During a 1997 Senate hearing , Robert Einhorn, then-Deputy Assistant Secretary of State for Nonproliferation provided one of the fullest explanations I’ve seen of the transfer of ring magnets from China to Pakistan:

Mr. Einhorn. We believe it is credible that central, senior-level Chinese authorities did not know of in advance and did not approve of that transaction, and the reason why we believe that is not just because senior Chinese officials told us that. It is because of our understanding of the Chinese system and how it operates. This transaction was probably less than $70,000. Ring magnets are very unsophisticated kinds of devices. They were treated under their export control system as general commercial goods and it is very plausible, in our view, that this transaction would have been treated as a routine kind of transaction. And the more we learn about the rudimentary State of Chinese export controls on dual-use items, the more plausible it becomes that this particular transaction would have been made without high-level governmental knowledge…