U.S.-China Nuclear Cooperation Agreement

^Pr^ep^ar^{ed f}^o^r^M^e^m^b^ers^an^d^Com^mⁱ^t^t^ees^of^C^ong^r^e^ss

This CRS Report, updated as warranted, discusses the agreement on civilian nuclear cooperation
with the People’s Republic of China (PRC) by focusing on congressional roles in crafting and
carrying out the agreement. Almost 13 years passed between the time that President Reagan
submitted the agreement to Congress in July 1985 and its implementation in March 1998 under
the Clinton Administration. Key developments in the U.S.-China nuclear cooperation agreement
were timed for diplomatic summits between U.S. Presidents and PRC leaders. On April 30, 1984,
President Reagan witnessed the initialing of the agreement. Secretary of Energy John Herrington
signed the agreement on July 23, 1985. On July 24, 1985, President Reagan submitted to
Congress the “Agreement Between the United States and the People’s Republic of China
Concerning Peaceful Uses of Nuclear Energy.” Consideration of whether a Presidential
certification would be the centerpiece of a summit in 1997 advanced the agreement’s
implementation. President Clinton, on January 12, 1998, signed certifications (as required by P.L.

99-183) on China’s nuclear nonproliferation policy and practices to implement the agreement.

Clinton also issued a certification and waived a sanction imposed after the 1989 Tiananmen
Crackdown (as required by P.L. 101-246). Congressional review ended on March 18, 1998, and
the agreement has since been implemented.
Congress played an important role in determining implementation of the agreement, including
holding hearings, crafting legislation, and requiring and reviewing Presidential certifications. One
of the primary congressional actions was enacted in P.L. 99-183, the Joint Resolution Relating to
the Approval and Implementation of the Proposed Agreement for Nuclear Cooperation Between
the United States and the People’s Republic of China, which required a Presidential certification
and a report followed by a period of 30 days of continuous session of Congress before the
agreement could be implemented. After the 1989 Tiananmen Crackdown, Congress enacted
sanctions in P.L. 101-246, the Foreign Relations Authorization Act for FYs 1990-1991,
suspending nuclear cooperation with China and requiring an additional Presidential certification
on the PRC’s nuclear non-proliferation assurances.
Some Members have been concerned about U.S. nuclear cooperation with China in the context of
China’s practices related to the proliferation of nuclear weapons. Members also have been
interested in how Congress reviewed the agreement with China as well as how this experience
might apply to other similar agreements, such as that with India. Congress also exercises
oversight of exchanges with China in the nuclear area conducted by the Department of Energy
and its National Nuclear Security Administration (NNSA). Some Members have considered
whether financing by the U.S. Export-Import Bank should support nuclear exports to China. On
February 28, 2005, Westinghouse submitted a bid to sell four nuclear power reactors to China, as
supported by the Bush Administration and the Export-Import Bank. In Beijing in December 2006,
Energy Secretary Samuel Bodman signed a bilateral Memorandum of Understanding that granted
the deal to Westinghouse. Westinghouse signed the contract in July 2007.

Congressional Concerns..................................................................................................................1
Nuclear Proliferation.................................................................................................................1
Export-Import Bank Financing.................................................................................................1
Overview: Nuclear Cooperation with China and U.S. National Interests.......................................2
U.S. Interests.............................................................................................................................2
Nuclear Power Market..............................................................................................................2
Summits and Timeline...............................................................................................................3
Negotiation of the Agreement.........................................................................................................3
Congressional Concerns in Early 1980s....................................................................................3
Reagan Visits China in 1984.....................................................................................................4
U.S. Initials Agreement.......................................................................................................4
U.S. Points to PRC Nonproliferation Pledges.....................................................................4
Senate Passes Restrictions.........................................................................................................5
Reagan Submits Agreement in 1985.........................................................................................5
Administration’s Concerns..................................................................................................5
Proliferation Concerns........................................................................................................6
Formal Submission.............................................................................................................7
Issues for Congressional Review..............................................................................................8
Other Hearings........................................................................................................................10
Legislation and P.L. 99-183.....................................................................................................11
Sanctions After the Tiananmen Crackdown..................................................................................12
Initial Legislation....................................................................................................................12
P.L. 101-246............................................................................................................................13
Implementation of the Agreement.................................................................................................13
Congressional Action Before Certification.............................................................................13
U.S.-PRC Summit in October 1997........................................................................................14
Governmental Cooperation.....................................................................................................15
Clinton Certifies Agreement in 1998......................................................................................15
Congressional Review.............................................................................................................16
Incomplete Assurances............................................................................................................17
Vi si ts ......................................................................................................................... ........ 17
Re-t rans fers ....................................................................................................................... 17
U.S. Nuclear Exports.....................................................................................................................18
Concerns ....................................................................................................................... ........... 18
Westinghouse’s Reactors.........................................................................................................19
Deal for Westinghouse............................................................................................................20
Author Contact Information..........................................................................................................21

This CRS Report discusses the Nuclear Cooperation Agreement between the United States and
the People’s Republic of China (PRC), which was signed in 1985 and implemented in 1998. The
discussion focuses on congressional roles in crafting and carrying out the agreement. On July 24,
1985, President Reagan submitted to Congress the “Agreement Between the United States and the
People’s Republic of China Concerning Peaceful Uses of Nuclear Energy.” Some Members have
been concerned about U.S. nuclear cooperation with China in the context of China’s practices
related to the proliferation of nuclear weapons. (See CRS Report RL31555, China and
Proliferation of Weapons of Mass Destruction and Missiles: Policy Issues, by Shirley A. Kan.)
Members also have been interested in how Congress reviewed the agreement with China as well
as how this experience might apply to other similar agreements, such as that with India. Congress
also exercises oversight of exchanges with China in the nuclear area conducted by the
Department of Energy and its National Nuclear Security Administration (NNSA). (On the
creation of the NNSA and issues related to China, see CRS Report RL30143, China: Suspected
Acquisition of U.S. Nuclear Weapon Secrets, by Shirley A. Kan.)
Some Members in the 109^th Congress considered whether U.S. government resources should be
used to support nuclear exports to China, specifically by Westinghouse Electric Company. On
June 28, 2005, Representative Bernard Sanders introduced Amendment 381 to the Foreign
Operations, Export Financing, and Related Programs Appropriations Act for FY2006 (H.R. 3057)
to prohibit funds from being used by the Export-Import Bank to approve an application for a loan
or loan guarantee for a nuclear project in the PRC. The House adopted the amendment (313-114)
and passed H.R. 3057 on June 28, 2005, with the language in Section 589. The Senate’s version
did not have similar language, and the amendment was dropped in conference (H.Rept. 109-265).
H.R. 3057 was enacted as P.L. 109-102 on November 14, 2005.
Concerning Westinghouse’s export, Congress would have an opportunity to review any proposed
Ex-Im Bank financial assistance before final approval by the Bank’s Board of Directors. For any
proposed nuclear-related assistance of $100 million or more, the Bank must notify Congress at
least 25 days of continuous session or 35 calendar days before final approval (12 U.S.C.
635(b)(3)). The congressional notification procedure was used in 1994, for example, when the
Ex-Im Bank proposed to guarantee $300 million in loans for Westinghouse to upgrade a reactor in
the Czech Republic. Although the controversial project drew a number of comments and
questions from individual Members of Congress, there was no move by Congress as a whole to
block the loan guarantees, and they were approved by the Ex-Im Bank Board of Directors after ¹
the review period ended. (For a discussion of the Ex-Im Bank, see CRS Report 98-568, Export-
Import Bank: Background and Legislative Issues, by Danielle Langton.)

¹^“Ex-I^m^Bac^k^{s Te}^m^e^lin^L^o^an^{s De}^sp^ite^A^u^s^t^rⁱ^aⁿ^{, C}^o^ng^r^e^s^sⁱ^ona^{l Q}^u^e^s^tions^,”^Nu^cl^eonⁱ^{cs Week}^{, Ma}^r^c^{h 1}⁷^,¹⁹^94,^p.¹⁷^.

The question for U.S. policy-makers since the Reagan Administration in the 1980s has been
whether nuclear cooperation with the PRC would be necessary to advance U.S. diplomatic,
security, and economic interests. There were tensions in the framework for bilateral relations that
informed U.S. considerations of peaceful nuclear cooperation. While the PRC under the rule of
the Communist Party of China already possessed nuclear weapons, the PRC also has had a record ²
of nuclear proliferation to countries such as Pakistan and Iran. The United States and the PRC
have not been allies. Nonetheless, in 1970, President Nixon began a rapprochement with
Communist Party ruler Mao Zedong, and both countries cooperated in various areas during the
Cold War until the disintegration of the Soviet Union in 1991. Nuclear cooperation involves
weighing risks and benefits. The risks include nuclear proliferation and upgrading technology and
knowledge that also might have military uses. The benefits involve expanding engagement,
building mutual confidence, and enabling U.S. businesses to compete for potentially lucrative
nuclear power contracts. Increased nuclear power in China’s electricity generation also could
have a slight impact on its demand for oil and emission of greenhouse gas.
After PRC rulers led by Deng Xiaoping began to reform the economy in 1978, China announced
plans for purchasing foreign nuclear power reactors to provide energy for economic
modernization. According to those initial plans, China desired a total of 10,000 megawatts of
nuclear power, or 5% of total electrical capacity by 2000. The acquisitions were estimated to be ³
worth $10-20 billion. However, by 1999, nuclear power accounted for only about 1% of ⁴
electricity generation in China.
In April 2004, Vice President Dick Cheney visited Beijing and discussed with Politburo Standing
Committee Member and PRC Vice President Zeng Qinghong China’s plans to build 24 to 30
nuclear power reactors by 2020, at the cost of $1.5 billion for each plant. Presumably, China ⁵
would then draw 4-5% of its electricity from nuclear power, expanded from 1-2% in 2003. On
February 28, 2005, Westinghouse submitted a bid to sell four nuclear power reactors to China, ⁶
with the U.S. Nuclear Regulatory Commission’s approval. (See “U.S. Nuclear Exports.”)

²^For^de^ta^ils^{, s}^e^e^C^R^S^R^e^p^o^r^t^97-³^91,^C^hⁱ^na:^Ball^istic^a^{nd Cr}^uise^Mⁱ^ssile^s^{, by}^Shir^le^y^A^.^K^a^{n; C}^R^S^R^e^por^{t R}^L³¹⁵⁵^5,
^C^hⁱⁿ^{a a}ⁿ^d^Pr^oli^f^e^r^atioⁿ^{of W}^e^ap^ons^{of M}^a^s^s^D^e^s^t^r^u^c^tio^{n a}ⁿ^d^Mⁱ^s^s^ile^s^:^Polic^y^I^s^s^u^e^s^{, by}^Shirle^y^A^.^Ka^n.
³^A^l^aiⁿ^Cass,^“U.^S^.^Nu^cl^{ear S}^ect^o^r^Lⁱ^{cks It}^s^Lⁱ^p^s^{Over Ch}ⁱⁿ^a,^”^Fⁱ^nan^ci^a^l^Tⁱ^mes^,^A^u^gu^st¹⁵^,¹⁹⁸⁵^.
⁴^I^A^E^A^{, “}^N^uc^le^a^r^P^o^w^e^r^A^r^{ound t}^h^e^W^o^r^l^d,”^{News Briefs}^{, A}^p^ril/M^ay²⁰⁰⁰^.
⁵^Ch^arl^e^{s Hu}^t^z^l^e^r,^“Chⁱⁿ^a^an^{d U.}^S^.^A^r^{e Cl}^o^s^{e t}^o^Eⁿ^dⁱⁿ^g^Nu^cl^{ear Di}^s^p^u^t^e,^”^W^a^ll^Str^e^e^t^J^o^ur^na^l^{, Se}^pte^m^be^r^{2, 20}^04.
⁶^Nu^cl^eoⁿⁱ^{cs Week}^,^M^a^r^c^h^3,²⁰^05.

