The strategic significance of Northeast Asia continues to grow. U.S. ties to Asian allies and friends span the range of security, economics, culture, and politics. The importance of long-standing U.S. alliances and security relationships in this region is further buttressed by the region’s unprecedented economic growth over the past decade. Security and stability in this region are essential if economic relations are to continue to flourish.

Despite recent positive trends toward political liberalization and market-oriented economic reforms, legacies of the Cold War and numerous territorial disputes continue to burden the region, including the division of the Korean peninsula and the China-Taiwan dispute. Multiple national claims to territory in the South China Sea remain a potential source of conflict that could engage many of the region’s nations. Additionally, leadership transitions facing many regimes in the region will have unknown consequences for regional stability.

The United States continues to seek a stable and economically prosperous region. Strong bilateral relations with friends and allies, particularly Japan and South Korea, are the foundation of U.S. efforts to encourage regional stability. Central to this goal are the approximately 100,000 soldiers, sailors, Marines, and airmen present in the region who reassure U.S. allies, deter aggression, and enhance stability. A long-term U.S. objective in the region remains the peaceful reunification of the Korean peninsula in accordance with the wishes of the Korean people. The United States, in close coordination with the Republic of Korea, will continue to maintain forces on the peninsula to safeguard mutual security interests into the foreseeable future.

Although the October 1994 Agreed Framework with North Korea over its nuclear facilities mitigated the immediate nuclear threat, Pyongyang still possesses an unreasonably large conventional force, as well as militarily significant chemical weapons and the means to deliver them. Proliferation, particularly the broad-based NBC weapons and missile programs that North Korea has implemented, poses a significant challenge to U.S. security interests, as well as to those of U.S. allies and friends. The North Korean NBC weapons and missile programs have the potential to set off destabilizing arms races and heighten tensions throughout the region.

In the event of another war on the Korean peninsula, NBC weapons present a significant threat to U.S. forces and the security of U.S. allies. Should a conflict occur, North Korea would likely try to consolidate and control strategic areas of South Korea by striking quickly and attempting to destroy allied defenses before the United States can provide adequate reinforcements. Pyongyang would most likely attempt to accomplish this with its large conventional force and its chemical weapons and ballistic missiles.

It is critically important that the United States engage China so that it contributes to regional stability and acts as a responsible member of the international community. China, a nuclear weapons state since 1964, remains a source of concern because of the role Chinese companies continue to play in supplying a wide range of dual-use materials, equipment, and technologies that contribute to indigenous missile and chemical weapon programs in some countries of proliferation concern. China’s influence is of critical importance in this region. The United States will continue to interact with China in order to promote adherence to international standards on human rights, nonproliferation, and international trade. The United States also seeks greater transparency in China’s defense programs, including its planning and procurement processes, and will continue to engage China in a dialogue aimed at fostering cooperation and confidence-building. Beijing has signaled some willingness to adopt a more responsible supply policy by adhering to international nonproliferation norms like the Nuclear Non-Proliferation Treaty (NPT), by ratifying the Chemical Weapons Convention (CWC), and by reaffirming to the United States its pledge to abide by the basic terms of the Missile Technology Control Regime (MTCR) regarding ballistic missile sales. However, the continued willingness of Chinese firms to engage in nuclear, chemical, and missile cooperation with countries of serious proliferation concern, such as Pakistan and Iran, presents security concerns in many regions where the United States has national interests at stake.

Counterproliferation will continue to be a strong component of the U.S. regional strategy in Northeast Asia as long as U.S. defense commitments and U.S. forces are threatened by the spread of NBC weapons and missiles. Should a proliferant go unchecked, calling U.S. capabilities and commitments into question, states may seek unilateral alternatives to ensure their security, thus stimulating proliferation.

In Northeast Asia, North Korea and China have substantial NBC weapons and missile capabilities. Should there be a conflict on the Korean peninsula, U.S. and allied forces must be prepared to defend against North Korean use of chemical weapons and ballistic missiles. The potential for China’s use of ballistic missiles, should a regional conflict occur involving China, also is a particular concern.

