DOWNSIDE LEGACY AT TWO DEGREES OF PRESIDENT CLINTON
SECTION: STATUS OF US INTELLIGENCE
SUBSECTION: GIVE-AWAYS
Revised 7/21/99

 

EXCEPTIONAL TECHNOLOGY FOR CHINA

Encryption expert Charles Smith (Softwar) pointed out that neither Reagan nor Bush authorized the transfer of encrypted satellite control systems to China. He also pointed out that in 1994, Hughes was denied a license to export a satellite to Australia because it contained a single encrypted control chip; but Clinton allowed this sort of sensitive technical information to be placed in both the Loral satellite which was launched by the booster that crashed in Southern China in 1996 (with the result that the control chip is missing) and a Motorola satellite successfully launched by the Chinese. In 1995 he pointed out that Clinton allowed Maneuvering Re-entry Vehicle (MARV) technology to be sent to China on a Hughes satellite. Within a year the Chinese had "tested" warheads using MARV technology off the coast of Taiwan. MARV gives the incoming warhead the capability to evade anti-missile defenses such as the U.S. Patriot missile. He also pointed out that Clinton authorized the shipment of Iridium satellites to China by Motorola in 1997 and 1998. The launch of multiple satellites on one rocket requires technology that can be used in Multiple Independently targeted Re-entry Vehicles (MIRV), that enable multiple warheads to be carried on a single missile.

Disputing the assumption that the Chinese cannot make military use of civilian satellite technology, the New York Times reported on 6/13/98 that "For the past two years, China's military has relied on American-made satellites sold for civilian purposes to transmit messages to its far-flung army garrisons, according to highly classified intelligence reports.Administration officials said it was impossible to prevent China's army from using American-made satellites sold abroad." The article went on the say that Hughes expected the government to vet its customers.

To a joint hearing on National Security and International Relations, John D. Holum, acting undersecretary of state for arms control, called U.S. space commerce with China a "carrot" to encourage its leaders to slow or halt their sales of missiles to nations such as Iran and Pakistan. In a 1997 memo by Holum, "There's been no evidence to date that this [trade] policy is having any effect.. Carrots have gotten us nothing." Holum addressed the difference in his position by pointing out that in 1997 he was head of the Arms Control and Disarmament Agency but now he is also is an undersecretary of state.

General Accounting Office 6/19/98: China could use even the limited military deliveries from the US since the Tiananmen Square arms embargo to improve its military capabilities. President Clinton has issued waivers of military items valued at $36.3 million and licensing of commercial military exports worth about $313 million. US government exports between 1990 and 1997 include four Mk. 46 Mod 2 torpedoes for test and evaluation purposes, avionics for the F-8 fighter, and four AN/TPQ-37 Firefinder counter-artillery radar systems. Commercial exports include satellites and related equipment and Munitions List equipment for inclusion in civil products.

7/9/98 Tom Raum AP "China has obtained weapons-capable technology from the United States that goes far beyond that of satellite exports, Congress was told Thursday by the former director of the Pentagon agency that oversees technology security. ``The export-control system is falling apart'' under the present jurisdiction of the Commerce Department, Stephen Bryen, director of the Defense Technology Security Administration during the Reagan administration, told a hearing by the Senate Armed Services Committee. In particular, he cited Commerce Department approval of exports to China of supercomputers,machine tools, jet engines and high-tech furnaces. ``China has been able to get technology that was forbidden to the Soviet Union,'' he said."

Prepared Testimony of Dr. Stephen Bryen for Armed Services Committee US Senate 7/9/98 ".Export controls played an important role in countering the military build-up of the Soviet Union, particularly from the mid 1970's until the late 1980's, by denying the Soviets technology to enhance the qualitative capability of their weapons systems. Today the export control system is in disarray. Most of the key components of the program have disintegrated. A vast array of sensitive goods and technology has been decontrolled, making it easy for potential adversaries and hostile countries and groups to acquire technology they can leverage against us. Even the remaining controls appear to be administered loosely, and the quality of review seems to be slipshod. Critical elements of the export control program, particularly end-user checks and verification, have been scuttled to accommodate customers, especially China, the only country that will not allow post shipment checks, and the only country to get away with denying US authorities this access.China has been able to get technology that was forbidden to the Soviet Union.."

Softwar 7/98 ".In 1994, just prior to traveling with Brown, Mr. Schwartz had his LORAL staff prepare a shopping list for the Chinese and Ron Brown. This list, complete with very big pictures, would make LORAL's large ticket items easier to understand and digest at Ron Brown's (executive) level. However, the same list would also make anyone familiar with military equipment go bananas. On that day Ron Brown stopped being Secretary of Commerce and started his new career as an international arms dealer. The items LORAL carried to the meeting with Ron Brown resemble a JANE'S Defense catalog of high tech weapons. Some of the Loral suggested "red" ticket items up for sale included "Airborne Reconnaissance Cameras, Weapon Delivery, Target Acquisition, Missile Guidance, Shipboard Target Acquisition, Radar Warning, Missile Warning, RF Jamming, IR Jamming..." and so on. Please note - Anything that starts with "weapon", "missile" or "target acquisition" does NOT qualify as a civilian application. The result of the 1994 China trade trip? Today, China is using Loral satellites to perform all weather bombing using a "western" based navigation system in their modified Russian SU-27 FLANKER jet fighters. These navigation aids were originally sold to China under the condition they would be used on "civilian" airliners. Of course, now that the satellites are under PRC control, their civilian operation has been shifted slightly. The SU-27s are made in Russia (soon to be copied by license in China) and they are not going to complain about the navigation gear being tuned to Schwartz's satellites. Thus, the next bombs to fall in anger from a PLA warplane will come courtesy (and with great accuracy) via the USA. Another US, high-tech, upgrade for the benefit of China's Generals and Commissars is their new secure military communication system. China is now using US built secure encoding systems to protect their military satellite and global communications. This 21st century system is a decades leap forward for the Chinese, who previously depended on former Soviet built analog scramblers to protect their highest military orders. The great leap forward for the PRC did not come at the end of years of costly R&D followed by careful deployment. Instead, the Princes in Beijing can now issue nuclear launch code orders using C4 (Command, Control, Communications, and Computers) systems that rival the best in the free west. Basically, this is because their system was built in the free west. .Additional proof of who authorized the military exports to China comes not from a SOFTWAR FOIA but from a recently published GAO report on US weapons exports to China. The GAO published a report on May 7, NSAID-98-171, which states "According to State (Department) officials, since 1990, 11 Presidential waivers have been issued removing export restrictions on 21 satellite projects. Presidential waivers were also granted to permit the export of encryption equipment controlled on the Munitions List". Thus, Bill Clinton determined it was in our national interest to arm Red China. He wrote the waivers. He authorized the sales... He took the donations.

