have not hesitated to express our concerns when warranted, nor have we hesitated to enforce United States sanctions 

against Chinese entities engaged in proliferation activities. But, 

our policy is to integrate China into global institutions when China 

and only when China becomes eligible and meets the criteria for 

membership. 

That brings me to the heart of today’s subject, namely the Chinese application for membership in the Nuclear Suppliers Group. 

How did it come about, and why do we support Chinese membership. Well, we first raised this issue in 1995, and since 1997 the 

NSG has made China part of its official outreach program. At the 

2003 NSG plenary in Busan, South Korea, the members agreed to 

consensus to pursue China’s membership. 

Over that same period of time, over those 9 years, China has 

taken steps indicating that it was increasingly serious about nuclear proliferation and that it was willing to work with others to 

that end. In September 1997, it promulgated nuclear export controls, and it based those controls on an itemized list that was substantively identical to the trigger list developed and used by the 

Nuclear Suppliers Group. At the October 1997 U.S.-China Summit, 

7

China committed publicly not to provide any assistance to 

unsafeguarded nuclear facilities and nuclear explosion programs. 

Third, it promised to promulgate and strengthen dual use controls by the middle of 1998, which it did, and those controls use a 

list substantively identical to the one used by the NSG. Fourth, it 

joined the Zangger Committee in 1997, and it has been a cooperative member there ever since. 

In September 2003, we concluded arrangements with China on 

a system for obtaining reciprocal government to government assurances that nuclear technology transferred to other parties and 

items derived therefrom would not be transferred to a third country without the consent of the supplier state. 

In December 2003, China issued a white paper setting forth its 

views and policies on nonproliferation. The paper is a useful and 

detailed statement on China’s export controls, the use of catch-all 

control, the responsibility of Chinese agencies and some of the provisions of Chinese law as it applies to export activities. 

In January of this year, Secretary Abraham and his counterpart 

at the China Atomic Energy Authority signed a statement of intent 

in Beijing pledging mutual cooperation and collaboration with the 

IAEA in the fields of export control, nuclear safeguards, physical 

protection and radioactive source security. 

That understanding is already bearing fruit. My principal deputy, Susan Burk, is in China today leading export control talks 

that will get into the details of licensing, enforcement, outreach 

and identifying challenges in implementation. There will be a separate breakout session on the details of nuclear export controls. This 

is a first, and we are very pleased that that process has started. 

That takes us to January 26, when China filed with the NSG 

Chairman its application to join the Nuclear Suppliers Group. 

China stated clearly it will act in accordance with the guidelines 

and control lists of the Nuclear Suppliers Group. 

It wrote to the Director General of the IAEA to inform the agency that it was adhering to the Nuclear Suppliers Group guidelines; 

specifically that it agreed to apply the commitments of the NSG to 

its own export control policies, including requirements for IAEA 

safeguards, physical protection and transfer consent rights. It also 

supplied additional information on its intention to amend its national legislation to incorporate full scope safeguards as a condition 

of supply. 

The NSG Chairman circulated the Chinese application to members the same day. He said he was reviewing the application and 

subsequently wrote requesting members’ views by April 30 with a 

view to China’s participation in the 2004 plenary in Sweden later 

this month. 

Why did we respond positively? First, this is not a new issue. It 

dates back two Administrations. Second, we have been trying for 

over a decade to bring China into the international nuclear nonproliferation arena. Third, China has continued to take steps to 

control nuclear and dual use exports and to demonstrate its willingness to adopt to global norms. 

We see broad scale cessation of nuclear cooperation with Iran 

and increasing cooperation with the United States in the areas of 

8

export controls, safeguards and physical protection. That said, we 

still have concerns. 

China needs to do a better job in identifying and denying risky 

exports, seeking out potential violators and stopping problematic 

exports at its borders. This week’s nuclear export control talks are 

one way of getting progress in that area, and I might add, Mr. 

Chairman, and if after 9 years of discussing Chinese membership 

in the NSG we have suddenly changed our mind, I am not sure we 

would be having those export control talk this week. 

In informing China that we supported NSG membership, we also 

made clear that we expected support from China for the President’s 

proposals on limiting the spread of sensitive enrichment and reprocessing technologies, as well as insisting on countries adhering 

to an additional protocol as a requirement of supply. 

Mr. Chairman, you and Mr. Lantos have expressed a number of 

questions. In my prepared statement I dealt with several. In concluding my remarks, let me run through just a couple briefly. 

First, will China be a spoiler inside the NSG? There are no certainties in diplomatic relations, but that has not been China’s role 

in the Zangger Group for the past 7 years. Moreover, China’s declared policies in its white paper suggests a confluence of views 

with the majority of NSG members on such issues as catch-all control. Also, we have heard twice from Chinese officials about the initiatives that the President put forward in his February 11 speech. 

Will China play a role similar to that of Russia? Some may think 

so. I do not. It may be that Russia is trying to protect its nuclear 

supply relationships with Iran and India. That is not an issue for 

China. 

Third, with regard to Chinese assistance to Pakistan, frankly 

Pakistan does not have full scope safeguards, and it does have a 

nuclear weapons program. The United States would prefer that no 

country provide Pakistan the benefits of peaceful nuclear cooperation, but the Chasma II plant will be under IAEA safeguards, and 

the NSG full scope safeguards provisions have always made allowance for the completion of agreements and contracts entered into 

before NSG membership. 

Why not tie NSG membership to our broader proliferation concerns? Our answer is that a decade ago we set out to resolve concern about Chinese policies and practices with regard to nuclear 

proliferation. We set some goals. We tied them to implementation 

of the agreement for peaceful nuclear cooperation. 

Tying NSG membership to a host of other issues at the last moment we do not believe would bring us progress on the other 

issues, but it could well cause the cessation of cooperation on nuclear issues that we care about and on which we are engaging even 

today. 

That said, Mr. Chairman, we are not reticent about approaching 

China when we have information about prospective worrisome exports by China’s entities, nor do we shy away from sanctioning 

those entities that violate United States laws related to proliferation. 

