Introduction
Military modernization can take two basic forms—first, simply replacing old systems/capabilities with a similar but new system, like replacing one’s old Honda Accord with a new Honda Accord. More frequently in Asia, modernization combines replacing old with new, while also adding entirely new systems/capabilities—the equivalent of replacing the family sedan with a newer model, while also buying a second car.
Trying to make sense of military modernization and assess the impact modernization might have must start by making judgments about the operational characteristic of the system/capability. Is it an offensive, defensive, or multi-role system?
Military modernization goes on continuously throughout Asia and not every modernization activity by any given country is an area of concern, or presages an arms race. Quite the contrary, as adding systems/capabilities that are clearly defensive in nature, or are carefully bounded in quantity and quality, can actually contribute to stability. In an ideal world, if every country were able to defend itself from aggression by its neighbor, stability would be the result.
Arguably, what is taking place in Southeast Asia can be considered “stability inducing” modernization in that it improves defenses without becoming a threat to its neighbors. Much of the modernization is oriented toward maritime capabilities—especially systems useful for the surveillance and policing of EEZ’s and for the protection of commercial shipping. Maritime patrol aircraft, air defense enhancements—including fighters, small frigate or patrol craft-sized warships -- land based radar surveillance sites and diesel submarines all fit within this category.
Similarly in Northeast Asia, the Republic of Korea’s ongoing introduction of a modest but capable blue-water navy does not threaten any of its larger neighbors; it is evident however, that like much of the rest of Asia, ROK economic health is increasingly dependent on trade, most of which travels by sea. As a result, Seoul has determined it has a requirement to look after its maritime interests without having to depend upon the US Seventh Fleet or its neighbors. This means that ROK decision-makers, who are not experienced in things maritime and are “embedded” in what has been an army-dominated military culture, have been willing to make the not inconsiderable investments necessary to build a modest blue water navy. What this suggests about the ROK’s long term plans or worries raises many interesting questions that are, however, beyond the scope of this essay. The modernization itself should not be considered an area of concern because it is not destabilizing.
Another category of modernization relates to offensive weapons systems; systems unambiguously designed to attack and not to defend. This category of modernization is normally undertaken for two reasons: either to deter a neighbor or potential foe from attacking or harming one’s interests, or to prepare for aggression against a neighboring state.
In Asia, there are a number of situations in which the offensive capability of the weapons system is not in doubt. Cyber warfare is an emerging problem. In the episodes where it has actually been used, either by organized militaries or by non-state sponsored hackers, it should be considered an offensive capability. Accurate conventionally tipped ballistic missiles and land attack cruise missiles are clearly offensive systems, as are the airwings of attack aircraft carriers, significant amphibious assault capability, long range bombers and certain categories of land based fighter aircraft. Today for instance, China uses the threat of a massive missile attack to deter Taiwan from declaring de jure independence. North Korea uses missiles to deter attack by threatening US bases in Japan and throughout South Korea.
The US posture in East Asia is largely offensive in nature, designed to be able to attack in retaliation, and as a result, deter countries that may threaten US allies and friends.
There is but one obvious example of a capability being put in place to attack and seize another “country,” and that is the case of the PLA’s continuing efforts to put in place the systems and capabilities necessary to capture Taiwan. Because China claims that Taiwan is a renegade province and is an internal Chinese sovereignty issue, it naturally rejects arguments that modernization aimed at a successful capture is offensive in nature. But the reality remains that capabilities useful for the Taiwan mission are also useful in any campaign against a Taiwan-sized island.
On the Korean peninsula it is less clear whether the forward postured North Korean Army is in place so it can attack the South, or whether it is in its current posture to defend against an attack from the South. At the June 2008 Shangri-la Dialogue, the new ROK Minister of Defense explicitly offered the judgment that it was an offensive posture. This is a case in which transparency is lacking, and I suspect that Pyongyang prefers this ambiguity since it is a powerful deterrent to any offensive action by the US against its nuclear weapons program.
Military modernization associated with these two situations clearly falls into the category of “areas of concern,” although efforts to mitigate the negative impacts of these modernizations have been going on for some time. In the case of Korea, the South has made adequate defensive preparations, so much so that the US is confident enough in the ROK Army that it is not balking at turning over responsibility for defense against an invasion; the US role will, over the next few years, transition to backstopping the ROK army with US air and naval power.