Softwar 9/1/98 Charles Smith ".Anewly released document obtained from the Defense Department, using the Freedom of Information act, shows that DoD joined the White House in a coordinated defense of the export to China. The document, a 1996 response letter from the deputy secretary of Defense to National Security Committee Chairman Floyd Spence, R-SC, also provides a detailed view of the Chinese military C4 (Command, Communications, Computers and Control) system. In 1994 SCM/Brooks Communications purchased large quantities of secure communications gear for sale to a so called "civilian" Chinese firm, New Galaxy Technology, including real time, encrypted, fiber-optic video systems. AT&T officials who sold most of the equipment to SCM/Brooks were adamant that there was no need to check the Chinese firm, New Galaxy, since it was obviously led by a civilian, Ms. Nie Lie. However, Nie Lie was the wife of Chinese Army General Ding Henggao. In 1994, General Ding Henggao was director of the Chinese Commission of Science, Technology, and Industry for National Defense or COSTIND. COSTIND, according to the GAO "oversees development of China's weapon systems and is responsible for identifying and acquiring telecommunications technology applicable for military use." One member of New Galaxy management, according to the Defense document, was Director and President "Mr. Deng Changru." Yet, Mr. Deng Changru was then also Lt. Colonel Deng Changru of the People's Liberation Army, head of the PLA Communications corps. Another Chinese Army officer in the New Galaxy staff is co-General Manager "Mr. Xie Zhichao" who is really Lt. Colonel Xie Zhichao, Director of the COSTIND Electronics Design Bureau. In 1994, despite the red stars and green uniforms, New Galaxy was certified as a civilian company by the Brown-led Commerce Department. New Commerce Department export regulations did not require a pre-sale check on end use with civilian companies. So the deal was completed and the People's Liberation Army obtained an encrypted C4 system from America. And where was the U.S. military watchdog on this? According to the Deputy of Defense, the export was of no concern because "the PLA already has its own, extensive and very modern communications infrastructure that incorporates very advanced technologies, including fiber optic systems and a nation-wide microwave system". Again, what the Clinton DoD left out is that the German built fiber optic system sold to China never worked and was abandoned in 1994."

DAWN (Pakistan) 9/2/98 "Pakistan will learn little from the Tomahawk cruise missile found unexploded in Pakistan territory after the Aug 20 US attack on Afghanistan, defence and US Navy officials here say..Many experts, however, believe Pakistan could allow Chinese missile experts to inspect the Tomahawk and they could provide Pakistan the capability to do some reverse engineering. This engineering capability could be used in improving both Chinese and Pakistani missiles, their engines and other systems, including any chances of improvising the 'Ghauri' long-range missile, said to be built on North Korean technology.."

New York Times Jeff Gerth 10/19/98 ".The Pentagon was traditionally the strongest voice against technology exports, and Clinton made several appointments calculated to change the culture. William J. Perry, an executive at a Silicon Valley company who was vocally opposed to the existing system of export controls, was named Deputy Defense Secretary and then Defense Secretary. John M. Deutch, a professor with similar views, was named to a senior post at the Pentagon, and then became Director of Central Intelligence. ."One reason I ran for President was to tailor export controls to the realization of a post-cold war world," Clinton wrote.. According to a 1995 estimate, more than $1.9 billion in annual trade with China had been removed from Federal scrutiny. A ban remains in effect on the sale to China of the most militarily potent technologies, like ballistic missiles, spy satellites and advanced fighter aircraft. Beijing buys those weapons from Russia, Europe and Israel. "China has benefited more than any other country from U.S. decontrols on certain dual-use commodities enacted in late 1993 and early 1994," one Commerce Department document says. "There has been a 60 percent decrease in the number of individual export licenses required for trade with China (from 2,229 in 1993 to only 925 in 1994)." The rules shifted much of the burden for controlling exports to the companies making the deals..By 1995, the Pentagon was urging Congress to look more closely at export policy. Military officials noted that the effect of technology was cumulative, and that while individual sales might appear benign, a combination of cutting-edge acquisitions would allow an adversary to build much better bombs or radars. President Clinton, documents show, was moving in the opposite direction.."

U.S Department of Commerce Press Release (via The American Cause) 1/28/99 Eugene Cotilli, Susan Hofer, U. S. Dept. of Commerce, Bureau of Export Administration ".U.S. high technology firms investing in the Chinese market are under increasing pressure to transfer commercial technologies and know-how as a condition of market access and investment approval in the People's Republic of China, the Commerce Department's Bureau of Export Administration (BXA) said in a report released today. "Technology transfer is both mandated in Chinese regulations or industrial policies (with which U.S. companies wishing to invest in China must comply) and used as a deal-maker or sweetener by U.S. firms seeking joint venture contracts in China," the report said... The report concludes that the massive size of China's market makes it extremely difficult for U.S. and other foreign companies to ignore its commercial potential. As long as China is demanding technology transfers as a condition of doing business, and other countries are encouraging -- and in some cases actively participating in -- technology transfer schemes with Chinese entities, Chinese leverage in dealings with U.S. companies is enormous. The Bureau of Export Administration, through authorities delegated under the Defense Production Act and other statutes, has a mandate to study the US defense industrial and technology base and to develop and administer programs to ensure the continued economic health and competitiveness of industries that support U.S. national security.."

James Kynge 3/25/99 "…China is planning to offer a key trade concession to Washington by opening its domestic market to the US mobile phone standard CDMA, raising the prospect of billions of dollars in exports for American companies. An announcement of Beijing's plans to allow the nationwide provision of CDMA (Code division multiple access) systems is expected around the time that Zhu Rongji, the Chinese premier, visits the US in April. A Chinese telecoms official cautioned, however, that the announcement could be withheld if Mr Zhu encountered hostility in Washington…."


