U.S. Imposes Sanctions on China, Pakistan Over Missile Deal : Arms technology: Export of satellite gear to Beijing is banned. Both Asian nations deny violating controls.

The Clinton Administration sought Wednesday to punish China for selling missile technology to Pakistan by banning exports of satellites and related equipment to Beijing for the next two years. But officials conceded that the sanctions will have little impact on China’s booming economy.

State Department spokesman Mike McCurry said that the sanctions--also applied to Pakistan but with less impact--were imposed after the Administration determined that China sold to Pakistan technology related to its nuclear-capable M-11 ballistic missile.

McCurry said there was no conclusive evidence that China supplied Pakistan with complete missiles or with major components. Had China done so, U.S. law would have required much more severe penalties.

Instead, McCurry said, the evidence only supports a conclusion that “missile-related” sales were made. He did not spell out details.

On paper, the newly imposed sanctions prohibit the sale to both China and Pakistan of a wide range of high-technology items related to missiles and satellites. Most of those sales already are banned, however, under earlier sanctions imposed on Pakistan because of its clandestine nuclear weapons program and on China as a result of the crackdown on pro-democracy demonstrators in Tian An Men Square four years ago.

Lynn E. Davis, undersecretary of state for international security affairs, said that the primary impact of the sanctions will be to prevent the use of Chinese rockets to launch American-made satellites. Technically, shipment of a U.S.-made satellite to China for launch is regarded as a U.S. export to China, even if the satellite is owned by an American firm that will manage it in space after the launch. Because America’s space shuttle program and Europe’s Ariane rocket are heavily booked, commercial satellites are often launched on Chinese rockets.

McCurry said that about $370 million worth of exports would have been affected if the sanctions had been in place last year. He estimated that sales totaling between $400 million and $500 million a year might be blocked during the two years in which the sanctions will be in force. He gave no estimate of the cost of the sanctions to China in terms of lost launch fees.

Davis and McCurry said the sanctions will have an adverse impact on U.S. satellite manufacturers. But they said that the measures are mandatory under U.S. law.

Donald O’Neal, a spokesman in Los Angeles for the satellite operations at Hughes Aircraft Co., said that the firm has not yet sold satellites directly to China, but has launched two communications satellites owned by others from Chinese launch sites. Launches in China are typically cheaper than those made from Western sites, he said.

One of those satellites, launched in 1991, was built for a Hong Kong company named Asiasat, and another that was launched in August, 1992, was made for an Australian concern called Optus Communications. Hughes also has sold a satellite to another Hong Kong company, Asia Pacific Telecommunications Co., which is partly owned by the Chinese government, O’Neal said. That satellite is to be launched from China next May.

Before announcing the sanctions, Davis sought an explanation of the deal from both China and Pakistan. She said the Chinese and Pakistani governments denied that their deal violated the international Missile Technology Control Regime but refused to provide any information about it.

In Beijing, the official New China News Agency reacted to the announcement of sanctions with a five-paragraph news account, stating, “The U.S. allegations about the so-called ‘missile technology transfers’ have been rejected by China and Pakistan.”

Just hours before the sanctions were announced, senior Chinese officials had reiterated their denial to U.S. congressional members visiting Beijing. The Chinese also denounced American intelligence agencies, which they accused of fabricating the evidence of missile sales.

“They not only deny that there was a violation but then go further and suggest that we have a collective faulty intelligence,” said Rep. Jim Chapman (D-Tex.), one of the three lawmakers who met with senior Chinese military and political officials.

In Islamabad, a Pakistani Foreign Ministry spokesman also denied that the deal violated the missile proliferation protocol. The official acknowledged that China had recently supplied Pakistan with missiles, but said they were small ones not covered by the Missile Technology Control Regime. It bans the sale of rockets capable of carrying a payload of 1,100 pounds for a distance of 190 miles.

“These missiles did not violate the MTCR,” the official said, according to Reuters news agency. “Both Pakistan and China have assured the United States on this point.”

The spokesman accused Pakistan’s archenemy, India, of breaching the accord with its own missile program.

“Concern for missile proliferation does not arise from Pakistan but from India’s extensive missile development program, including Prithvi and Agni missile systems,” he said.

This latest U.S.-China rift over weapons proliferation dates to last October, when a U.S. intelligence agency spotted what it contended were components for the Chinese-made M-11 missiles on a ship headed for a Pakistani harbor.

Other American intelligence sources disputed the report. As late as July of this year, a senior U.S. official in Washington said the Administration did not yet have a “smoking gun” with definitive proof in the M-11 case.

Neither China nor Pakistan has signed the 1987 missile control agreement originally negotiated by the United States, Germany, Britain, France, Italy, Japan and Canada.

However, after an earlier controversy over missile parts deliveries in 1991, in which the George Bush Administration imposed sanctions against two Chinese companies and one Pakistani firm, the Chinese government agreed to abide by the missile protocol. In exchange, the Bush Administration dropped the sanctions.

Kempster reported from Washington and Tempest from Beijing. Times staff writer James F. Peltz in Los Angeles contributed to this story.