China

In June 1989, the United States and the members of the European Union embargoed the sale of military items to China to protest China's massacre of demonstrators in Beijing's Tiananmen Square. Members of Congress have raised concerns about continued Chinese access to foreign technology during the past decade, despite these embargoes. This report discusses (1) the terms of the European Union embargo and the extent of European Union military sales to China since 1989, (2) the terms of the U.S. embargo and the extent of U.S. military sales to China since 1989, and (3) the potential role that such European Union and U.S. sales could play in addressing China's defense needs. GAO focuses on military items, including both lethal items, such as missiles, and nonlethal items, such as military radars, that cannot be exported without a license.

GAO noted that: (1) the EU embargo is based on a 1989 political declaration that EU members will embargo the trade in arms with China; (2) each EU member may interpret and implement the embargo's scope for itself; (3) it found no cases of EU members entering into new agreements to sell China lethal military items after 1989, although some members delivered lethal and nonlethal military items to China during the 1990s--apparently in connection with preembargo agreements--and have more recently agreed to deliver additional nonlethal military items; (4) according to experts, the embargo is not legally binding and any EU member could legally resume arms sales to China if it were willing to bear the political consequences of doing so; (5) at least two EU members are now considering whether the embargo should continue; (6) in contrast to the EU embargo, the U.S. embargo is enacted in law and bars the sale to China of all military items--lethal and nonlethal--on the U.S. Munitions List; (7) the President may waive this ban if he believes that doing so is in the national interest; (8) since 1989, he has issued waivers to: (a) allow the delivery to China of military items valued at $36.3 million to close out the U.S. government's pre-1989 defense agreements with China; and (b) license commercial military exports valued at about $313 million--primarily commercial satellite and encryption items; (9) recent U.S. executive branch actions suggest that its view of China's human rights record--the basis of the embargo in the first place--may be changing; (10) erosion of the EU embargo may also raise questions regarding the future of the U.S. embargo; (11) the rather small amount of EU and U.S. sales of military items to China since 1989 could help address some aspects of China's defense needs; (12) however, their importance to China's modernization goal may be relatively limited because Russia and the Middle East have provided almost 90 percent of China's imported military items during this period; and (13) according to experts, China must overcome obstacles posed by its military command and control, training, and maintenance processes before it can fully exploit such items.