North Korea supplies missiles and missile-related technology to countries in the Middle East, while China supplies various NBC- and missile-related equipment to countries in the Middle East and South Asia. Such sales serve both nations’ economic and political interests and are especially critical as an income source for Pyongyang. Because of these supply policies, particularly missile exports, any improvements that China and North Korea make to their NBC weapon or missile capabilities in the coming years could have implications far beyond the region.

Since the 1950s, Pyongyang’s defense programs have been aimed at developing a strong military force designed to preserve its regime, provide political leverage, and reunify the peninsula. The development of its NBC weapon and ballistic missile capabilities is viewed by Pyongyang as an important means of augmenting its large conventional land forces in the event of a conflict on the peninsula.

North Korea also uses sales of equipment and technologies to generate hard currency revenues for its depressed economy and as a means of supporting continued research and development for its NBC weapon and missile programs. Sales have consisted primarily of missiles and missile-related technology, mostly to countries in the Middle East. In the future, barring a diplomatic breakthrough, North Korea is likely to continue these sales and to market its equipment and technology, especially in the Middle East and South Asia.

Activity in North Korea’s nuclear weapons material production program at Yongbyon was suspended in accordance with the October 1994 Agreed Framework. North Korea is abiding by its provisions of that agreement. Nevertheless, it retains key technology and expertise to restart its effort, should it decide to do so. The North also retains chemical warfare and ballistic missile capabilities, which it could employ against both military and civilian targets if war were to break out on the peninsula.

North Korea’s economic situation has continued to decline, with an estimated drop of 5 percent in gross domestic product (GDP) annually for the last five years. This situation has severely limited Pyongyang’s ability to support both the military and civilian sectors of the economy. Shortages, especially food, have been common in recent years. On several occasions, the North has requested and received emergency relief from the international community. Nevertheless, Pyongyang continues to invest scarce resources in developing and maintaining its military forces, including its chemical and biological warfare and missile programs.

As a result of the 1994 Agreed Framework, key facilities at North Korea’s Yongbyon nuclear complex either were shut down or construction was halted. Although it is believed that the North previously produced enough plutonium for at least one weapon, under the terms of the Agreed Framework, Pyongyang agreed to freeze its plutonium production capability at Yongbyon. Currently, it has halted operations of the 5-megawatt (electric) plutonium production reactor, where U.S. personnel are helping to prepare spent fuel for eventual shipment out of North Korea. Also, North Korea has ceased construction on two large reactors that could have produced large quantities of plutonium, suspended operations at the reprocessing plant, and agreed to dismantle nuclear facilities covered by the Agreed Framework, eventually, in exchange for two light-water reactors, which are less easily exploited for weapons production. However, the North does retain key nuclear technology and expertise and is not obligated to dismantle facilities acknowledged in the Agreed Framework for several more years.

So far, North Korea has adhered to provisions of the Agreed Framework. However, in some areas progress has been slow. In 1996, for example, work on fuel storage (canning) at the 5-megawatt (electric) reactor was halted temporarily, as were discussions on the light-water reactor program. Fuel canning under the auspices of the International Atomic Energy Agency (IAEA) has resumed and is progressing slowly; it is expected to be complete by the end of 1997. Also, preliminary activity related to the construction of the light-water reactor began in August 1997.

By the late 1980s, Pyongyang was able to produce large quantities of chemical agents and munitions independently. Its chemical warfare effort was intensified and expanded further between 1990 and 1995. Today North Korea is believed to have a sizable stockpile of chemical weapons. In keeping with Pyongyang’s self-reliant philosophy, it has achieved the capability to manufacture large quantities of nerve, blister, choking, and blood agents. As a result of this effort, chemical weapons may have become an integral part of North Korea’s warfighting strategy.

In any attack on the South, North Korea could use its arsenal of chemical weapons to attack U.S. or allied forces deployed along the demilitarized zone (DMZ), as well as to try to isolate the peninsula from strategic reinforcements by attacking ports and airfields deeper inside South Korea. The North could use a variety of means to deliver chemical agents, including domestically produced artillery, multiple rocket launchers, mortars, aerial bombs, and ballistic missiles.

