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China's Missile Imports and Assistance From Israel

China's missile-related imports and assistance from Israel have been a subject of particular concern in the United States because of
worries that Israel may be providing China with "back door" access to controlled, sensitive US technology. For example, in the early
1990s, reports surfaced that Israel had secretly transferred information on the US Patriot missile system to China, in violation of
Israel's promise to the United States not to transfer the Patriot technology to any third country. Although both China and Israel
denied the allegations, US government sources concluded that it was almost certain that a transfer of technology (though not
physical equipment) had taken place.

China is reportedly using the Patriot technology to improve its surface-to-air missile (SAM) systems and to develop countermeasures
against the Patriot for its ballistic and cruise missiles; reports also indicated that China intended to sell these SAMs and enhanced
missiles to other countries, possibly including Iran. Reports suggested various Israeli motives for the transfer: some suggested that
Israel had traded Patriot information for information on China's missiles; others asserted that Israel's transfer of Patriot technology
was intended to encourage China to curtail its sales of ballistic missiles to countries in the Middle East such as Syria and Iran.

In addition to the alleged Patriot technology transfer, Israel has allegedly supplied China with cruise missile technology, including
sensitive US technology. Specifically, Israel is allegedly assisting China with the development of its YF-12A, YJ-62, and YJ-92 cruise
missiles.

In September 1992, responding to US accusations that Israel sold China Patriot missile secrets, Chinese Foreign Minister Qian Qichen
denied "that there had been any kind of military cooperation between Israel and China prior to the establishment of diplomatic
relations."

Under U.S. pressure, Israel backed out of a deal with China, potentially valued at $1 billion, in July of 2000. Under the deal, Israel
would have outfitted three Chinese Il-76 planes with Phalcon radars. The United States believed the deal would tip the strategic
balance against Taiwan. Chinese authorities responded harshly and demanded return of their deposit and compensation. In the
Spring of 2002, Israel agreed to pay a reported $300 million to put an end to the dispute over the cancellation.

Since the cancellation of the Phalcon radar deal, Israel has assisted China in other areas including the development of the HQ-9/FT-
2000, a surface-to-air missile, which would possibly use U.S. seeker technology. It has also assisted China in the area of unmanned
aerial vehicles (UAV). In July 2002, China deployed Israeli "Harpy" anti-radar drones in military exercises in Fujian Province.

On 2 January 2003, State Department spokesman Richard Boucher stated that Israeli military exports to China were of concern to
the United States. The following day, Israel announced that it would comply with U.S. demands and halt all contracts on the export
of arms and security equipment to China. A spokesperson for the Israeli Defense Ministry announced on 8 January that, "Defense
relations between Israel and China require from time to time consideration of specific issues. The revision [sic] concluded vis-a-vis
China and on concrete issues also vis-a-vis the U.S., bearing in mind American sensitivity." An Israeli official, electing to remain
anonymous, suggested that Israel would continue to sell to China military equipment available on the global arms market. According
to the Associate Press, China issued a written statement in response to the Israeli announcement. In the statement, it states that,
"It is China's consistent position that the development of normal military trade cooperation with Israel is a matter between the two
countries."