Key developments in the U.S.-China nuclear cooperation agreement were timed for diplomatic
summits between U.S. Presidents and PRC leaders. On April 30, 1984, President Reagan
witnessed the initialing of the nuclear cooperation agreement. Secretary of Energy John
Herrington signed the agreement on July 23, 1985. On July 24, 1985, President Reagan submitted
the agreement to Congress. Consideration of whether a Presidential certification (as required by
P.L. 99-183 on China’s nuclear nonproliferation policy and practices) would be the centerpiece of
a summit in 1997 advanced the agreement’s implementation. President Clinton, on January 12,
1998, signed certifications to implement the agreement. The President also waived a sanction
imposed after the 1989 Tiananmen Crackdown (in P.L. 101-246). Congressional review ended on
March 18, 1998, and the agreement has since been implemented.
Almost 13 years passed between the time that President Reagan submitted the agreement to
Congress in July 1985 and its implementation in March 1998 under the Clinton Administration.
Congress played an important role in determining implementation of the agreement, including
holding hearings, crafting legislation, and requiring and reviewing Presidential certifications. One
of the primary congressional actions was enacted in P.L. 99-183, the Joint Resolution Relating to
the Approval and Implementation of the Proposed Agreement for Nuclear Cooperation Between
the United States and the People’s Republic of China (December 16, 1985), which required a
Presidential certification and a report followed by a period of 30 days of continuous session of
Congress before the agreement could be implemented. After the 1989 Tiananmen Crackdown,
Congress enacted sanctions in P.L. 101-246, the Foreign Relations Authorization Act for FYs
1990-1991 (February 16, 1990), suspending nuclear cooperation with China and requiring an
additional Presidential certification on the PRC’s nuclear non-proliferation assurances.

In January 1983, U.S. officials negotiating a nuclear cooperation agreement with China linked
possible U.S. nuclear exports to China with its reported nuclear proliferation practices, ⁷
particularly in Pakistan. Before an agreement was finalized, Senators Gordon Humphrey,
William Roth, and William Proxmire wrote to Secretary of State George Shultz in December
1983. They urged that an agreement be drafted so that none of the provisions of the Nuclear
Nonproliferation Act of 1978 would be waived. They also wrote that the agreement should
include explicit pledges by China not to transfer any nuclear weapons equipment or information
to any nation; to support the U.S. requirement for recipients to accept the International Atomic
Energy Agency (IAEA)’s safeguards on nuclear exports; and to enter into an agreement with the
IAEA to place China’s civilian nuclear activities under IAEA safeguards with terms identical to
those of the U.S.-IAEA safeguards agreement. Reported concerns about China also included its ⁸
nuclear proliferation activities in Argentina and South Africa.

⁷^R^{ob L}^a^uf^e^r^{, “}^C^hina^’^s^R^o^leⁱⁿ^W^o^r^l^dw^ide^N^u^c^l^e^a^r^W^e^a^pons^B^u^il^d^{up U}^nde^r^U^.^S^.^Sc^r^u^tiny^,^”^Nu^cl^eoⁿⁱ^{cs Week}^{, J}^a^nua^r^y
^{20, 19}⁸³^.
⁸^Nu^cl^eoⁿⁱ^{cs Week}^,^A^u^gu^st¹^,¹⁹⁸³^an^{d Dece}^m^b^er⁸^,¹⁹⁸³^.

In preparation for President Ronald Reagan’s first visit to the PRC in April 1984 to improve
bilateral relations, officials sought an agreement on civil nuclear cooperation as the “deliverable”
that caught the most attention. Begun in 1981, negotiations intensified before the visit over the
U.S. requirement (under the Atomic Energy Act) for China to obtain U.S. prior approval before
reprocessing, enrichment, or other alteration of transferred nuclear material. China objected to
perceived infringement of its sovereignty. At the end of his visit, on April 30, 1984, Reagan
witnessed the initialing of the nuclear cooperation agreement. The President said that he was
“particularly proud” of the agreement, saying that “it will open broad opportunities for joint work
in development of the energy base which China needs for her modernization.” According to a
summary of the terms provided by officials to the New York Times, China agreed that it would not
enrich or reprocess fuel from U.S.-built reactors or store materials without U.S. consent; and the
United States agreed not to use its control rights to inhibit the growth of China’s nuclear industry ⁹
out of commercial rivalry.
China also took steps in response to U.S. concerns about nuclear proliferation during negotiations
for the agreement. While China opposed the Nuclear Non-Proliferation Treaty (NPT), China
applied for membership in the International Atomic Energy Agency (IAEA) in September 1983
and became a member on January 1, 1984. (The PRC did not accede to the NPT until March 9, ¹⁰
1992. Also, China joined the Zangger Committee in October 1997 and the Nuclear Suppliers
Group (NSG) in May 2004. Since 1992, the NSG has required “full-scope safeguards,” or IAEA
inspections of all other declared nuclear facilities in addition to the facility importing supplies to ¹¹
prevent diversions to weapon programs.)
In making China’s first address to the IAEA conference in September 1984, the PRC Minister of
Nuclear Industry said that “China will, in exporting its nuclear materials and equipment, request
the recipient countries to accept safeguards in line with the principles established in the agency’s
statutes. In the same view, when importing nuclear materials and equipment, China will also
make sure that they are used for peaceful purposes.” China did not offer to place its civilian
nuclear facilities under IAEA safeguards, the only nuclear weapon state that remained outside ¹²
such arrangements. Also, Administration officials were able to point to a statement issued in

⁹^S^t^even^W^eⁱ^s^m^aⁿ^,^“Rea^gan^L^e^av^e^s^oⁿ^T^rⁱ^p^t^o^C^hⁱⁿ^a;^S^{eeks t}^o^E^a^{se T}^eⁿ^sⁱ^oⁿⁱⁿ^Rel^a^tⁱ^oⁿ^s^{” and}^“U.^S^.^S^aⁱ^d^t^o^Reach
^P^act^wⁱ^t^h^Chiⁿ^{ese on}^Nu^cl^ear^P^o^w^e^r,^”^N^e^{w Yor}^k^Tim^e^s^{, A}^p^r^{il 23}^a^nd^24,¹⁹⁸⁴^{; C}^h^rⁱ^s^t^o^phe^r^W^r^eⁿ^{, “}^C^hine^s^e
^C^onc^e^s^sⁱ^on^P^e^r^m^its^U^.^{S. A}^c^c^o^r^d^{on A}^t^om^P^o^w^e^r^,^”^{New Yo}^{rk Time}^s^{, A}^p^{ril 17,}¹⁹⁸⁴^{; “}^U^.S.-C^hⁱⁿ^e^s^e^A^g^re^e^m^eⁿ^ts^,”^New
^Yor^k^Tim^e^s^{, A}^p^r^{il 3}⁰^,¹⁹^84.
¹⁰^T^h^{e Z}^aⁿ^{gger Co}^mmⁱ^t^t^ee,^o^r^Nu^cl^{ear E}^x^p^o^r^t^e^{rs Co}^mmⁱ^t^t^ee,^h^a^{s est}^a^b^lⁱ^s^h^e^d^guⁱ^d^elⁱⁿ^{es f}^o^{r exp}^o^r^t^co^nt^ro^l^o^fⁿ^u^c^l^ear
^ite^m^sⁱⁿ^A^r^tic^le^{III o}^f^th^e^Nu^c^l^e^a^r^Noⁿ^p^ro^lif^e^r^a^tioⁿ^T^r^e^a^t^y^.^Sin^c^e^th^e¹⁹⁷⁰^s^{, t}^h^e^c^o^m^m^itte^e^h^a^{s c}^o^m^pⁱ^l^e^d^a^“^t^rig^g^e^r
^list,”^{or l}ⁱ^{st of}ⁿ^u^c^l^e^a^r^ite^m^s^w^h^ic^{h if}^traⁿ^sf^e^rre^d^w^ould^tr^ig^g^e^{r a re}^q^uⁱ^rem^eⁿ^t^f^o^{r IA}^E^A^sa^feg^u^ard^s^{. T}^h^{is list h}^e^lp^s^to
^pre^v^eⁿ^{t div}^e^rsion^of^nuc^le^a^r^m^a^te^ria^l^{s a}^{nd e}^s^pe^cⁱ^a^lly^de^si^gⁿ^e^d^{or pr}^e^p^a^r^e^d^m^a^te^ria^l^{, e}^quipm^eⁿ^{t, a}^{nd f}^a^c^ilitie^{s to}
^pr^og^r^a^m^s^m^a^kⁱ^ng^nuc^le^a^r^e^x^plos^iv^e^s^.
¹¹^C^R^S^R^e^por^{t R}^L³¹⁵⁵⁵^,^C^hⁱⁿ^{a a}ⁿ^d^Pr^ol^ife^r^a^ti^on^{of W}^e^ap^ons^{of M}^a^s^s^D^e^s^t^r^u^c^{tion a}ⁿ^d^Mⁱ^s^s^ile^s^:^Poli^c^y^I^s^s^u^e^s^{, by}
^Shirle^y^A^.^Ka^n.
¹²^A^{nn Ma}^c^L^a^c^h^la^{n, “}^C^hina^Ma^k^e^s^Str^o^ng^N^oⁿ^p^r^o^lⁱ^f^e^r^a^tion^P^l^e^d^g^eⁱⁿ^I^A^EA^C^onf^e^r^eⁿ^c^e^A^ddr^e^s^s^,^”^Nu^cl^eoⁿⁱ^{cs Week}^,
^Se^pte^m^be^r^{27, 1}⁹⁸⁴^.