Pyongyang’s huge military, as well as its civilian population, is prepared for operations in a contaminated environment. Many troops are equipped with chemical protective gear, including masks, suits, detectors, and decontamination systems. North Korean forces regularly train for operations in chemically contaminated environments. Additionally, North Korean civilians conduct regular chemical warfare drills; the civilian population is required to store and maintain chemical warfare protective equipment at home. While North Korean propaganda emphasizes the threat of U.S. and South Korean use of chemical agents, these preparations for chemical use could also support offensive use of chemical weapons.

North Korea has not signed the Chemical Weapons Convention and is not likely to do so in the near-term because of the required intrusive inspections and verification provisions.

North Korea has pursued research and development related to biological warfare capabilities for the past 30 years. North Korean resources, including a biotechnical infrastructure, are sufficient to support production of limited quantities of infectious biological warfare agents, toxins, and possibly crude biological weapons. North Korea has a wide variety of means available for military delivery of biological warfare agents. North Korea has ratified the Biological and Toxin Weapons Convention (BWC).

BALLISTIC MISSILES

Despite economic and political problems, Pyongyang continues to attach a high priority to the development and sale of ballistic missiles, equipment, and related technology. Since the early 1980s, North Korea has pursued an aggressive program which has steadily progressed from producing and exporting SCUD short range ballistic missiles (SRBMs) to work on development of medium- and long range missiles.

North Korea produces two variants of the former Soviet Union’s SCUD SRBM, the SCUD B and SCUD C. It has a production capacity of four to eight SCUDs monthly, both for export and for its own armed forces. Pyongyang has hundreds of SCUDs in its inventory and available for use by its missile forces. It also has developed the No Dong medium range ballistic missile (MRBM), based on SCUD technology, likely for its own use as well as for export.

North Korea has two additional ballistic missile systems in the early stages of development, the Taepo Dong 1 and Taepo Dong 2. Both missiles are two-stage systems and likely would employ separating warheads. Both systems appear to represent a logical evolution of the experience gained through work on the SCUD and No Dong systems.

Taepo Dong 1 flight testing could begin at any time. However, both Taepo Dong missiles represent a significant technological departure from the proven SCUD designs. North Korea has little experience flight testing its missiles and has no experience testing multistage ballistic missiles or other related technologies. This lack of test experience could complicate North Korea’s ability to evaluate, improve, or repair flaws in its missile designs.

North Korea has several types of short range land- and sea-launched anti-ship cruise missiles. In the past, North Korea has produced two versions of cruise missiles based on Soviet and Chinese designs; these have ranges of about 100 kilometers. North Korea also has a variety of fighters, bombers, helicopters, artillery, rockets, mortars, and sprayers available as potential means of delivery for NBC weapons.

North Korea operates a complex, integrated network of trading companies, brokers, shippers, and banks that facilitate NBC weapon and ballistic missile-related trade. This trade involves complete systems, components, manufacturing and test equipment, and technology. Since the late 1980s, North Korea has used its networks to locate and acquire technologies as well as to pursue a sales program, selling missiles to countries such as Iran and Syria. North Korea provided material and know-how for domestic missile production programs in both Iran and Syria. Should these or other states acquire longer range North Korean missiles currently being developed, these states could pose a threat far beyond their neighbors. North Korea is not a member of the MTCR and is not expected to join, at least for the immediate future, but is engaged in missile talks with the United States.

China’s national objectives include comprehensive modernization of the country. This modernization encompasses major improvements to China’s technological base, economy, and military establishment, as well as rapid economic growth, domestic stability, eventual recovery of claimed territories, and most important, preservation of the current communist political system.

China’s strategy consists of developing sufficient modern military forces to exert influence within the region, deter enemies, preserve independence of action in foreign affairs, protect its economic resources and maritime areas, and defend the sovereignty of its territory. As a means to attain this strategy, China has nuclear and chemical weapons capabilities with the ability to deliver them, including a wide variety of ballistic missiles. It will continue to modernize these forces in the coming years.

China’s resource allocation for overall defense and modernization for nuclear, chemical, and missile forces is not expected to increase significantly. Current defense expenditures total approximately 5 percent of China’s total GDP. It is estimated that actual military spending will increase at a rate similar to China’s economic growth. Projecting a realistic modest growth pattern, including expected economic fluctuations, total military funding levels are expected to average over $40 billion (in constant 1994 dollars) annually between 1997 and 2006.