James Kynge 3/25/99 "…China's plan to embrace CDMA, the mobile telephony standard created by the US company Qualcomm, could prove hugely beneficial to North American manufacturers which are developing the equipment. It could mean a significant shift in the balance of power in digital mobile communications away from Europe, where Nokia and Ericsson and Siemens are in the driving seat, and towards US manufacturers such as Lucent and Motorola….The roll-out of CDMA in China would allow Beijing to pressure US manufacturers to transfer their third generation technology - CDMA 2000 - in the same way as the Europeans are doing, a Chinese telecoms official said. This might convince Beijing to opt for a standard compatible either to US mobile phones, or to both European and US technologies."The Americans would be wise to transfer their CDMA-2000 technology. It can only help them in the Chinese market," the official said…."

San Diego Union-Tribune 3/19/99 Mike Drummond "…San Diego-based Qualcomm is trying to clamp down on unauthorized leaks to analysts and the media. Jeffrey Belk, vice president of marketing, fired off a memo to employees this week warning that reporters and others are trying to infiltrate the corporate fortress. ….Indeed, Belk also was worried about pesky Wall Street analysts and nosey investors who approach employees…."



Dean Calbreath 3/17/99 "… When China Telecom wants to lay phone lines in the Chinese countryside, it can tap an entire army of laborers to do the job. Literally. The young soldiers of the People's Liberation Army often are ordered to pick up shovels so they can lay fiber-optic lines for the telephone company's voice and data networks…The army's involvement in telecommunications goes beyond digging ditches. An army-backed company has entered a partnership with San Diego-based Qualcomm and other U.S. companies to help bring CDMA phones to China. Trading companies set up by the army have bought satellite communications equipment from Radyne ComStream and AT&T, among others. The army itself
runs several phone-equipment factories and telecom networks in southern China…… Much of the investigation has focused on such hot-button topics as rocket technology and multiple warheads, but sources on Capitol Hill say telecommunications is becoming an item of major concern. The chief fear: that the Chinese are using U.S.-made fiber-optic lines, cellular phones, satellite dishes and encryption technology to build a network impervious to jamming or interference….."We're creating a situation in which a strategic surprise will happen and we won't be able to read the other side's mail," says Peter Leitner, a trade specialist with the Defense Technology Security Administration at the
Pentagon. "We won't be able to prepare for the other side's actions, dissuade them from happening or, perhaps, pre-empt them. And that makes the world a more dangerous place."….Hua Mei's principal partner is a company controlled by the Chinese army. The chairwoman of Hua Mei is Nie Li, the wife of Gen. Ding Henggao, chief of the Chinese ministry responsible for developing technology for the
military. Hua Mei's vice chairman, Xie Zhiehao, is a lieutenant colonel in the PLA who heads ministry's electronics bureau. Several other board members are military officers or have direct ties to the military.
"Such a high degree of involvement in Hua Mei could indicate a strong military interest in the company," said the U.S. General Accounting Office in 1997. The Chinese army had reason to be interested. According to the GAO, the type of equipment AT&T was exporting had numerous military applications, including intelligence-sharing. It also enhanced the army's command and control capabilities. Katherine Schinasi, the GAO official who directed the Hua Mei investigation, does not fault AT&T for failing to notice the Chinese army's involvement in the company….. One of ComStream's biggest recent exports was a $6.2 million shipment of VSAT satellite receivers in July 1997 to China National Instruments Import and Export, which said it would use the equipment to expand China's communications infrastructure. At the time, National Instruments was a purchasing arm of the Chinese army. Mike Lee, director of Asia-Pacific sales at ComStream, says he was not aware that National Instruments is owned by the PLA. He declined to say whether National Instruments is still a customer….. The manager of Leitner's office,
Michael Maloof, raised concerns about VSAT and other high-tech exports in November during Rep. Cox's hearings on technology transfers to China….. "The problem is that no one's doing an assessment of what it will mean when all these technologies are put together. Many of these technologies were
created for military use, so it shouldn't be a surprise that the Chinese would want to use them that way." ….
Leitner says that even the most innocuous-sounding exports could be used by the Chinese military. Qualcomm, for instance, is testing its Omni-Tracs system to improve truck communications in southern China, under a deal struck last May with the Guangdong South Satellite Telecommunication Service. With Omni-Tracs, a small satellite dish is installed behind the cab of a truck. Not only does the dish allow the driver to engage in two-way satellite communications, but it also works as a global-positioning system, allowing the trucking company to know where its vehicles are at all times….."


Dean Calbreath 3/7/99 "…Qualcomm in San Diego attributes part of its success in the worldwide telecommunications market to being able to attract brainpower from outside the United States. In testimony before the House Subcommittee on Immigration and Claims last
year, Daniel Sullivan, chief of Qualcomm's human resources department, said that engineers such as Yu-Chen Jou, a Chinese national who gained his doctorate at the University of Southern California, "have helped transform Qualcomm into a global leader in wireless communications…However, critics of technology transfers to China say there is a vast difference between trading with a Russia that has destroyed much of its weaponry and trading with a totalitarian government in Beijing, which only two years ago was conducting missile practice off Taiwan….Qualcomm and other U.S. companies, for example, have been helping the Chinese make advances in Code Digital Multiple Access technology, or CDMA, the wireless technology the People's Liberation Army wants to introduce to
China. Last March, Qualcomm set up a joint research program on CDMA with the Beijing University of Posts and Telecommunications, a major campus for teaching Chinese scientists and technicians. The firm also offered a series of scholarships for professors and students studying CDMA technology at the
university….. Some observers say that by learning how to increase the bandwidth, the Chinese will also be able to enhance the military value of CDMA since it will allow for traffic that could provide a smoke screen for battlefield communications. "The wider the bandwidth, the more applicable it becomes for a military scenario," says Larry Milstein, professor of electrical and computer engineering at UCSD…."

Dean Calbreath 3/7/99 "…Motorola, for instance, has provided more than 2,000 scholarships over the last four years for Chinese students at technical universities. The company has supplied electronics kits and technical manuals to about 30 universities throughout China in the past three years, and it plans to establish microprocessor labs and communications labs in 20 Chinese universities by 2001. In the meantime, Motorola's Asia Manufacturing Research Center in Beijing -- it's the company's first manufacturing research lab outside the United States -- is working on joint research projects with Qinghua University,known as China's MIT…. In a special report released last month, the U.S. Commerce Department's Bureau of Export Administration said U.S. companies often establish "technology development centers" or similar facilities to open business opportunities in China….."


