House International Relations Committee Hearing: China's Military Sales to Iran

September 12, 1996

Weapon Program: 

  • Missile
  • Military

Related Country: 

  • Iran
  • Iraq
  • Russia

REP. GILMAN: The hearing will come to order. Our hearing today is entitled "Consequences of China's military sales to Iran." Our witnesses have been asked to inform us of the effects (of) Chinese weapons that were sold to them will have on our troops, on Israel, and on the stability of the entire region. According to the State Department's annual report on terrorism entitled "Patterns of Global Terrorism 1995," and I quote, "Iran remains a premier state sponsor of international terrorism and is deeply involved in the planning and execution of terrorist acts, both by its own agents and by surrogate groups. This year Teheran escalated its assassination campaign against dissidents living abroad."

It goes on, and I quote, "Iran provides arms, training and money to Lebanese Hezbollah and several Palestinian extremist groups that use terrorism to oppose the Middle East peace process. Tehran, which is against any compromise with or recognition of Israel, continued in 1995 to encourage Hezbollah, Hamas, the PIJ and PFLP, GC and other Palestinian rejectionist groups to form a coordinated front to resist Israel and the peace process through violence and terrorism."

Hezbollah held American hostages in Lebanon, blew up the Marine barracks in Beirut in 1983. Hezbollah was also responsible for bombing the Israeli embassy in Argentina in 1992, killing some 92 people. Iran has a network of clandestine operatives in the Persian Gulf states. There are indications that Iran was involved in the June 25th bombing in Dhahran. Over this summer Bahrain, a close ally of the United States, uncovered an Iranian plot to destabilize their regime.

Little by little Iran is gaining influence in Iraq. It arms, trains and funds Islamic guerrillas that are active not only in southern Iraq but in the north as well. Iranian meddling has much to do with the intra-Kurdish fighting in Iraq that's now brought Saddam Hussein back in control in the north.

According to the State Department's terrorism report, and I quote, "Iran continues to view the United States as its principal foreign adversary, supporting groups such as Hezbollah that pose a threat to United States citizens."

With the help of China, Iran is becoming a formidable military power. China supplies Iran with weapons of mass destruction and delivery technology. China's acceptance has helped Iran to develop one of the largest chemical weapons programs in the entire world. A CIA study concluded that China had "delivered dozens, perhaps hundreds of missile guidance systems and computerized tools to Iran."

In January of 1996, our Navy detected Iranian close firing of Chinese-supplied C-802 sea-skimming Cruise missile in the Persian Gulf. China is said to have sold Iran about 40 of these missiles, against which the US Navy does not have a reliable defense.

China's Silkworm missiles were fired by Iran at US-escorted ships during the Iran-Iraq war. Accordingly, this committee needs to take a good hard look at what these Chinese weapons, in the hands of current hostile anti-American Iranian regime, means to our troops in the region, to our friends and to our allies. We look forward to hearing from our witnesses today. Our witnesses today include Mr. Seth Carus, research analyst at the Center for Naval Analysis. Mr. Michael Eisenstadt, military fellow, Washington Institute for Near East Policy. Mr. Leonard Specter, senior fellow, Carnegie Endowment for International Peace.

I am going to call on our members for any opening statement. Mr. Smith.



A Representative from New Jersey


REP. CHRISTOPHER SMITH (R-NJ): Thank you very much, Mr. Chairman. I want to thank you for convening this very important hearing. What the committee is trying to find out today is whether there is anything the Beijing regime can do, and anything at all so egregious that it will cause the Clinton administration to reconsider its policy of appeasement of that brutal regime.

Our government has taken the position in recent years that the way to get Beijing to behave is what it calls constructive or comprehensive engagement. So we impose no economic or diplomatic sanctions and not even mild ones, for the imprisonment of political and religious dissidents for torture, (or when) forced abortion or sterilization are policies that amount to genocide against the people of Tibet.

We impose no sanctions against the PRC for supplying nuclear materials to Pakistan, although our law clearly requires such sanctions. The administration has aided this requirement by pretending that the Chinese government did not really know it had been supplying those ring magnets.

Today we will hear testimony about the more dangerous form of proliferation by Beijing, not to Pakistan but to Iran. Our distinguished witnesses will provide not only details as to what's going on, but also I hope about the extent to which this activity represents a threat to the interests of the United States and to other freedom-loving peoples, and about what the United States ought to do in response.

Ironically, the Clinton administration secretly announces that it will impose trade sanctions against the PRC for economic infractions, such as pirating software and CDs and video cassettes. This suggests that when the US government really wants to persuade the PRC government to stop doing something we disapprove of, it regards trade sanctions as an effective tool.

Perhaps our witnesses today will be able to help us understand whether the use of trade sanctions in one case but not the others just means the Clinton administration cares more about software and CDs and cassettes than about nuclear proliferation, or whether there is a principled way to defend the distinction.

Mr. Chairman, again I want to thank you for having this very timely hearing, and I yield back the balance of my time. REP. GILMAN: Thank you, Mr. Smith. Mr. Bereuter.

REP. DOUG BEREUTER (R-NE): I have no opening statement. Thank you, Mr. Chairman.

REP. GILMAN: We'll start with Mr. Carus' statement. Dr. Seth Carus currently is a research analyst from Center for Naval Analysis. While at CNA he has written and researched and written classified studies for the office of the Secretary of Defense and Department of the Navy, including a study of the implications of North Korean MBC capabilities for the prosecution of a major regional conflict on the Korean peninsula.

Prior to joining CNA Dr. Carus worked in the office of the undersecretary of defense for policy assigned to the policy planning office. Dr. Carus received his Ph.D. in intentional relations from Johns Hopkins University in 1987.

Dr. Carus, you may submit your full statement, or you may summarize, whichever you feel appropriate.

MR. CARUS: With your permission, Mr. Chairman, I'll summarize my prepared statement.

REP. GILMAN: Without objection, your full statement will be made part of the record. Please proceed.



Research Analyst,
Center for Naval Analysis


MR. CARUS: It's an honor to be asked to testify before this committee. I will be focusing specifically on the implications of Chinese conventional arms transfers to Iran. Before proceeding, let me clarify that my views do not necessarily represent those either of the Center for Naval Analysis or the Department of Defense. In addition, I want to clearly indicate that all the information discussed here is from open sources.

Now why should we care about Chinese arms sales to Iran? China is not the only supplier of arms to Iran, nor in most cases is it the source of the most advanced arms going to the Islamic republic. Just to take a few examples, while China has sold Iran some F-7 fighters, which are versions of a very old Soviet fighter, the MiG-21, Russia has provided larger numbers of the far more capable MiG-29 fighter and SU-24 strike aircraft.

While the Chinese have supplied versions of the antiquated SAM-2, the Russians are apparently negotiating with the Iranians on the sale of the SAM-10, which is one of the world's most sophisticated surface- to-air missiles.

As it happens, we care about Chinese arms sales to Iran for a very specific reason. If it was just limited to the systems I described, we would care little, but unfortunately that is not the case. Chinese arms suppliers have played a significant role in two categories of concern to the United States. First, the Chinese have supplied the Iranians with large quantities of the short-range C-SS8 surface-to-surface missiles to supplement the longer-range SCUD derivatives obtained from the North Koreans.