As I said, we have been working on this for a long time. We 

wanted China in a multilateral nuclear export control forum then. 

We achieved Zangger membership first. Today it is the NSG where 

9

the major nuclear export control issues are considered, and China, 

as a nuclear supplier, will have to face those issues head on. It is 

part of the global responsibility that China should take on. 

The NSG is not a social club. Membership has responsibilities. 

Chinese membership in the NSG will mean that its evolving civil 

nuclear industry will have to follow the same rules that every other 

NSG member follows. We think it is important that China is official here not just from the United States, but from all of the members of the NSG, but we will continue to be active in our bilateral 

dialogue as well. 

Mr. Chairman, I will stop here with my NSG remarks and answer any questions that you might have. I want to thank you, sir, 

for your kind remarks about me personally. It has been a pleasure 

in over 15 years and five separate assignments to work with the 

Members of this Committee on a variety of issues. 

We have not always agreed, but the comments and the engagement have always been extremely constructive, and certainly in my 

position as Assistant Secretary for Nonproliferation you have provided us with generous support. My colleagues and I deeply appreciate that support, and I personally welcome the support that you 

have given to me over the course of my career. 

I look forward to working with the Committee in this new incarnation as the President of the Eisenhower Fellowships, an organization which I believe provides genuine benefit, thus my willingness and my pleasure in accepting the offer. I hope the trustees 

concur tomorrow, but I am genuinely pleased, and I think it is an 

exciting new opportunity. 

Thank you very much. 

[The prepared statement of Mr. Wolf follows:]

PREPARED STATEMENT OF THE HONORABLE JOHN WOLF, ASSISTANT SECRETARY, 

BUREAU OF NONPROLIFERATION, U.S. DEPARTMENT OF STATE

Mr. Chairman and Members of the Committee: 

I appreciate the opportunity to appear before the Committee today. Mr. Chairman, your letter of May 14 noted that you wish to focus the hearing on the decision 

by the Administration to support the membership of the People’s Republic of China 

in the Nuclear Suppliers Group (NSG). I’m happy to address that issue as well as 

other questions that you or the Committee members may have. 

In my statement, I would like to address the status and overall direction of our 

relationship with China, our efforts to bring China into the international nuclear 

nonproliferation regime, the progress we have made in this area, and just how we 

came to see now as the appropriate time for China to join the NSG. 

First, let me say a few words about our relationship with China. As the Secretary 

has often said, the relationship is as good—if not in many respects better—than it 

has been at any time in the past twenty-five years. We had a rough start at the 

beginning of this Administration when an American reconnaissance aircraft flying 

in international airspace was intercepted, damaged and forced to land on Hainan 

Island in April 2001. The United States and China worked through this difficult and 

sensitive issue with an eye toward finding ways in which we could enhance cooperation and minimize misunderstanding in the future. And for the most part, we have 

been remarkably successful. 

There are multiple reasons for that. Obviously, Korea is an important part in the 

‘‘cooperation’’ side of the equation. In a January article in Foreign Affairs, the Secretary wrote:

‘‘. . . we have worked to transform our common interests with China into solid 

and productive cooperation over the challenges posed by Pyongyang. . . . Our 

agenda is ambitious, but it is succeeding, as attested to by the six-party framework for talks over North Korea’s nuclear program. . . . Beijing, as well as 

Washington, deserves credit for this achievement.’’

10

But there is far more at stake in the U.S./China relationship than just the North 

Korea issue. China has emerged in the past decade as a country of major political 

and economic consequence. The President’s National Security Strategy document 

from September 2002 stated that point succinctly, stating: ‘‘We welcome the emergence of a strong peaceful, and prosperous China.’’ What we care about is how 

China will put its growing power to work. What choices will it make? 

We need a candid, constructive and cooperative relationship with China as it rises 

to meet the challenges of global responsibility. And we measure that responsibility 

by China’s tangible decisions and actions. Our countries pursue certain complementary—and sometimes common—policies, particularly in the global war against terrorism. China supported UN resolutions in both Afghanistan and Iraq and has donated $150 million in bilateral assistance to Afghanistan and $25 million in bilateral assistance to Iraq. It is forgiving some of the sovereign debt Iraq owes. And 

again I have to note the importance of the fact that we are working together to end 

North Korea’s nuclear weapons program. 

At the same time, I would be the first to admit that we have differences with 

China, and we need to speak candidly about them. We make clear our concerns 

about trade issues, human rights, and nonproliferation, as well as our commitment 

to the Taiwan Relations Act. We have not hesitated to express our concerns when 

warranted, or to enforce U.S. legal sanctions against Chinese entities engaged in 

proliferation activities. We have encouraged China to broaden its laws, commitments and export controls, and to take more vigorous action to enforce new restraints. But the fact that there are differences should not preclude cooperation 

where we agree. Particularly since the overall trend in the nuclear area is positive 

and much has been accomplished over the last decade. 

But overall? U.S./China relations are on the upswing. Mr. Chairman, this Administration and this President are committed to working toward a relationship with 

China that enhances America’s security and that of our allies and friends, especially 

those in the Asia-Pacific area. Indeed, the President has led the way. On December 

9, 2003, on the occasion of the visit of Premier Wen, he stated:

‘‘America and China share many common interests. We are working together 

in the war on terror. We are fighting to defeat a ruthless enemy of order and 

civilization. We are partners in diplomacy working to meet the dangers of the 

21st century.’’

And at the Heritage Foundation on February 2 of this year, the President reaffirmed that.

‘‘. . . it is American policy to integrate China into Asian and global institutions. To do so, we pursue a candid, constructive and cooperative relationship 

with China in all spheres.’’

And that’s our policy. To integrate China into global institutions—but only when 

China comes eligible and meets the criteria for membership. And that brings me to 

the heart of our subject today, namely the Chinese application for membership in 

the Nuclear Suppliers Group. How did that come about? And why do we support 

Chinese membership? To answer those questions I need to review just a bit of history. 