Dean Calbreath San Diego Union-Tribune 3/7/99 "…Using technology from Qualcomm in San Diego, China's state-owned satellite company is linked to Globalstar, the network of communications satellites created by Qualcomm and Loral Space Systems. It's the '90s version of the space race: Globalstar vying with other satellite competitors -- Iridium by Motorola and ICO Global Communications by Hughes Electronics -- to bring China into its worldwide phone system….. Over the last six months, Bernard Schwartz, the New York magnate who heads both Loral and Globalstar, has figured prominently in a congressional investigation to determine if his engineers passed sensitive rocketry information to the Chinese. At the same time, the National Security Committee in the House has been investigating whether satellite ground stations in China, such as those that Qualcomm is building in Beijing, Guangzhou and Lanzhou, can be adapted to handle secure military communications for the People's Liberation Army. "Generally speaking, we're concerned whenever there's (been) an export of satellite equipment to China that contains encrypted technology," says Bill Klein, a military affairs adviser to Rep. Tillie Fowler, R-Fla., who has been spearheading the investigation…. Just weeks after it was founded, Globalstar was holding seminars in China, outlining plans to bring phones to the masses…..However, because U.S. export laws tightened after the Tiananmen Square massacre in 1989, Globalstar and its U.S. competitors at that time could not export satellites and ground stations to China without obtaining waivers from the State Department. Schwartz, a lifelong Democrat, succeeded in getting waivers from both the Bush and Clinton administrations to export some goods to China. In the spring of 1994, Schwartz successfully urged Ron Brown, the late Commerce secretary, to lift restrictions on transfers of technology, permitting Schwartz to launch satellites in Russia and China….. "

Dean Calbreath San Diego Union-Tribune 2/26/99 "…The Qualcomm deal is noteworthy because of its reliance on Code Multiple Division Access technology, or CDMA, the U.S. standard for wireless communications. U.S. government documents say CDMA is the technology of choice for the PLA,which pushed hard for the technology's entrance into China. Although it has widespread civilian applications, CDMA is also useful in protecting messages from jamming or eavesdropping……"Technologies like CDMA are harder to (penetrate) because of their digital nature," says Bukasha Tshilombo, a senior analyst on the wireless communication team at Dataquest. "They provide an element of security thatis beneficial to military organizations." CDMA technology originally was developed during World War II to protect battlefield communications from interference. During the Cold War, it was refined to provide security for satellite communications….In a 1996 memo, Jim Sasser, then the U.S. ambassador in Beijing, cabled Washington that the army "has for some time been discussing with (the ministry) the possibility of . . . establishing a mobile phone network based on CDMA technology." In the memo, obtained through the Freedom of Information Act by Softwar, an arms-trade watchdog in Virginia, Sasser wrote that the army pressed for CDMA because it offered greater capacity than GSM…..In 1997, the army and the phone ministry formed Great Wall Mobile Communications, which quickly set about acquiring CDMA technology from the West….."

Mike Drummond and Dean Calbreath 2/26/99 "…"China is a big (potential) CDMA market," said Qualcomm President Richard Sulpizio. "We want Qualcomm to get a piece of that." Sulpizio said the company wants to partner with one or more Chinese companies and sell wireless phones and supporting CDMA base stations, as well as possibly build manufacturing plants in China. He noted that he will be with the delegation U.S. Secretary of Commerce William Daley is taking to China next month. "We'll be working this hard over the next 30 to 60 days," Sulpizio said…"

Matt Pottinger 3/26/99 "…Just days after fretting about its fortunes in China, a surprise deal with Qualcomm has given Ericsson pole position in the world's fastest growing mobile phone market, Ericsson's China chief said Friday…. Ericsson's announcement Thursday that it was buying the wireless network business of San Diego-based Qualcomm Inc (Nasdaq:QCOM - news) -- the company that developed the CDMA standard. ``We'll be able to sell into both'' the CDMA (Code Division Multiple Access) and GSM (Global System for Mobile Communications) markets in China, he said…"

William Norman Grigg 7/6/99 "…According to Loral officials, the Chinese-born former Loral executive who headed the launch investigation, Dr. Wah Lim, violated company policy when he turned over the 200-page assessment without notifying U.S. officials. Representative Gerald Solomon (R-NY), chairman of the House Rules Committee, is investigating a report that Lim was previously denied a high-level security clearance when he worked for Northrup Grumman on the B-2 bomber. After providing Chinese officials with the launch assessment, Lim left Loral to take a position with Hughes Electronics as vice president of technology and development. Hughes is a firm that literally celebrates its technical collaboration with Beijing: The corporation commemorates "Collaboration Day" every July 10th. The event, sponsored by the Hughes-China Technology Program, "is part of Hughes' commitment to support China electronics and communications industries," explained an October 15th press release from the corporation. Not surprisingly, the press release noted that "Hughes executives acknowledge the encouragement and support of the Chinese government." "Hughes values the development of mutually beneficial partnerships with China and hopes to continue providing assistance, expertise, and resources to Chinese universities and institutions for the research and development of advanced technology," declared Dr. Wei-Yu Wu, director of the Hughes-China Technology Program. "There are numerous very qualified scientists and technicians in China. Hughes would like to work with these talented individuals to help them scale new heights through the launch of even more technological cooperation projects. Hughes-China Technology Collaboration Day will be held every year from now on in order to enhance exchanges and cooperation." COSTIND's General Ding himself might easily have drafted this statement…."