China also is reported to have supplied technology needed by Iran in its indigenous efforts to develop and build more capable surface- to-surface missiles. Second, the Chinese have played a central role in the reconstruction of Iranian naval warfare capabilities. The growing capabilities of Iran's naval forces since the end of the Iran- Iraq war in 1988 poses a serious challenge both to the interests of the United States and its friends and allies in the region. It's this Chinese contribution to Iran's growing naval power that will be the focus of my testimony today.

The strategic importance of Iranian naval armaments grows from the economic geography of the Persian Gulf. Through the waters of the Persian Gulf transit much of the world's petroleum. Every oil- producing country in the Gulf exports at least some of its oil using tankers that must pass through the Straits of Hormuz to reach the international markets.

Even Saudi Arabia, which has a large pipeline that carries much of its oil to a port in the Red Sea, transports most of its oil by ship through the Gulf. As a result, safe passage through the waters of the Persian Gulf is vital to the international economy.

By its geographic position, Iran dominates the Gulf. It has the longest coastline in the Gulf, which stretches its entire length from the border with Iraq to the Strait of Hormuz. As a result, Iran casts a looming shadow over everything that happens there. In particular, it dominates the route that tankers must travel to leave the Gulf. Besides its control over half of the Strait of Hormuz, Iranian- controlled islands inside the Gulf sit astride the key tanker routes. Thus, Iran and its naval forces are well positioned to challenge the movement of tankers.

Iran has made considerable efforts to strengthen its naval forces in the year since the end of the Iran-Iraq war. Most of the military exercises conducted by the Iranians since 1988 have involved naval forces, reflecting the importance Iran assigns to its maritime border. In addition, the Iranians have acquired significant amounts of new naval equipment, which is what I will talk about here.

As I mentioned before, the Chinese have played a significant role in these efforts, although they are not the only supplier. Thus, the Russian sale of Kilo submarines to Iran is the most widely reported sale of naval equipment to Iran. But while the submarines may be the most expensive Iranian purchase, I tend to believe that they're far less important than the less well-known Chinese supplies.

The recent Chinese sales to Iran continue a pattern of activity that began nearly a decade ago. In 1987 the Chinese provided Iran with Silkworm anti-ship missiles. At the time the Chinese denied supplying them, and it appears that the missiles were sent to Iran through North Korea so the Chinese leadership could deny responsibility for the shipments.

Significantly, the Silkworm missiles were shipped at a time of growing tensions between Iran and the United States and posed serious problems for the United States during the so-called tanker war, the Operation Ernest Will in 1987 and 1988.

More recently, the Chinese have sold three types of equipment that are expanding Iranian naval capabilities. First, the Iranians have received from China 10 Hudong missile patrol boats, providing Iran with ship-based anti-ship missiles for the first time since 1988. Second the Chinese have sold Iran a new generation of anti-ship missiles, the C-802, which the chairman referred to, which is significantly more capable than the older shore-based missiles that Iran received in 1987.

Finally, the Chinese reportedly are providing Iran with the EM- 52, a new anti-ship mine that could be used in the Strait of Hormuz. Let me discuss these three deliveries in more detail, and why we should be concerned about them.

First, on the Hudong missile boats. Prior to 1995, as I mentioned, Iran had no ship-mounted anti-ship missiles. Although the United States had sold Iran a small number of harpoon anti-ship missiles for use on some French-built missile boats, by 1988 the harpoons were no longer operational. Thus, the acquisition of new missile boats ended a significant gap the development of Iranian naval forces. In 1995, China shipped five of these missile patrol boats to Iran. Five additional Hudongs were delivered in March earlier this year. Based on the design of the old Soviet missile boat, these ships carry four Chinese C-802 anti-ship cruise missiles.

With the delivery of these Hudongs, the Iranians acquired a force of 10 missile-equipped boats, which could expand to 20 if its existing inventory of older missile boats are also armed with new missiles.

Now the significance of the Hudong delivery comes from the accompanying supply of C-802 anti-ship missiles. The C-802 is a relatively new turbo-powered missile first unveiled only in 1989. It is significantly more capable than the existing Silkworm-type missiles that the Iranians have operated for the last eight years or so.

Significantly, it's reported that at least two of Iran's 10 French-built missile boats have also been equipped with the new missile. As a result, Iran today has at least 12 guided missile patrol boats compared with none at the beginning of 1995. It seems likely that the rest of the older missile boats will be similarly equipped, giving Iran eventually a total of 20 missile patrol boats.

Now finally, the Iranians are believed to be obtaining from the Chinese an advanced naval mine, the EM-52 rising mine. This new mine will significantly enhance Iranian mining capabilities. The EM-52 is a rocket-propelled mine of new design that can be deployed in waters far too deep for other types of mines.

While Iran currently has a substantial inventory of mines that could be used in the shallower waters of the Persian Gulf, it has lacked a mine that it could use effectively in the deeper waters of the Strait of Hormuz. Once they make the new EM-52 mines operational, they will have such a capability.

Now to understand why we should be concerned about this, I'd like to at least remind you of some now ancient history, which is that in the years 1987-88 the United States fought a limited war with Iran. I won't say much more about that, but in the course of that war, the Iranians were able to rely extensively on small boats, on naval mines, and on anti-ship missiles mounted on the shore to harass neutral shipping, some of it flying American flags.

Now how shall we evaluate the impact of these Chinese armaments on the ability of Iran to confront the United States? I think it's clear that the Chinese have provided the Iranians with an expanded ability to confront the United States and its friends in the Persian Gulf. There's evidence that Iranian naval forces are far more capable than they were two years ago. Much of the responsibility for this improvement must be credited to China.

Having said this, however, it's important to put the recent developments in some perspective. The missile boats and anti-ship missiles that the Iranians have acquired are essentially similar to those possessed by most navies today, including every other navy in the Persian Gulf. From this perspective, the acquisition of ship- borne anti-ship missile capabiilites merely brought the Iranian navy up to the standards of typical navies in this day and age.

Moreover, since the quality and sophistication of Chinese equipment is often suspect, it is unclear that the Iranians have closed the qualitative gap between their forces and most other Middle Eastern navies. While the missile boats complicate the military situation for the United States and its friends in the region, we have no reason to expect that Iran would be able to operate indefinitely without such systems.

In this regard I'd like to respectfully disagree with a comment the chairman made in his opening remarks about the significance of the C-802. While I agree that these missiles pose serious challenges for the US Navy, I have every reason to believe that the US Navy is fully capable of defending itself against these missiles.

In my mind more significant is the anticipated supply of the new mines. In addition to being more sophisticated than others in the Iranian arsenal, they have substantially new capabilities, ones that we've never had to face before. And detecting and clearing these mines will pose a significant challenge to US forces.

Ultimately, however, I think the significance of the Chinese arms depends more on what the United States does than on anything else. First, the United States currently has sufficient military forces in the region to counter virtually any move taken by the Iranians in this arena. The US Navy has substantial capabilities in the Gulf. There is usually a carrier battle group in the region, and when it is not present the US Air Force deploys expeditionary forces to fill the gap.

Significantly, the US Navy has currently deployed two mine countermeasure ships to the Gulf, reducing one of our more serious weaknesses.

Second, the level of cooperation between the United States and its partners in the Gulf Cooperation Council remains high. There is considerable support in the GCC for the US military presence, and widespread belief that the United States is a vital deterrent against Iranian aggression. So long as these relations remain strong, the United States will have access to facilities needed to effectively operate our forces in the Gulf.