We initialed an agreement for peaceful nuclear cooperation with China back in 

July 1985 and submitted it to Congress for the requisite period of Congressional review. The agreement entered into force in December of that year. However, exports 

under the agreement could not begin until the President made certain nonproliferation-related certifications set forth in a Congressional resolution of approval of the 

agreement. Those certifications were not made—for reasons that would have to be 

discussed in classified session. 

By 1994, however, it began to appear that China was taking a more serious approach to nonproliferation issues—although there were still problems—and we suggested to the Chinese that implementation of the nuclear cooperation agreement 

might be possible under certain conditions and if China took certain steps. Negotiations began in earnest in the spring of 1995. 

We asked China to join one of the two multilateral nuclear export control groups, 

the Nuclear Suppliers Group or the Zangger Committee. China chose to join the 

Zangger Committee for an obvious reason. China was supplying Pakistan with the 

Chasma nuclear power reactor. Chasma would be under IAEA safeguards, but Pakistan does not accept full-scope IAEA safeguards over its entire nuclear program. 

The NSG requires full-scope safeguards as a condition of nuclear supply. Zangger 

does not, because Zangger interprets the requirements of the Nuclear Nonproliferation Treaty, and the NPT does not require full-scope safeguards as a condition of 

supply. The point to note here is that we were suggesting Chinese membership in 

11

the NSG over nine years ago. This is not an issue that just surfaced over the last 

six months. 

What steps did China take at the time? First, China promulgated nuclear export 

controls in September 1997 and based those controls on an itemized list that was 

substantively identical to the trigger list developed and used by the NSG. Second, 

at the October 1997 U.S./China Summit, China committed publicly not to provide 

any assistance to unsafeguarded nuclear facilities and nuclear explosive programs. 

Third, China promised to promulgate strengthened dual-use controls by the middle 

of 1998, which it did. Those dual-use controls use a control list substantively identical to the one used by the NSG. Fourth, China did join the Zangger Committee 

in 1997 and has been a cooperative member ever since. 

My Director of Nuclear Energy Affairs, Dick Stratford, was on the U.S. negotiating team at the time, and he tells a good story. The U.S. wanted to see dual-use 

export controls promulgated before the Summit. The Chinese said that was impossible because developing a dual-use control list was a complicated task and getting 

interagency approval was worse. Dick said, ‘‘Why would you reinvent the wheel? 

Here’s the NSG dual-use list. It’s been accepted by over 30 supplier countries. And 

because it’s an IAEA publication, it’s already translated into Chinese.’’ The Chinese 

said they couldn’t just copy slavishly what others had done. But, when the list was 

published the following spring, one could tell that the entries were the same as on 

the NSG list, right down to the indentations. 

In the meantime, after 1997, we continued to think about Chinese membership 

in the NSG. The NSG made China part of its ‘‘outreach’’ efforts each year. When 

I was the NSG Chairman in the spring of 2002 my briefing paper noted that China 

had indicated informally that it might be interested in seeking NSG membership. 

When we reported on the Chair’s outreach efforts to the Prague Plenary in May 

2002, we noted that China had expressed interest in how the NSG handled existing 

contracts (the so-called ‘‘grandfather clause’’)—a clear signal that China was thinking about membership. 

In 2003, some NSG members reported that their bilateral discussions with China 

indicated that a Chinese request for membership might come sooner than expected. 

That fact was discussed at the 2003 NSG Plenary in Busan, South Korea, and the 

Busan Plenary, by consensus, agreed to pursue China’s membership over the next 

year. That agreement by the group may have influenced China’s thinking about the 

timing of membership. In any event, Chinese officials in Vienna last fall were asking us questions on how the grandfather clause worked—a sure sign of serious intent. 

Meanwhile, China continued to take additional steps indicating that it was increasingly serious about nuclear nonproliferation and that it was willing to work 

with others to that end. 

First, in September of 2003, we concluded arrangements with China on a system 

for obtaining reciprocal government-to-government assurances that nuclear technology transferred to the other party, and items derived therefrom, would not be 

retransferred to a third country without the consent of the supplier state. That was 

a complex negotiation because it involved creating a mechanism whereby each foreign ministry would have a way of knowing precisely what technology was proposed 

to be transferred, to whom, and what had actually gone. 

Second, in December 2003 China issued its ‘‘white paper’’ setting forth China’s 

views and policies on nonproliferation. The white paper is a useful and detailed 

statement on Chinese export controls, the use of ‘‘catch-all’’ controls, the responsibilities of Chinese agencies, and some of the provisions of Chinese criminal law as it 

applies to export activities. 

Third, DOE Secretary Abraham and his counterpart at the China Atomic Energy 

Authority signed a Statement of Intent in Beijing in January 2004 pledging mutual 

cooperation and collaboration with the International Atomic Energy Agency in the 

fields of export control, nuclear safeguards, physical protection and radioactive 

source security. 

That understanding, by the way, is already bearing fruit. My Principal Deputy, 

Susan Burk, is in Beijing this week leading export control talks that will get into 

the details of licensing, enforcement, outreach, and identifying challenges in implementation. Those talks will also include interagency decision-making, identifying 

suspicious transfers, investigation and prosecution. There will be a separate breakout session on the details of nuclear export controls, including developments in the 

supplier regimes, dual-use licensing reviews, nuclear technology security, and intangible technology transfers. 

And that takes us to January 26, 2004 when China filed with the NSG Chairman 

its application to join the NSG. In its letter of application, China stated clearly that 

it will act in accordance with the Guidelines and Control Lists of the NSG. On the 

12

same day, China wrote to the IAEA Director General to inform the Agency that it 

was adhering to the Nuclear Suppliers Guidelines, specifically that:

‘‘China will, once admitted into NSG, act in accordance with the NSG Guidelines (as contained in INFCIRC/254/Part 1 and Part 2, including Annexes, as 

amended) and duly exercise export control over nuclear and nuclear dual-use 

items.’’