William Norman Grigg 7/6/99 "…In the wake of Chung's damaging disclosures, State Department spokesman James Rubin insisted that "no controlled information" regarding missile technology "has been authorized to be made available to Chinese authorities." In this fashion Rubin decanted a sophisticated falsehood worthy of Bill Clinton himself: Loral's technology transfers were unauthorized at the time they were made, but essentially authorized after the fact by Bill Clinton's February 1998 waiver. The waiver was issued despite the State Department warnings to the National Security Council that Loral's actions were "criminal, likely to be indicted, knowing and unlawful." Rubin also protested that "the whole underlying suggestion that somehow we want to transfer technology to the Chinese ... is simply fatuous." Perhaps Rubin has not been informed that in late 1994, the Clinton Administration entered into an agreement with Red China's Commission on Science Technology and Industry for National Defense (COSTIND) for the specific purpose of facilitating technology transfers to Red China. As reported in these pages more than a year ago (see "Honoring the Butcher of Beijing" in our January 20, 1997 issue), in October 1994 then-Defense Secretary William Perry signed an unprecedented agreement with COSTIND chairman Lieutenant General Ding Henggao to provide for technology transfers from the U.S. to Beijing under the rubric of the "U.S.-China Defense Conversion Commission." While the putative purpose of that Commission was to assist the Chinese in adapting military technologies for civilian use, Beijing, not surprisingly, has a different perspective, and General Ding has expatiated upon that perspective quite capably. In the Summer 1994 issue of Chinese Military Science, General Ding declared: "Defense and commercial products are becoming more and more compatible. While we emphasize the conversion of defense technology into commercial use, we must study defense-commercial dual-purpose technology and possible transfers from commercial technology to defense use." The drive for "socialist modernization" means acquiring new high-tech capabilities for the Chinese military, noted Ding: "Defense science, technology, and industry are the major material bases on which we can realize our army modernization.... "

Rediff 4/17/99 Seema Sirohi "....From India's perspective, the picture looked distorted, even skewed. No matter how much China violated international norms, proliferated nuclear technology or used its spies against the United States, it was the guest of honour at the party. As if to rub it in, Clinton, who granted China the status of "overseer" in South Asia during his visit to Beijing, publicly thanked Zhu for helping "curb" proliferation in South Asia. Zhu completed his summit meeting with Clinton without the agreement he most sought - US support for China's entry into the World Trade Organisation. He also received mild rebukes for China's human rights record and uncomfortable questions on Taiwan. But the underlying message was one of working together as Clinton continues down the course of "constructive engagement" with the superpower-in-waiting. ....The depth of the engagement policy was most evident in a report timed for release with Zhu's arrival. The report showed that China received $15 billion worth of strategically sensitive US exports, ranging from super computers to oscilloscopes, over the past 10 years. The array of high-tech equipment legally exported to China could be used for designing nuclear weapons, processing nuclear weapons material, building missile parts and transmitting data from missile tests. The endless list of export licenses granted to China presents a sharp contrast to the "deny, deny, deny" policy toward India. While sophisticated technology is sold directly to the Chinese military, even paper clips are denied to the Indian defence department after last May's nuclear tests. The restrictions against India, already many-layered because of New Delhi's refusal to sign the Nuclear Non-Proliferation Treaty, multiplied after Pokhran-II, effectively choking the flow of technology. China, meanwhile, enjoys American trust and buys cutting-edge equipment despite its record of supplying nuclear technology and missile components to Pakistan, Iran, Syria, Iraq and other countries over the years. The buying spree continues even in the face of at least two serious instances of Chinese nuclear espionage which recently came to light. Chinese moles allegedly stole the design of W-88, the most advanced American nuclear warhead, and data on the neutron bomb from US government labs.....But what China allegedly stole pales in comparison to what it legally bought through regular channels under Clinton's "trade-first" policy. The report prepared by the Wisconsin Project on Nuclear Arms Control, a Washington-based think tank, said that lax Commerce Department rules allowed China's military establishment to purchase dual use items, many of which later turned up in Pakistan and Iran. The damage to US national security from such legal largesse was far greater than China's nuclear espionage. China bought more than 11,000 computers on the restricted list worth $7.7 billion after 1993 when the definition of what constitutes a "supercomputer" was changed by the Clinton administration. The bar was raised, allowing for a seven-fold relaxation in supercomputer export controls. By February 1994, the Clinton administration leaning under industry pressure and trying to promote trade, defined a supercomputer as a machine performing 1.5 billion operations per second from the earlier 195 million operations per second. By 1996, the controls were relaxed even further, allowing export of computers performing 2 billion operations per second. "If a Chinese buyer did not admit to being a nuclear, missile, or military site, it could import computers performing up to 7 billion operations per second. Such computers are used, among other things, to encode and decode secret messages, to design and test nuclear warheads and to simulate the performance of missiles from launch to impact," the report says....."

 

INTELLIGENCE - Exceptional Technology for China

www.softwar.net Freeper report "...The Sino-Swearingen plant in West Virginia is a joint project between Texas based Swearingen aircraft, the AFL-CIO, and Sino-Aerospace Investment Corporation. The joint interests of PRC billionaire Li Ka-Shing, a big U.S. union, and Sen. Rockefeller were teamed up to manufacture business jets in the remote mountains of rural West Virginia. The so-called SJ-30 "business" jet is state-of-the-art. The SJ-30 can travel 2,500 miles at nearly the speed of sound and is rated to cruise at 49,000 feet. The SJ-30 is considered to be the leading edge of U.S. commercial aerospace technology and includes all the latest in avionics such as GPS navigation. The immense speed, range and altitude capability of the SJ-30 can be attributed to the twin Rolls Royce/Williams FJ-44 turbofans that power it. The Williams FJ-44 is also used in the Swedish SK-60 military attack trainer and powers the USAF DarkStar stealth robot spy plane. Williams is best known for making the jet engines for U.S. Tomahawk and ALCM cruise missiles....."

Koenig's International News 5/18/99 Charles Smith "....According to a 1997 Commerce Dept. report, the Clinton administration gave the Chinese "fine images of rural China and Beijing as well as Siberian port cities, Seoul and Kadena Air Force Base on Okinawa." In 1997, U.S. Commerce Dept. officials at the American Embassy in Beijing wrote that the Chinese obtained satellite images in order to "help demonstrate that Tibet has enough arable land to feed itself.".... Dept. of Commerce documents shows the Chinese "remote Sensing Center" was supplied with "world class remote sensing data acquisition, processing, archive and distribution" equipment. The state-of-the-art satellite equipment was provided by HUGHES Corp. In 1995, the Hughes Corp. CEO was million dollar DNC donor Michael Armstrong. The U.S. space images were obtained from the satellite "remote sensing" station operated by a Chinese Army unit - the Commission on Science, Technology and Industry for National Defense (COSTIND). In 1995, COSTIND was led by PLA General Ding Henggao. General Ding, a close friend of U.S. Defense Secretary William Perry, led several so-called "commercial" ventures with the Commerce Dept. to obtain advanced U.S. technology for the Chinese Army, including the joint Hughes/PLA remote sensing venture.... Clearly, the war to dominate Earth starts in space...."