January 1984 by PRC Premier Zhao Ziyang when he visited the United States and said that “we
do not engage in nuclear proliferation ourselves, nor do we help other countries develop nuclear ¹³
weapons.” That promise left a question about any future activities. Later, on January 19, 1985,
PRC Vice Premier Li Peng issued an additional nonproliferation pledge, saying that the PRC
“does not and will not in the future help any non-nuclear states to develop nuclear weapons” and ¹⁴
that China would abide by commitments to the IAEA. Still, questions remained about whether
there would be written pledges and whether any such assurances would be publicly issued by
China, itself, rather than the United States expressing its interpretation of an understanding
reached with China either verbally or in writing.
Senator John Glenn introduced an amendment to the FY1986 continuing appropriations
resolution (H.J.Res. 465) to prohibit the availability of funds for the transfer of nuclear
equipment, materials, or technology to China until the President certifies to Congress that the
standards and methods of verifying peaceful use of U.S. nuclear exports will be equivalent to
those applied by the IAEA. On December 9, 1984, the Senate adopted the amendment (by voice ¹⁵
vote), but it was dropped in the conference committee.
Although the agreement was initialed during Reagan’s visit to China in April 1984, the President
did not submit it to Congress until July 1985, apparently timed for a visit by PRC President Li
Xiannian, who arrived in Washington, D.C., on July 22, 1985, and was to be treated to a state
dinner at the White House. Prior to this visit, Administration officials briefed Congress and the
press about supposed new written assurances from China about nuclear nonproliferation.
Members included Senator Alan Cranston, who had reported in May 1984 that PRC nuclear
technicians were in Pakistan at a suspected nuclear weapon facility. The Administration, however,
did not release the written assurance and said that the language of the agreement remained largely ¹⁶
the same. Secretary of Energy John Herrington and Li Peng signed the agreement on July 23,

1985.

Although President Reagan’s top officials approved the agreement, there were acknowledgments
of problems in the agreement as well as disagreements within the Administration. Kenneth
Adelman, Director of the Arms Control and Disarmament Agency (ACDA), wrote in his
memorandum for the President that “the proposed Agreement meets all the applicable
requirements of the Atomic Energy Act and the Nuclear Non-Proliferation Act and its entry into
force will substantially benefit U.S. non-proliferation objectives.”

¹³^{New Yo}^{rk Times}^{, A}^p^{ril 2}⁷^,¹⁹⁸⁴^.
¹⁴^R^{on R}^e^dm^{ond, “}^C^hⁱ^na^Ela^bor^a^t^e^s^N^u^c^l^e^a^r^N^on-^pr^olif^e^r^a^tion^Polic^y^,^”^UPI^{, J}^a^nua^r^y^{25, 1}⁹⁸⁵^.
¹⁵^A^r^chⁱ^v^ed^CRS^Issu^{e Bri}^e^f^IB8⁶⁰⁵⁰^,^Imp^l^emen^t^a^tⁱ^oⁿ^of^t^h^{e U.}^S^.^-C^hⁱⁿ^e^{se A}^g^reemen^t^f^o^{r Nu}^cl^ea^{r C}^o^o^p^e^ra^tⁱ^oⁿ^{, by}
^W^a^r^r^e^{n D}^onne^lly^{, Se}^pte^m^be^r^28,¹⁹⁸^9.
¹⁶^Jo^anⁿ^e^Om^an^g,^“U.^S^.^-^Chⁱⁿ^{a N}^u^cl^{ear P}^act^Near,^”^W^a^s^hⁱⁿ^gt^{on Pos}^t^{, J}^u^ly^22,¹⁹^85.

Nonetheless, Adelman first acknowledged that
^th^{e su}^bj^{ect ag}^ree^m^{ent is}^uⁿⁱ^qu^{e a}^m^ong^a^g^ree^m^eⁿ^ts^f^o^{r peacef}^u^lⁿ^u^c^{lear cooperation}
^con^c^l^u^{ded s}ⁱⁿ^{ce t}^h^{e 1978 N}^u^cl^{ear N}^oⁿ^-^Prolⁱ^f^eratⁱ^oⁿ^A^c^t^.^Itⁱ^s^t^h^{e f}ⁱ^rs^t^s^u^ch^a^g^r^e^em^en^t^wⁱ^t^h^a
ⁿ^u^c^lear^-w^eapon^s^t^ate^;^an^{d it is}^wⁱ^t^h^{a cou}ⁿ^t^r^y^t^h^{at h}^a^sⁿ^o^t,^uⁿ^{til recen}^tly^{, s}^u^pport^e^dⁿ^oⁿ^-
^prolⁱ^f^eratⁱ^oⁿ^m^easu^r^es^.^A^l^t^h^oug^h^t^h^{e ag}^ree^m^ent^w^a^sⁱⁿⁱ^tⁱ^a^l^e^dⁱⁿ^A^p^ri^l^{1984, w}^eⁿ^{eeded t}^o
^clar^if^y^cer^taiⁿ^m^a^tter^s^r^e^late^d^to^im^p^l^e^m^en^tatioⁿ^o^f^C^hⁱⁿ^a’^{s n}^u^clear^p^o^{licies. T}^h^o^s^e
^dis^c^u^s^sⁱ^ons^con^c^l^u^{ded s}^u^cces^s^f^u^l^l^y^la^s^t^m^oⁿ^t^h^.^A^m^a^j^o^{r th}^{reat to ou}^rⁿ^on-^prolif^eration
^o^b^j^ectiv^{es i}^s^th^e^p^o^t^en^tial^f^o^r^“m^av^er^ic^k^”^su^p^p^lier^s^to^uⁿ^d^er^cu^{t t}^h^{e sa}^f^e^g^u^a^r^d^{s a}ⁿ^d^o^t^h^e^r
^con^t^rol^s^es^t^a^blⁱ^s^h^e^{d t}^h^roughⁱⁿ^t^e^rn^atⁱ^oⁿ^a^l^cooperatⁱ^oⁿ^an^{d con}^s^ensu^s^.^{In t}^h^{e pas}^t^{, C}^hⁱⁿ^a^’^s
^policies^w^e^{re a cau}^s^e^f^o^{r con}^c^ern^becau^s^e^{it n}^e^it^h^e^{r adh}^e^{red to th}^{at con}^s^ens^u^sⁿ^o^{r accepted}
^ot^h^e^{r n}^on-^prolⁱ^f^eratⁱ^oⁿⁿ^o^r^m^s^.^{” [em}^p^h^a^sⁱ^s^added]
Adelman also noted that “a few of the major provisions in the agreement were subject to long and
difficult negotiations. We have had detailed discussions on what it means in practice not to assist
other countries to acquire nuclear explosives... We understand that China’s policy will be
implemented in a manner consistent with those basic non-proliferation practices common to the
United States and other major suppliers... The United States sought China’s acceptance of IAEA
safeguards on U.S. supply under the agreement, but they adamantly refused to accept that
condition.” [emphasis added]
Finally, Adelman argued that the agreement for U.S. exports provided for “mutually acceptable
arrangements,” in the future, “to be established prior to approval of U.S. exports” that “will
include exchanges of information and visits by U.S. government personnel to relevant sites in
China where material or equipment subject to the agreement will be stored or used.” He also
contended that “reprocessing of U.S. origin material cannot take place without U.S. consent.” He
concluded that “it will be important to ensure that the specific arrangements provide adequate
confidence that any material or equipment subject to the agreement will be used only for purposes ¹⁷
consistent with the agreement.” [emphasis added]
Adelman also submitted ACDA’s “Nuclear Proliferation Assessment Statement” that detailed the
Reagan Administration’s justification for the agreement with China, pursuant to Section 123a of ¹⁸
the Atomic Energy Act. ACDA reached “a favorable net assessment of the adequacy of the
provisions of the proposed agreement to ensure that any assistance furnished thereunder will not
be used to further any military or nuclear explosive purpose.” It also concluded that execution of
the proposed agreement “would advance the non-proliferation program, policy, and objectives of
the United States.”
In contrast, Thomas Roberts, Acting Chairman of the Nuclear Regulatory Commission (NRC),
wrote a memorandum to President Reagan that offered a different assessment. He referred to
reviewing not only the State Department’s proposed agreement but also an accompanying
“Agreed Minute.” He wrote that he agreed with the State Department that the agreement met the
legal requirements of Section 123 of the Atomic Energy Act and the Nuclear Non-Proliferation

¹⁷^K^e^nne^{th A}^d^e^l^m^a^{n, D}ⁱ^r^e^c^t^or^of^th^e^A^r^m^s^C^ontr^o^l^aⁿ^d^Dⁱ^s^a^r^m^am^eⁿ^t^A^g^eⁿ^cy^{, “}^M^em^or^a^ndum^f^o^r^the^P^r^e^s^ideⁿ^t;
^S^u^b^j^ect^:^U^.^S^.^-C^hⁱⁿ^a^P^eacef^u^l^Nu^cl^{ear C}^oope^r^a^ti^{on A}^g^r^e^em^eⁿ^t,”^J^u^l^y^{19, 19}^85.
¹⁸^Kenⁿ^e^t^h^A^d^el^m^aⁿ^,^“Nu^c^l^{ear P}^r^olⁱ^f^eratⁱ^oⁿ^A^s^s^e^ss^men^t^S^t^at^em^en^t^,^{” Ju}^l^y¹⁹^,¹⁹⁸⁵^.

Act. However, Roberts wrote of concerns about “the adequacy of certain assurances provided by
the PRC.” He wrote that,
^{We al}^s^oⁿ^o^t^e^t^h^at^{, al}^t^h^ough^w^e^belⁱ^e^v^e^t^h^{e requ}ⁱ^r^e^m^ent^s^o^f^S^ectⁱ^oⁿ^{123 are s}^a^tⁱ^s^fⁱ^ed,^w^e
^w^o^u^l^{d h}^a^v^e^pref^{erred th}^{at th}^{e a}^g^ree^m^eⁿ^{t con}^t^aiⁿ^{a clear s}^t^atem^{ent of}^{U.S. con}^s^eⁿ^{t righ}^ts^f^o^r
^th^{e s}^u^bs^equ^eⁿ^t^reproces^sⁱ^ng^{or en}^richm^eⁿ^t^o^f^U.^S.-s^u^{pplied nu}^{clear reactor f}^u^{el or}^f^u^e^l^u^s^e^d
ⁱⁿ^U.S.^-^s^u^{pplied reactors}^.^Such^{a s}^t^ate^m^eⁿ^t^w^{ould eli}^mⁱⁿ^{ate t}^h^{e poten}^tial^f^o^{r fu}^tu^re
^mⁱ^s^uⁿ^d^ers^t^an^di^ng^s^.
^Ou^r^fⁱⁿ^a^{l o}^b^s^er^v^a^tioⁿ^{is th}^{at t}^h^e^A^g^r^e^e^m^en^{t co}ⁿ^t^aiⁿ^s^{a p}^r^o^v^isioⁿ^w^h^ich^w^o^u^l^d^ex^p^r^essl^y
^q^u^alif^y^th^{e a}^u^t^h^o^r^it^y^o^f^th^e^Coⁿ^g^r^e^{ss to}^en^{act su}^b^s^eq^u^eⁿ^t^legⁱ^slatioⁿ^a^f^f^ectⁱⁿ^g^th^{e acti}^v^itie^s
^cov^e^{red by}^t^h^e^A^g^ree^m^eⁿ^t^.^Prevⁱ^ous^ag^ree^m^eⁿ^t^s^f^o^{r coopera}^tⁱ^oⁿ^wⁱ^t^h^ot^h^e^{r cou}ⁿ^t^ri^e^s^h^a^v^e
ⁿ^o^{t co}ⁿ^t^aiⁿ^e^d^s^u^ch^{a p}^r^o^vⁱ^s^ioⁿ^.^T^h^{e p}^r^o^v^isioⁿ^co^u^l^d^r^e^d^u^c^e^th^e^f^l^ex^ib^ilit^y^o^f^t^h^{e U}ⁿ^ited¹⁹
^Statesⁱⁿ^th^e^fu^tu^re.
On July 24, 1985, President Reagan submitted to Congress the “Agreement Between the United
States and the People’s Republic of China Concerning Peaceful Uses of Nuclear Energy,”
pursuant to Sections 123(b) and 123(d) of the Atomic Energy Act of 1954, as amended. In his
transmittal message, Reagan did not refer to the NRC’s concerns (the memorandum cited above
was classified at the time). He noted that the proposed agreement was the first peaceful nuclear
cooperation agreement with a Communist country and the only such agreement with another
nuclear-weapon state (because cooperation with the United Kingdom and France was covered by
U.S. agreements with the European Atomic Energy Community, or EURATOM).
The President first cited China’s “ambitious plans” for a “substantial number of nuclear power
stations.” He pointed to China’s steps to “clarify” its non-proliferation and nuclear export
policies, including Premier Zhao’s statement, but Reagan did not mention PRC practices. He
referred to bilateral “talks” rather than statements or agreements and said that “we can expect”
that China’s policy of not assisting a non-nuclear weapon state to acquire nuclear explosives will
be implemented in a manner consistent with the basic non-proliferation practices common to the
United States and other suppliers. As benefits for U.S. interests, the President wrote that the
agreement would “have a significant, positive impact on overall U.S.-China relations;” “provide
the United States and its companies an opportunity to participate in another aspect of China’s
energy programs, with possible substantial economic benefit;” and “further the non-proliferation
and other foreign policy interests of the United States.” Reagan argued that the agreement would
not constitute an “unreasonable risk” to common defense and security. He noted that he was
submitting the agreement to Congress “without exempting it from any requirement” in section ²⁰

123(a) of the Atomic Energy Act.