That means that China agrees to apply the commitments of the Nuclear Suppliers 

Guidelines to its own export control policies, including requirements for IAEA safeguards, physical protection, and retransfer consent rights. 

China also supplied additional information on its intention to amend its national 

legislation to incorporate full-scope safeguards as a condition of nuclear supply (and 

in case of delay, to take administrative measures to the same effect, such as the 

issuance of a State Council decree). 

The NSG Chairman circulated the Chinese application to members on January 

27, noting that he was reviewing the application. On March 22, the Chairman wrote 

to NSG members stating that:

‘‘It is the NSG Chair’s view, after evaluating the content of China’s export control legislation and other requirements for participation, that China has taken 

all the necessary steps for consideration for participation in the NSG.’’

The Chairman requested that members provide their written responses on China’s 

application by April 30, ‘‘with a view to China’s participation in the 2004 NSG Plenary in Sweden.’’

Thirty members have replied to the Chairman. As of midday Monday, Vienna 

time, the Chairman had received nine positive responses from South Korea, New 

Zealand, Switzerland, Ukraine, Kazakhstan, Latvia, Turkey, Russia and the United 

States. The issue is complicated by the fact that there are three other applications 

pending. Estonia, Lithuania, and Malta; and Russia has not been positive on the 

two Baltics. Because of the Russian hesitation on the Baltics, 21 EU countries have 

told the Chairman that they want to discuss all four applications at the Plenary. 

The Chairman has now proposed that all four applicants be invited to the Swedish 

Plenary as ‘‘observers’’ and the issue taken up there. 

As I said, Mr. Chairman, the U.S. did reply positively on the issue of China’s admission to the NSG, for a number of reasons: 

First, we raised NSG membership with China in 1995 as one of the steps we 

wanted China to take at the time—with Zangger Committee membership as an acceptable alternative. China chose Zangger for the reasons I mentioned. 

Second, for over a decade, we have been trying to bring China into the international nuclear nonproliferation arena. As Secretary Powell has said, we welcome 

a global role for China. 

Third, China has continued to take steps to control nuclear and dual-use exports 

and to demonstrate its willingness to adopt global norms. To that end, we can cite 

the adoption of nuclear and dual-use export controls, full-scope safeguards as a condition of supply, the broad-scale cessation of nuclear cooperation with Iran, the Chinese white paper on nonproliferation, and the increasing cooperation with the 

United States in the areas of export controls, safeguards, and physical protection. 

In informing China of our support for membership, we also informed Chinese officials that we expect China’s support for the President’s initiatives involving the 

NSG, and specifically for the ban on the further transfer of enrichment and reprocessing technology, and for making the Additional Protocol a condition of supply for 

trigger list items by the end of 2005. 

There are still problems that concern us. There are implementation issues. China 

needs to do a consistently better job in identifying and denying risky exports, seeking out potential violators, and stopping problematic exports at the border. This 

week’s nuclear export control talks in Beijing are one way of getting progress in 

these areas. 

Mr. Chairman, among the questions that might be raised is whether China would 

prove to be a ‘‘spoiler’’ inside the NSG. There are no certainties in diplomatic relations, but certainly that has not been their role in Zangger for the last seven years. 

Moreover, their declared policies in their white paper suggest a confluence of views 

with the majority of NSG members on such issues as catch-all controls. Also, Chinese officials have commented positively on the initiatives that President Bush put 

forward in his February 11 speech. Generally, we see that China takes its responsibilities in international organizations seriously. 

Do we think that China will play a role similar to that of Russia? Some might. 

But I don’t. Russia has posed some difficulties in the NSG on certain issues, probably driven in part by Russia’s interest in protecting its nuclear supply relationships 

13

with India. That said, we do not foresee China posing the same difficulties regarding nuclear supply relationships, as this is not an issue for China. And China has 

stated that it will inform the NSG of the particulars about its supply of Chasma 

II to Pakistan—something which is not yet required by the Guidelines. 

We have known for some time that China planned to supply Chasma II. But, although we would prefer that no such cooperation occur, Chasma II will be under 

IAEA safeguards and the NSG full-scope safeguards provisions have always made 

allowance for the completion of agreements and contracts entered into before membership. 

Another question might have to do with our sanctioning of Chinese entities for 

various exports of concern, including as recently as April. When we see exports from 

time to time that concern us, we are sometimes able to use diplomatic channels to 

get China to stop the shipments. When shipments do occur in spite of laws prohibiting them and our considerable diplomatic efforts, we apply sanctions. The vast majority of sanctions cases deal with missile and chemical issues. But nuclear technology, services and materials are represented in the mix. And therefore we have 

to continue to call such instances to Chinese attention and to insist that Beijing 

take the necessary steps to stop such transfers. 

If missile and chemical transfers are a major issue, some would ask why it might 

not seem prudent to tie Chinese admission to the NSG to across-the-board improvements in export behavior. The answer is that a decade ago we set out to resolve 

concerns about Chinese policies and practices with respect to nuclear nonproliferation. We set certain goals and tied them to implementation of the agreement for 

peaceful nuclear cooperation. China greatly desires to be a participating member of 

the international nuclear nonproliferation regime, and has continued to take steps 

to demonstrate its bona fides to that end. Tying NSG membership to a host of other 

issues at the last moment would not bring us progress on the other issues. It would 

only cause the cessation of cooperation on nuclear issues we care about and on 

which we are now engaging—even this week. 

And lastly, did we favor NSG membership for China because we want China to 

buy U.S. nuclear power reactors? No. The Administration does favor the sale of U.S. 

products, including nuclear reactors and civilian nuclear power technology to China, 

and there are people whose job it is to urge the Chinese to buy American. Moreover, 

since the Chinese are interested in procuring nuclear power reactors from abroad, 

if they buy from the United States we would have substantial influence on how 

China manages its civilian nuclear program in such areas as nuclear safety. But, 

as I said, we set out a decade ago to influence and change the direction of Chinese 

policy and practices with respect to nuclear nonproliferation. We wanted China in 

a multilateral nuclear export control forum then and we achieved that with Zangger 

membership. But today, it’s the NSG where the major nuclear export control issues 

are considered and China as a nuclear supplier should face those issues head-on. 

