CHINA'S ENTRY INTO THE IAEA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00287R000600940001-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: December 22, 2016
• Document Release Date: July 27, 2010
• Sequence Number: 1
• Publication Date: October 6, 1983
• Content Type: MEMO

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)I I
Central Intelligence Agency
Washington, D. C. 20505
DIRECTORATE OF INTELLIGENCE
6 October 1983
China's Entry into the IAEA
Summary
China's acceptance into the International Atomic Energy Agency (IAEA) at
the IAEA General Conference in Vienna on 10-14 October should be a positive
development because it will:
-- Place China under greater international pressure to exercise restraint
as a nuclear exporter.
25X1.
-- Facilitate nuclear cooperation between China and advanced industrial
nations such as Japan and the United States. F__~ 25X1
However, China's entry could pose several long term problems for the
Agency's effectiveness and weaken the international system of nuclear
safeguards. These problems include:
-- Concern among several IAEA members that China, despite assurances to
the contrary, might continue to export nuclear materials to potential
proliferators without requiring IAEA safeguards.
-- The difficulties in satisfying Beijing's demand for a permanent seat on
the Agency's Board of Governors without either disrupting the status
quo or increasing the Board's membership--a move that could tip the
voting majority in favor of the developing countries.
October 19.8-3
- - The possibility that China might try to reinterpret its understanding
with the United States about the future implementation of IAEA
safeguards coverage of Taiwan's nuclear program.
This memorandum was prepared by
International Security Issues
25X1
Division, Office of Global Issues. This analysis is based on information as
of 5 October 1983. Comments and queries are welcome and rraa be addressed to
Chief, Weapons Proliferation Branch, OGI,
25X1
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 I China's Entry into the IAEA
China's Nuclear Export Activities
have expressed concern to US officials that Chinese 25X1
The most important issue connected with Chinese membership
in the IAEA will be whether Beijing discontinues its practice of
exporting unsafeguarded nuclear materials to potential prolifer-
ators. During the past few years, the Chinese have sold enriched
uranium and heavy water either directly or indirectly through
middlemen to Argentina and South Africa without insisting on IAEA
safeguards. According to US Embassy reports, Beijing, thus far,
has only required customers to pledge that nuclear materials be
used for peaceful purposes. This arrangement is unenforceable
because without inspection rights the Chinese have no way to
ensure that the pledge has been honored. Beijing's previous
criticism of international safeguards, its persistant refusal to
sign the nuclear Non-Proliferation Treaty (NPT), and its refusal
to acknowledge that unsafeguarded Chinese-origin nuclear material
was sent to South Africa continue to raise questions among
western supplier states about China's willingness to play by the
-- The Chinese practice of authorizing nuclear assistance to
potential proliferators without international safeguards.
-- Beijing's desire for a permanent seat on the IAEA Board of
Governors. 25X1
guards inspections of Taiwan's nuclear activities.
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I I
China's interest in joining the International Atomic Energy
Agency (IAEA) is a major political development because it
signifies Beijing's willingness to support the organization which
administers controls to discourage the use of nuclear technology
for military purposes. Although we expect approval for Chinese
membership at the General Conference meeting in Vienna on
10-14 October, some members, are fearful that 25X1
Chinese membership might eventually affect their own position
within the IAEA. Other member states, 25X1
membership may still not signify Beijing's commitment to nonpro-
liferation. These general concerns reflect the expectation that
there will be problems with:
rules of the game.
These concerns have been reinforced by widespread inter-
national speculation that the Chinese are involved in the
Pakistani nuclear program, perhaps to the extent of providing
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assistance in the weapons application area.' It is unlikely
that the Chinese-Pakistani nuclear connection will be an issue
for the Board of Governors meeting or the General Conference this
October. US Embassy reports indicate, however, that several
important member-states, including Japan, and the Soviet Union,
have doubts that the Chinese will behave responsibly as a nuclear
exporter after they join the IAEA. The Soviets have told US of-
ficials that at the General Conference they will explicitly urge
the Chinese to abide by the NPT's rigorous safeguards requirments
even if they still choose not to ratify this treaty.
Skepticism regarding China's intentions concerning its
future export activities may be wellfounded. Chinese officials
in mid-July promised their US counterparts that Beijing will in
the future request IAEA safeguards for all its nuclear exports 25X1
after becoming an IAEA member. They were more ambiguous, how-
ever, in their commitment on this point in discussions with IAEA
Director-General Blix in Beijing in August.
The Chinese could defend unsafeguarded nuclear exports after 25X1
becoming an IAEA member on narrow legal grounds. The IAEA
statute does not specifically require a nuclear supplier state to
impose IAEA safeguards on all its transfers. It merely states
that IAEA safeguards are necessary for any Agency-related nuclear
project or in those cases where the supplier and customer
mutually agree on the desirability of safeguards for a nuclear
transfer. The Chinese are almost certainly aware of this loop-
hole in the IAEA statute. The ambiguous nature of their commit-
ment on safeguards suggests that they may think other nuclear
supplier states will not create an outcry if clandestine unsafe-
guarded nuclear transactions are uncovered. We believe that such
an assumption would be a miscalculation. The reactions of the
United States, the Soviet Union, and other major nuclear supplier
states is likely to be severe in view of their recent extensive
efforts to tighten export controls and safeguards coverage for
sensitive nuclear materials, equipment, and technology. Some of
them, in response, might refuse to assist China in developing a
domestic nuclear power program. 25X1
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China's Seat on the Board
Beijing's demand for a permanent seat on the IAEA Board of
Governors is the second major issue that will cause some
problems. Because there is no vacant seat on the Board, either
one current Board member must relinquish its permanent seat or
the number of Board seats must be increased.2 There are now 34
seats on the Board of which 12 are permanent. Nine permanent
seats are reserved for those countries with the most advanced
nuclear technology, and the remaining three which are allocated
by regions are held by Australia, Egypt, and Argentina. The
Chinese are certain to demand one of the nine permanent seats
reserved for countries with advanced programs.