¹⁹^T^hom^a^s^R^obe^r^t^s^,^A^c^ting^C^h^aⁱ^r^m^aⁿ^of^the^N^u^c^l^e^a^r^R^e^g^u^la^tor^y^C^o^m^mⁱ^s^sⁱ^{on, Me}^m^o^r^a^ndum^f^o^r^the^P^r^e^s^ideⁿ^{t, J}^u^ly^19,
¹⁹⁸⁵^(red^act^{ed un}^cl^assi^fⁱ^ed^versi^oⁿ⁾^.
²⁰^Rona^l^d^Re^a^g^aⁿ^{, “}^M^e^s^s^a^g^e^f^r^o^m^the^P^r^e^s^ideⁿ^t^of^the^Uⁿⁱ^t^e^d^Sta^t^e^s^T^r^aⁿ^s^m^itting^Aⁿ^A^g^r^e^em^eⁿ^{t f}^o^{r Coope}^ra^ti^on
^b^e^t^w^een^t^h^{e G}^o^vern^men^t^o^f^t^h^{e U}ⁿⁱ^t^e^d^S^t^at^{es o}^f^Ameri^{ca an}^d^t^h^{e G}^o^vern^m^eⁿ^t^o^f^t^h^{e P}^e^op^l^e^{’s Rep}^ublⁱ^c^o^f^Chⁱⁿ^a
^Coⁿ^cernⁱⁿ^g^P^eace^f^u^l^{Uses o}^f^Nu^cl^{ear E}ⁿ^erg^y^,^P^u^rsu^aⁿ^t^t^o^S^ecs.¹²³⁽^b⁾^and¹²³⁽^d⁾^o^f^t^h^{e A}^t^o^mⁱ^c^Eⁿ^erg^y^A^c^t^o^f¹⁹⁵⁴^,
^a^s^A^m^e^nde^d,”^J^u^ly^24,¹⁹^85,^H^o^u^s^e^D^o^c^u^m^e^{nt 99-}⁸⁶^.

The agreement’s submission began the periods of congressional review: 30 days of continuous
session under Section 123(b) to be followed by 60 days of continuous session under Section
123(d) of the Atomic Energy Act. Chaired by Representative Dante Fascell, the House Foreign
Affairs Committee held a hearing on July 31, 1985. Secretary of Energy John Herrington, ACDA
Director Kenneth Adelman, Ambassador for Non-proliferation Richard Kennedy, and Assistant
Secretary of State Paul Wolfowitz testified. Members debated a number of issues, raised in
particular by Representative Edward Markey, Chairman of the House Energy and Commerce
Subcommittee on Energy Conservation and Power, who testified and submitted his legal analysis ²¹
of the proposed agreement.
Safeguards and Prior Approvals: Representative Markey raised objections about the agreement,
saying that it contained the same “lax terms” as the draft that was initialed in 1984: objections
based on a lack of guaranty that safeguards will be maintained for U.S. nuclear materials and
equipment to ensure peaceful use; lack of a guaranty of prior approval by the United States of any
reprocessing, enrichment, or alteration of nuclear material; and concerns about China’s nuclear
exports and technical assistance with other countries. He asserted that,
^In^s^t^{ead of}^obtainⁱ^ng^{a tigh}^t^eⁿⁱⁿ^g^o^f^t^h^{e langu}^ag^{e o}^f^th^{e a}^g^ree^m^en^{t, t}^h^e^A^d^mⁱⁿⁱ^s^t^ration
^r^e^p^o^r^ted^l^y^h^a^{s sp}^eⁿ^{t th}^{e las}^t^y^e^ar^p^r^o^v^idⁱⁿ^g^it^sel^f^wⁱ^t^h^classi^fⁱ^ed^a^s^s^u^r^aⁿ^c^es^t^h^a^t^th^e^s^h^a^d^o^w^y
^C^hⁱⁿ^e^s^e^t^e^c^hⁿⁱ^cⁱ^aⁿ^s^p^u^r^p^o^r^t^e^d^l^y^w^o^r^kⁱⁿ^g^a^t^P^a^ki^st^aⁿ^{’s r}^e^ne^ga^d^e^K^a^hut^a^ur^aⁿⁱ^u^{m e}ⁿ^rⁱ^c^h^me^nt
^pl^an^t^h^a^v^e^di^s^a^{ppeared, an}^{d t}^h^at^C^hⁱⁿ^{a i}^sⁿ^o^l^oⁿ^g^e^{r e}^x^portⁱⁿ^g^un^s^a^f^e^g^u^a^{rded su}^pplⁱ^e^s^of
^h^eavy^w^a^{ter an}^{d lo}^w^-^eⁿ^rich^e^d^u^r^an^ium^{to oth}^e^{r th}^res^h^{old n}^u^c^lear^-w^eapon^s^t^ate^s^s^u^ch^as
^A^r^g^eⁿ^tⁱⁿ^a^an^d^S^o^u^t^h^A^f^ri^{ca. I}^tⁱ^sⁿ^o^t^eⁿ^ough^t^h^at^t^h^e^A^d^mⁱⁿⁱ^s^t^ratⁱ^oⁿ^s^a^tⁱ^s^fyⁱ^t^s^e^l^f^{on t}^hⁱ^s²²
^c^o^unt^.
Unilateral Understanding of Verbal Assurances: Representative Markey also contended that
the assurances from China were actually assurances in a secret memorandum or “Non-Paper” of
the State Department. In his written statement, he reported that “Ambassador Kennedy reportedly
resorted to the device of writing down his own (classified) understanding of China’s new
improved nonproliferation policy. While declining to sign this ingenious document, responsible
Chinese officials reportedly nodded their assent, and Kennedy raced back to Washington to report
this triumph of diplomacy to the President.”
Ambassador Kennedy testified that the Chinese “understood” U.S. legal requirements, “said” they
had no “plans” to undertake activities in question, and were concerned about whether the United
States would give a timely response. Kennedy also testified that the Chinese made it “clear” that
when they “say” that they will not assist other countries to develop nuclear weapons, “this also ²³
applies to all nuclear explosives,” acknowledging that it was in question. (During a meeting of
the committee to mark-up legislation in November 1985, Deputy Assistant Secretary of State
James Devine confirmed Representative Dan Burton’s assertion of confidential summaries of
discussions that were not in writing. Devine said that the PRC “assured us orally that they would
... require safeguards on their own exports.”)

²¹^H^ous^e^C^o^m^m^itte^e^{on For}^e^ig^{n A}^f^f^a^ir^s^,^“^P^r^o^p^o^s^e^{d N}^u^c^l^e^a^r^C^o^ope^r^a^tion^A^g^r^eem^eⁿ^{t W}^{ith the}^P^e^op^le^’^s^R^e^publ^ic^of
^C^h^ina^,^”^H^e^a^r^ing^aⁿ^d^Ma^r^k^up^on^H^.^J^.^R^e^s^.⁴⁰^{4, J}^u^ly^{31, N}^o^v^e^m^b^e^r^13,¹⁹⁸⁵^.
²²^Ibid^.
²³^{On the}^{PRC’s re}^f^u^sa^{l to g}ⁱ^v^e^{its ow}^{n a}^ssura^nc^e^s^{in w}^r^iting^,^se^e^{R. G}^r^e^g^or^y^Nok^e^{s, “}^H^o^w^the^U.S.-C^hina^Nuc^l^e^a^r
^Agree^m^en^t^w^a^{s S}^a^ved^,^”^AP^{, A}^ugus^{t 3,}¹⁹⁸⁵^.

Legal Compliance: Representative Markey further testified that the proposed agreement did not
reconcile with all the requirements of the Atomic Energy Act, and so the President should re-
submit the agreement with exemption from the criteria for safeguards and prior consent, as
stipulated in the “Proxmire Amendment” to the Export Administration Act that amended the
Atomic Energy Act.
Congressional Procedure: In his legal memo, Representative Markey wrote that the agreement
did not satisfy the requirements of Section 123a(1) and 123a(7), (on safeguards and prior ²⁴
approval). (Section 123d provides further that “an agreement for cooperation exempted by the
President pursuant to subsection a. from any requirement contained in that subsection shall not
become effective unless the Congress adopts, and there is enacted, a joint resolution stating that
the Congress does favor such agreement.”) Representative Markey advised that, after asking the
President to re-submit the agreement with an exemption from the “strict terms” of those sections,
“the Congress would then be in a position to make an affirmative decision as to whether the
benefits of this particular agreement outweigh the damages which would flow from deviating
from United States’ long-term non-proliferation policy.”
China as a Nuclear Power: In the hearing, Representative William Broomfield pointed out that
China was already a nuclear weapon state. Representative Markey later noted that the agreement
stated that transferred material, facilities, or components, and material used in or produced
through the use of the supplies “shall not be used for any nuclear explosive device, or research
specifically on or development of any nuclear explosive device, or for any military purpose,” but
did not provide for safeguards to ensure this intent.
Proliferation Risk: As for the risk of nuclear proliferation to other countries, Representative
Markey urged his colleagues at the hearing to obtain Top Secret classified briefings from the
NRC and the Central Intelligence Agency in order to understand “some unresolved questions that
the NRC and others have with respect to the retransfer of nuclear materials and technology.” He
referred to a suspected temporary suspension in China’s cooperation with Pakistan’s nuclear
program to coincide with the proposed agreement.
Progress in Non-proliferation Policy: Representative Henry Hyde said that “the notion of
consultations which are provided by Article 8 does provide the right to visit and to exchange—not
simply talk.” He argued that, “getting a closed society to open up and allow us this opportunity to
visit and exchange, and the potential to influence their policy, seems to me a move forward.”
Representative Benjamin Gilman also asked, “hasn’t negotiation of this agreement served our
nonproliferation interests by helping China adopt a more supportive approach to
nonprol if er ation?”
Non-Proliferation Standards: Representative Stephen Solarz asked, “even in a worse case
scenario where [the Chinese] reneged on their commitments or it turns out that their
understanding of the commitments differed from ourselves and they utilize some of the
technology we transferred for the purpose of helping other countries develop nuclear weapons,
could they not have done that anyway even without this agreement? If so, what do we lose by
approving this agreement when potentially it might work in bringing them into the