Neither of there conditions should be taken for granted, however. The United States maintains its military forces in the Gulf only with great difficulty. The distances involved to get them there are quite substantial.

Moreover, most of the ships deployed in the Gulf must make the long transit from bases on the coast of the United States. This imposes a substantial burden on the shrinking US military force structure, and should the US military take substantial cuts in the future, it will be difficult to sustain the current commitment to the security of the Gulf.

Nor should we assume that the GCC countries will always support us no matter what. These countries have concerns and interests of their own and the United States has sometimes not taken sufficient effort to work with the GCC. Many of our closest friends believe that the United States is often unnecessarily provocative in its relations with Iran. Moreover, they worry that the United States often adopts new policies without taking into account the interests and concerns of the GCC, thus potentially putting them at risk.

Even those most hostile toward Iran worry that they may suffer in the event of a confrontation between the United States and Iran. If we are to sustain the political cooperation needed to sustain support for our military forces, Washington needs to do a better job of working with the GCC countries.

Finally, while the Chinese military sales to Iran have significantly enhanced the military capabilities of the Iranian military, they have not fundamentally shifted the balance of power in the region. The United States remains the dominant military power in the Gulf. Despite Iranian efforts, this will not change so long as we maintain a substantial military presence in the region, and so long as we maintain close ties with the GCC countries.

While China's military sales to Iran have significantly enhanced the military capabilities of the Iranian military, they have not fundamentally shifted the balance of power in the region. The United States does remain the dominant military power in the Gulf. Despite Iranian efforts, this will not change any time in the future.

Finally, critical in this whole regard are the attitudes of the American people toward our commitment in the Gulf. So long as they support the strategic rationale for a confrontation with Iran, I believe that they will accept the costs of that commitment. For that reason, it's critical that the administration and that the US military articulate a solid case to justify their continued military role in the Gulf. Just like our GCC friends, the American people must be sure that we have good cause to resort to military force, should that be necessary.

With those comments I'll conclude my remarks, Mr. Chairman.

REP. GILMAN: Thank you, Dr. Carus.

(Brief audio break.)

MR. EISENSTADT: (In progress) -- summarized version of the statement and I will submit the full statement for the record.

REP. GILMAN: Without objection the full statement will be put into the record.



Military fellow,
Washington Institute for Near East Policy


MR. EISENSTADT: Thank you, Mr. Chairman. It's an honor to appear before this committee to talk about this subject. What I would like to do is provide an overview of Chinese military assistance to Iran in both the conventional and non-conventional realms.

In the past decade the People's Republic of China has emerged as one of Iran's main sources of conventional arms and technology needed to produce non-conventional -- that is, nuclear, biological, or chemical -- weapons. The military supply relationship between the two countries dates to the early 1980s, during the early stages of the Iran-Iraq war. China provided Iran with much of its war material during this period.

Following this war, as part of Iran's efforts to rebuild, expand and modernize its war-ravaged armed forces, Iran tried to acquire large numbers of tanks, combat aircraft and warships from Russia, China, and several Eastern European states. Financial constraints, however, had forced it to cancel a number of contracts and dramatically reduce its procurement plans. Moreover, US pressure on several countries has effectively scuttled several major arms deals. Only Russia and China have ignored US pressure and continue to sell conventional arms to Iran.

Arms transfer to Iran from all sources since 1989 -- well, actually what I would like to do is just go down the various categories of arms and look where China has made the greatest contribution. In terms of tanks, mainly Russia and Poland which have provided Iran with tanks since 1989. In terms of aircraft, Russia has provided MiG-29s and Su-24s. China has provided 20 F-7 fighters. These are Chinese versions of the old Russian Soviet MiG-21.

Artillery, China has provided more than 100 artillery pieces during this time. Armored personnel carriers, it's been mostly the Russians who've supplied BMP-2s. In terms of ships, as Seth has mentioned, Russia provided Iran with two Kilo class submarines. However, China has provided 10 Hudong class fast attack aircraft. HY- 2, C-801 and C-802 cruise anti-ship missiles, and as he mentioned, they are trying to acquire EM-52 rising mines from China. Now this listing makes several things clear. In rough quantitative terms, China is more or less on a par with Russia as a supplier of conventional arms for Iran. But whereas Russia is able to provide world-class high tech weapons, China provides for the most part older, less expensive low-tech weapons that are used to fill out Iran's force structure.

The small numbers of obsolete F-7 fighters, FA-2 SAMs and artillery pieces that China has transferred to Iran hardly alter the regional military balance and are not of great consequence for the US. On the other hand, China has played a crucial role in Iran's naval build-up. This is of particular importance to the US because it is in the naval arena that US interests and those of its Arab world allies are most deeply engaged. And it is in this area that the armed forces of Iran and the United States operate in closest proximity.

Because of Iran's geographic position along the northern coast of the Persian Gulf and adjacent to the Strait of Hormuz, even relatively old weapons such as HY-1 Silkworm and HY-2 Seersucker anti-ship missiles, and newer and more dangerous weapons like the C-802 and the EM-52 rising mine can have a significant impact on the balance of power.

In recent weeks it has been reported that Iran and China are negotiating a $4.5 billion arms deal, which is expected to be finalized in December. Details concerning what is involved in this package aren't clear, although it is reported to include combat aircraft, fast patrol boats, multiple rocket launchers, armored personnel carriers, missiles, and missile launchers.

In evaluating the course of this latest arms deal, several things should be kept in mind. First, two multi-billion dollar arms deals with Russia concluded in June 1989 and July 1991 have never been fully consummated. Only a fraction of the arms agreed upon between Iran and Russia have been delivered, due to Iran's financial woes. Moreover, a Russian Kilo class submarine built for Iran and finished in 1994 remains in St. Petersburg due to Tehran's inability to pay.

Finally, in an Iranian-Chinese deal for two 330 megawatt nuclear reactors, which the two sides have been negotiating for several years, appears to be in limbo for the same reason, for financial reasons. In light of this track record, reports of a massive Chinese-Iranian arms deal should be treated with concern but also skepticism. Our reaction is, I'll believe it when I see it.

China also plays an important role in Iran's ballistic missile program. In 1989 Iran purchased between 150 and 200 CFS-8 (ph) missiles from China. That means SA-2 surface to air missiles, which have been modified to use against ground targets, but possessing limited range of about 150 kilometers have payload accuracy that enabled Iran to dramatically increase its missile inventory at a time when its stock of Scud-B missiles was nearly depleted. These missiles would be important in the event of a future war with Iraq because of their ability to be used as terror weapons to hit major Iraqi population centers located near the border of the two countries. And they offer Iran a cheap and effective way to dramatically augment its offensive punch.

Because of their range, these missiles also threaten some of the southern Gulf states. Iran has also obtained equipment, machinery, components, including missile guidance systems, and special materials for China to aid its effort to produce North Korean Scud-C and possibly Chinese M-9 and M-11 missiles. These missiles would enable Iran to augment its offensive punch against all of its immediate neighbors, although none of these missiles have sufficient range to reach Israel.

These efforts to create an indigenous missile production capability, however, have not yet yielded any results. Finally, China may be helping Iraq produce artillery rocket systems for use primarily in a battlefield support role, and who extend the range of Silkworm and Seersucker anti-ship missiles to create a first generation cruise missile for use against ground targets.

China is also deeply involved in Iran's chemical weapons program. In the past few years it has emerged as Iran's principal source of chemical weapons precursors and production technology. On the other hand, there is no evidence of Chinese involvement in Iran's biological weapons program at this time.

