301. Briefing Memorandum From the Assistant Secretary of State for East Asian and Pacific Affairs (Holbrooke) to Secretary of State Vance1

Technology Transfers and Military Sales to China

Harold intends to raise this issue at tomorrow’s VBB lunch. The attached paper embodies the recommendations of the EA “informal group.”2 In toto the steps proposed may suggest substantial adjustments in our policy toward China. In fact, however, these steps essentially implement decisions already adopted.

1. Munitions Control List. While this list (Tab A) looks long, it excludes 13 of the 19 categories on the Munitions Control List, and merely identifies those categories and parts of categories from which we will consider items for licensing on a case-by-case basis.3

2. Chinese Requests. Our proposed response to outstanding Chinese requests is outlined in Tab A, Encl. 2.4 The Defense Department’s office of Research and Engineering and the Joint Staff have reviewed the list with an eye to possible adverse consequences to our security and that of our Asian friends and allies. Their willingness to approve further discussion of various items reflects a variety of considerations. Some (e.g. Honeywell Level 66 Computers) have previously been sold to the [Page 1094] USSR. Others (e.g. 100 MB disk driver or LTN–51 INS) contain technology we have already sold to the PRC for civilian purposes. In still other cases (e.g. IR sensors) sales would be subject to strict conditions—e.g. early generation systems only.

3. U.S. Export Control Categories. This is a purely cosmetic change, but one which is symbolically important to Beijing and fully consistent with other adjustments in our trade relationship with China.

4. Dual Use Technology and COCOM. While we have informed our COCOM partners of our preference for a procedure patterned along the lines of the Polish formula, we have not formally tabled a proposal. It is time that we do so. This will surprise no one and we think our allies will buy this approach.

5. Arms Sales, Military Equipment Sales and COCOM. Bureaucratic simplicity and allied solidarity incline us to favor handling sales of all items destined for military end-use in COCOM. To be sure, the creation of a separate high level committee to handle such items might enable us to avoid taking a position on the record on third country arms sales. But having indicated our own intent to sell military support equipment to China, it is difficult for us to argue that our allies should respond to our requests within COCOM while requiring them to seek our views on arms sales outside the existing framework. In any event we would be participants in whatever consultative process was established, and the Russians have probably assumed we have been urging our allies to sell weapons to China whatever we say. (COCOM was, of course, established to restrict, not promote sales.)

6. The Package as a Whole. There is a larger policy question: How should we play these decisions in relation to our current efforts to orchestrate a coordinated allied response to Soviet action in Afghanistan? Announcement of these measures at this time could invite some charges—e.g. from Europeans—that we are acting in a hasty fashion to stick it to the Russians. While such allegations will undoubtedly surface, we believe they are manageable because they are wide of the mark.

—In fact these steps are not that new; they represent essentially a codification of decisions already announced at least in general terms. To that extent they have already been discounted by Moscow and others. Beijing expects them; failure to follow through would be hard to explain to the Chinese who may, however, be disappointed that we have not been more forthcoming.

—They do not get us out ahead of our allies, who will welcome a clearer definition of our intentions regarding military equipment sales to China and our agreement to handle arms sales within COCOM. Cer[Page 1095]tainly we should consult further with the allies on these steps prior to any public announcements.5

—Congressional sensitivities must also be accommodated through prior consultations.

—We should emphasize in backgrounders to the press that we will continue to process requests carefully on a case-by-case basis.

Tab A

Memorandum From the Deputy Assistant Secretary of Defense for International Security Affairs (Platt), the Assistant Secretary of State for East Asian and Pacific Affairs (Holbrooke), and Roger Sullivan of the National Security Council Staff to Secretary of Defense Brown, Secretary of State Vance, and the President’s Assistant for National Security Affairs (Brzezinski)6


  • Technology Transfers and Military Equipment Sales to China

1. Sale of Military Equipment to China

We must provide U.S. industry with further guidance on the sale of military equipment to China. For domestic purposes we prefer to do this in terms of categories of the Munitions Control List, which conforms to existing laws and regulations, is familiar to U.S. and foreign industry, and can be understood as a comprehensive and definitive statement of our policy. The announcement could be made through the Munitions Control Newsletter. A proposed announcement, which includes only those categories which are consistent with our policy of not selling arms to China, is at Enclosure 1. Specific items will be subject to a case-by-case review.

Recommendation. That you approve the approach outlined above and the announcement at Enclosure 1.