²⁴^Rep^r^esen^t^a^tⁱ^v^{e E}^d^w^a^rd^M^a^rke^y^,^“L^e^g^al^Aⁿ^al^y^sⁱ^s^o^f^t^h^{e A}^g^r^e^e^m^en^t^f^o^{r P}^eacef^u^l^Nu^cl^{ear Co}^op^eratⁱ^oⁿ^wⁱ^t^h^t^h^e
^P^e^o^p^le^{’s Re}^p^ublic^of^China^,^”^s^u^b^m^itte^{d f}^o^{r a}^he^a^r^ing^by^the^House^Com^m^itte^e^{on Fore}^ig^{n A}^f^f^a^{irs, “}^P^r^o^p^o^se^{d Nuc}^l^e^a^r
^C^oope^r^a^ti^{on A}^g^r^e^em^eⁿ^t^w^{ith the}^P^e^o^p^le^’^s^R^e^p^ublic^of^C^h^ina^,^”^J^u^ly^31,¹⁹⁸⁵^.

nonproliferation regimes which so far at least they have resisted in terms of full scope safeguards
and other things?” In turn, Representative Markey asked, “if we decline to establish by both law
and practice a clear, objective standard, ... on what basis then do we turn to the Pakistanis or to
the South Africans or to the Indians or to the Libyans or anyone else in the world and say there is
still an objective standard for nuclear restraint?” He argued that “we have to decide whether we
want a nonproliferation policy or a policy of selective proliferation.”
Exception for China: Representative Markey differed with the Administration on whether China
should be treated as an exception concerning the question of safeguards, stating that “we insisted
that the United Kingdom, a weapons state and our closest ally, accept [safeguards] as part of our
nuclear cooperation agreement. So why not the Chinese?” He said that “under the provisions of
the Atomic Energy Act, the People’s Republic, as a nuclear weapons state, is exempted from the
IAEA safeguards requirement. However, contrary to the agreement’s erroneous implication,
China is not altogether exempted from safeguards requirements.”
Precluding Application of Laws: Representative Lawrence Smith raised the question of whether
the agreement “waives the appropriate provisions of American law and makes only the agreement
the underlying document on which a violation could be claimed.” Representative Markey agreed
that committing the United States to the nuclear cooperation agreement with China would provide
the sole operative language for determining violations and nuclear transfers. Referring to the
precedent of congressional debate in 1980 about whether the Nuclear Non-Proliferation Act of
1978 applied retroactively to an agreement for uranium exports to India, Representative Markey
asserted that “this agreement ensures that no subsequent language by the United States Congress
affects the activities covered by the agreement.”
Prejudice: Representative Markey objected to the lack of a guaranty of U.S. prior approval for
any reprocessing or enrichment of nuclear materials by China, along with language to consider
the activities “favorably.”
Precedent: Representative Markey also asked “what the future holds if this vague, elastic, and
unverifiable framework of cooperation becomes the standard for nuclear negotiations with other
countries?”
Necessity for Diplomacy and Trade: Representative Ted Weiss said, “I think Members of the
Congress fully appreciate the importance of cooperation diplomatically and strategically with the
People’s Republic of China, as well as increased trade relations with the PRC, but I don’t think
that necessarily requires us to forego the requirements of law adopted by us after very careful
consideration.”
Unresolved Disputes and Credibility: Representative Dan Burton raised the issue of China’s
unresolved dispute with and threats to use force against Taiwan. He also raised the question of
whether China could be trusted to enter into an agreement.
Besides the hearing held by the Committee on Foreign Affairs on July 31, 1985, other hearings
were held by the:
• House Energy and Commerce Subcommittee on U.S.-Pacific Rim Trade, on
September 12, 1985

• House Foreign Affairs Committee, closed hearing, on October 3, 1985
• Senate Foreign Relations Committee, October 9, 1985.²⁵
Concerning legislation, Congress had the options of: requesting the President to re-submit the
agreement; passing a resolution to disapprove the proposed agreement; passing a resolution to
approve it; or passing a resolution to approve it with conditions.
H.Res. 269. On September 20, 1985, Representative Markey introduced H.Res. 269 to request the
President to re-submit the proposed agreement with exemptions from Sections 123a(1) and

123a(7) of the Atomic Energy Act.

H.R. 3537. On October 9, 1985, Representative Edward Feighan introduced H.R. 3537 to ensure
adequate verification of peaceful uses of nuclear exports to the PRC (modeled on IAEA ²⁶
safeguards). The Administration opposed the bill.
S. 1754. Also on October 9, 1985, Senator John Glenn introduced S. 1754 to ensure adequate
verification of peaceful uses of nuclear exports to the PRC (modeled on IAEA safeguards). The
Administration also opposed this bill. Senator Dave Durenberger, Chairman of the Committee on
Intelligence, supported the bill. In a floor speech on October 21, 1985, Senator Alan Cranston
reported questions about China’s assistance for Iran’s nuclear program. Senators Richard Lugar ²⁷
and Jesse Helms reportedly supported the Administration.
H.J.Res. 404. On October 1, 1985, Representative Fascell introduced by request H.J.Res. 404, a
joint resolution to approve the proposed agreement. On November 13, 1985, the House Foreign
Affairs Committee met to mark up the resolution. Representative Don Bonker offered an
amendment, favoring the agreement with conditions. The language added requirements for a
Presidential certification before the issuance of export licenses or approval of retransfers and a
waiting period of 30 days of continuous session of Congress. The President was to certify that (1)
the verification was designed effectively to ensure the peaceful use of U.S. exports; (2) China
provided additional details about its nuclear non-proliferation policies and all information was in
conformity with Section 129 of the Atomic Energy Act (prohibiting nuclear exports to any
country that engaged in nuclear proliferation); and (3) the obligation to consider activities
favorably shall not prejudice U.S. decision-making. The amendment also declared that each
proposed export would be subject to U.S. laws and regulations in effect at the time of each export.
The language also called for a Presidential report detailing in unclassified form the PRC’s past
and current non-proliferation policies as well as practices. Finally, the amendment stated that the
agreement with China would not provide a precedent for negotiating other agreements.
Representative Howard Wolpe objected to the language as a unilateral attempt to address the
agreement’s “deficiencies” with U.S. interpretations. Representative Solarz defended the
language, which the Administration accepted, because China already possessed nuclear weapon

²⁵^A^r^chⁱ^v^ed^CRS^Issu^{e Bri}^e^f^IB8⁶⁰⁵⁰^,^Imp^l^emen^t^a^tⁱ^oⁿ^of^t^h^{e U.}^S^.^-C^hⁱⁿ^e^{se A}^g^reemen^t^f^o^{r Nu}^cl^ea^{r C}^o^o^p^e^ra^tⁱ^oⁿ^{, by}
^W^a^r^r^e^{n D}^onne^lly^{, Se}^pte^m^be^r^28,¹⁹⁸^9.
²⁶^Ibid^.
²⁷^Mark^Crawf^o^rd^{, “Ru}^m^o^r^{s o}^f^Chⁱⁿ^a-Iran^T^r^ad^{e Clo}^u^d^s^Nu^k^e^P^act,”^ASAP^{, N}^o^v^e^m^b^e^r^{8, 19}⁸⁵^.

capability and would have “additional incentives” to refrain from nuclear proliferation. The
committee adopted the amendment by voice vote. The committee’s report on the bill, H.Rept. 99-
382, noted that while U.S. nuclear cooperation with the PRC will in no way further its ability to
use nuclear energy for military or explosive uses, the committee “has long been concerned by
reports of Chinese nuclear assistance to Pakistan’s clandestine nuclear program.” On November
20, 1985, the Foreign Affairs Committee reported H.J.Res. 404 (H.Rept. 99-382). The House
subsequently passed S.J.Res. 238 in lieu.
S.J.Res. 238 (P.L. 99-183). Meanwhile, the Senate Foreign Relations Committee passed a
resolution identical to that of the Foreign Affairs Committee, S.J.Res. 238, the Joint Resolution
Relating to the Approval and Implementation of the Proposed Agreement for Nuclear
Cooperation Between the United States and the People’s Republic of China. The Senate passed
(by voice vote) S.J.Res. 238 on November 21, 1985. The House then passed it (307-112) on
December 11, 1985. President Reagan signed it on December 16, 1985 (as P.L. 99-183). The ²⁸
agreement took effect on December 30, 1985.
In his statement upon signing the bill, the President noted that he was required to submit a one-
time certification and a one-time report, with the decision about certification assigned ²⁹
“exclusively to the President.” However, President Reagan did not issue the certification.

On June 4, 1989, Deng Xiaoping and other PRC leaders used the People’s Liberation Army
(PLA) to brutally suppress demonstrators in Beijing (commonly called the Tiananmen
Crackdown in reference to the square that was the focal point of nationwide protests). As part of
the U.S. response, on June 21, 1989, Representative Markey sought to limit nuclear cooperation
with the PRC by introducing language to H.R. 2655, to amend the Foreign Assistance Act. The
language sought to ban the issuance of export licenses and nuclear cooperation unless the
President: (1) has made certifications and submitted the report required by P.L. 99-183; (2) has
certified to Congress that the PRC government ended martial law and that the human rights
situation has “significantly improved;” and (3) has certified to Congress that the PRC government
has provided the United States with a “written declaration that it is not directly or indirectly
assisting any nation in testing, developing, or acquiring nuclear explosive devices or the materials ³⁰
and components for such devices.” On June 29, Representative Dante Fascell introduced
sanctions on China in an en bloc amendment (H.Amdt. 107) to H.R. 2655, which passed the
House by 418-0. H.R. 2655 was passed in the House but not the Senate.

