| http://www.smh.com.au/news/0107/07/world/world3.html
Oiling the wheels: how the US won China's support By Colum Lynch, in New York The United States released more than $US80 million ($155 million) in frozen Chinese business deals with Iraq last month as it sought China's support for a Security Council resolution that would have overhauled UN sanctions on Baghdad, according to diplomats and UN documents. The package included a $US28 million Iraqi contract to buy mobile telephone equipment from Huawei Technologies, a Chinese company previously accused by the Pentagon of violating the sanctions by providing fibre-optic cable for Iraq to upgrade its anti-aircraft missile batteries. The joint US-British effort to revamp the 10-year-old sanctions failed this week because Russia threatened to use its veto in the 15-member Security Council. But before Russia blocked the resolution, the US and Britain succeeded in winning China's backing for a key element of the proposal - a list of items that Iraq could import only with the council's approval because they have military as well as civilian uses. The horse-trading that was involved in winning China's assent is now becoming clear. Under the UN's oil-for-food program, Iraq can sell oil and use the proceeds to buy humanitarian supplies and spare parts to keep its oil industry running. But the US and other Security Council members can place "holds" on contracts for items they suspect are really intended for the Iraqi military. The US has frozen about $US3 billion in contracts, despite vociferous criticism from China, among other countries. Nine days ago the Bush Administration informed the UN that it was lifting its holds on nine Chinese contracts in the telecommunications and oil sectors valued at nearly $US60 million, according to diplomats. Earlier that week the US had unfrozen $US20 million worth of Chinese deals. Eight days ago the US and China announced they had reached agreement with Britain and France on the list of "dual use" items as part of the broader attempt to revise the sanctions. The US Secretary of State, Mr Colin Powell, had placed a high priority on the effort, which he said was intended to lift all restrictions on Iraqi imports of civilian goods while cracking down on Baghdad's smuggling of oil and military equipment. "The US has promised to take care of some of our concerns," China's deputy ambassador to the UN, Mr Shen Guofang, said after the agreement was announced. US officials denied they were buying China's support, although they acknowledged that the relaxation of the holds was designed to help win broad backing for an overhaul of the sanctions. "There wasn't a quid pro quo," one said. "But we wanted to demonstrate not just to China, but to other members of the Security Council, that the new system we are proposing would involve a real change of behaviour." US officials also said American technical experts had conducted a thorough "assessment of the relative risk" before approving the Huawei contract. Early this year, when the US bombed Iraqi radars and anti-aircraft batteries, Pentagon officials said the main reason was that Huawei was upgrading those sites with fibre-optic cables. China denies the allegation. Although the details of China's commercial dealings through the UN oil-for-food program are kept confidential by the UN, The Washington Post obtained internal UN records that describe the deals unfrozen by the US last week. They include two Iraqi contracts to buy nearly $US15 million of microwave radio equipment from a Chinese firm, Cmec International Engineering Co. Another deal involved a $US15.5 million sale of telecommunications equipment by China National Technical Import. Last week was not the first time the Bush Administration has approved contracts at critical stages in negotiations over Iraq. On June 1, for example, the US announced it would lift holds on $US800 million in deals between Iraq and various firms. |