That is one of the global responsibilities it should take on. It also means that Chinese diplomats and export control officials would be exposed regularly to the nonproliferation views of 40 (and soon 43) other countries. That can only help. 

Mr. Chairman, I’ll stop here. I hope I’ve answered many of the questions you 

might have had and assuaged concerns about the merits of having China inside, not 

outside, the NSG. I’m at the Committee’s disposal and would be happy to address 

any other questions or concerns. 

Thank you.

Chairman HYDE. Thank you, Ambassador. Any support you get 

is more than well deserved. 

Mr. Ackerman? 

Mr. ACKERMAN. Thank you, Mr. Chairman. 

Thank you, Ambassador, for your service, and thank you today 

for your testimony. As you say, it is not a social club. What does 

China get out of joining? 

Mr. WOLF. By joining the Nuclear Suppliers Group, China is 

stepping up to a set of responsibilities that reflect and will incorporate the kind of position and the kind of position that China, a 

member of the P–5, aspires to have around the world. It exercises 

responsibilities in the international arena, and being part of the 

NSG enables it to continue to do that. 

China has a nuclear weapons program. It has an evolving civil 

nuclear program. It will continue to be able to cooperate with other 

14

NSG members in developing its civil nuclear program, but I think 

the most important thing for China will be that it will be part of 

a group that is the principal rule setter for international trade in 

nuclear technology. 

Mr. ACKERMAN. So this is more like scoring brownie points in a 

sense? 

Mr. WOLF. I think you have to ask China really why. We have 

a national interest in seeing China included in the Nuclear Suppliers Group. Our interest is in having China playing by the same 

set of rules that every other nuclear supplier plays by. 

Mr. ACKERMAN. Our interest is putting limitations. How does 

that advance whatever their goals and objectives might be? Surely 

we have analyzed that. 

Mr. WOLF. I cannot answer for China. 

Mr. ACKERMAN. I would ask China, but they are not here today. 

Mr. WOLF. I am not going to sit here and testify for China. What 

I am going to say is they have stated a policy that is a policy of 

responsibility. They have said they are prepared to engage in the 

Nuclear Suppliers Group in a positive sort of a way. 

We are prepared. We have been working for a decade to try and 

encourage exactly that kind of responsibility in terms of specific 

countries and in terms of the broad nuclear trade that takes place 

around the world. 

Mr. ACKERMAN. I was just curious as to whether or not we have 

analyzed their motivation. 

In your view, does China perceive the proliferation of nuclear 

weapons technologies as a threat to themselves, and do they generally support the goals of nonproliferation regimes as a matter of 

their national policy? 

Mr. WOLF. In my view, they would view the spread of nuclear 

weapons technology as a threat. I cannot answer for all the nonproliferation regimes in part because I am not convinced that they 

have exercised the kind of enforcement that would—in several of 

the regimes particularly related to the CWC and missiles that 

would show that they are fully committed. They state it. 

They have improved their export controls. The export control legislation that they put forth in the fall of 2002 is really quite good, 

and it brings them up to the standard or to the level of the Australia Group and the MTCR, but the behavior of a number of Chinese entities would suggest that the signal in the Chinese marketplace is still not sufficiently clear about Chinese intention to enforce the export controls in those two areas. I think they have done 

a better job on the nuclear side. 

Mr. ACKERMAN. If China, as you say, perceives the threat of nuclear proliferation as a threat to themselves, who do they see this 

threat coming from? 

Mr. WOLF. Again, I would rather testify for this Administration 

and not for that. I would guess if I were China——

Mr. ACKERMAN. No, but this Administration should be analyzing 

the motivation of potential adversaries. 

Mr. WOLF. Sure, and I think the answer, Mr. Ackerman, would 

be that if they saw the growth of nuclear weapons in their neighborhood that that would be of concern. We see a very positive Chinese engagement. 

15

Mr. ACKERMAN. For instance, in the——

Mr. WOLF. If I could finish answering your question? We see 

China playing a very active role——

Mr. ACKERMAN. You can finish answering my questions by——

Mr. WOLF [continuing]. In North Korea in terms of achieving a 

nuclear free——

Mr. ACKERMAN. Do the Chinese see a threat from North Korea? 

Mr. WOLF. They clearly see a nuclear armed Korean Peninsula 

as adding to the instability in their region, and they have played 

a very active role and a positive role in helping to move the six 

party talks forward. 

Mr. ACKERMAN. I have one final question, Mr. Chairman. 

Chairman HYDE. Surely. 

Mr. ACKERMAN. Did we ask China to use their considerable influence to get Pakistan to improve its export controls? 

Mr. WOLF. I do not think so. We have our own export control dialogue with Pakistan that is making some progress, and we have 

used a fairly intensive bilateral——

Mr. ACKERMAN. Would one not think it would be in our national 

interest for Pakistan to tighten up those controls, having seen what 

we have seen with their dealings with North Korea in specific, and 

others most likely, to use their desired membership and leverage 

that to place a condition that they do that? 

Mr. WOLF. We have used the Nuclear Suppliers Group to have 

outreach to Pakistan, and as a member of the Nuclear Suppliers 

Group——

Mr. ACKERMAN. But we have some leverage over China. They 

want in, and why do we not just tell them that we would like a 

commitment from them that they help to put the reins on Pakistan? 

I do not know that this thing has been thought out very well, 

Ambassador. 

Mr. WOLF. I think, Mr. Ackerman, that you are perhaps suggesting that membership in the NSG gives us more leverage on 

more different issues than we do. This is clearly——

Mr. ACKERMAN. I am suggesting, Ambassador, that if someone 

wants something that we have the ability to grant then we should 

try to get something for that, especially if it is in the interest of 

security within the region and the world. 