²⁸^A^r^chⁱ^v^ed^CRS^Issu^{e Bri}^e^f^IB8⁶⁰⁵⁰^,^Imp^l^emen^t^a^tⁱ^oⁿ^of^t^h^{e U.}^S^.^-C^hⁱⁿ^e^{se A}^g^reemen^t^f^o^{r Nu}^cl^ea^{r C}^o^o^p^e^ra^tⁱ^oⁿ^{, by}
^W^a^r^r^e^{n D}^onne^lly^{, Se}^pte^m^be^r^28,¹⁹⁸^9.
²⁹^R^ona^l^d^R^e^a^g^aⁿ^{, “}^U^.S.-^C^hⁱⁿ^a^N^u^c^l^e^a^r^C^oope^r^a^tio^{n A}^g^r^e^em^eⁿ^t,^P^r^e^s^ideⁿ^t’^s^Sta^t^e^m^eⁿ^{t, D}^e^c^e^m^b^e^r^{16, 1}⁹⁸⁵^,”^Weekl^y
^Compil^atio^{n of}^Pre^s^ideⁿ^tial^Doc^u^me^nts^{, D}^e^c^e^m^b^e^r^23,¹⁹^85.
³⁰^A^r^chⁱ^v^ed^CRS^Issu^{e Bri}^e^f^IB8⁶⁰⁵⁰^,^Imp^l^emen^t^a^tⁱ^oⁿ^of^t^h^{e U.}^S^.^-C^hⁱⁿ^e^{se A}^g^reemen^t^f^o^{r Nu}^cl^ea^{r C}^o^o^p^e^ra^tⁱ^oⁿ^{, by}
^W^a^r^r^e^{n D}^onne^lly^{, Se}^pte^m^be^r^28,¹⁹⁸^{9; a}^nd^C^o^ng^ressioⁿ^a^l^Reco^rd^,^J^une^21,¹⁹⁸⁹^{, p}^.^H²⁹⁹^5.

In the Senate, on July 14, 1989, Senators George Mitchell and Robert Dole introduced an
amendment (S.Amdt. 271) to S. 1160, the Foreign Relations Authorization Act for FY1990,
seeking to impose additional sanctions against the PRC. Those sanctions included the limitation
of nuclear cooperation. The Senate passed the amendment by 81-10. On July 21, the Senate
incorporated the bill in the House version (H.R. 1487) and passed it in lieu of S. 1160.
In the end, Congress legislated comprehensive sanctions in response to the Tiananmen
Crackdown in H.R. 3792, the Foreign Relations Authorization Act for FYs 1990 and 1991
(introduced on November 21, 1989 and enacted as P.L. 101-246 on February 16, 1990). Section

902(a)(6) of P.L. 101-246 suspended nuclear cooperation with China until the President: (1)

certifies to Congress that the PRC “has provided clear and unequivocal assurances to the United
States that it is not assisting and will not assist any non-nuclear weapon state, either directly or
indirectly, in acquiring nuclear explosive devices or the materials and components for such
devices;” (2) makes the certifications and submits the report required by P.L. 99-183; and (3)
makes a report under subsection (b)(1) or (2), reporting that the PRC government has made
progress in political reforms or that it is “in the national interest” of the United States to terminate
a suspension or disapproval.

Presidents Reagan and George H. W. Bush did not issue the certifications to implement the
agreement. After the deterioration in bilateral ties after the Tiananmen Crackdown of 1989, the
relationship with China again deteriorated in the Taiwan Strait Crisis of 1995-1996. President
Clinton dramatically underscored U.S. interests in a peaceful resolution of the Taiwan question by
deploying two aircraft carrier battle groups near Taiwan in March 1996. Questions persisted about ³¹
U.S. sanctions for PRC nuclear proliferation activities in Pakistan and Iran. President Clinton’s
1998 certification to Congress conceded that “the United States [had] decided not to proceed with
implementation of the 1985 nuclear cooperation agreement because of continuing questions about
contacts between Chinese entities and elements associated with the Pakistani nuclear weapons
program.” He also noted that “nuclear cooperation between China and Iran dates from June ³²

1985.”

By the spring of 1997, Washington and Beijing discussed efforts to improve ties, including the
first formal U.S.-PRC summit in the United States in 12 years. Those discussions included
China’s request for implementation of the agreement. The Clinton Administration considered a
Presidential certification for implementation as the “centerpiece” of a state visit by PRC ruler
Jiang Zemin to Washington, D.C., in October 1997. (Jiang was the Communist Party General-
Secretary, Central Military Commission Chairman, and PRC President.)

³¹^For^m^o^r^e^dis^c^us^sⁱ^oⁿ^{, s}^e^e^C^R^S^R^e^por^{t R}^L³¹⁵^55,^Chi^na^an^{d Pr}^olife^ratio^{n o}^f^W^e^apo^ns^{of M}^a^{ss De}^struc^tio^{n a}ⁿ^d
^{Missiles: Po}^{licy Issu}^es^{, by}^Shirle^y^A^.^Ka^n.
³²^W^illia^m^Clinto^{n, “}^U^nc^la^ssifⁱ^e^d^Re^{port t}^o^C^ong^re^{ss on N}^oⁿ^p^rolⁱ^f^e^r^a^tion^Polic^ie^{s a}ⁿ^d^P^r^a^c^tic^e^s^of^the^P^e^ople^’^s
^R^e^public^of^C^h^ina^,^”^J^aⁿ^u^a^r^y^{12, 1}⁹⁹⁸^.

In Congress, Representatives Markey and Solomon led a total of 62 Members to write a letter to ³³
President Clinton in July 1997, urging him not to certify. Chaired by Representative Benjamin
Gilman, the House International Relations Committee held a hearing on the agreement on ³⁴
October 7, 1997. In the Senate, the Committee on Energy and Natural Resources, chaired by ³⁵
Senator Frank Murkowski, held a hearing on October 23, 1997. On November 5, 1997, the
House passed (by 393-29) an amendment sponsored by Representative Gilman to extend
congressional review for implementation of the agreement from 30 to 120 days and provide for
expedited review procedures. The language amended H.R. 2358, the Political Freedom in China
Act of 1997, which passed the House on November 5, 1997. Meanwhile, U.S. firms, such as
Westinghouse Electric Corporation, Asea Brown Boveri (ABB), Bechtel Power Corporation, and
Stone and Webster Engineering, lobbied Congress to allow them to bid in a market worth as much ³⁶
as $50 billion.
On the eve of the summit in October 1997, the PRC advanced its nuclear non-proliferation policy
by joining the Zangger Committee (the NPT’s Exporters’ Committee) on October 16 and
promising in writing not to begin new nuclear projects in Iran (in a confidential letter to Secretary ³⁷
of State Madeleine Albright). At the summit on October 29, 1997, President Clinton did not
issue the certifications to implement the agreement, but the White House announced that “subject
to case-by-case licensing and on-going U.S. monitoring, President Clinton will take action to
enable U.S. companies to compete in China’s nuclear power market.” According to President
Clinton, the agreement would serve U.S. national security, environmental, and economic
interests, saying that “the United States and China share a strong interest in stopping the spread of
weapons of mass destruction and other sophisticated weaponry in unstable regions and rogue
states—notably, Iran.” The President also said that he welcomed the steps China took and the
“clear assurances” it gave that day to help prevent the proliferation of nuclear weapons and
related technology and that “on the basis of these steps and assurances,” he agreed to move ahead ³⁸
with the nuclear cooperation agreement. On October 30, 1997, the State Department announced
that “the U.S. and China have agreed to a memorandum of understanding on arrangements for
visits and exchanges of information” and asserted that “this memorandum of understanding will ³⁹
permit us to monitor sales and uses of equipment.”

³³^R^e^pr^e^s^eⁿ^ta^tiv^e^s^Edw^a^r^d^Ma^r^k^ey^a^{nd G}^e^r^a^{ld Sol}^o^m^{on, “}^D^e^a^r^C^o^lle^a^g^ue^,”^J^une^5,¹⁹⁹⁷^{; “}^C^lint^oⁿ^U^r^g^e^{d to D}^e^ny
^Nu^cl^{ear Cert}ⁱ^fⁱ^catⁱ^oⁿ^t^o^Chiⁿ^a,^”^Re^ute^r^s^{, J}^u^ly^31,¹⁹^97.
³⁴^House^In^te^rna^tio^na^{l Re}^la^tio^{ns Co}^m^m^itte^e^,^“^I^m^p^le^m^e^nta^{tion of}^the^U^.^S.-^C^hi^na^N^u^c^l^e^a^r^C^o^ope^r^a^tioⁿ^A^g^r^e^em^eⁿ^t:
^W^hos^e^Iⁿ^te^r^e^s^t^s^a^r^e^Se^r^v^e^d^?^”^,^O^c^tobe^r^7,¹⁹^97.
³⁵^Se^na^te^Ene^r^g^y^a^{nd Na}^tura^{l Re}^so^urc^e^s^Com^m^itt^e^e^,^“^U^.S.-China^Re^la^tions^,”^O^c^to^be^{r 2}³^,¹⁹⁹⁷^.
³⁶^Dan^M^o^rgan^aⁿ^d^Davi^d^Ot^t^a^w^a^y^,^“U.^S^.^React^o^r^Fⁱ^rm^{s M}^aⁿ^e^u^v^eri^{ng t}^o^T^a^p^Chⁱⁿ^a’s^V^a^st^M^a^rket^,^”^Wa^shⁱⁿ^gt^on^Po^st^,
^O^c^tobe^r²¹^,¹⁹^97.
³⁷^R^.^J^e^f^f^r^e^y^S^m^{ith, “}^C^hina^’^s^P^l^e^d^g^e^{to E}^{nd I}^r^a^{n N}^u^c^l^e^a^r^Aⁱ^{d Y}ⁱ^e^l^ds^U^.^{S. H}^e^lp,”^Wa^s^hⁱⁿ^g^t^on^Po^st^{, O}^c^tobe^r^30,¹⁹⁹⁷^;
^also^{see CRS Rep}^o^r^{t RL}³¹⁵⁵⁵^,^C^hⁱⁿ^{a a}ⁿ^d^Pr^oli^f^e^r^atioⁿ^{of W}^e^ap^on^s^{of M}^a^s^s^D^e^s^t^r^u^c^tio^{n a}ⁿ^d^Mⁱ^s^s^ile^s^:^Polic^y^I^s^s^u^e^s^,
^by^Shirle^y^A^.^Ka^n.
³⁸^W^hⁱ^t^e^Ho^u^s^e,^“F^act^S^h^eet^:^A^cco^m^p^lⁱ^s^h^m^en^t^s^o^f^U.^S^.^-Chⁱⁿ^a^S^u^m^mⁱ^t^”^an^d^“P^{ress Co}ⁿ^f^eren^{ce b}^y^P^r^esi^d^en^t^Clⁱⁿ^t^oⁿ
^a^nd^P^r^e^s^ideⁿ^{t J}ⁱ^aⁿ^g^Ze^mⁱ^n,”^W^a^shing^t^oⁿ^{, D}^.^C^{., O}^c^to^be^r²⁹^,¹⁹⁹⁷^.
³⁹^D^e^pa^r^t^m^e^{nt of}^Sta^t^e^,^“^D^aⁱ^l^y^P^r^e^s^s^B^r^ie^fⁱ^ng^,”^O^c^tobe^r^30,¹⁹⁹⁷^.

