Confounded By the Chinese Puzzle

Little wonder no one knows what U.S. policy toward China is these days. At the same time that Clinton Administration officials are threatening to curtail trade by revoking Beijing's most-favored-nation status because of China's dismal human-rights record, the Administration is quietly poised to approve one of the largest sales of U.S. military hardware and technology ever to the People's Liberation Army. The deal, which could be worth as much as $2 billion, involves gas turbine engines. The Chinese say they want to use them for jets, but some nuclear nonproliferation experts insist that Beijing has more sinister plans.

While the transaction involves neither military secrets nor cutting-edge American technology, it has nevertheless become a symbol of confusion within the Administration. The deal circumvents trade sanctions on military equipment enacted after the 1989 Tiananmen Square massacre and appears to contravene Defense Department efforts to engage China in defense conversion, not modernization. To benefit an American company, the U.S. may allow the transfer of equipment that some experts say could enable China to develop a longer- range cruise missile, capable of lofting nuclear warheads as far as Japan and India. If approved, the sale would provide a graphic demonstration of the constant collision of competing goals in Bill Clinton's foreign policy: protecting human rights, controlling proliferation of weapons of mass destruction and nurturing American trade.

The deal began in 1987, when Garrett, an engine company based in Phoenix, Arizona, beat out rivals from France, Britain and Canada for a contract to supply engines to Nanchang Aircraft, a Chinese government-owned manufacturer. Nanchang said it needed the engines for a light military jet trainer, the K-8, that was destined to be sold abroad. In November 1991, the U.S. Commerce Department, which had been moving aggressively to promote American trade by cutting through export barriers, quietly dropped national security controls originally imposed during the cold war, allowing the engines to be shipped to China without an export license.

As the first order of goods was being shipped, however, the picture changed again. Officials at the Defense Technology Security Administration learned about the deal after they read a wire between the U.S. embassy in Beijing and the State Department. Fearing that China intended to use the Garrett engine to extend the range and payload capacity of its Silkworm missile, the agency raised furious objections.