Koenig's International News 5/18/99 Charles Smith "The modern space war includes satellites for highly accurate navigation and bombing. For example, the bombs that struck the Chinese Embassy in Belgrade were directed to the target using the GPS (Global Positioning System) satellite navigation system. In 1995, the Clinton administration approved the sale of the very same bombing/navigation technology directly to a company owned by the Chinese Air Force. The sale included a complete manufacturing facility and training for the Chinese workers.

Freeper ohmlaw98 5/12/99 reports Page H2955 Certification by Clinton on 5/10/99 "...To the Congress of the United States: In accordance with the provisions of section 1512 of Public Law 105-261, the Strom Thurmond National Defense Authorization Act for Fiscal Year 1999, I hereby certify that the export to the People's Republic of China of satellite fuels and separation systems for the U.S.-origin Iridium commercial communications satellite program: (1) is not detrimental to the United States space launch industry; and (2) the material and equipment, including any indirect technical benefit that could be derived from such export, will not measurably improve the missile or space launch capabilities of the People's Republic of China....."

Koenig's International News 5/19/99 Charles Smith "... The transfer in late 1994, known as the Hua Mei project, involved advanced telecommunications technology -- with a variety of battlefield and civilian applications -- from AT&T via SC&M Brooks in St. Louis to Galaxy New Technology in China. The fiber-optic technology sold to Galaxy New Technology is not a weapon itself, but it greatly enhances the command and control system linking the Chinese army, navy and air force. The Chinese may have repackaged the same system and resold it to Iraq, where it would be able to threaten the lives of U.S. pilots flying reconnaissance missions. According to Aviation Week & Space Technology, Iraq's air-defense system -- code- named "Tiger-Song" by NATO commanders -- is an advanced internet for surface-to-air missile batteries using secure fiber-optic communications. One of the advantages of Tiger-Song is that it allows the Iraqi radar installations not associated with Iraqi missile batteries to lock in on U.S. aircraft and transfer the information to the missile operators through the secure fiber-optic network. Perry faced a firestorm of criticism in early 1996 following reports that he overruled objections from the Pentagon's technology directorate, as well as from critics in the National Security Agency, who wanted to block the transfer in 1994...."

Koenig's International News 5/19/99 Charles Smith "...Newly released documents from the Commerce Department reveal that Perry and other officials met with several leading generals of the PLA at an unannounced closed-door meeting at Commerce on Nov. 17, 1994. The documents show the level of contact between the Chinese army and the Clinton Commerce Department to be far deeper than previously admitted. On the U.S. side, Perry was assisted by his friend and colleague at Stan ford University, John Lewis, who was a business partner of Galaxy New Technology and a member of the Defense Policy Board of the Pentagon, as well as a civilian consultant to the Secretary of Defense, according to Pentagon documents. In 1994 Lewis was executive director of Chicago-based SCM (which later became SC&M and merged with St. Louis-based Brooks Telecom.) According to the Far Eastern Economic Review, Lewis was a member of the SCM board until January, 1995, although Lewis told the Review that he left SCM at the time he was appointed to the Defense Policy Board in August, 1994. SC&M Brooks was acting as a conduit for AT&T fiber-optic technology wanted by the Chinese generals. SC&M/Brooks was financed on the U.S. side by Perry's investment-banking firm, Hambrecht and Quist, according to one of the bank's advertisements in 1995. Perry in 1985 helped found Hambrecht and Quist, which also is the financial backer of the liberal-leaning Salon magazine...The Chinese delegation was led by PLA Gen. Ding Henggao -- the head of the Chinese Commission of Science, Technology and Industry for National Defense, or COSTIND -- who brought with him some of the highest-ranking PLA officers to travel outside of China. Dine brought his aide and second in Command at COSTIND, Lt. Gen. Huai Guomo, as well as Maj. Gen. Fu Jiaping and Maj. Gen. Chen Kaizeng. Ding even brought one of the spymasters of the Chinese army, Major Gen. Hou Gang, deputy director of the Intelligence Department of the PLA. The military affiliation of the company officials meeting with Perry should have raised serious doubt as to the supposed civilian application of the fiber-optic system being traded, as required by Commerce Department licensing regulations. The cochairmen of the Hua Mei joint venture in 1994, according to Pentagon documents, were former senator Adlai E. Stevenson III and Madam Nie Li, wife of Ding. Lie holds her own military rank -- Madam General Nie of the People's Liberation Army. Lewis is listed in the same document as one of five directors under Stevenson's chairmanship...."

Koenig's International News 5/19/99 Charles Smith "... The Galaxy New Technology deal went public in 1996, drawing reams of press and a General Accounting Office, or GAO, report. According to the GAO, "Defense Department officials told us that broadband telecommunications equipment could be used to improve the Chinese military's command and control communications networks." House Judiciary Committee Chairman Henry Hyde of Illinois tried to prompt an investigation in 1997 by writing Attorney General Janet Reno a letter outlining his concerns about Galaxy. According to Hyde's letter to Reno, "In 1994, sophisticated telecommunications technology was transferred to a U.S.-Chinese joint venture called HUA MEI, in which the Chinese partner is an entity controlled by the Chinese military. This particular transfer included fiber-optic communications equipment which is used for high-speed, secure communications over long distances." Despite the GAO report, Hyde's letter, a furious Congress and embarrassing press reports, Reno did nothing...."

Augusta Chronicle 5/30/99 Editorial "...``The dissolution of the Coordinating Committee for Multilateral Export Controls in 1994 left the United States without an effective international mechanism to control the transfer of important military technologies. The U.S. relaxed restrictions on high-performance computer (HPC) sales in 1996. The PRC has been using HPCs for nuclear weapons applications ... (and the) research and development of missiles, satellites, spacecraft, submarines, aircraft.'' (China had no HPCs in 1996; it purchased more than 600 from the U.S. by the end of 1998!) Just these two examples underscore not only how the espionage undermined our national security, but how legal technology transfers by America's un-American firms stabbed us in the back...."

Augusta Chronicle 5/30/99 Editorial "...It was in April 1998 when some patriotic congressmen discovered how three U.S. companies helped China improve its missiles. Loral Space & Communications, Hughes Electronics and Motorola shamefully supplied Beijing with the launch know-how that China used to improve the reliability of its long-range nuclear missiles....."