China is pursuing a strategy of close political and economic relations with a variety of nations. In support of this strategy, China continues its role as a supplier of military and technical assistance. Such sales are a major additional source of revenue for the defense budget. The profits from these sales are used to finance military equipment modernization and to defray military operating costs. Additionally, Chinese entities have provided ballistic missiles and related technology, as well as nuclear and chemical technology, to Middle Eastern and South Asian countries.

China’s NBC and missile programs also receive the benefit of an infusion of foreign know-how. Many Chinese scientists and engineers have received or are receiving their education and technical experience in the West. China and Russia have renewed and expanded their military cooperation, which has the potential to assist China’s military modernization effort. China is seeking to exploit the poor economic conditions in former Soviet states by encouraging collaboration with former Soviet scientists and technicians. Beijing also is trying to acquire a variety of Western technologies that it can adapt for its own military industry.

NUCLEAR PROGRAM

China considers nuclear weapons primarily within the larger context of maintaining deterrence vis-a-vis the United States and Russia and as enhancing its status as an international power. China first tested a nuclear weapon in 1964. It completed a series of nuclear weapons tests in 1996, probably to finalize weapon designs. Since July 30, 1996, China has been under a self-imposed moratorium on nuclear testing and has signed the Comprehensive Test Ban Treaty (CTBT). China joined the IAEA in 1983 and acceded to the NPT in 1992. In 1997, China issued detailed nuclear export control regulations and became a member of the Zangger NPT Exporters’ Committee. China frequently has stated that it will never be the first to use nuclear weapons against another nuclear power and that it never will use them against a nonnuclear power.

China has over 100 nuclear warheads deployed operationally on ballistic missiles. Additional warheads are in storage. China is not currently believed to be producing fissile material for nuclear weapons, but it has a stockpile of fissile material sufficient to increase or improve its weapon inventory. Such warhead improvements could complement China’s missile modernization effort.

The Chinese have an advanced chemical warfare program, including research and development, production, and weaponization capabilities. Chinese military forces have a good understanding of chemical warfare doctrine, having studied the tactics and doctrine of the former Soviet Union. Chinese military forces conduct defensive chemical warfare training and are prepared to operate in contaminated environments. In the near future, China is likely to achieve the necessary expertise and delivery capability to integrate chemical weapons successfully into overall military operations.

China’s current inventory of chemical agents includes the full range of traditional agents, and China is conducting research into more advanced agents. It has a wide variety of delivery systems for chemical agents, including tube artillery, rockets, mortars, landmines, aerial bombs, sprayers, and SRBMs. China signed the Chemical Weapons Convention in January 1993, and ratified it shortly after the U.S. ratification in April 1997.

China acceded to the Biological and Toxin Weapons Convention in 1984, though its declarations under the BWC confidence-building measures are believed to have been inaccurate and incomplete. China has consistently claimed that it has never researched, manufactured, produced, or possessed biological weapons and that it would never do so. However, China possesses an advanced biotechnology infrastructure and the biocontainment facilities necessary to perform research and development on lethal pathogens. Moreover, China likely has maintained the offensive biological warfare program it is believed to have had before acceding to the BWC.

China has an extensive and well-established ballistic missile industrial infrastructure and has developed and produced a variety of land- and sea-based ballistic missiles. Only the former Soviet Union and the United States have more extensive production capabilities for ballistic missiles. China’s missile force is designed to serve as a strategic deterrent against Russia and the United States. China is the only country other than Russia whose land-based strategic missiles can strike the United States. China increasingly sees ballistic missiles as important weapons for a regional conflict or use as psychological weapons. For example, China fired a number of CSS-6 SRBMs into waters near Taiwan in 1995 and 1996 to deter what Beijing saw as moves by Taiwan toward independence.

China has embarked on a ballistic missile modernization program. While adding more missiles and launchers to its inventory, China also is concentrating on replacing liquid-propellant missiles with mobile solid-propellant missiles, reflecting concerns for survivability, maintenance, and reliability.

China has produced several types of land-, sea-, and air-launched cruise missiles. Most are short range and are deployed for anti-ship operations. China has exported several versions of these missiles to countries in the Middle East and South Asia. China also has a variety of fighters, bombers, helicopters, artillery, rockets, mortars, and sprayers available as potential means of delivery for NBC weapons.