Mr. WOLF. I think it would be fair to say that we do discuss proliferation in the region and the things that we have seen. I am not 

sure that I would agree that NSG membership, holding that as a 

condition for achieving improved Pakistan export controls, I am not 

sure that I see that linkage as working very well. 

As I said, we are working very hard directly with Pakistan. We 

have made a good deal of progress on a number of issues related 

to export control. 

Mr. ACKERMAN. I understand that. 

Mr. WOLF. There are other things that I have briefed to the Committee. 

Mr. ACKERMAN. The whole rest of my question is we are not 

leveraging anything for the good of the international community 

and our own security. 

16

Chairman HYDE. The gentleman’s time has expired. We will have 

a second round. 

Mr. Smith of Michigan? 

Mr. SMITH OF MICHIGAN. Mr. Chairman, thank you very much. 

The pros and the cons. Do I understand there are 40 countries 

now signed into the NSG? 

Mr. WOLF. Yes, I think that is correct. 

Mr. SMITH OF MICHIGAN. If the United States were neutral, 

would they probably accept it the week after next or whenever the 

next meeting is? 

Mr. WOLF. I believe so. I believe so. 

Mr. SMITH OF MICHIGAN. You indicated, Ambassador, that China 

would be obligated to do these things, but look at our experience 

with Russia, who is also a member of NSG. Russia has violated 

some of the provisions, certainly some of the intent of NSG and 

some of their actions. 

About enforcement or enforcement effort, either I do not understand it or it does not exist. 

Mr. WOLF. The NSG is not a treaty group. It is a political—it is 

a group that comes together, and there are countries that give a 

political commitment to each other, but there are obviously differences in interpretations, and we have a different interpretation 

about Russian exports, for instance, than Russia does, but I will 

leave them to explain their own policy. 

The NSG, though, creates a consensus on the kinds of controls 

that each country should legislate and enforce, and we believe 

there is a real utility to bringing in China, which has an evolved 

civil nuclear program. We believe, and we have believed for 10 

years, that there is an advantage in bringing them into that group. 

At the same time, we think it is important that they improve 

their export controls. One of the first set of discussions that I had 

when I took this job——

Mr. SMITH OF MICHIGAN. And you think the chances are as members they will be more apt to control their exports? 

Mr. WOLF. I think it adds to the influence that can be brought 

to bear because it is not just the United States having a bilateral 

discussion with China there will now be several dozen other members who can also——

Mr. SMITH OF MICHIGAN. You know, I think I tend to agree that 

the chances are of them being a little more in compliance with restricting proliferation of either weapons of mass destruction or 

other weapons technology is probably maybe a little better if they 

are members of this group, but was it not just last April that we 

put sanctions on China because of their proliferation of weapons of 

mass destruction? 

That raises the question of how much they want to cooperate in 

this effort. The decision to continue the Chasma agreement with 

Pakistan makes me a little suspicious that they are just, maybe 

flouting is not the correct word, but knowing that there is a grandfather clause before they are admitted they can do these things, 

and they do it just several weeks before the meeting of the NSG. 

It should make us a little suspicious. 

Mr. WOLF. Let me be clear on the April cases. When you talk 

about the Iran Nonproliferation Act covers all of the export control 

17

regimes, not just the Nuclear Suppliers Group list. Most of the 

sanctions that were imposed on Chinese entities related to things 

that were non-nuclear. 

In the nuclear area, it is our impression, based on the information that we have, that they are addressing the kinds of concerns 

that we had. We have not seen the kinds of activity that worried 

us several years ago. That does not mean that it is not taking 

place. It is only that we have not seen it. 

We always worry when there is a degree of exchange back and 

forth, for instance, between Chinese scientists and Pakistani scientists. It will happen because of the Chasma. It will happen because of the Chasma contract, and it will be important that China 

assure that no information that should not pass—it will be important that they make sure that no information has passed that 

should not pass. 

Mr. SMITH OF MICHIGAN. But the nuclear reactor agreement of 

China and Pakistan, the Chasma agreement, would that not be allowed technically once they are members of NSG? 

Mr. WOLF. It will be allowed because it is grandfathered. 

Mr. SMITH OF MICHIGAN. No, no. No, no. I am saying would that 

kind of action several weeks before they are admitted to NSG, 

would that be allowed if it took place after their membership in 

NSG? 

Mr. WOLF. If they had been a member of the NSG before they 

entered——

Mr. SMITH OF MICHIGAN. No, no. My question, maybe I am not 

saying it correctly. If Chasma were to happen after membership in 

NSG, would it be a violation of the NSG? 

Mr. WOLF. No. No. The contract will be grandfathered. Once 

again, the Chasma II facility will be under IAEA safeguards. 

Chairman HYDE. The gentleman’s time has expired. 

Ambassador Watson? 

Ms. WATSON. Thank you so much, Mr. Chairman, and welcome, 

Ambassador Wolf. 

In June 2002, you testified before the Senate Government Affairs 

Committee that there is a continuing gap between the commitments China has made and the implementation of these commitments. China still has not promulgated all the laws and regulations that would implement the nonproliferation policy that Chinese officials at every level say is China’s policy. Is this still a valid 

statement, and would you clarify it? 

Should the United States be promoting China’s entrance into the 

Nuclear Suppliers Group, and why should we be? I join some of the 

earlier questions. What leverage would we have? 

Mr. WOLF. Thank you, ma’am. The answer to your questions go 

in several different directions. 

One, in terms of export controls, after June in the fall of 2002 

China promulgated a wide ranging and much improved export controls set of laws and regulations they are still in the process of implementing. That is on the good side. 

On the other side, we still do not believe that, broadly speaking, 

the enforcement of those rules and regulations has resulted in Chinese entities, that is the company in the street, believing that they 

18

have to stop and so we still see proliferation, especially in the CW 

and missile area and related to Iran in particular. 

Where we can, we have provided information to China in order 

to stop transactions. Where transactions have nonetheless taken 

place either because we were not able to provide information because of the sensitivity of sources and methods or because they did 

not take action, we have not hesitated to sanction those Chinese 

entities that violated United States proliferation laws. We continue 

to watch very closely. 