In the case of Taiwan, the Chinese threat to use force has been a feature of the Asian security scene for over 50 years. What is different today is that Beijing’s threat is actually credible. It is credible in the sense that it can militarily “punish” Taiwan. It can “bombard” Taiwan with hundreds of missiles, but is not yet able to capture Taiwan. In this situation, it is the combination of the willingness of the people of Taiwan to endure a bombardment, with efforts being taken by the Taiwan authorities to “harden” key facilities against bombardment, and the threat of US intervention in the defense of Taiwan that has sustained stability. Obviously, it is the state of the cross-strait political relationship that will determine whether in the future Beijing would actually be willing to “pull the trigger.” Today, for the first time this decade, the political situation could be characterized as hopeful.
While categorizing these systems/capabilities is relatively straightforward, more and more modern weapons systems are designed to be multi-role. In these cases, they can be used to either attack or defend—they are not purely offensive or purely defensive. Multi-role aircraft are perhaps the best example. The aircraft’s role is determined by what weapons they are fitted to employ, what avionics software package is installed and what training regimen the aircrew has received.
In cases where the nature of certain potentially threatening weapons systems is unclear, officials charged with defense responsibilities have to weigh the trade-off between a country’s military capability versus its intentions. That is why issues of transparency are intimately linked with assessments of modernization.
This brings me to a third way in which modernization can have an impact on stability. This is the circumstance created when a country fields defensive capabilities to assure its defenses but in so doing puts the security of its near neighbors in jeopardy. Political scientists call this a security dilemma. Arguably this is what is going on today between China, the United States and its Northeast Asian neighbors and US allies—Japan, the ROK and Taiwan. This is an area of great concern.
Alliance-Based Security Architecture Has Worked Well
For almost 50 years, Asia’s security environment has been stable and relatively predictable. After the 1953 armistice that ended combat in Korea, Asia’s security environment quickly settled into a unique balance of power, in which the continental powers of the Soviet Union and the PRC were “balanced” by the US-led coalition of Asian littoral powers.
There are a number of reasons why stability persisted, but arguably the most important one is that a real military balance existed.[1] The military capability of each side was effectively limited to its domain—the continent or the oceans. Each side was able to militarily “trump” any attempt by the other side to intrude in a militarily significant way into its domain. The USSR and the PRC were safe from invasion, thanks to their large armies, vast territories and nuclear weapons. US friends and allies were safe from invasion and maritime blockade thanks to US air and sea power which was constantly “in play” because of alliance obligations.
Modernizing China Is Changing the Continental-Maritime Strategic Balance
Throughout China’s long history, its strategic orientation could be categorized as continental and hence its strategic tradition—its way of thinking about and framing strategic issues—has been largely focused on land war.
Today, however, the risk of cross-border aggression is no longer a serious security concern for Beijing. The combination of adroit Chinese diplomacy within a contextual framework of globalization, international norms of behavior that eschew cross-frontier aggression and the deterrent value of nuclear weapons have substantially lowered the likelihood of cross-boarder aggression. The threat of invasion, the primary worry of Chinese or indeed most Eurasian strategists for many centuries, has all but disappeared.
As globalization proceeds economic growth is increasingly dependent on trade, most of which is carried in containers loaded on ships. As a result, security on the high seas is becoming a growing preoccupation for countries that historically were not strategically focused on the maritime domain. The ROK has already been mentioned; the PRC is also in the midst of this evolving strategic zeitgeist.
While its land frontiers are secure, Beijing faces a host of outstanding sovereignty claims and unresolved strategic issues that are maritime in nature. Specifically:
*
Taiwan is an island. It is the combination of Taiwan’s air defense and the threat of intervention by the US military (primarily the US navy) that effectively keeps the Taiwan Strait a moat rather than a highway open to the PLA.
*
Perhaps as strategically significant as Taiwan to a PLA planner is the geostrategic reality that the PRC’s economic center of gravity is on its east coast, which, because it is a “seaboard,” is extremely vulnerable to attack from the sea—a military task the United States is uniquely suited to execute.
*
Territorial disputes with Japan over islands and seabed resources in the East China Sea remain unresolved and with price of oil continuing to soar, the economic stakes become more serious, and represent a potential flash point where Sino-Japanese interests are contested. (Although the recent Sino-Japanese summit may lead to fair compromise.) The point here is that the entire issue is maritime in nature.
*
Unsettled territorial disputes, and their concomitant resource issues, remain with respect to the Spratly Islands and the South China Sea. Again, this problem is maritime in nature.
*
China’s entire national strategy of reform and opening depends largely upon maritime commerce—i.e., trade. The PRC’s economy is driven by the combination of exports and imports which together account for almost 75% of PRC GDP. This trade travels mainly by sea.
