U.S. officials say there are "strong indications" that China is sending Iran either more Silkworm missiles or a newer, more deadly cruise missile, as sophisticated as the French-built Exocet, that Iran could use in its escalating "tanker war" against Iraq in the Persian Gulf.
The new missiles have been spotted in crates aboard an Iranian ship that U.S. intelligence sources saw leaving a North Korean port recently but have since lost track of, one well-informed U.S. official said.
The missiles are believed to be Chinese-made, because North Korea has been used previously as a transshipment point for Chinese arms bound for Iran and the North Koreans are not known to manufacture cruise missiles.
The Reagan administration has not yet formally protested to the Chinese government about the suspected new supply of cruise missiles to Iran because, as one official put it, "people are being very cautious. They want to be sure."
Not until the ship arrives at an Iranian port and the crates are unpacked will it be possible to know with certainty, the official said.
Chinese sale of arms to Iran has become a major irritant in U.S.-Chinese relations, and confirmation of more Silkworms, or more sophisticated cruise missiles, going to Iran is likely to provoke a strong reaction in Congress.
Rep. Les Aspin (D-Wis.), chairman of the House Armed Services Committee, attacked China in a speech Dec. 11 for its "flimflam" in seeking to deny its arms sales to Iran. He said "about two-thirds" of all military supplies imported by Iran now originate in China.
"We're not just talking about Silkworm missiles. We're talking about artillery shells, mortar rounds, antitank weaponry and perhaps even aircraft," Aspin said.
The administration has already launched a diplomatic campaign to persuade China, now Iran's No. 1 arms supplier, to stop selling Silkworm missiles and other military supplies to Tehran. In protest over the sales, the administration on Oct. 22 cut off the export of sophisticated U.S. technology to China.
Chinese leaders have publicly denied they are providing Iran with Silkworms and promised the administration they would take steps to prevent Chinese arms being sold by other governments to Tehran.
The administration is pressing the U.N. Security Council to adopt a resolution imposing an arms embargo on Iran for its refusal to accept a July U.N. demand for a cease-fire. The Soviet Union has been the most reluctant so far to take this step, but China may prove the major obstacle in the long run to an effective embargo, according to U.S. officials.
ABC News reported last Saturday that U.S. intelligence sources believe the Chinese cruise missiles aboard the ship are a newer, more lethal version of the Silkworms capable of being launched from ships. China has already provided Iran with ground-launched Silkworms, one of which struck the Sea Isle City, a Kuwaiti tanker under U.S.-flag protection, while it was anchored in Kuwaiti territorial waters in mid-October.
U.S. officials said the new weapon China may be providing now to Iran is the C801, which one U.S. defense industry publication describes as China's "most formidable cruise missile" and compared favorably to the French Exocet and the U.S.-made Harpoon.
The C801 has a solid-fuel engine amd booster and can be launched from ships or aircraft. It flies at 20 to 30 yards above the water and its warhead is semi-armor-piercing, according to Defense Electronics.
Defense Department officials said there is no evidence the C801 missile has arrived in Iran as one Arab newspaper, quoting gulf maritime sources, reported Dec. 18. The officials estimated it would take several months after arrival before the Iranians would be able to use it in the "tanker war."
U.S. officials say China nonetheless has continued to sell Iran arms and may have actually increased its supply since the U.N. Security Council unanimously passed a resolution July 20 demanding a cease-fire in the seven-year-old gulf war, with the possibility of an arms embargo to back it up.
"I don't see any indication of a halt in the flow," one Pentagon source said in late November. The Chinese, he said, had provided Iran with "lots of field artillery pieces and mountains of ammunition for them."
U.S. officials estimate that China sold $600 million worth of arms to Iran last year and believe the figure will be higher this year.