China:  Beijing Denies U.S. Missile Export Charges

China criticized Friday the U.S. decision to impose sanctions on the state-owned North China Industries Corporation (Norinco) for allegedly aiding Iran’s ballistic missile efforts (see GSN, May 24).

The sanctions, which took effect May 9, prohibit Norinco from entering into contracts with the United States or importing goods into the country for two years.  In addition, the U.S. State Department has also suspended all defense-related export licenses for the company.

“The United States is imposing its national policies on others, and the implementation of sanctions is entirely unreasonable,” the Chinese Foreign Ministry said in a statement.

In its statement, the ministry said that Chinese missile-related export controls were being effectively enforced and denied that Norinco had aided the Iranian missile program (see GSN, Sept. 3, 2002).

“The Chinese government has consistently carried out measures to prevent the spread of weapons of mass destruction and the means of delivering them, and opposes any method used by any organization to engage in their spread,” the ministry said.  “The related Norinco company has not supplied any assistance to the relevant project in Iran,” it said (John Pomfret, Washington Post, May 24).

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China:  United States Sanctions Chinese Company Over Aid to Iran

The United States has imposed sanctions on a Chinese company for allegedly aiding Iran’s ballistic missile program, U.S. officials said yesterday (see GSN, July 25, 2002; Dobbs/Kessler, Washington Post, May 23).

The sanctions, which took effect May 9, prohibit the North China Industries Corporation (Norinco) from entering into contracts with the United States or importing goods into the country for two years, according to a notice published today in the Federal Register.  In addition, the U.S. State Department has also suspended all defense-related export licenses for the company (Federal Register, May 23).

The United States has also imposed two-year sanctions on the Shahid Hemmat Industrial Group, an Iranian company (Federal Register, May 23).

While U.S. officials said the sanctions are expected to deprive Norinco of more than $100 million worth of exports to the United States, the Iranian company will suffer fewer financial consequences because it has already been sanctioned and has little U.S. business, the Post reported.  “This is a huge blow” to the Chinese company, an official said.

The decision to impose sanctions against Norinco was the subject of debate for some time within the Bush administration, an administration official said.  Although there has been “excellent cooperation” with Beijing on terrorism and the North Korean nuclear crisis, “this shows the Bush administration still takes the proliferation of weapons of mass destruction very seriously,” the official said.

Overall, U.S.-Chinese relations are strong enough to withstand U.S. complaints about the actions of individual Chinese companies, said James Lilley, former U.S. ambassador to China.

“You don’t have to shut your mouth on their proliferation activities because you want to keep the relationship solid,” Lilley said.  “If you do it right, the decibel count should not get too high,” he said (Dobbs/Kessler, Washington Post).

Norinco so far has no comment on the sanctions, a company spokesman said.  “We will make a statement in a few days,” the spokesman added.

Analysts have said that China’s controls on companies were growing weaker as the country makes the transition to a market economy.

“It will be more and more common for businesses not to comply with government policy.  The international community must understand that,” said Jin Canrong, a professor of international relations at Renmin University in Beijing.  “If they want China to move to a more limited government, then you must accept the end result,” he said (Benjamin Kang Lim, Reuters, May 23).

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