*
Finally, there is the issue of energy security—or, as President Hu Jintao characterized it, China’s “Malacca dilemma.” It has become commonplace to observe that the PRC will increasingly depend upon foreign sources of oil and natural gas, most of which come by sea, and must pass through the Indonesian straits to reach China.
Finally, Beijing’s primary military competitor is the United States, which is the world’s foremost naval power and which, as it has for the past 50 years, maintains a significant naval presence on “China’s doorstep.” Should the PRC elect to use force to resolve either reunification with Taiwan or outstanding maritime claims, the US is the one country that could militarily deny success.
All of these factors, plus China’s historic experience since the 1840’s, have generated a “demand signal” that has caused China to field weapons systems and capabilities that can protect its maritime approaches. This in turn means that China is introducing an element of military competition into the maritime region that has been the preserve of the United States and its allies for the past half-century because it is beginning to have the effect of upsetting the five-decade-old balance of power between continental and maritime powers that has been so successful in preserving stability in the region.
What is China Doing?
Specifically, China is putting in place a credible way to deny access to US forces by knitting together broad area ocean surveillance systems, a large number of submarines, land based aircraft with cruise missiles, and ballistic missile systems that can target ships on the high seas. The operational objective is to keep US naval power as far away from China as possible in case of conflict. It closely resembles the operational concept that the Soviet Union, another continental power attempting to protect its maritime approaches, had in place by the end of the Cold War. According to the latest US Defense Department report to the US Congress on military power, key elements of China’s capability are still apparently in the testing stage. If however, they succeed in introducing a credible anti-ship ballistic missile and an associated surveillance and targeting system that are coupled with other proven conventional capabilities such as quiet, conventionally powered submarines, China will introduce a destabilizing element into the regional military balance.
By working to achieve security on its maritime frontier, Beijing is creating a dynamic that, as its maritime security situation improves, will make the security environment for Japan, Taiwan and potentially South Korea, worse because a central element of its strategy is to keep US power as far away from East Asia as possible.
The US interests and obligations depend on sustained access to East Asia, whereas China’s off-shore strategy is increasingly aimed at denying that access. The United States has characterized China’s approach as “anti-access,” because if successfully executed, it could deny the US the ability to operate its naval and air forces as it pleases along the littoral of East Asia.
In effect, for good and sensible strategic reasons, China and the United States are pursuing two mutually contradictory approaches: access denial versus assured access. This is a serious issue.
Concluding Thoughts
This suggests the military balance and concomitant modernization of forces in East Asia will be in a constant state of evolution as the US and its allies work to preserve existing advantages as new Chinese capabilities enter the PLA—rising on the same tide as it were. As a result, military to military engagement between the US military and the PLA, while necessary and appropriate, will tend to be colored with elements of suspicion or concern as each side participates in what could be termed a “capabilities competition.”
Even with the prospect of a much less tense cross-strait relationship, Beijing has not yet persuaded itself that it can afford to “take its finger off the trigger” when it comes to Taiwan. Until the threat of military force is removed from the table, each side will work to deter the other when it comes to the use of force over Taiwan. This will fuel the capabilities competition.
Beyond the direct issue of Taiwan, the competition also is a factor in whether the rest of the region views the US as a credible ally or as a credible off-shore balancer. Credibility is normally discussed in terms of Washington’s political will to act; this stems from the assumption that the US has the ability to act if it so chooses. That assumption could change if the region comes to believe that Beijing’s access denial concept is a viable operational capability. This concern will continue to provide a strong incentive for Washington’s Asia-Pacific modernization efforts to receive a high priority.
Monday, 11 August 2008
U.S. is financing China's war plan
China is making a statement in the Pacific that threatens several of America's most important allies and could force a showdown with the United States. The Red Chinese plan, say U.S. intelligence sources, is to expand its military hegemony to dominate trade in the South China Sea. It's called "power projection" and Pentagon officials, China experts and senior intelligence specialists privately are saying that it could erupt in bloodshed on the water.
These experts say the United States is facing a multibillion-dollar military threat. And, to complicate matters, it is being subsidized by the U.S. bond market, senior national-security officials tell Insight. It is money from American pension funds, insurance companies and securities that may never be paid back.
China's plan is militarily to dominate the first tier of islands to the west of Japan and the Philippines and then project its force to the next "island tier," leaving America's most important allies in the Pacific surrounded by the Chinese military and, short of nuclear war, defenseless.
