The Secret Missile Deal

The CIA has discovered that China is helping Pakistan build a missile plant. Will the U.S. object?

By Douglas Waller/Washington

(TIME, June 30) -- The Clinton Administration and the Chinese government have worked hard for the past year to improve relations between their two countries. And with some success. What had looked like a tough fight to get congressional approval this week for most-favored-nation trading status for Beijing now looks like a sure thing. China has agreed to stop nuclear testing and refrain from selling nuclear technology to rogue nations. But a dark side to the relationship continues.

For five years the CIA had been carefully tracking the flow of Chinese M-11 missile components into Pakistan. Then at the end of 1995 came a stunning discovery. Agency satellites spotted a curious-looking facility under construction near the northern Pakistani town of Rawalpindi, just 10 miles from the capital of Islamabad. It had long, narrow buildings with doorways large enough to roll out a rocket the size of the 30-ft. M-11, as well as a test stand nearby, where the solid-fuel engine could be mounted and fired up. The agency concluded that not only was China selling missiles, but it was also helping Pakistan build a factory to manufacture them. For the CIA, uncovering the plant represented "a first-class piece of spying," says a senior agency official. But because it doesn't want to disrupt the improving relationship, the Clinton Administration doesn't want to deal with this secret.

China has been eager to market M-11s, tactical ballistic missiles that can carry a 1,100-lb. warhead more than 185 miles. But the Bush and Clinton Administrations slapped trade sanctions on China in 1991 and 1993 for sending M-11 components to Pakistan. The penalties were lifted in 1994, after Beijing promised to abide by an international agreement prohibiting countries from selling rockets with the range of the M-11 that could be fitted with a nuclear warhead.

The CIA, however, soon turned up evidence that Beijing was reneging on its promise. The agency maintains a vast network of informants in Asia who report movements of weapons-related equipment in the region. By last summer the CIA concluded that China had delivered to Pakistan not just missile parts but also more than 30 ready-to-launch M-11s that are stored in canisters at the Sargodha air force base west of Lahore. The Pakistanis were also working to build nuclear warheads small enough to fit atop the missiles.

Spy-satellite photos showed that the layout of the plant in the Rawalpindi suburbs was similar to an M-11 rocket facility in Hubei province in central China. Reports from agents on the ground, along with telephone intercepts, revealed that about a dozen engineers from the China Precision Machinery Import-Export Corp. have visited the Rawalpindi sit