Right Magazine 5/16/99 Linda A. Prussen-Razzano "...COSTIND's primary function is the acquisition of modern technology, preferably "dual-use" technology that can be transitioned for military applications. In the early 1990's, COSTIND's focus specifically shifted; "COSTIND Deputy Director Shen Rongjun called for China's weapon development programs to focus on high-technology, especially electronics and military applications of satellites." (96-889, Kan, December 3, 1997). News and intelligence reports indicate that in order for COSTIND to obtain this technology, they created various "civilian" fronts (some of which are directly under the supervision of the PLA), including:

Galaxy New Technology Corporation
New Era Corporation (Xinshidai)
Yuanwang Group
Technology Selection Inc. of California
China Association for Peaceful Use of Military Industrial Technology (CAPUMIT)
China National Nuclear Corporation
Aviation Industries Corporation of China
China Aerospace Corporation
China Great Wall Industry Corporation (CGWIC)
China North Industries Group (NORINCO)
China State Shipbuil ding Corporation.
China Electronics Industry Corporation (Ministry of Electronics Industry)
China Satellite Launch Agents, Ltd.
China Xinxing Group
China Satellite Launching and Tracking Control
Poly Technologies Corporation (Baoli)
Sinosat
EuraSpace..."
MILITARY General

Miami Herald 6/4/99 Robert Reno "....The American military is shedding its apolitical traditions in a trend that soon could lead to an exclusively right-wing, deeply partisan officer corps...Polling of senior U.S. officers shows that between 1976 and 1996 they went from being 33 percent Republican to 67 percent Republican. Those calling themselves Independents, once a majority, now are the exception, and liberals, outnumbered 4-1 in 1976, now are outnumbered 23-1...."

Sen. James M. Inhofe Republican from Oklahoma. "...But as the Cox Report points out, nuclear espionage by China is only one part of the problem. China's efforts to acquire U.S. military-related technology is pervasive. Operating through a maze of government and quasi-government entities and front companies, China has established a technology-gathering network of immense proportions. They are willing and able to trade, bribe, buy, or steal to get U.S. advanced technology-all for the purpose of enhancing their long-term military potential. Their success is often determined largely by our willingness to make it easier for them to get what they want. The Cox Report has shed light on the fact that the Clinton Administration has actually helped China in its technology-acquisition efforts or made it easier for them to commit thefts and espionage. You know the truth is always difficult and controversy is difficult. It is easier to take polls and tell people what they want to hear. But I have to make a decision-whom do I love more, this president or America. That is easy. The following are just some of the things that the Clinton Administration has done. And I want to applaud Cong. Weldon for helping to bring many of these things to light.

1. In 1993, the Clinton Administration removed the color-coded security badges that had been u

sed for years at Energy weapons labs claiming they were "discriminatory"-as if that makes any sense whatsoever. Now just a few weeks ago, in the wake of all these revelations, the Energy Department has reinstated the color-coded badges to tell us it is fixing the problem. But I don't hear current Energy Secretary Bill Richardson talking about who created this particular problem.

2. In 1993, the Clinton Administration put a hold on doing FBI background checks for lab workers and visitors, an action which helped to dramatically increase the number of people going to the labs who would previously have not been allowed to have access.

3. In 1995, the Clinton Administration took the extraordinary action of overturning its own agency's decision to revoke the security clearance of an employee found guilty of breaching classified information. When this happened, it sent a message to employees throughout the Department, that this administration was not serious about countering breaches of classified information.

4. The Clinton Administration deliberately, and many would say recklessly, declassified massive amounts of nuclear-related information in what the Clinton Administration touted as a new spirit of openness.

5. In the W-88 investigation, the Clinton Administration turned down four requests for wiretaps on a suspect who was identified in 1996 and allowed to stay in his sensitive job until news reports surfaced in 1999.

6. In 1995, someone at the Department of Energy gave a classified design diagram of the W-87 nuclear warhead to U.S. News & World Report magazine which printed it in its July 31 issue that year. Rep. Curt Weldon is still trying to get answers about how this leak was investigated and what was determined. He has good reason to believe the investigation was quashed because it was going to lead straight to President Clinton's Energy Secretary.

7. Career whistleblowers at the Department of Energy, who tried to warn of serious security breaches-people like Notra Trulock, the former Director of Intelligence, and Ed McCallum, the former security and safeguards chief-were thwarted for years by Clinton political appointees who refused to let them brief Congress and others about what they knew. Trulock was demoted, but will now get to keep his job. McCallum appears on his way to being scapegoated and perhaps fired for trying to tell the truth.

8. Rejecting advice from his Secretaries of State and Defense, President Clinton approved switching the licensing authority for satellites and other high technology from the State Department to the Commerce Department, making it easier for China to acquire U.S. missile technology.

9. President Clinton granted waivers making it easier for U.S. companies to transfer missile and satellite technology to China during the launching of U.S. satellites on Chinese rockets.

10. In 1994, President Clinton ended COCOM, the Coordinating Committee on Multinational Export Control, the multi-nation agreement among U.S. friends and allies that they would not sell certain high technology items to countries like China. When this happened, it opened the commercial floodgates. Ever since, there has been a wild scramble of competition to sell more and more advanced technology to China. As a result, proliferation has never been worse than it has been in the last six years.

11. In a series of decisions throughout his presidency-and many surrounding the 1996 election-Clinton has consistently relaxed export and trade restrictions on various forms of high technology of interest to China.

12. At the same time, President Clinton has ignored or downplayed numerous China's arms-control violations by not imposing sanctions required by law. So while we're selling more and more high tech to China, China is sending prohibited military technology to countries like Pakistan, Iran, North Korea, Syria, Libya, and Egypt. And what does the Clinton Administration do? Nothing. ..."

AFP Washington Post 6/21/99 "...BEIJING, June 21 (AFP) - An indirect subsidiary of China's state-owned news agency Xinhua has teamed up with a US company to match promising high-technology Chinese companies with venture capital firms overseas. Xinhua Financial Corporation joined hands with Bush Corporation to form Bush-Xinhua Financial Consulting Services, a joint news statement said. The firm will focus on smaller, mid-cap firms in high technology and emerging industries. "We are taking a page from the most successful IPO (initial public offering) markets in the world and Silicon Valley in California," said Dennis Pelino, Bush's chairman and co-founder. ....As much as three billion US dollars can be raised over the next three years to support Chinese enterprises, the statement said....."

 

NATIONAL SECURITY GIVEN AWAY?