Finally, China is Iran's main supplier of pre-nuclear technology, although if further contract agreements with Russia are consummated, Moscow will soon supersede Beijing in this role.

Iran's known nuclear technology base is rather rudimentary. Chinese contributions to this includes a small research cavitron, a miniature neutron source reactor, heavy water -- power reactor, and two subcritical assemblies. While none of these items can be used to produce fissile material for nuclear weapons, they could help Iranian scientists master the technologies and processes required to do so.

In addition, Iran has reportedly concluded an agreement with China for the sale of two 300 megawatt power reactors worth about $800 (million) to $900 million for a nuclear power plant in the southwest of the country. Disputes over the design, terms of the location of the facility, however, have delayed construction and the future of the project is uncertain.

While the lowly enriched uranium fuel used to power these reactors cannot be used in a weapon without further enrichment, spent fuel from these reactors, if successfully diverted, could yield plutonium which could be used for weapons building.

In addition, China is also believed to be helping Iran to build fuel cycle-related facilities. The most alarming of these discussions involves the construction of the uranium hexafluoride production plant, which produces feed stock which is used in various enrichment processes and indicates that Iran is probably pursuing the enrichment route.

Now what can the US do? US efforts to induce China to curb or cease the transfer of potentially destabilizing conventional arms or nonconventional weapons-related technology are likely to have only a marginal impact on Chinese behavior. First of all, Washington does not want to jeopardize billions of dollars in trade with China. This hampers our ability to effectively press Beijing to hold arms and technology transfers to Tehran and other destinations.

Furthermore, China sees Iran as an important trade partner as a source of valuable (inaudible), as an ally against the US, which both countries see as a potential adversary, as a potentially important actor in central Asia, which abuts western China. And Beijing may also be interested in a political alliance with Tehran as a means of achieving long-term energy security for its rapidly growing economy.

As a result, China has a number of policy reasons to preserve its close ties with Iran, while for Iran China is a one-stop shopping mart from which it can buy both conventional arms and sensitive technologies for its non-conventional weapons programs. Thus, for various reasons the military supply relationship is important to both countries and both will resist efforts to disrupt this relationship.

Regardless of the strategic rationale for Iranian-Chinese relations, however, the crucial element for China is financial. Accordingly, China is not likely to downgrade its ties with Iran or cease sensitive arms and technology transfers as long as Tehran is able to pay for them. Thus, US sanctions on Iran, while harming Iran's financial situation, act as a brake on Tehran's ties with Beijing by denying it the hard currency which is the bottom line and lifeblood of the relationship.

The US should also focus its efforts to deny Iran weapons and technology from China on leveraging technologies, such as advanced anti-ship missiles and mines, which have the ability to transform the regional balance. These items are not necessarily big revenue earners for China but could have a major impact on the military balance in the Gulf and thereby adversely affect US interests there.

Recent experience, however, such as the Chinese transfer of C-802 missiles to Iran, indicates that the prospect for success here are probably not very good. In light of these considerations, economic sanctions and other strategies of finance denial which prevent Iran from acquiring the hard currency resources needed to purchase arms and sensitive technologies, may be the only way in which the US can scuttle pending arms deals between Iran and China and to thereby prevent Iran from acquiring the dangerous new capabilities it is seeking. Thank you.

REP. GILMAN: Thank you, Mr. Eisenstadt. We'll temporarily recess the hearing for a few minutes until Mr. Bereuter returns and we'll continue. We have a vote on at the moment and we'll continue as soon as one of our members returns. The meeting stands in recess.

(Brief recess.)

REP. BEREUTER: Chairman Gilman has asked me to reconvene to expedite this hearing, and so now we'll call upon Mr. Leonard Spector, senior fellow, Carnegie Endowment for International Peace. Mr. Spector, we look forward to your testimony as well.

MR. SPECTOR: Thank you. I would like to summarize my written comments and have them included in full in the record if that's okay.

REP. BEREUTER: Without objection, that will be the order.



Senior fellow,
Carnegie Endowment for International Peace


MR. SPECTOR: Thank you. Mr. Chairman, it's an honor to testify today before the committee on China's role in assisting Iran's programs to develop weapons of mass destruction and missile systems for delivering them, which will be the focus of my remarks, rather than the conventional side.

Let me say a few words about each of the major weapons of mass destruction and a missile program and China's role. Under nuclear weapons, although Iran is prohibited from developing nuclear arms by virtue of its status as a non-nuclear weapons state party to the Nonproliferation Treaty, Iran is widely believed to be pursuing a nuclear weapons program. Its program remains in its early stages apparently, although this timetable could be accelerated depending on the amount of outside help that Iran receives.

Currently it appears to be pursuing a two-track approach to nuclear weapons, on the one hand seeking to acquire weapons-grade nuclear materials or perhaps even nuclear weapons themselves from the states of the former Soviet Union, and on the other hand developing a domestic production capability with the greatest emphasis apparently on the use of gas centrifuges for enriching uranium. So far, however, it is not known to have made significant progress on either track.

As a member of the nonproliferation treaty, Iran has agreed to subject all of its nuclear activities to international monitoring by the International Atomic Energy Agency, an organization whose powers now include the right to demand inspection of undeclared suspected nuclear facilities. Iran has gone a bit further, has gone so far as to voluntarily agree to permit the IAEA to visit any site in the country, and to date the agency has made two such visits under this arrangement, neither of which have as yet disclosed improper activities.

This has not completely allayed US concerns, obviously, but the availability of such an intrusive IAEA monitoring serves as a highly valuable tool for helping to check Iranian nuclear advances. According to the Pentagon, China is the principal supplier of nuclear technology to Iran, but the precise extent of China's contribution to Iran's nuclear program is not clear.

As Mr. Eisenstadt said a few moments ago, China has supplied some small research reactors to Iran, which would have some utility in training. It has also provided Iran extensive assistance to develop its uranium resources, including a plant, as he mentioned, to produce uranium hexafluoride. The facility is ill-suited to Iran's civilian nuclear power program but might have a role to play in a nuclear weapons program. The installation will be subject to International Atomic Energy Agency inspection, however, which will severely limit Iran's ability to divert uranium from this facility without detection.

In late 1995, China suspended plans announced in '92 to supply Iran with two nuclear power plants, in part because of US efforts to discourage the sale. The United States has led an international nuclear embargo of Iran, which all Western suppliers have supported. The effort apparently led France, Germany, and perhaps Japan to decline to supply certain components that had to go into the plant that China was going to supply to Iran, and it was sensed that this contributed to the suspension of the deal.

China is a nuclear weapons state party to the NPT, to the Nonproliferation Treaty, and although this status permits China to keep nuclear weapons, the treaty prohibits China from assisting any other state to develop nuclear arms. In addition, the treaty requires that any nuclear exports from China be placed under inspection in the recipient state. So far, at least, China appears to have followed this rule with Iran insofar as I'm aware.

In addition, Beijing pledged in May of 1996 that it would not provide assistance to any nuclear facility which was not subject to International Atomic Energy Agency inspection. This was apropos of developments in Pakistan, but it was a global pledge. This understanding would appear to rule out any assistance to any facility that Iran might try to hide from the IAEA.

These restrictions may help to limit improper Chinese assistance to Iran's nuclear weapons program in the future, but I think, given the history of behavior both by Iran and China, one has to be cautious before assuming too much from them.