2. Chinese Requests

During Secretary Brown’s visit, the Chinese provided him, through his representative Dr. Dinneen, a list of items which they [Page 1096] wished to purchase. It was implied that these items would be for military use.

We have reviewed this list using two criteria: (1) the level of technology and (b) consistency with our policy of sale of support equipment but not weapons. Enclosure 2 represents our analysis and identifies items which we are prepared to discuss further, items which require further clarification by the Chinese before we are willing to engage in technical discussions with them, and items which we are not prepared to discuss further.

Recommendation. That you authorize us to respond to the Chinese list along the lines shown in Enclosure 2. This would be in addition to informing them of our policy on military equipment sales as outlined in the proposed announcement in the Munitions Control Newsletter (Enclosure 1).

3. U.S. Export Control Categories for China

In the regulations implementing the U.S. Export Administration Act, China is included in Category Y along with Albania, the USSR, and the other Warsaw Pact countries except Romania, Hungary, and Poland. Inclusion of China in Category Y with the Soviet Union is an unnecessary irritant in our relations with China. Changing the name of the category would not affect our policy on exports to China or any other country. Nor would it directly affect COCOM since this category is used only within the USG.

Recommendation. That the Department of Commerce be instructed to revise its regulations issued pursuant to the Export Administration Act to provide a separate category for China.

4. Dual-Use Technology and COCOM

We have held political discussions with our principal COCOM partners and informed them that we wish to establish exception procedures for the transfer of technology to China which are similar to those that nominally exist for Poland. While there is some disagreement with the French on the adoption of a formal procedure versus an informal one, our other major COCOM partners are amenable to proposals to treat exceptions for dual-use export licenses to the PRC more favorably than for the Warsaw Pact. We believe that in the end the French will go along with a formal procedure.

Recommendation. That we instruct our delegation to COCOM to propose a formal procedure along the lines of the Polish formula.

5. Arms Sales, Military Equipment Sales and COCOM

Our allies have repeatedly pressed us to change our policy on the handling of third country arms sales, because of the extreme difficulty of justifying COCOM controls on non-weapons if there are no apparent [Page 1097] controls on weapons sales. Our recent decision to approve sales of military support equipment to China, which we have already told our COCOM partners will be submitted to COCOM for review, makes our present policy of keeping weapons sales out of COCOM seem even less logical. In the long term, allowing the most important decisions on allied exports to China to be undertaken outside of COCOM seriously undercuts the rationale for the organization and could tempt COCOM members to circumvent the organization on major non-weapons sales to the Soviet Union as well as to China.

There are basically two options:

—Option A: Create a special committee within COCOM to handle sales for military end use to include arms, military equipment and dual-use technology.

—Option B: Handle all sales of arms and equipment—whether for military or civilian end use—through the existing COCOM framework.

We believe that Option B now represents the best approach. This is a change from our recommendation in 1978. It would respond to strong representations of our allies that the COCOM members judge all sales, whether for military or civilian end use, by the same standards. The existing COCOM structure is designed to deal with all categories of technology—dual-use, weapons and military equipment, and nuclear. Using it would avoid the complication and consequent confusion that establishment of an additional consultative mechanism would entail. This option would promote allied unity and would clearly strengthen COCOM at a time when we are trying to tighten controls on the USSR.

Recommendation. That you approve Option B.

6. Consultations

We will have to consult with appropriate members of Congress concerning our guidelines for military equipment sales before they are published. Moreover, Congress would have to be informed of our intended changes to the implementing regulations of the Export Administration Act to provide a separate category under the Act for China. We do not anticipate any significant opposition from the Congress providing consultation is broad and undertaken sufficiently in advance of announcements.

  1. Source: Department of State, Executive Secretariat Files: Lot 84 D 241, Vance/Brown/Brzezinski Luncheons. Top Secret; Sensitive. Drafted by Armacost on February 27. Attached to a February 27 briefing memorandum from Bartholomew to Vance before Vance’s February 28 luncheon meeting with Brown and Brzezinski. (Ibid.) At the bottom of the last page of this memorandum, Holbrooke wrote, “All this has been coordinated with Reggie [Bartholomew]—but no one else, per your instructions. RH.”
  2. Tab A, printed below.
  3. The list is attached but not printed as Enclosure 1 to Tab A.
  4. Enclosure 2 to Tab A, “Proposed Response to Chinese Request,” is attached but not printed.
  5. An unknown person, probably Vance, underlined all except the first word of this sentence.
  6. Top Secret; Sensitive.