Company executives in Long Beach California informed David Rupert to arrange for Chinese aviation officials' inspection of the McDonnell Douglas plant in Columbus. Before the tour, Rupert covered some Air Force aviation parts with tarps to avoid a security breach. The Chinese were not interested in investing in the Ohio plant but only in purchasing machines that had been used to fabricate specialized parts for some of the U.S. military's most sensitive projects, Rupert said. "They kept coming back and saying, `No, we're only interested in these assets,' and I kept coming back and saying, `Well, then you're wasting my time, because I've got a purchaser to buy all of them,"' Rupert said. "The Chinese didn't like that." Afterwards, a McDonnell executive told Rupert that he was "not dealing with these people properly . This stuff needs to be negotiated with them, and it's not going to stay in Columbus." A few weeks later Rupert was replaced in this assignment. Under a special Commerce Department license, in September 1994 - McDonnell delivered the equipment to China. McDonnell Douglas learned that the equipment it sold to the Chinese was not where it should be and alerted the government.

7/14/98 Worldnetdaily Joseph Farah concerning COSCO and Long Beach "It's a staging ground for the New World Order. When Bill Clinton says he and China share a vision for one big happy planet, this is what he is talking about.. The wacky idea was formulated right in the Oval Office following one of those visits by Chinese arms dealers who dumped money into President Clinton's 1996 election campaign. Long Beach city officials, oblivious to the national security concerns of the plan, saw it as a bonanza for local commerce and jobs. China's interest in Long Beach is as understandable as Beijing's desire to take control of the Panama Canal. But there's even more to the story than meets the eye -- more than most of the opposition to the plan have ever imagined. China also wants COSCO, which serves as an intelligence-gathering operation for the PLA, located near the multinational Sea Launch project, which will use its Long Beach base to launch dozens of satellites into space from equatorial ocean locations. The Russian company RSC-Energia is a partner in Sea Launch along with Boeing. RSC-Energia is as closely tied to Russian military intelligence as COSCO is to Chinese military intelligence.."

Freeper Report ".Several months ago there was a curious article in the WSJ. A naturalized Vietnamese owns an environmental cleanup firm. He met with John Huang in DC and the two of them met in turn with another Asian-American who is an Undersecretary of Defense in the Clinton administration. The article delt with illegal or questionable contributions to the DNC. It did not mention the location of the cleanup firm. It is a small town (my old hometown, actually) that is a primary research, development, and production facility for thermonuclear weapon component production.."

10/15/98 Freepers quidam, Steven W. and Trident/Delta about a Stealth IC ".(To Q From T/D) Different subject: Have you heard anything about a "stealth IC" appointed by the 3 judge panel under auspices of "national security" operation out of Ft Meade.. Supported by ASA and Naval OIS???? .(to T/D From SW) When Janet Reno testified at the beginning of the year, she went over the list of active Independent Counsels and reviewed their budget costs, etc.. One of the things she mentioned was "the secret independent counse" - which I've always tried to clear up to no avail ...(to SW from T/D) Ok here is what I got... AN IC was appointed in Sept of 1997 and given staffing from the Army Security Agency and the Naval Office of Investigative Services. They are using a part of the secure facility (NSA) at Ft Meade. Don't know if there is a Chinagate connection or not. Whoever they ared they have over-ride priority for "key-hole" satellite and Echelon intercept traffic. I was given the code-word "Raptor" for this operation.. Don't know if it is accurate or not. .(to T/D from Q) I know you have a lot of questions. Trust Starr."

New York Times 5/30/99 "...Now that a congressional committee has released its three-volume, 872-page techno-thriller on the theft of atomic secrets by Chinese spies, much of Washington is agog. But the uproar overlooks an arresting fact. For more than a half decade, the Clinton administration was shoveling atomic secrets out the door as fast as it could, literally by the ton. Millions of previously classified ideas and documents relating to nuclear arms were released to all comers, including China's bomb makers..... Back in 1993, when the terrors of the Cold War were still fresh, the administration decided that the best way to keep the nuclear arms race from heating up again was to get the world's nations to sign a test-ban treaty. The idea was that even if a country knew how to make a bomb, it couldn't perfect new ones and build up advanced forces without physically testing new designs. So development of new weapons would be frozen, ending the vicious spiral of nuclear move and countermove. Releasing many of America's nuclear secrets was seen as an essential part of this strategy, since it would signal a new global order in which nuclear know-how was suddenly and irreparably devalued and real security would lie in the collective knowledge that nobody was able to push weaponry beyond the known boundaries. What had been gold would become dross, and the atom would lose power and prestige. Driven by such logic, the administration made public masses of generalities about nuclear arms, even as specific weapon designs were kept secret..... In response to the China scandal, the Clinton administration has stopped all declassifications, beefed up security at the national weapons laboratories and adopted a conciliatory tone. Last week. as the House select committee released its report, President Clinton called protecting atom secrets "a solemn obligation." But in private, administration officials say the openness was smart after all, its advantages even now outweighing its risks. They insist that its crowning jewel, the test ban, while admittedly shaky, still has lessened the risk of new atomic advances, making it a potent force for international good....."It would be nothing short of miraculous if the openness has not seriously damaged U.S. interests," said Frank Gaffney Jr., a Pentagon official during the Reagan administration who now directs the Center for Security Policy, a research group in Washington. Since 1993, officials say, the Energy Department's "openness initiative" has released at least 178 categories of atom secrets. By contrast, the 1980s saw two such actions. The unveilings have included no details of specific weapons, like the W-88, a compact design Chinese spies are suspected of having stolen from the weapons lab at Los Alamos, N.M. But they include a slew of general secrets....."

The American Spectator 8/99 Kenneth R. Timmerman "...In January 1996, controls on supercomputer sales to the PRC were dramatically liberalized, allowing U.S. companies to sell directly to Chinese military entities without a license for the first time. The new regulations allowed license-free sales of even faster machines to "civilian" entities, with no safeguards to ensure the machines were not used for military purposes. (As the Pentagon later discovered, a large number of supercomputers were sold to Chinese state-run telephone companies run by the Military Districts, and may have been used in the effort to devise new encryption codes for military communications.) In April 1996, the administration transferred licensing authority for jet-engine production technology from the Munitions List, which is administered by the State Department, to the "dual-use" list at Commerce; gaining access to hot section technology was another top COSTIND priority, Pentagon officials say...."