The chemical weapons and biological weapons area were also highlighted by Mr. Eisenstadt. According to the CIA, Iran's BW program is already one of the largest in the Third World, and its BW program, which has been operating since the 1980s, is recently believed to have acquired stocks of biological weapon agents and actual biological weapons.

As is true in the case of Iran's nuclear program, China's role in facilitating Iran's CW and BW program is uncertain. Chinese firms have apparently played a role in supplying CW, chemical weapon precursors to Iran, leading to the imposition of sanctions by the United States against several firms and persons in 1994 and 1995.

In November of 1995, referring to Iran's CW program, a senior Defense Department official testified that in a chemical arena, we have some evidence that China has provided some assistance, or Chinese firms have provided some assistance both in terms of the infrastructure for building chemical plants and from precursors for developing agents.

I would point out here that the Chinese chemical industry is very rapidly growing at this time and not all facets of it may be under the scrutiny of the Chinese government, so there is a connection how significant, how broad-based, how officially approved the connection is in the chemical weapon area, at least from the public record is not clear. US officials have not indicated whether China is implicated in Iran's BW program.

Iran's ratification of the chemical weapon convention will dramatically alter the threat posed by CW capabilities, since Tehran would be required to destroy all existing stocks and place all relevant facilities under an international monitor. China's ratification of the chemical weapon convention, it might be added, would require it not only to destroy its own chemical weapons stocks, if it has any, but also to implement effective national export controls over chemical weapon precursors.

Iran's acquisition of biological weapons stocks is a violation of the biological weapons convention, which is currently in force, and to which Iran is a party.

Unlike the nonproliferation treaty on the nuclear side and the pending chemical weapon convention, the biological weapon convention does not include verification mechanisms that could provide clear evidence of Iranian violations. The BWC, the biological weapon convention, however, does permit parties to call on the UN Security Council to investigate allegations of infringements of the pact. Unfortunately, this mechanism has never been invoked.

In sum, at the present time the threat posed by the Iranian CW and BW program is far more immediate than that posed by the country's nuclear activities, but Chinese involvement may be less significant.

We've heard a good deal about the missiles of Iran. I won't reiterate too much here except to highlight that among the various capabilities that it has and that China has contributed to, most of these are not really potential subjects of American sanctions under existing law. It may be, however, that the anti-ship cruise missiles, some from China and some being developed with Chinese assistance, get into the range that they might be subject in terms of numbers and in terms of the capabilities, that might subject them to sanctions under the Iran-Iraq nonproliferation act. And also any Chinese assistance by way of production technology or by way of major components to the Iranian missile program might open the door for US sanctions.

I don't have enough information to be able to state whether we're over that threshold or not because the allegations in the public domain are a bit vague.

The transfer of the CSS-8, the short range surface-to-surface missiles, as I read the law and I've had it explained to me recently, are not subject to American sanctions.

Let's talk about the next steps for the United States. If you look at what the Clinton administration has been attempting to do, it has a multi-faceted strategy for trying to constrain China's assistance to Iran's weapons of mass destruction and missile programs, and is also trying to reduce the dangers posed by those programs as they exist today.

The first arrow in the administration's quiver has been active diplomacy, including jawboning, the threat of sanctions under existing US laws against China and Iran, and the imposition of sanctions to pressure China to reduce its support for Iran's most sensitive weapons programs.

On the plus side, we've seen the suspension of the nuclear power plant sale, and I believe we've also seen China refrain from selling complete M-9s into the region, which was feared in the late 1980s. Although, as Mr. Eisenstadt points out, China may be supplying production technology for F-9s, which would be even worse. I'm not clear as the status of that part of China's exports.

It's also possible that China's assistance to Iran's CW program has been curtailed as a result of US diplomatic activism. Again, my information is imperfect.

On the negative side, however, it must be recognized that China may be in the process of assisting Iran to build the uranium hexafluoride plant, that Chinese missile production technology and missile component transfers may be continuing, and that Chinese sale of shorter range ballistic and strategically important anti-ship cruise missiles may be continuing. So the record here may be as good as one could hope for, but it's certainly very imperfect.

A second element of the administration's strategy has been regime-building and enforcement. The administration has had the benefit of an indefinite extension of the nonproliferation treaty last year, and the enhanced authority of the International Atomic Energy Agency, which I mentioned. These created significant impediments to Iran's nuclear weapons effort, and they also place significant constraints on China in terms of nuclear exports.

If the chemical weapon convention enters into force, pressures will mount on Iran to ratify a step that could in turn lead to the elimination of its CW program and to tight ongoing inspections. But even if Tehran remains outside the treaty, the pact will impose new restrictions on all other parties, including China, if they were to ratify, prohibiting transfers to Iran of sensitive dual-use chemicals. The broad acceptance of the prohibition against chemical armaments embodied in the treaty, moreover, would increasingly isolate Iran as a malefactor, and US ratification of the treaty, of course, will be essential to its success and I believe that's on the Senate floor today or perhaps tomorrow.

Other elements of regime-building also deserve mention. We have the Wassenaar (sp) agreement, of which Russia is now a party. This may help to slow the quantity and capabilities of weapons that Iran is receiving. China is not part of this Vassanar arrangement, but it will stand out in contrast if it continues major arms sales and will be coming under pressure. And of course as Mr. Eisenstadt mentioned, economic sanctions against Iran are another element here that is working to support our nonproliferation efforts.

Intelligence is a third critically important element in the US set of initiatives to address the Iran-China weapons of mass destruction connection and to restrain the Iranian WMD program. In many respects adequate intelligence is the sine qua non for all other US initiatives. It has given Washington the ability to ferret out Iran's clandestine activities, to intervene on numerous occasions, to block sales to Iran of sensitive technology and equipment, including those from China, to provide strategic warning of Iranian intentions, and to enable the United States to help the IAEA develop targets for its special visits in Iran, a role US intelligence may also play if the CWC, chemical weapon convention comes into force in Iran.

Chemical proliferation is a fourth area, also actively supported by Congress. The effort is aimed at applying US military resources to address proliferation after the fact, particularly in the BW, CW and missile areas. The effort includes the development of passive defenses, active defenses, new operational approaches, and related measures.

I really do want to call attention to the last item on my list, however, which is not the subject of this hearing but is truly critical to attempting to constrain the Iranian weapons of mass destruction program, and that's the need for enhanced controls in the former Soviet Union. It's the single most important measure needed to constrain Iran.

The loss of control in Russia and the other Soviet successor states over nuclear weapons which now are exclusively in Russia except for a handful in Belarus, weapons-usable nuclear material, predominantly in Russia, a little bit scattered elsewhere, chemical weapons and biological weapons predominantly in Russia, and related production technology in a handful of post-Soviet states -- if these were to leak out, we would have a drastic change in global proliferation patterns that could occur overnight, and in Iranian capabilities in particular.

Administration programs to assist Russia to denuclearization efforts, to provide nonmilitary employment opportunities for Soviet scientists in some of these sensitive areas, and to enhance the protection of material usable for nuclear, biological, and chemical weapons is critically important.

(Audio break.)

MR. : (In progress) -- transfers that they've engaged in have been contrary to any kind of international agreement. The only exception to that may be how you classify ballistic missile technology, which may be in contravention to agreements not to supply certain missile technology. That may be the one exception, but it's something that I don't have a lot of detail on.