On the other hand, it is also the President’s policy to try to integrate China into the global system and into the major global institutions that are part of that system, and in that respect we believe 

that it is important to bring China into the NSG, but also to continue to hold it—to hold it accountable. 

Ms. WATSON. Yes. Will they play fair? That is my question. You 

know, when you think of a nation that is 1.2 billion people and controlling nuclear weapons, they pretty much have control over that 

part of the world. 

Let me extend my questioning onto another concern, and that is 

how are they helping us in North Korea? I am sure that negotiations are such that we want to keep them on the supportive side 

so that we can have them be kind of the watchdog in that area. 

Can you let us know what is going on between the Chinese and 

North Korea, and will they play fair and follow their own rules? 

Mr. WOLF. Answering the second question first, our experience 

with China in the Zangger Group, and the Zangger Group relates 

to the list that are directly part and that come directly under the 

nonproliferation treaty. It is less broad than the Nuclear Suppliers 

Group. Our experience with China is that they have been positive 

there, and our analysis of proliferation concerns suggests that 

China is trying to stop proliferation by its nuclear entities. 

In terms of North Korea, it is my view, but I defer to Assistant 

Secretary Kelly or others who are most deeply involved. It is my 

view that China has played a very positive role both in terms of 

helping to pull together the six party talks and also using its special influence with North Korea to keep North Korea focused in the 

talks. 

The talks themselves have not moved far along the path toward 

accomplishing complete, verifiable, irreversible dismantlement of 

North Korea’s weapons program, weapons and program, but the 

talks are very important, and the fact that all of North Korea’s 

neighbors, with China playing a major leading role. The fact that 

all of the neighbors are seeking a solution I think is very important 

in terms of keeping North Korea focused on the international interest in seeing a nuclear free Korean Peninsula. 

I give them a great deal of credit for a very forward leaning approach to those six party talks. It is kind of uncharacteristic. China 

tends in many fora to be less visible. They have been quite visible 

in the six party talks. 

Chairman HYDE. The gentlelady’s time has expired. 

Ms. WATSON. Thank you, Mr. Chairman. 

Chairman HYDE. Mr. Ambassador, I understand some United 

States companies are interested in building civilian nuclear reacVerDate Mar 21 2002 15:17 Jul 23, 2004 Jkt 094509 PO 00000 Frm 00022 Fmt 6633 Sfmt 6601 F:\WORK\FULL\051804\93775.000 HINTREL1 PsN: SHIRL
19

tors in China. Does our companies’ interest play any role in our decision to bring into the NSG? 

Mr. WOLF. No, Mr. Chairman, it did not. Having said that it did 

not, we are interested in promoting the sale of United States nuclear technology to the civil program in China coming in the context of the bilateral nuclear cooperation that we have that ensures 

that we will have a direct voice in how that technology is used or 

whether or not it could ever be transferred, and so in that respect 

we think that it is both good for the United States economy, but 

it is also good in terms of giving us influence in terms of an evolving civil nuclear program in China. 

It is a program that is going to evolve. They will acquire technology from somewhere as well as develop it on their own. To the 

extent that United States technology provides the basis for that, it 

does give us the means to have a direct discussion with China on 

how that technology is used, and we think that that is valuable. 

To your question, the answer is no. 

Chairman HYDE. Ambassador, is China providing any assistance 

to Iran’s nuclear program? 

Mr. WOLF. When we reached an agreement with China on that, 

there were two projects that were grandfathered from the agreement. I believe one of them was a mine, and I forget what the 

other one is. Those have been winding down rather slowly. 

Other than that, it is not clear to us that there is ongoing Chinese activities. There was activity in the past that was worrisome. 

It is not clear that it continues. 

Chairman HYDE. Thank you. 

Mr. WOLF. I would have to go into restricted session if we were 

going to go much further on that. 

Chairman HYDE. Okay. We will have a second round. Mr. Ackerman? 

Mr. ACKERMAN. Thank you, Mr. Chairman. 

Ambassador, you said that it was the President’s policy to involve China in as many international organizations and relationships as possible, and I think that the stated goal of the President 

is appropriate and wise, and that is the course that we should be 

taking. 

I am concerned, however, about how the Department is implementing those goals. If we could return to the question that one of 

our colleagues brought up on Chasma II? Going back to Chasma 

I, China built a nuclear plant in Pakistan. China now wants to 

build a second plant in Pakistan, and they say that they are grandfathered in, as you put it, because the contract was signed prior. 

My question is have you seen the contract? 

Mr. WOLF. I have not. I have not, but as part of the process that 

leads to China joining the NSG we were very specific to them—

with them—in terms of a couple of things. 

One, we indicated that we expected that they would support the 

President’s initiatives related to curtailing the spread of reprocessing and enrichment technology, as well as the requirement for an 

additional protocol. 

We also said that we expected China to provide prompt information on any ongoing support to foreign commercial nuclear programs that it wishes to grandfather. This would include informaVerDate Mar 21 2002 15:17 Jul 23, 2004 Jkt 094509 PO 00000 Frm 00023 Fmt 6633 Sfmt 6601 F:\WORK\FULL\051804\93775.000 HINTREL1 PsN: SHIRL
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tion about China’s support for the Chasma II nuclear program, as 

well as any other support activities. 

I am not aware that we have gotten a response, but, as you 

know, these conversations have only been on for the last couple of 

weeks. 

Mr. ACKERMAN. I am just concerned about basing an important 

foreign policy on expectations and wishes because that is not a 

plan. 

You have not seen the contract. Have we asked to see the contract? 

Mr. WOLF. We have asked for prompt information. 

Mr. ACKERMAN. Have we asked to see——

Mr. WOLF. I am not aware that we have asked for the contract. 

Mr. ACKERMAN. Why would we allow them to build a nuclear 

plant in Pakistan, which plays fast and loose with nuclear technology as we have seen, and allow them to escape what we want 

to control by saying that they have a preexisting contract if we do 

not even ask to see the contract? 

