Justice Department officials called it the largest single seizure of illegal automatic weapons in U.S. history. The complaint unsealed last week implicated 14 people – and drew a seamy portrait of Chinese brokers happy to create false paperwork and transship weapons through third countries. That was powerful ammo for those in Congress who would punish China for its rampant piracy of U.S. films and software and its transfer of nuclear technology to Pakistan. “You can’t export as many as 2,000 weapons from China unless you have someone in the government going along,” said Rep. Charles Schumer, a gun-control advocate who issued an open letter to President Clinton demanding firmer measures to stop Chinese arms smuggling.
But it was not clear that the case would roil relations at the political and diplomatic level. That depends mainly on whether the scandal taints the Taizi, or “princelings” – sons and daughters of the Chinese elite who profited hugely from the arms trade. “I don’t see why this needs to complicate U.S.-China relations at all,” said State Department spokesman Nicholas Burns. It sounded disingenuous, but he may well be proved right.
China experts doubt that there was any high-level collusion. China sold hundreds of millions of dollars’ worth of weapons in the United States in the early ’90s – including the highly popular semiautomatic version of the AK-47 – but the market dried up with the 1994 embargo. And the princelings go where the money is – in the high-end items offered by the country’s two main arms firms, China North Industries Corp. (Norinco) and Poly Technologies. Traditionally, that has meant organizing megadeals such as the sale of intermediate-range ballistic missiles to Saudi Arabia in the late 1980s. More recently, they’ve diversified into real estate, commodities trading and import-export. Tai Ming Cheung, a Hong Kong analyst who has written extensively on the Chinese arms trade, says weapons now represent only about 20 percent of the revenue of Poly, where most of the princelings are concentrated. He speculates that the U.S. bust resulted from poor export controls by China, rather than official collusion. He notes that the Norinco factory that actually shipped the AK-47s is in Dalian, in China’s northern rust belt, where factories are under intense pressure to remain profitable. “You can always bribe a customs official to look the other way,” he says. And dabbling in the U.S. black market doesn’t make sense for a regime that has recently built new law-enforcement ties with Washington. Alarmed by a dramatic rise in organized crime and drug trafficking, China has approved the stationing of an FBI legal attach in Beijing and cooperated in three recent criminal investigations.
The two arms firms implicated in last week’s bust flatly denied the charges. “This report is a sheer fabrication,” said a spokesman for Poly. “As a state company we do not smuggle arms,” said his counterpart at Norinco. Administration officials hoped Beijing would leave it at that, treating the bust as purely a law-enforcement matter. “It’s not a big deal bilaterally,” said a State Department source. But the scandal now adds gun-control activists to an alliance of liberal human-rights advocates, opponents of nuclear proliferation and hard-line anti-China conservatives. With Clinton due to notify Congress next week that he plans to extend China’s most-favored-nation status for another year, the last thing he needed to hear was a plot line worthy of an episode of “Miami Vice.”