REP. : What agreement would that be?

MR. : There has been various agreements between the United States and China as to what China would and would not do in terms of complying with the Missile Technology Control Regime. There are others who could go into more detail.

REP. : That was a bilateral agreement. At this point I'm focusing on international treaty, multilateral international treaty was my question.

MR. : Well, the MTCR has -- is in a quasi status between bilateral and multilateral. It is an agreement that a lot of countries participate in. It's not simply the United States. It's not a treaty obligation.

REP. : The Chinese, of course, contend that they do not violate the MCTR with respect to sales to Pakistan or to Iran, is that correct?

MR. : That's correct.

REP. : Now when it comes to weapons of mass destruction, Mr. Spector or any of the three of you, are the Chinese violating international law?

MR. SPECTOR: Well, let's see. When you come to the nuclear side of things, any exports that they may have made to Iran or to Pakistan of items that are specially designed or prepared for use in nuclear installations, any exports that were not then placed under inspection in the recipient state would run afoul of the Nonproliferation Treaty, and also any assistance more broadly defined that they might be offering to nuclear weapon programs.

REP. : Yes, and have they delivered that kind of equipment or technology which causes them to be in violation of the agreements?

MR. SPECTOR: It's my understanding that with regard to Iran, what we know about has been above board, appropriately inspected, more or less publicly announced. There may be activities behind the scenes that I'm not aware of that we need to be concerned about. In the Pakistani case, it's clear that activities that were not appropriate were going on. Whether you can declare that these constituted a full fledged violation of the Nonproliferation Treaty or not is a little unclear without some precision as to just what was happening.

REP. : So it sounds like to me that while we're very unhappy with increasing the military capabilities of the Iranians, be it conventional or through weapons of mass destruction development, while we're very unhappy with that and would like to stop it, we have no violations that are clear on the part of the Chinese and what they're supplying. And the Chinese are one source of weaponry among a number.

Now I was told just lately that probably the Iranians have spent about $3 billion, roughly $3 billion post-Gulf War in modernizing their military capabilities, and certainly the Chinese have been providing some of that through sales. And what would be the other major suppliers of weaponry, other than Russia? How many Western companies are supplying technology, if any? What are the other alternative sources other than Russia or potentially North Korea? Let's go conventional first.

MR. : As far as I know, sir, there really are no other countries selling weapons beyond North Korea, China, Russia to Iran at this time. There is probably some stuff being transferred on the black market from -- and the gray market in the West and elsewhere, spare parts and the like. There's also, I believe, a number of, say, for instance in the last years I think there have been some helicopters sold from some Western countries, civilian helicopters, but that could be perhaps easily modified and refitted for military purposes.

REP. : I'm interested to see -- a lot of the focus on conventional capabilities seems to focus on the enhancement of the naval capabilities of Iran. The Hudong class attack patrol boats. I think purchase was of 10 of those. And the mines, the EM-52. I'm not sure if that was the designation.

I don't understand the technique of how that mine works, but I gather it's a concern to us. Is there comparable or better mine equipment available from other sources? That are willing to sell to the Iranians at this point. Or is this a unique advancement in mine warfare that is being supplied by sale from the PRC?

MR. CARUS: If I may, the mine in question is of a type that's really only available from two sources today. One is China, the other is Russia. So far as I know, the Russians have never been accused of exporting that particular system. So basically the only alternative source to China is Russia.

REP. : Could you tell me in a minute or two how the technology works and what makes it difficult for our minesweeping operations?

MR. CARUS: As you may be aware, mining in deep waters is very difficult, especially when you have strong currents, as occur in the Strait of Hormuz. Apparently what this particular mine involves is you place the mine in relatively deep waters. It has a rocket engine in it. When the target ship passes within range of it, the rocket propels the mine toward the surface where it engages the ship.

REP. : Does it lie docile on the bottom or near the bottom then until this is activated?

MR. CARUS: Yes, sir. That provides a capability that would not be obtainable in any other way for mining deep waters.

REP. : Thank you. And the patrol, the attack patrol boats with the Hudong missiles, the capability of that missile is what in range? Is this the missile that requires complete use of its -- no, it isn't. The other major missile that they have been receiving. I've forgotten the designation. There's one that requires an over-the-horizon radar capability they apparently do not have at this point, is that correct?

MR. CARUS: To effectively use actually any of the anti-ship missiles they have right now, you would need an over-the-horizon targeting capability, and I believe you are correct in saying that as far as we know, they do not have the ability to do that.

REP. : It's the C-802 anti-cruise missile. What's the approximate range, unless that's classified.

MR. CARUS: Well, the published estimates are that it has a range of about 120 kilometers.

REP. : And so the problem there is the radar for guidance, as far as they're concerned?

MR. CARUS: That's correct, sir. I mean, if you don't know where the target is beyond the horizon, you can't take advantage of all of that range.

REP. : Well, finally, Mr. Chairman, Mr. Spector gave us a good description of what he thinks we should do systematically to try to limit the weapons of mass destruction capability the Iranians can acquire, or are acquiring. What would the other two of you gentlemen, Mr. Eisenstadt, Mr. Carus, suggest to us, and what we can do to discourage other countries, the Russians, the North Koreans, the Chinese from providing enhanced conventional weaponry to the Iranians. What we can do beyond what we're doing, if anything?

MR. EISENSTADT: I'm kind of skeptical, as I said during my talk, of our ability to alter the motivations of countries like, whether it be Russia or China, to sell these weapons. I think first of all what we could do is focus our efforts on specific systems that really bother us, that really could have an effect on our ability to conduct operations in the Gulf. Not to try to block every arms sale but focus our efforts on anti-ship missiles, bottom mines, advanced torpedoes, stuff like that. To make the point that, again, these weapons are perhaps small ticket items in terms of money and find ways to perhaps concentrate the Russians or the Chinese from foregoing sales of these weapons. But again, I think overall it would be very hard to alter the motivations of the sellers, and as a result perhaps the most effective way we could prevent these transfers is by harming Iran's ability to pay for them.

REP. : Thanks. Do you have a comment?

MR. CARUS: Just one brief comment, sir. I would tend to agree with that. I don't have a lot of optimism that we can convince the Chinese not to supply some of these weapons. We tried under circumstances which were much more intense, which is to say eight and seven years ago when we were in the midst of a conflict with Iran, the Chinese were still willing to supply these kinds of weapons. So I'm not convinced under today's circumstance that we're likely to have any more success.

On the other hand, the various activities the United States has promoted that would reduce the ability of the Iranians to pay for them have clearly had a significant impact on their ability to purchase sophisticated systems, and I think that's had a significant impact over the long term.

REP. : That's a good point. Would you speculate that they might be for buying high performance aircraft from the Russians if they had the capabilities, the financial capability?

MR. CARUS: If they had the financial capability, I have no doubt that they would be buying a lot of very sophisticated equipment that would provide us with many more challenges than those that they've acquired so far.

MR. EISENSTADT: If I might just add one point. We have this new international arrangement called the Vassanar arrangement, which has in effect created a Western and I guess Russian arms embargo against Iran, Iraq, North Korea, and Libya, with the exception that the existing contracts between Russia and Iran can be completed, and of course China is not part of the arrangement.

But the upshot is that the rest of the world has sort of signed off to say that we want to be very, very cautious about arms sales to Iran, and in effect it's isolating China a bit. So it's not as if simply we have a one-on-one, America versus China, trying to jawbone them into stopping the sales. You have sort of an emerging international consensus which says this is very unwise. We have to proceed very cautiously. China, you should take heed.