Mr. WOLF. Mr. Ackerman, we have asked for full information on 

China’s——

Mr. ACKERMAN. There is a difference between asking for full information and asking for the contract. If they say they have a contract that is a legal document. Any 1st year law student doing due 

diligence would ask to see the contract. 

By what right do you have to build this? This is one of the terms 

to get into the organization. If you are saying that you have a get 

out of jail free card, show it to us. 

I do not know that you guys are on top of this situation. It is 

very disappointing. 

Mr. WOLF. I think, Mr. Ackerman, that we are on top of it, and 

we have asked for full information. 

Mr. ACKERMAN. Why do you not ask for the contract, Ambassador? 

Mr. WOLF. I will take your comment. I do not know whether that 

is either possible—it is always possible. I do not know whether it 

is appropriate, but let us look at that issue. 

Mr. ACKERMAN. If you want to come into my house and you say 

you have a warrant, show me the warrant. 

Mr. WOLF. Mr. Ackerman, I think you are——

Mr. ACKERMAN. This is not a done deal. 

Mr. WOLF [continuing]. Overestimating the ability of the United 

States to stop this transaction or even to look at——

Mr. ACKERMAN. I did not ask you to stop it. 

Mr. WOLF. Or even look at what might be commercially sensitive 

information. I am not sure that if a third party asked us to see the 

contract of a Westinghouse contract with somebody else that Westinghouse would necessarily show that third party the details of 

the contract. 

Mr. ACKERMAN. But if it was the price of admission of somewhere we wanted to get into, we might consider it, but you would 

not know the answer to that unless you asked. 

Mr. WOLF. That is why we have asked. 

Mr. ACKERMAN. The amazing thing here is that you have not 

asked to see the contract. 

21

Mr. WOLF. Well, maybe we did not think about asking for the 

contract. What we thought about asking for was full information. 

Mr. ACKERMAN. I am glad you answered that. I get the idea that 

maybe you should ask to see the contract because maybe they are 

not grandfathered in. 

Chairman HYDE. The gentleman’s time has expired. 

Mr. WOLF. Thank you for your suggestion, and we will certainly 

take a look at it, but we will also seek information about the details of this contract. 

Chairman HYDE. I want to thank you, Ambassador Wolf, for your 

testimony. It is very enlightening. I again wish you every good 

luck. 

Mr. WOLF. Thank you very much, Mr. Chairman. As I said, we 

do not always agree, but it is always fun. 

Chairman HYDE. That is true. 

The Committee stands adjourned. 

[Whereupon, at 11:30 a.m. the Committee was adjourned.] 

(23)

A P P E N D I X 

MATERIAL SUBMITTED FOR THE HEARING RECORD

PREPARED STATEMENT OF THE HONORABLE NICK SMITH, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF MICHIGAN

I want to thank Chairman Hyde for holding this hearing today. I have concerns 

about China entering the Nuclear Suppliers Group, it is important to take the opportunity to discuss these concerns. I look forward to hearing the position of the administration from our witness. 

The Nuclear Suppliers Group (NSG) was created in 1974 after Pakistan tested a 

nuclear device. It is currently comprised of 40 countries that have agreed to participate in one of several nuclear export control regimes. These countries have committed to limiting the proliferation of nuclear technology and materials by restricting the countries and the materials that they supply. Like similar international 

agreements, the NSG has no enforcement mechanisms. 

Since 1995, it has been United States policy that China should be part of the 

NSG. Secretary Powell restated our support for this position recently. There are several important arguments for this. First, China is a signatory as a nuclear power 

to the Nuclear Nonproliferation Treaty (NPT) and the Advanced Protocol. Under 

these, it has already made commitments to limit its nuclear exports. Inviting them 

into the NSG would simply recognize those policies. Second, membership would give 

us additional leverage over China on proliferation issues where they still exist. In 

essence, these arguments are for further normalizing relations with China and integrating it into the international order. They are a continuation of President Nixon’s 

policies from the 1970s. 

However, these arguments invite us to learn from our experiences with Russia’s 

participation in the NSG. Russia is a participant in both the NSG and the NPT. 

However, it has a terrible proliferation record that this Committee has discussed on 

several occasions. How would China’s membership in the NSG help us address our 

proliferation concerns with China where it has not with Russia? Or, alternatively, 

how has Russia’s membership in the NSG helped us address its proliferation record? 

However, there are important arguments against inviting China into the NSG. It 

could be viewed as whitewashing over behavior that is not consistent with the principles of the NSG. Just last week China announced a new reactor project, Chasma, 

in Pakistan. This took place less than three weeks before the next NSG meeting at 

which China could become a member. While the project could continue under the 

‘‘grandfather’’ provisions of the NSG, it is disturbing that China would flout the 

principles of the NSG so close to entering. If China were to continue its behavior, 

it would be yet another example of China disregarding its international agreements. 

It is not clear that the right response to this is to enter into another international 

agreement. 

Chasma is not the only active source of concern over Chinese proliferation. On 

April 1st of this year, we imposed additional sanctions on Chinese firms due to proliferation behavior related to either missile sales or WMD transfers. The State Department has not yet clarified its reasons for these sanctions. The 2003 World Wide 

Threat assessment included a statement about links between Chinese and Iran that 

were of concern. When this statement was made again this year, this language was 

dropped. What happened to those links? Some administration officials have also 

raised concerns about China’s export controls. While laws are on the books, it is not 

clear if China is fully implementing them or even if it can. What are the administration’s views on these and other proliferation issues related to China? 

I would like to thank the chairman for holding this hearing to address these questions. The administration clearly believes that China’s entrance into the NSG is imVerDate Mar 21 2002 15:17 Jul 23, 2004 Jkt 094509 PO 00000 Frm 00027 Fmt 6601 Sfmt 6621 F:\WORK\FULL\051804\93775.000 HINTREL1 PsN: SHIRL
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portant. However, it is not clear how the benefits of China’s entrance balance 

against other concerns about Chinese behavior.

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