In recent years, China has increasingly participated in arms control and nonproliferation regimes and has accepted Western initiatives on such issues as extension of the NPT, the ratification of the CWC, and signing the CTBT. China attended the May 1997 meeting of the Zangger NPT Exporters’ Committee as an observer and joined the Committee in October 1997. The Zangger Committee is a group of states parties to the NPT, that has developed a safeguard trigger list of items that member states will export to facilities in non-nuclear weapons states only if these facilities are under IAEA safeguards.

Also, China has a bilateral agreement with the United States under which it has agreed to ban all exports of MTCR-class ground-to-ground missiles and to abide by the original 1987 MTCR guidelines and parameters. Nonetheless, the United States remains concerned about continuing Chinese assistance to missile programs in some countries of proliferation concern. In most cases, Beijing agrees publicly on the danger and inadvisability of NBC weapons and missile proliferation. On the other hand, China’s continuing and long-standing economic and security relationships provide incentives for activities that are inconsistent with some nonproliferation norms. These interests are likely to continue to drive Chinese supply activities for the next few years. Because of Chinese supply activities, particularly missile-related exports, improvements to China’s military production capabilities can have major implications for the proliferation of NBC weapons and missile technologies, especially in the Middle East and South Asia.

In South Asia, Chinese policy is driven in part by its long-standing rivalry with India. China views Pakistan’s nuclear and missile programs as an important balance to India’s more powerful conventional military forces and its nuclear weapons and missile programs. Before its 1992 NPT accession, China provided assistance to Pakistan’s nuclear weapons program. Concerns about possible continued assistance persisted even after accession.

In May 1996, China further clarified its nuclear nonproliferation policy by announcing that it would not provide assistance to unsafeguarded nuclear facilities. Since that time, the United States has raised with Beijing concerns about certain activities with Pakistan, but there is no basis to conclude that China is not honoring its pledge. Chinese firms continue to assist Pakistan’s indigenous missile development effort.

China probably perceives its support to Iran as enhancing its presence in the Gulf and helping to ensure access to a key source of oil—essential to China’s expanding economy. The United States has sought to persuade China that support to Iran contributes to instability in the Gulf region and thereby jeopardizes its access to oil. Beijing has provided technical assistance and equipment to Iran’s nuclear program under IAEA safeguards. China has also provided assurances that it will not engage in additional nuclear cooperation with Iran. China also is an important supplier of equipment, materials, and technology for Iran’s chemical warfare and ballistic missile programs. China is not a member of the Australia Group and refuses to restrict sales of any chemicals not listed in the CWC. While China has not sold Iran any MTCR-proscribed ballistic missiles, Chinese firms have assisted Iran’s missile industry.

North Korea maintains a large army, threatening South Korea and U.S. military forces positioned there. The basic goal of North Korea’s offensive strategy is to consolidate and quickly control strategic areas of the South and destroy the allied defense before the United States can provide significant military reinforcement. North Korea could use chemical weapons and ballistic missiles, and possibly biological weapons, to support this strategy. North Korea’s NBC weapons and missiles also threaten Japan, and Pyongyang has declared publicly its intentions to target U.S. facilities in Japan to disrupt the resupply of South Korea. Pyongyang’s policy of supplying rogue states with ballistic missiles and related technology remains a factor in the advancement of several Middle Eastern missile production programs. As the North develops even longer range missiles and improves its chemical warfare capabilities, the potential exists for additional North Korea exports.

China will continue to take actions that will advance its status as an international power. China’s current actions indicate that it will gradually improve its NBC weapon and missile capabilities. While it will support nonproliferation regimes publicly, China is most likely to take concrete steps in support of arms control regimes only when such steps serve its overall larger interests.

China may choose not to sell certain technologies to some unstable areas, but other sales will continue to occur, driven by China’s perception of its own self-interest. Finally, although relations with India have improved, the Chinese-Indian rivalry persists; as a balance, China likely will maintain a special relationship with Pakistan.

The NBC weapon and missile programs in North Korea and China will remain serious concerns for the region and for the United States. The programs pose threats in terms of potential use in a conflict in Northeast Asia and because of the potential proliferation of these weapons and supporting technologies to other regions where the United States also has critical interests.