So we have a bit more to work with than simply going head-to-head with our colleagues in Beijing.

MR. SPECTOR: If I could just pick up on what was just said. As far as I know, as I mentioned in my testimony, there are still large portions of earlier deals between Iran and Russia, and according to the information published in the press about what was to be included in those deals, and including very large numbers of modern combat aircraft and armored fighting vehicles and the like.

So I think in fact, just to reinforce what Seth said, I think Iran's financial woes due to mismanagement of the regime, low oil prices, and US sanctions has forced them to pare back their procurement, and that's good.

REP. : Well, I thank you gentlemen. I think you made an excellent point that the economic sanctions that we have in place are having their impact and we need to encourage our Western allies, the West Europeans, for example, not to relent in their support of the sanctions.

Mr. Chairman, thank you.

REP. GILMAN: I thank the gentleman for his review of the issues here.

Gentlemen, just a few questions and then we'll try to conclude. What is your understanding of the dollar value of China's arms sales to Iran, since 1990, and I'll ask any of the panelists who may wish to respond. Any estimate?

MR. : I don't have an estimate. We do know the Iranians have published information about their annual overall arms purchases every year. For the first three or so years after 1990 it was about $1.6 billion, and then for the last two or three years it has been $800 million. I think most of those have been for Russian sales, so I would say Russia probably gets roughly about two-thirds of those totals and the remainder might go to China and maybe some to North Korea.

REP. GILMAN: So it exceeds $2 billion in this --

MR. : No, no. Actually, each year their target goal was about $2 billion a year for the last --

REP. GILMAN: Each year.

MR. : Each year, but actually what they've -- the first three of the last five years they reached maybe $1.6 billion and then the last two or three years they've only spent about $800 million a year on foreign arms. I think in each case the lion's share to two-thirds roughly speaking probably went for Russian arms and the remainder went for Chinese and maybe some North Korean arms. So it's maybe just a few hundred million a year overall, I would say.

REP. GILMAN: A few hundred million? I don't fully understand. You said $1.9 billion initially?

MR. : No. The target goal is $2 billion a year for the last five or six years.

REP. GILMAN: For expenditures?

MR. : The target, exactly, for foreign arms procurement. Our understanding is, based on public figures, they were only able to come up with about $1.6 billion for the first three years or so. In 1990, 1991, '92, '93, and then the last two or three years they've only been able to come up with about $800 million a year. Overall.

REP. GILMAN: What does that add up to?

MR. : And that includes Russia. It's probably a few hundred million a year for arms sales from China.

REP. GILMAN: Does $300 million a year sound like a fair average?

MR. : That's within the ball park.

REP. GILMAN: Since 1990.

MR. : Probably.

REP. GILMAN: What are China's objectives in selling the kind of arms that they are selling to Iran? What would you consider their objectives to be?

MR. : Well, I would probably defer to a China specialist on this because I don't -- this is not my area. Certainly, though, I could say basically hard currency. In addition, possibly, because there are -- other people have pointed out that there is a certain coincidence between China and Iran. Both have a sense of grievance, a sense that they suffered occupation and domination by foreign powers, that they see themselves as being isolated by the United States, and that perhaps they see Iran as a potential ally in some future confrontation as a way of counter -- putting counter pressure on the US.

REP. GILMAN: Mr. Spector, any comment?

MR. SPECTOR: No, I think those are the two most widely understood rationales for China's assistance. I think I would leave it at that. Strategic rationale and a monetary one.

REP. GILMAN: Mr. Eisenstadt? Mr. Carus?

MR. CARUS: I would basically agree, though. I don't think we really know to what extent the strategic rationale drives things as opposed to the desire for greater amounts of cash. I think there has been a feeling for some time that the arms industry in China and the military services who sometimes sell equipment out of inventory are much more motivated by financial gain than they are by some broad, geostrategic concern.

REP. GILMAN: Thank you. In view of -- is China in the process of displacing Russia as Iran's chief supplier? Any of the panelists.

MR. EISENSTADT: I don't think so. I think there will always be certain things that the Iranians will go to the Russians for. If they want high quality, high performance combat aircraft, they have to go to Russia. They could get, though, quantities of lower quality aircraft to fill out their inventory to give them additional mass in their air force. So I think they're going to continue to rely on both for certain things because each supplier brings different things to the table in terms of what they're able to supply.

REP. GILMAN: What most effectively should our foreign policy be with regard to stopping China from arming Iran?

MR. : Again, I would defer to a China specialist, but as I mentioned, I think we have limited ability to alter Chinese motivations in this regard and anything we can do to reduce Iran's ability to pay for arms from China I think would probably be the most effective route that we can influence these kind of arms transfers.

REP. GILMAN: So any economic sanctions measure we passed in this committee could be helpful in that direction?

MR. : Yes, sir.

REP. GILMAN: Go ahead, did you want to comment?

MR. SPECTOR: If I could add an additional dimension, which is that --

REP. GILMAN: Could you put the mike a little closer to you, please.

MR. SPECTOR: This is a role that the international arms restriction agreement and arms control treaties can play. I highlighted in my testimony the important current role played by the Nonproliferation Treaty in terms of inspections in Iran and restrictions on Chinese exports. We may be seeing similar elements here from chemical weapons conventions, maybe something we can do on the biological weapons side. Certainly the international arms control -- conventional arms control understandings are also part of the picture.

So it's not a panacea, but a nice -- it may be more affirmative. It's an important incremental addition to the basic tools we have of diplomacy, economic sanctions and the rest, and I think we should look at the totality of all these different elements as they work together and not omit any, and make sure that we are advancing along as many paths as we can because this is a very, very difficult problem.

REP. GILMAN: Let me ask about Iran's chemical program. How effective is their program? What sort of a factor is it? Is it an important arms program, important weapons program? And how important is China with regard to the supply of that program?

MR. : It appears that China has emerged in the last few years as the most important supplier of both precursors for chemical weapons and the technology used to supply chemical weapons -- used to produce chemical weapons, excuse me.

In terms of its military efficacy, this is one area where I think US forces are well equipped to deal with the threat. It's an inherently difficult threat. As anybody who has worn the protective overgarments and masks and gloves will know, it makes it a lot harder to accomplish your military mission when you're functioning in a contaminated environment and you have to wear that.

So it will certainly complicate operations, complicates our contingency planning, but it is something which we are a lot better prepared to deal with than, say, biological weapons.

REP. GILMAN: Any other panelist wish to comment on that?

MR. : I think you have another dimension here, which is sort of the strategic threat which is posed by the chemical and biological weapons program. I think some of the recent CIA reporting suggests that there may now be Scud missiles that have chemical weapon warheads, and that in four or five years when they have biological weapon warheads for them too.

That is nothing which is going to strike the United States, but they can terrorize allies, especially Gulf allies, whose cooperation we will need in the event of any contingency in the Gulf region. We've already seen how fragile the collaboration can be with regional powers. We've seen the terror that can be invoked even by a small number of conventionally armed Scuds when they were used against the Saudis and against the Israelis in the Gulf war.

So I think this is a threat that has two dimensions. It has the tactical problem of whether we can operate in the region militarily in terms of our forces being protected and able to do their job, but then there's the political dimension, which is whether allies will deny us bases, will want to avoid participating in a coalition and so forth. So I think these threats are very serious.

