By Carol Giacomo, Diplomatic Correspondent
WASHINGTON (Reuters) - China is sending nuclear technology to Iran in exchange for oil and allowing North Korea to use Chinese air, rail and seaports to ship missiles and other weapons, congressional investigators reported on Tuesday.
Although the Bush administration has emphasized a growing convergence with Beijing on halting the spread of weapons of mass destruction and countering terrorism, the U.S.-China Economic and Security Review Commission took a much harder line.
"China's continued failure to adequately curb its proliferation practices poses significant national security concerns to the United States," the commission said in its annual report.
It also raised the possibility the administration is using "inducements" -- such as not being tough enough with Beijing on trade infractions -- to reward China for its cooperation on the North Korea nuclear crisis.
The U.S.-China Economic and Security Review Commission, established by Congress in 2000, tends to be skeptical of Beijing, and its conclusions are often controversial.
"China's assistance to weapons of mass destruction-related programs in countries of concern continues, despite repeated promises to end such activities and the repeated imposition of U.S. sanctions," the commission concluded.
This "calls into question the effectiveness" of Washington's partnership with Beijing, the panel said.
Unlike the 1990s, "Chinese transfers have evolved from sales of complete missile systems to exports of largely dual-use nuclear, chemical, and missile components and technologies; qualitatively, these transfers are equally worrisome," it said.
Dual-use refers to items that could be used for either weapons-related or peaceful pursuits.
"Continuing intelligence reports indicate that Chinese cooperation with Pakistan and Iran remains an integral element of China's foreign policy," the commission reported.
It said cooperation on North Korea is a "critical test" of U.S.-China relations, but Beijing is not using its substantial leverage to force Pyongyang to end its nuclear programs.
While making made much of hosting six-party talks aimed at resolving the nuclear crisis, Beijing "continues to permit North Korea to use its air, rail and seaports to trans-ship ballistic missiles and WMD-related materials," the commission reported.
U.S. officials, in recent public testimony and interviews with Reuters, put different emphases on China's behavior, underscoring continued differences over proliferation issues.
Chinese leaders have told the Americans any nuclear-related trafficking is done without the government's knowledge.
The State Department recently sanctioned five Chinese companies for trading with Iran, but the commission faulted this focus, saying many companies have direct ties to top level government and military officials.
The commission said China's growing energy needs are "driving it into bilateral arrangements ... that may involve dangerous weapons transfers." Iran is a key oil producing country.
"This need for energy security may help explain Beijing's history of assistance to terrorist-sponsoring states, with various forms of WMD-related items and technical assistance, even in the face of U.S. sanctions," it said.
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