On October 29, 1997, at the summit in Washington, DC, the U.S. Department of Energy and the
PRC State Planning Commission signed an “Agreement of Intent on Cooperation Concerning
Peaceful Uses of Nuclear Technology.” They intended to exchange technical information and
promote cooperation (including joint research and development projects); to enter into an
agreement for nuclear-related cooperation; to invite relevant entities to participate in projects; and
to engage in cooperation that may include exchanges of technical information, personnel, ⁴⁰
samples, materials, equipment; training, use of facilities, and other forms of cooperation. Later,
at a summit in Beijing in June 1998, the Department of Energy (DOE) and the PRC State
Planning Commission signed an Agreement on Cooperation Concerning Peaceful Uses of
Nuclear Technologies, including bringing PRC scientists to U.S. national laboratories, ⁴¹
universities, and nuclear reactor facilities. In Beijing, starting on October 24, 2005, DOE’s
National Nuclear Security Administration (NNSA) and the China Atomic Energy Authority held a
week-long Integrated Nuclear Material Management Technology Demonstration on security at ⁴²
civilian nuclear facilities.
On January 12, 1998, President Clinton signed certifications (as required by P.L. 99-183) on
China’s nuclear nonproliferation policy and practices to implement the 1985 Nuclear Cooperation
Agreement. The President also issued the certification and waived a sanction imposed after the
Tiananmen Crackdown (in P.L. 101-246). President Clinton submitted his certifications to
Congress, contending that “the Agreement will have a significant, positive impact in promoting
U.S. nonproliferation and national security interests with China and in building a stronger ⁴³
bilateral relationship with China based on respect for international norms.”
Under Section 902(b)(2) of P.L. 101-246 (waiver authority), President Clinton reported that it was
in the “national interest” to terminate the suspension of nuclear cooperation:
• “it is in the U.S. national interest to consolidate and build on the progress China
has made in the nonproliferation area, and the implementation of the Agreement
for Cooperation between the U.S. and the People’s Republic of China
Concerning the Peaceful Uses of Nuclear Energy will establish a promising
framework for doing so;”
• “it is also in the U.S. national interest to build stronger, mutually advantageous
bilateral relations with China based on respect for international norms;”

⁴⁰^“Agree^men^t^o^f^In^t^eⁿ^t^oⁿ^C^o^op^er^atⁱ^oⁿ^C^oⁿ^cernⁱⁿ^g^P^eacef^u^l^{Uses o}^f^Nu^cl^ear^T^ec^hnolog^y^B^e^t^w^ee^{n th}^e^D^e^pa^r^t^m^e^{nt of}
^Eⁿ^erg^y^o^f^t^h^{e Un}ⁱ^t^e^d^S^t^at^{es o}^f^Ameri^{ca an}^d^t^h^{e S}^t^at^e^P^l^anⁿⁱⁿ^g^Commi^ssi^oⁿ^o^f^t^h^e^P^e^op^l^e^{’s Repu}^b^lⁱ^c^o^f^Chⁱⁿ^a,^”
^O^c^tobe^r²⁹^,¹⁹^97;^W^h^ite^H^ous^e^,^“^J^{oint U}^.^S^.^-^C^hi^na^Sta^t^e^m^eⁿ^t,”^O^c^tobe^r^29,¹⁹⁹⁷^{; a}ⁿ^{d D}^e^pa^r^t^m^e^{nt o}^f^Ene^r^gy^,^f^a^c^t
^sh^eets.
⁴¹^“Agree^men^t^Bet^w^een^t^h^{e Dep}^a^rt^men^t^o^f^Eⁿ^erg^y^o^f^t^h^{e Un}ⁱ^t^e^d^S^t^at^{es o}^f^Am^eri^c^{a an}^d^t^h^{e S}^t^at^{e Deve}^l^o^p^m^en^t
^P^l^aⁿⁿⁱⁿ^g^Co^mmⁱ^ssi^oⁿ^o^f^t^h^e^P^e^op^l^e^{’s Rep}^u^b^lⁱ^c^o^f^Chⁱⁿ^{a on}^Coo^p^e^ratⁱ^oⁿ^C^oⁿ^cernⁱⁿ^g^P^eacef^u^l^Uses^o^f^Nu^cl^ear
^T^e^c^hnolog^ie^s^;^”^a^{nd W}^h^ite^H^o^us^e^,^“^F^a^c^t^She^e^{t: A}^c^hie^v^em^eⁿ^ts^of^the^U^.^S.-^C^hi^na^Sum^m^it,”^J^une^29,¹⁹⁹⁸^.
⁴²^D^e^pa^r^t^m^e^{nt of}^Ene^r^gy^{, new}^s^r^e^lea^s^e^,^O^c^tobe^r²⁴^{, 2}⁰⁰⁵^;^Chⁱⁿ^a^D^a^il^y^{, O}^c^tobe^r^24,²⁰⁰⁵^.
⁴³^W^illia^m^Clinto^{n, le}^tte^{r t}^o^Ne^w^t^Gⁱ^ng^ric^h^{, Spe}^a^k^e^r^of^the^House^,^J^a^nua^ry^{12, 1}⁹⁹⁸^.

• “the United States also has an economic national interest ... The Agreement will
enable U.S. companies to compete for contracts in the world’s fastest growing
nuclear energy market.”
In making his certification, Clinton submitted to Congress:
• Presidential Determination No. 98-10 (Memorandum for the Secretary of State,
“Certification Pursuant to Section (b)(1) of Public Law 99-183 and to Section

902 (a)(6)(B) of Public Law 101-246”) dated January 12, 1998;

• Unclassified Report on the PRC’s Nonproliferation Policies, Practices, and
Assurances Required by P.L. 99-103;
• U.S.-PRC Memorandum of Understanding on Exchanges of Information and
Visits (initialed on June 23, 1987) and Side Notes on Protection of Business
Confidential Information (signed on October 22, 1997);
• Basis for certification under Section (b)(1)(A) of P.L. 99-183;
• Rationale for Report Required by P.L. 101-246.
During debate on the agreement, some in Congress, the nonproliferation community, and
elsewhere were skeptical that PRC nonproliferation policies and practices had changed
sufficiently to warrant the certifications and that they served U.S. interests. They also pointed out
that China had not joined the Nuclear Suppliers Group, which required full-scope safeguards. The
House International Relations Committee held a hearing on February 4, 1998, in which Robert
Einhorn, Deputy Assistant Secretary of State for Nonproliferation, testified for the Clinton ⁴⁴
Administration.
Congressional review ended on March 18, 1998, with no legislation to block the agreement’s
implementation, and it has since been implemented. U.S. firms may apply for Export-Import
Bank financing and licenses from the NRC and DOE for nuclear exports to China, and foreign
firms may apply to re-export U.S. technology.
On March 19, 1998, 13 Members in the House led by Representative Markey wrote to President
Clinton to urge him to terminate implementation of the agreement. Also, as amended by
Representative Gilman, Section 1523 of the National Defense Authorization Act for FY1999 (P.L.
105-261), enacted on October 17, 1998, requires the President to notify Congress “upon” granting
licenses by the NRC for nuclear exports or re-exports to a non-NATO country that has detonated
a nuclear explosive device (e.g., China). As required, the State Department, on June 9, 2000,
issued the first notification to Congress that the NRC issued a license on February 3, 2000, for the
export of tantalite ore to China.

⁴⁴^House^In^te^rna^tio^na^{l Re}^la^tio^{ns Co}^m^m^itte^e^,^“^I^m^p^le^m^e^nta^{tion of}^the^U^.^S.-^C^hi^na^N^u^c^l^e^a^r^C^o^ope^r^a^tioⁿ^A^g^r^e^em^eⁿ^t,”
^Fe^br^ua^r^y^{4, 19}⁹⁸^.

President Clinton had submitted his certification with a Memorandum of Understanding (pursuant
to Article 8 of the agreement) that was initialed in Washington, DC, on June 23, 1987, but not
signed. (Concerning “consultations,” Article 8(2) of the agreement stated that the cooperation
would be between two nuclear-weapon states and that bilateral safeguards “are not required.” It
called for “diplomatic channels to establish mutually acceptable arrangements for exchanges of
information and visits to material, facilities, and components.) The Memorandum called for
annual visits to reactors. In the event of discrepancies, it called for the parties to “consult” to
make “mutually acceptable” arrangements for the addition or reduction of visits, in place of
safeguards. The President contended that this initialed Memorandum provided for arrangements
that met the certification standard of P.L. 99-183 that the arrangements were designed to be
effective in ensuring peaceful uses of nuclear material, facilities, or components. In February
1998, the Office of Arms Control and Nonproliferation of the Department of Energy published
the “Proposed Subsequent Arrangement Concerning Reciprocal Arrangements for Exchanges of
Information and Visits Under the Agreement for Cooperation for Peaceful uses of Nuclear
Energy” between the United States and the PRC, noting that it sought to sign the initialed ⁴⁵
Memorandum which provided the “framework” for arrangements. The United States and the ⁴⁶
PRC signed the Memorandum of Understanding on May 6, 1998, and DOE published it.
Given the PRC’s nuclear cooperation with Pakistan that raised questions of U.S. sanctions,⁴⁷ the
Clinton Administration apparently did not have adequate assurances from the PRC that it would
not re-transfer and divert U.S. nuclear technology to another country, potentially for military use.
The Administration continued negotiations with China on this issue, after the agreement’s ⁴⁸
implementation. According to a reported NRC memorandum of April 4, 2000, DOE officials
had held up 16 applications for licenses to export U.S. technology since 1998, due to
disagreement about assurances, including a U.S. demand for a blanket assurance and a PRC offer ⁴⁹
of case-by-case assurances. Those cases were called “Part 810 cases” in reference to the DOE’s
export controls that are regulated by Part 810 of Title 10 of the Code of Federal Regulations.
On September 16, 2003, in Vienna, Austria, Secretary of Energy Spencer Abraham and the
chairman of China’s Atomic Energy Authority apparently agreed to assurances from China that
U.S. nuclear technology would not be re-transferred by China to third parties without prior U.S.
consent. The understanding, however, was reached in an exchange of diplomatic notes to
“establish a process for determining what nuclear technologies require government-to-
government nonproliferation assurances and set forth procedures for exchanging the assurances.”

⁴⁵^Fe^de^{ral Re}^gⁱ^ste^r^{, Fe}^br^ua^r^y^{10, 1}⁹⁹⁸^.
⁴⁶^Fe^de^{ral Re}^gⁱ^ste^r^,^J^une^{4, 19}⁹⁸^.
⁴⁷^For^m^o^r^e^{, s}^e^e^C^R^S^R^e^por^t^R^L³¹⁵⁵⁵^,^C^hⁱⁿ^{a a}ⁿ^d^Pr^oli^f^e^r^atioⁿ^of^W^e^apons^{of M}^a^s^s^D^e^s^t^r^u^c^tioⁿ^an^{d M}ⁱ^s^s^ile^s^:^Polic^y
^Issu^es^{, by}^Shirle^y^A^.^Ka^n.
⁴⁸^Nu^cl^eoⁿⁱ^{cs Week}^{, J}^u^ly^{1, 1}⁹⁹⁹^.
⁴⁹^{Bill G}^e^rtz^,^“^B^e^ijing^Sta^{lls o}ⁿ^Nu^c^l^e^a^r^P^r^om^ise^s^,”^W^a^s^h^ingt^on^Tim^e^s^{, Ma}^y^{9, 200}^0.

Afterwards, the Bush Administration continued to seek assurances to prevent unauthorized re-⁵⁰
transfers by China.
In September 2004, the State Department publicly stated that the exchange of diplomatic notes in
September 2003 followed as a “second significant event” the 1998 implementation of the
agreement, which permitted transfers of nuclear reactor fuel and components “based on case-by-
case review.” Then, the diplomatic notes “confirmed conditions and assurances governing
transfers of nuclear technology which are not covered by the agreement, and those notes provided
as well for a case-by-case review.” The NRC issued licences for export of nuclear reactor
components under the Nuclear Cooperation Agreement, while the DOE authorized transfers of
nuclear technology to China for its civilian nuclear power program based on the PRC’s “written ⁵¹
nonproliferation assurances.”

