The Reagan administration is on the verge of the first government-to-government arms sale to China, including a $6 million package of explosives that could lead to a $98 million artillery munitions factory, according to congressional and State Department sources.
Congressional sources described the sale as a landmark in what has been a slowly developing military relationship between the United States and China, and predicted that it would facilitate other, far more important military sales to Peking long under discussion.
"This is the icebreaker," one source said.
A State Department official called it "a very prudent move" by the administration, aimed at working out an agreement in a "compatible" military area.
"This is something modest, conventional and nonthreatening in the field of military cooperation," he said.
The main significance of the proposed sales agreement, he added, was "the modesty and care with which this thing military cooperation is being approached."
Rep. Stephen J. Solarz (D-N.Y.), chairman of the House subcommittee on Asian and Pacific affairs, predicted yesterday that congressional reaction to the proposed sale would depend on the ordnance involved and whether it was seen as posing any threat to noncommunist Taiwan.
Solarz said he planned to hold hearings "to satisfy ourselves regarding the purpose and extent to which the sale poses an unwarranted security threat to Taiwan." If it does not and is "anti-Soviet-oriented," Solarz said he does not expect much opposition to the sale.
For some time, administration officials have been discussing possible sales of military technology to China, including TOW (tube-launched, optically tracked, wire-guided) antitank missiles, naval sonar, ship defense systems, air defense missiles and avionics to modernize Chinese planes. But the Chinese have been extremely slow in reaching a decision on such sales.
Last year Peking purchased commercially 24 S70C2 Sikorsky helicopters, a civilian version of the Black Hawk military helicopter, in a deal worth an estimated $150 million. In August, General Electric signed a contract to sell China five sophisticated gas turbine engines as part of its naval modernization program.
But these purchases were company-to-government commercial deals and did not involve military items listed under the U.S. Foreign Military Sales program involving special licensing, though the helicopter sale did require State Department approval and formal congressional notification.
The present transaction is directly between the U.S. and Chinese governments; it involves Foreign Military Sales items requiring a 20-day period of informal notification to Congress followed by a 30-day formal notification of any "major defense equipment" worth $14 million or more or any "defense articles or services" worth $50 million or more. The sale is automatically approved unless Congress acts to stop it.
In June 1984, President Reagan issued a formal policy determination that the sale of U.S. weapons to China would "strengthen the security of the United States and promote world peace," clearing the way for Peking to make government-to-government purchases under the Foreign Military Sales program. Such a determination is required by the Arms Export Control Act.
The Foreign Military Sales program also includes provisions for financing the purchase of U.S. arms, but the administration is not requesting any credits for the present sale.
State Department sources said informal notification of the sale was forwarded to Congress Sept. 9. They said it involves an initial U.S. government sale of fuzes, primers and detonators worth $5 million to $6 million, and included a $98 million "potential package" for helping China to build an artillery munitions factory.
Discussion of the United States helping China improve its artillery technology dates to the June 1984 U.S. visit of China's defense minister, Zhang Aiping. At that time, U.S. officials said antitank weaponry was one area in which the administration thought it could help China modernize and at the same time improve its defenses against the Soviet Union.
U.S. officials were quoted as saying the administration would like to sell China TOW antiarmor missiles and artillery technology.
Because of the sensitivity surrounding Chinese purchases of U.S. arms -- both in China and in this country, where conservative support for noncommunist Taiwan remains strong -- it has taken a long time for both sides to reach agreement.
A recent Congressional Research Service study of U.S. arms sales to China says the administration has followed a "case-by-case approach" and focused discussions on possible arms sales to those "whose primary capabilities are confined to tactical defense."
The study, by Kerry B. Dumbaugh and Richard F. Grimmett, concluded that this was consistent with the limited military relationship currently supported by policy makers in Peking and Washington, and predicted that progress would continue to be "slow in pace and limited in scope."
It added, however, that the limited nature of this relationship could change to include advanced U.S. weapons systems if the Soviet military threat against joint American-Chinese interests in Asia increased sharply or Washington's support for Taiwan declined significantly.