Beijing's proliferation record may stall efforts to grant China permanent normal trade relations (PNTR) with the U.S. At issue are allegations that China continues to provide missile components and technical advice to other states. While China is not technically a member of the Missile Technology Control Regime (MTCR), it has pledged to abide by MTCR guidelines.

The White House disagrees with key Senators as to whether Beijing is truly committed to this pledge. Some point out that under the 1990 Missile Control Act, sanctions must be imposed on a host of Chinese entities. Implementation of the Act's provisions would also prevent a number of hi-tech U.S. firms from doing business in China. The Clinton administration counters that China has improved its proliferation record in recent years and that broad-ranging sanctions will not goad Beijing into changing its policies.

Sen. Fred Thompson (R-Tenn.) is spearheading an effort to include a provision in the PNTR bill that would force the President to certify annually that China is not involved in the transfer of advanced conventional weapons and/or weapons of mass destruction or related technologies. If China fails this certification process, US foreign aid to China will automatically be suspended. In addition, Chinese arms dealers would lose their US export licenses. After vehement objections by the White House, Senate Democrats, and business leaders anxious to pass the PNTR bill, Thompson and Senate majority leader Trent Lott agreed to submit the provision as "stand alone" legislation. With the Thompson proposal likely to pass, the White House has sought to limit the damage to relations with China by asking Thompson to make the language in any potential bill less China-specific.

In a July 13 meeting between the GOP and Democrats, progress was made towards resolving the increasingly knotty problem of pushing through the PNTR vote. Senators leaving the meeting were reportedly optimistic that the PNTR vote would occur before the August recess, after Thompson has time to present his legislation. Both the PNTR and the Thompson bill may ultimately pass the Senate.