On February 28, 2005, Westinghouse Electric Company (with headquarters near Pittsburgh, PA),
then owned by British Nuclear Fuels Limited, submitted a bid for a PRC contract to supply four
commercial nuclear reactors. The Bush Administration supported Westinghouse’s bid to sell ⁵²
nuclear reactors to China. Earlier in February 2005, the Export-Import Bank approved a
Preliminary Commitment for guaranteed and/or direct loans of up to $5 billion to support
Westinghouse. Competing against Westinghouse were Areva of France and Atomstroyexport of ⁵³⁵⁴
Russia. All three bids were reported to be strongly backed by their respective governments. In
October 2006, British Nuclear Fuels Limited sold Westinghouse Electric Company to Toshiba
Corporation of Japan. Toshiba gained 77% of Westinghouse with management control. Another
Japanese company bought a 3% stake, and the Shaw Group of the United States bought 20%
ownership. Westinghouse Electric Company retained its headquarters in Pittsburgh, PA, and ⁵⁵
eligibility for financial support from the Export-Import Bank.
An article posted on Human Events Online, in criticizing the tentative Ex-Im Bank support for the
deal, focused on China National Nuclear Corporation (CNNC)’s alleged role in transferring
nuclear weapons technology to Pakistan and Iran. By subsidizing the cost of Westinghouse
reactors, the article contended, the U.S. Government would be “inviting charges of hypocrisy by
dealing with known proliferators” and undermining U.S. diplomacy with the Chinese Communist

⁵⁰^Nu^cl^eoⁿⁱ^{cs Week}^{, Se}^pte^m^be^r^18,²⁰⁰^{3; A}^p^r^il^1,²⁰⁰⁴^.
⁵¹^D^e^pa^r^t^m^e^{nt of}^Sta^t^e^,^D^a^il^y^P^r^e^s^s^B^r^ie^fⁱ^ng^a^{nd Q}^u^e^s^tion^T^a^k^e^{n, Se}^pte^m^be^r^{2, 200}^4.
⁵²^Dⁱ^s^c^us^sⁱ^onsⁱⁿ^B^e^iji^ng^{in A}^u^g^u^s^t²⁰⁰⁵^be^tw^e^eⁿ^U^.^{S. of}^fⁱ^cⁱ^a^l^s^a^{nd a}^c^ong^r^e^s^sⁱ^ona^{l s}^t^a^f^f^de^leg^a^{tion r}^e^por^te^d^{in C}^R^S
^G^e^ne^r^a^{l D}ⁱ^s^t^rⁱ^buti^oⁿ^Me^m^o^{, “}^C^ong^r^e^s^sⁱ^ona^{l Sta}^f^f^D^e^l^e^g^a^tion’^s^Vi^s^{it to t}^h^e^P^R^C^,^H^ong^K^ong⁽^A^ug^us^{t 20}⁰⁵⁾^,”
^Se^pte^m^be^r^{14, 2}⁰⁰⁵^,^by^Shir^le^y^Ka^n.
⁵³^“^A^r^e^v^a^,^W^e^s^ting^hous^e^-^MH^I^Su^b^m^{it B}ⁱ^ds^f^o^r^N^e^w^R^e^ac^tor^s^f^o^r^C^h^ina^,^”^Nu^cl^eonⁱ^{cs Week}^,^Ma^r^c^h^{3, 200}^{5, p. 3.}
⁵⁴^“^W^{ith G}^o^v^e^rn^m^e^{nts Supp}^orting^{Bids, Com}^p^e^titio^{n i}ⁿ^C^h^ina^L^ook^{s Fie}^r^c^e^,^”^Nu^cl^eoⁿⁱ^{cs Week}^{, Fe}^br^ua^r^y^{24, 20}⁰⁵^{, p}^.
^1.
⁵⁵^T^o^s^h^iba^,^“^T^os^hiba^C^o^m^p^le^te^s^We^s^ting^hous^e^A^c^quis^iti^on,”^O^c^to^be^r¹⁷^{, 2}⁰⁰⁶^{; a}ⁿ^{d c}^o^ns^ulta^ti^on^w^ith^Ex^por^t-^I^m^por^t
^Ban^k^.

regime. The article further argued that the deal would be inconsistent with U.S. opposition to ⁵⁶
Russia’s sale of reactor technology to Iran.
CNNC has not been subject to U.S. sanctions for nuclear proliferation. In 1996, some in Congress
had called for sanctions after news reports disclosed that China sold unsafeguarded ring magnets
to Pakistan, apparently in violation of the NPT and in contradiction of U.S. laws, including the
Arms Export Control Act (P.L. 90-629) and Export-Import Bank Act (P.L. 79-173), as amended
by the Nuclear Proliferation Prevention Act of 1994 (Title VIII of P.L. 103-236). The China
Nuclear Energy Industry Corporation, a subsidiary of the state-owned CNNC reportedly had
transferred to the A.Q. Khan Research Laboratory in Kahuta, Pakistan, 5,000 ring magnets that
can be used in gas centrifuges to enrich uranium. At the end of February 1996, Secretary of State
Warren Christopher reportedly instructed the Ex-Im Bank to suspend financing for commercial
deals in China for one month. On May 10, 1996, the State Department announced that China and
Pakistan would not be sanctioned, citing a new nuclear nonproliferation promise from China. The
Clinton Administration also argued that PRC leaders insisted they were not aware of the magnet
transfer and that there was no evidence that the PRC government had willfully aided or abetted
Pakistan’s nuclear weapon program through the magnet transfer. Thus, the State Department
announced that sanctions were not warranted, and Ex-Im Bank considerations of loans for U.S.
exporters to China were returned to normal. That year, Congress responded to the
Administration’s determination not to impose sanctions by adding language on “persons” in the
Export-Import Bank Act, as amended by Section 1303 of the National Defense Authorization Act ⁵⁷
for FY1997 (P.L. 104-201), enacted on September 23, 1996.
The reactors that Westinghouse is selling to China are a new design called the AP-1000, which
have never been constructed. However, the AP-1000 received final design approval from the
Nuclear Regulatory Commission (NRC) on September 13, 2004. The NRC approved the design
certification in December 2005 (as a standard plant that could be built in the United States
without further review).
The 1,100-megawatt AP-1000 is an improved version of existing Westinghouse commercial
nuclear power plants. Westinghouse pressurized water reactors use “light” (ordinary) water to
help sustain the chain reaction in the reactor core and to carry away the resulting heat. The heated
water circulates under pressure in a closed loop through heat exchangers that make steam to drive
electric generators. This basic Westinghouse pressurized water technology is dominant in the U.S.
nuclear power industry and, through licensing arrangements, in most of the world.
Technological benefits that China might gain from purchasing the Westinghouse reactor as
opposed to its French competitor are likely to be modest. China already has four operating
commercial reactors supplied by Areva, using updated versions of French reactors originally built
under a now-expired Westinghouse license. In the competition for the latest contract in China,
both Westinghouse and Areva contended that they offered the most advanced designs available.

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There would be no direct effect of the proposed Westinghouse reactor sale on China’s nuclear
weapons program. China has been a nuclear weapons state since 1964 and already has reactors
designed for producing weapons materials. Light water reactors (such as the Westinghouse and
Areva designs) are poorly suited for weapons production. In contrast to the PRC situation, the
United States opposes Russia’s light water reactor construction in Iran, because Iran is not a
nuclear weapons state and appears to be using its nuclear power program as a pretext for
developing other nuclear fuel cycle facilities that could be used to make weapons.
Indirect benefits that the Westinghouse contract might provide to China’s already existing nuclear
weapons and nuclear-powered submarine programs are inherently difficult to assess. While there
might not be a significant concern about a specific technology transfer to civilian nuclear power
plants, there are general concerns about any dual-use transfers to China, particularly with
involvement by PRC nuclear engineers in the Westinghouse projects. A staff member for Senate
Banking Committee Chairman Richard Shelby was quoted as saying, “There is an inevitable
tension that exists between the desire to support U.S. commercial interests abroad on the one
hand and the requirement to ensure national security is not endangered through the advancement ⁵⁸
of those commercial interests.”
Westinghouse’s commercial interest in the PRC contract are considerable. The project would give
the company the opportunity to build a working model of the AP-1000 design and gain a foothold
in the potentially large Chinese nuclear power market. Although no new commercial nuclear
power plants have been ordered in the United States since 1978, several U.S. utilities are now
studying the feasibility of new reactors, and the successful construction of the AP-1000 design in
China could be an important factor in their decisions. Nuclear power incentives included in the
Energy Policy Act of 2005 (P.L. 109-58) have further increased interest in renewed U.S. reactor
construction.
Because the PRC contract envisions a series of four reactors, Westinghouse could also cover
some of its “first of a kind” engineering (FOAKE) costs for the AP-1000 and gain some
production economies, which could help reduce the price for future buyers. Some FOAKE costs
for the AP-1000 are also expected to be paid by the Department of Energy’s “Nuclear Power
2010” program. Westinghouse and other nuclear suppliers have long contended that new nuclear
power plants could be competitive if a sufficient number of identical reactors were built in a
series.
While in Beijing in December 2006, Secretary of Energy Samuel Bodman signed a bilateral
Memorandum of Understanding (MOU) that granted the deal to Westinghouse. Secretary
Bodman said that the agreement would lead to a multi-billion dollar sale that could create as
many as 5,500 jobs in the United States. He also said that Westinghouse agreed to transfer
technology to China that could lead to the construction of many more nuclear power reactors in
China over 15-20 years. While nuclear power provided 1.5% of energy, that share could increase ⁵⁹
to 4% if China completes construction of 30 new reactors over 15 years. While the plan is
ambitious, nuclear power would be a limited source of power generation in China.

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⁽^c^onti^nue^d.^..)

PRC and foreign sources said in April 2007 that the deciding factor for granting the deal for four ⁶⁰
reactors to Westinghouse was its terms for technology transfer. (However, China also awarded
France’s Areva with contracts to build two reactors at Yangjiang city in southern Guangdong ⁶¹
province.) The PRC State Council and four major state-owned enterprises (including CNNC) set
up the State Nuclear Power Technology Corporation (SNPTC) in May 2007 as China’s authority
to sign contracts for nuclear technology transfers from foreign countries. Two of Westinghouse’s
reactors would be built at Zhejiang province’s Sanmen city for CNNC as the primary investor,
and two reactors are for Shandong province’s Haiyang city for Shandong Nuclear Power ⁶²
Company. In July 2007, Westinghouse and the Shaw Group signed a contract with SNPTC for
the “first-ever deployment of advanced U.S. nuclear power technology in China,” with the
contract’s value estimated at $8 billion. The four reactors are to be constructed between 2009 and ⁶³

2015.

Note: A version of this report was originally written for the House International Relations ^th
Subcommittee on Asia and the Pacific in the 109 Congress, and material from that study is made
available for general congressional use with permission.
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