Hopes for a warming in U.S.-China relations following President Clinton’s state visit to Beijing last summer have given way to caution following a series of events over the past few months.

The Clinton administration’s vision of a "strategic partnership" with China, outlined during his June 1998 trip, has come under withering attack in recent months because of reports of Chinese espionage and negative Congressional reaction to the allegations. A U.S. proposal for a "Star Wars" missile defense umbrella for its allies in Asia, including possibly Taiwan, and concerns over Chinese human rights and a rising U.S. trade deficit have also put strains on ties.

Although negative news abounds, signs indicate that progress could be made on at least one issue of mutual concern—China’s entry into the World Trade Organization (WTO). Premier Zhu Rongji is expected to announce significant progress in Beijing’s attempt to join the world trade body during his visit to the United States in early April (see page 8). But even then, a deal on China’s entry into the World Trade Organization could be held up by a Congress fuming over reports that China has stolen U.S. nuclear secrets.

Chinese espionage allegations

Allegations of Chinese spying first gained attention in December, when a bipartisan Congressional committee released a 700-page classified report accusing China of stealing U.S. nuclear secrets and acquiring other military know-how since the 1980s. According to leaks from the report, China received information that allowed it to build a miniaturized nuclear warhead similar to America’s most sophisticated weapons.

The findings of the Cox report, named after panel chairman Christopher Cox (R-CA), have since led to a reassessment of technology transfers to China and a veto of the sale of a U.S. satellite to a group linked to the Chinese military. The deal between Hughes Space and Communications Corporation, a unit of Hughes Electronics Corporation, and the Chinese Singaporean Asia-Pacific Mobile Telecommunications Company was rejected because of fears that sensitive U.S. technology might fall into the hands of China’s army.

Although more details of the technology transfers and nuclear spying will not be known until the panel issues a declassified report, key incidents are said to have taken place during the 1980s in U.S. nuclear laboratories. A Taiwan-born scientist at the Los Alamos National Laboratory has been accused by investigators of passing sensitive information on to visiting Chinese scientists in 1988. While not charged with a crime, the scientist failed an F.B.I. lie detector test and has since been fired by the Energy Department for the alleged security breaches.

The alleged incidents have caused a firestorm in Congress, where members accused the Clinton Administration of not tightening security months even years earlier, when suspicions were first raised by various investigators. Some Republicans have tried to link the perceived oversight to suspected Chinese donations to Clinton’s 1996 reelection campaign. For its part, China has denied the espionage allegations, saying that it had never spied on American nuclear secrets or tried to infiltrate U.S. nuclear laboratories.

President Clinton has denied that his administration has minimized evidence of nuclear spying and has ordered a broad bipartisan review of security threats to U.S. nuclear weapons laboratories over the last twenty years. The C.I.A. and the Energy Department have been given the go-ahead to conduct independent reviews of the damage done by the suspected thefts that took place in the mid to late 1980s.

Administration officials have called much of the criticism unwarranted, noting that the incidents occurred during Republican administrations. They said it was important that the incidents not jeopardize America’s strategic partnership with China now that it is bearing fruit in several areas. They cited success in getting China to sign the Chemical Weapons Convention and the Comprehensive Test Ban Treaty, its cooperation in nonproliferation programs aimed at Iran, Pakistan, and North Korea, and its role in limiting the fallout from the Asian economic and financial crisis.

Theatre Missile Defense

U.S. anger over the reports of Chinese spying has met with equal Chinese ire over U.S. plans to build a Theatre Missile Defense (TMD) system for its allies in Asia.

The impetus for a TMD system, which has its origins in the "Star-Wars" anti-ballistic missile research of the 1980s, came from the August test-firing of a North Korean missile over Japan. The incident triggered concern that U.S. troops in Asia were potential targets of North Korean warheads. Some say missile defense could provide protective cover and assuage the worries of America’s allies in the region. Anti-missile defenses detect enemy launches and fire defensive missiles that find and destroy incoming warheads moving at thousands of miles per hour.

Particularly goading for China is a suggestion that Taiwan should be included in a defense umbrella for Japan and South Korea. China warned that any transfer of missile technology to Taiwan by the United States would be the "last straw" and would "certainly lead to serious consequences." The warning came despite belief among some Western experts that the missile technology is at best unproven and at least eight years from being deployed and at worst a costly mistake.

Analysts say that there are several reasons why China is hostile to talk of a TMD system. One factor is Beijing’s fear that the TMD would encourage Taiwan’s independence movement and further delay reunification. One Chinese observer said that a TMD plan with Taiwan would constitute a "defacto military alliance" with the United States and would deny China a tactical advantage over Taiwan’s armed forces.

In reaction to word of the plan in February, China is said to have deployed more than 100 extra ballistic missiles in provinces facing the island, more than three times what was previously believed to be positioned there. Members of Congress eager to see Taiwan included in the missile defense umbrella have noted those moves and a Pentagon report that said China was building a major force of ballistic and cruise missiles near its coasts and could present an overwhelming threat to Taiwan in five years. The Senate has overwhelmingly passed a bill that would commit the U.S. to building a national defense against limited ballistic missile attack "as soon as technologically possible.''

President Clinton has budgeted money for the start of construction for a TMD system in his fiscal 1999 budget request, but a decision on whether to go ahead with a full-scale system will not be made until June 2000.

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