Members of the Board of Governors
1982-83
Western Group Socialist Group
*Australia Bulgaria
*Canada Czechoslovakia
Denmark *Soviet Union
*France
*Italy
*Japan
The Netherlands
Portugal
Spain
*UK
*USA
*West Germany
Developing Group
Algeria
*Argentina
Bangladesh
Brazil
Columbia
*Egypt
*India
Indonesia
Kenya
Libya
Me x i c o
Panama
Pakistan
Romania
South Korea
Thailand
Venezuela
Zaire
Zambia
(Romania and South Korea vote with the developing nations on many
IAEA issues.)
2Taiwan was a member of the IAEA until 1971 when it was expelled
in the wake of China's entry into the United Nations. Taipei
never had a permanent seat on the Board of Governors.
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None of the permanent Board members is likely to relinquish
its seat for China. Western nations with permanent seats on the
Board can be expected to resist strongly any solution that
reduces their influence on the Board. The seat traditionally
held by Italy is the most vulnerable. On the basis of a recent
agreement, this seat will rotate among Italy and four other West
European countries following the October board meeting. Belgium
will occupy this seat during the 1983-84 period and will probably
come under pressure to step down in view of its modest nuclear
program. The only other option is for India to accept a new seat
designated for the South Asia region. This would allow China to
have a permanent seat without any of the current permanent Board
members giving up their seats. However, India is adamently
opposed to any solution that suggests that it accept a "regional"
permanent seat because New Delhi does not want to give the
impression that it has lost status in the organization. 25X1
A formal amendment to the IAEA statute is necessary to
increase the number of permanent seats reserved for advanced
countries. An agreement to expand the Board could take several
years because of the difficulties in securing a two-thirds
majority of all IAEA members for approval. The issue of Board
expansion is one of the most controversial IAEA issues because it
stimulates demands for additional seats from Pakistan and Black
African states that have long complained about underrepresen-
tation. According to the US Mission to the IAEA, the western
industrial nations, want to retain the blocking power they now
have on Board actions requiring a two-thirds majority. One extra
seat for China would still leave the western nations with enough
votes to determine Board decisions. The addition of two extra
seats, however, would force the western countries to depend on
support from the Soviet Union, and other members of the socialist
group to prevent China and the developing nations from con-
trolling the decisionmaking process on important issues. 25X1
Safeguards on Taiwan
Unlike the issues concerning Chinese nuclear exports and
the Board seat, future safeguards covering Taiwan's nuclear
program is the one problem that required an agreement prior to a
vote on China's membership at the General Conference. The IAEA
continues to implement safeguards under the auspices of a tri-
lateral agreement involving the Agency, Taiwan, and the United
States. Chinese officials acknowledge that the continuation of
international inspections of nuclear facilities on the island to
ensure their peaceful use is in China's own interest. They have
informed their US counterparts that their country is not opposed
to the continuation of this unusual arrangement as long as it is
in harmony with Beijing's political position that Taiwan is not a
separate state. IAEA officials, with US support, have given
assurances to the Chinese that the Agency will characterize
Taiwanese participation in the trilateral arrangement as "non-
governmental" and will refer to the island in IAEA publications as
"Taiwan, China." 25X1
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Despite these concessions, we believe there is still
potential,for trouble over the Taiwan safeguards issue because
Beijing clearly wants to preserve the right to define the future
nature and scope of the IAEA's presence in an area which it con-
siders to be a part of China. Chinese officials have expressed
the view in discussions with IAEA Director-General Blix that the
trilateral safeguards agreement is only an "interim solution."
Blix has stated to US officials that he expects that the Chinese,
following their admission into the IAEA, will characterize the
existing trilateral agreement as "illegal" and call for its
renegotiation. However, he has also expressed the view that such
statements will be "for the record" and that Beijing will not
press the issue further. We doubt that the Chinese will mount an
aggressive legal attack on the Taiwan safeguards arrangements in
the near term but the Chinese claim could eventually pose
political problems for the IAEA should the existing safeguards on
Taiwan be deemed no longer adequate or should there be a
deterioration in US-Chinese relations.
Conclusions
Over the longer run the willingness of the Chinese to place
their future nuclear exports under IAEA safeguards will be the
principal test of whether their entry into the IAEA strengthens
international efforts to control nuclear proliferation. We
believe that Beijing cannot continue clandestine unsafeguarded
nuclear transfers to potential proliferators without being
discovered and without triggering controversy in the IAEA
concerning China's behavior as a nuclear exporter. The effec-
tiveness of the IAEA in the safeguards area could be jeopardized
if Beijing decides to support Third World efforts to shift the
Agency's focus toward the promotion of nuclear assistance pro-
grams for developing nations. China may be willing to further
politicize debates over budgetary matters and perhaps even to
side with Third World efforts to restrict the membership rights
of Israel and South Africa. In short, there is considerable
potential that Chinese membership could reinforce negative trends
in the IAEA that have Posed serious policy problems for the
United States. 25X1
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