The other thing that these non-nuclear weapons of mass destruction threats do is they create an umbrella so that no one is going to be tempted to go in and destroy, let's say, a nuclear facility that might be under construction in Iran for fear that there might be retaliation with one of these other weapons. So these are weapons systems that are very serious threats on multiple planes.

REP. GILMAN: Thank you. What information do you have about Iran's reported new ballistic missile program, the earthquake missile, which is said to resemble new Chinese missiles? Do you have any information with regard to that?

MR. : Almost nothing as far as I know, sir.

REP. GILMAN: Any other panelist have any information?

Mr. Moran, do you have some questions?

REP. JAMES MORAN (D-VA): Thank you very much, Mr. Chairman. I don't have many but I do have one area that I'd like to explore a little bit.

It would seem that China's military transfers to Iran would undermine Israel's security. I think there's little question about that. But what is the relationship between Israel and China? I understand that there have been arms transfers from Israel to China and perhaps vice versa. Can you address that? MR. : I don't have any information on that subject.

REP. MORAN: Mr. Eisenstadt?

MR. EISENSTADT: There is not a lot of information in the open sources on that. Clearly there is a military supply relationship there, there is cooperation, and there is probably some technology transfer. For instance, the Israelis have helped the Chinese upgrade some of their tanks in the past, If you look at pictures of the new Chinese F-10 fighter, there's a striking resemblance to the LaVie (ph), and there have been claims in the past of cooperation in the area of ballistic missiles and the like.

But beyond that, I don't have any information beyond just knowing the bare outlines of what might be going on.

REP. MORAN: That's my understanding too, is that Israel has supplied the kind of cooperation that would be necessary for the development and improvement and sophistication of China's weapons systems. Then China in turn, when they sell such weapons to Iran, for example, you would think that there would be at least an embarrassing situation, if not an untenable situation vis-a-vis the relationship between Israel and China, if Israel's providing technology to China. That is a cycle that seems to be kind of productive.

But none of you would care to address that any further?

MR. EISENSTADT: There just isn't a lot of information available about what's going on. Clearly it has the potential, if China perhaps emerges as a clear rival, as some people have referred to it in the Pacific, this perhaps could be an emerging area of tension in relations between Israel and the United States in the future.

REP. MORAN: I was a little less concerned about Iran's threat when I realized that they had purchased a submarine for operation in waters that were crystal clear and a submarine could have been viewed for miles around. It seemed to be questionable judgment on their part.

The only other question I wanted to raise, we refer to Iran as one single entity, as a country, a government that is under control. I'm not so sure that's really the case. Iran does not -- strikes me that there are so many factions that when we say Iran is selling arms or receiving arms or engaging in terrorism, whatever, sometimes it's the government. Other times it's different tribal groups.

Can you just briefly address the governmental control over Iran's operations generally? I know there's a great deal of political instability and many of the parts of Iran are simply not under any control.

MR. : Well, I wouldn't go so far as to say -- while it may be true that parts of the country are under tenuous control of the central government, I believe that the military, the armed forces, the export of the revolution apparatus, I think is generally under very tight control. I think it might be possible to only point to a few instances over the past decade or so where perhaps particular actions might not have had the full concurrence of all the members of the government.

But in general, I think you could say, for instance, with regard to terrorism, you could show that the pattern of Iranian terrorism corresponds to Iranian state interests and to the general policy guidelines set out by the senior leadership of the country. Because there is a fit between the policy and the terrorism, I have to believe that most acts of terrorism, almost all of them, are sanctioned at the highest level and are seen as a way of advancing state objectives.

REP. MORAN: So it's appropriate to hold Rafsanjani responsible?

MR. : Well, either way he is. As the head of the government he is responsible for what various parts of the bureaucracy, whether on his order or not, do. But I believe that this has been going on for so long over so much time, both under Khomeni's rule and under Rafsanjani, I can't believe that this would happen and that nobody would be punished and that the source of all these rogue operations would go unpunished if they were really rogue operations.

REP. MORAN: So the military can't be operating in a unilateral fashion, it must be under the control of--

MR. : In general. It is possible -- for instance people have speculated that some of the pirate operations going on in Iraq, it might be via individual commanders who are lining their pockets by allowing Iraqis to smuggle oil and dates and other things out of the country. So it's possible that low level operations like this might be conducted at the initiative of a local commander. But overall strategic operations, whether they be terrorist or otherwise, I think have almost unfailingly have the approval of the highest authorities in the country.

REP. MORAN: That's helpful information. Thank you.

Anyone else care to respond? Mr. Carus?

MR. CARUS: Actually, if I may make a comment about the submarine that you alluded to. If the Iranians intended to use the submarines in the Gulf, I don't think we would be as concerned as we tend to be. The problem is that there are a lot of good waters in the Gulf of Oman and the north Arabian Sea where they could pose significant problems for the US Navy.

REP. MORAN: They would not be detectable?

MR. CARUS: Well, they would be difficult to detect. Again, submarines are some of the most difficult weapons in the world to use and I think it's going to be a long time before the Iranians have the kind of mastery of that kind of technology that some other countries in the Third World or, say, the US Navy has. So I think that's more of a future threat, but there is a strategic rationale, an operational rationale.

REP. MORAN: So even if it was visible in the strait or in clear water, that's not a permanent location for it, that clearly it does represent a very real threat to security in the region?

MR. CARUS: That would be my view, sir.

MR. : If I could just add to Seth's comments about the submarines. I would just make two points. First of all, submarines operate from known, well-defined ports and they have to leave and they have to come back eventually to rearm, refuel, and be repaired. So sooner or later, I believe, if we are involved in a confrontation with Iran, there's only two of them right now, I have no doubt that eventually we would get them, if not while leaving the port, well, on their return.

The second point I would make is that historically in order for submarines to be successful, you have to have large numbers. Two, my understanding is (that) about 6,000 tankers transit the strait every year. Two submarines could certainly have an effect on world oil markets in terms of psychological effect. But in terms of having a tangible effect on interdicting oil from the region, I believe that they could cause problems, but it's not something that we couldn't deal with.

REP. MORAN: It would be harassment really. They could not shut down the flow of oil, which would be the real concern, the primary concern. Okay. That was very instructive.

MR. : If I could sort of attack the question from a different way. It's not so much in terms of the Iran-China connection, the threat of rogue operations in Iran. It's perhaps the threat of rogue operations in China, where you have a lot of exports that are alleged to have occurred because of independently operating chemical facilities or supplies of different kinds of hardware. Not tanks, obviously, not pieces of major military equipment, but a lot of the wherewithal to manufacture some of these capabilities may be leaking out without the full knowledge of the Chinese government or perhaps because they are less than eager to learn everything that's going on.

REP. GILMAN: The gentleman's time has expired.

REP. MORAN: Thank you, Mr. Chairman.

REP. GILMAN: Thank you, Mr. Moran.

Gentlemen, one of our members, Mr. Sherrod Brown, has submitted some questions for Mr. Spector. We'll appreciate a written response. We will submit the questions and response for the record. We'll make sure you have the questions before you leave.

At this time I'd like to thank our panelists for giving us of their time and expertise today. It seems clear to me that China's sales to Iran do pose an increasing, alarming threat to our forces in the Persian Gulf, and hope that the administration is going to do all that it can to limit China's sales to Iran.

The committee stands adjourned.