Foreign diplomats tell Insight the move toward the second tier started two years ago when China's People's Liberation Army, or PLA, set up command posts on uninhabited islands near the Philippines. "They are drawing their line, basically saying this area is Chinese territory," a Philippine diplomat who is monitoring Chinese military movements warns.
An ancillary motive behind China's plan to expand its military hegemony by more than 1,000 miles to the southern part of the South China Sea, say regional experts, revolves around the Spratly Islands, believed to be rich in oil and natural gas. Countries already claiming part of the Spratlys include Taiwan, the Philippines, Malaysia and Vietnam. In addition, China has shown interest in Guam and a set of islands north of the Spratlys, which Japan claims. A further target, says the Philippine diplomat, is control of the Kalayaan Island group, dominating the supply routes to the Philippines and important logistically to resupply other islands.
"They are setting the building blocks to eventually make that power projection," says the diplomat, who asked not to be named. "These are the building blocks for controlling the sea lines on which all the countries in the region such as Taiwan and Japan rely for economic vitality. The Chinese want to constrict trade to break Taiwan and Japan by being able to cut off the oil supply. While they may not be a direct threat to the U.S., they are more than enough of a threat to smaller weaker countries including ourselves and Japan.... The U.S. has done nothing because there is no blood on the water -- yet."
A Japan Embassy official, who spoke for the record but asked not to be named, says Japan has no intention of surrendering claims to its islands in the region. "It is clear the islands [Beijing wants] belong to us " the official says, adding that if China moves in this way Japan expects the U.S. to intervene. "We have been watching China's military very closely," says the official.
Arthur Waldron, a China strategy expert at the U.S. Naval War College in Newport, R.I., says China has wanted to reclaim the South China Sea since 1950, but placed that mission on the back burner because it was trying to defend itself from a possible Soviet invasion. Most of China's troops were deployed along the Soviet border or near Tibet and Vietnam, countries that were armed by Moscow. But now that the Russian threat has been greatly reduced, Beijing strategically has revised its military strategy and reorganized the PLA aggressively to pursue its maritime expansion mission, as was evident last year when Red Chinese missiles were fired over Taiwan as a means of intimidating both Taipei and Washington.
"I think it's absolutely delusionary to think they can achieve that goal by military force, but for us not to take China's military seriously is extremely dangerous," Waldron warns. "That is exactly what the Chinese want us to do. This is such a very dangerous situation that [protection of the South China Sea] should be negotiated and settled by all the parties concerned."
In April, the House Intelligence Committee released a Department of Defense report called "Selected Military Capabilities of the People's Republic of China" which highlights similar concerns. The report claims China has focused on developing nuclear-weapons systems and advanced intelligence, surveillance and reconnaissance capabilities to "develop a capability to fight short-duration, high-intensity wars in the region" and defeat the U.S. Navy.
The report concludes that China will have the capacity "to produce as many as 1,000 new [ballistic] missiles within the next decade" and is developing land-attack cruise missiles as a high priority for strategic warfare.
A naval-intelligence report released in February warned of Beijing's emphasis on obtaining a sophisticated blue-water navy technology to achieve four objectives: First, safeguard what the PRC calls China's territorial integrity and national unity -- this includes China's claim over Taiwan; second, conduct a possible blockade of Taiwan; third, defeat seaborne invasions; and fourth, create intercontinental nuclear retaliatory forces. Meanwhile, two Red Chinese fleets patrol the area -- one within 20 nautical miles of the coast targeting the first tier of islands, and another patrolling the outer reaches of the East China Sea in the area of the Taiwan Strait, the February report says.
In a country with nuclear attack submarines, this could mean trouble. Also, China possesses accurate and stealthy ballistic and cruise missiles with multiple warheads -- some of which are aimed at Los Angeles and either Alaska or Hawaii, according to U.S. intelligence officials. China's force-projection plans also include building modern aircraft carriers.
The architect behind this buildup, say Western intelligence sources, is the Soviet-educated Chinese navy commander, Gen. Liu Huaqing, 79, a hardliner whose family is reported to be heavily involved in international power-projection through trade with the West in the manner of V.I. Lenin's New Economic Plan. To China's neighbors Liu is the "power broker who calls the tunes," which fits with the widespread opinion among security experts that the PLA is the power behind the Chinese government.
Former Time journalists Ross Munro and Richard Bernstein claim in their recently published book, The Coming Conflict With China, that Beijing's primary objective is to become "the paramount power in Asia" by tapping U.S. technology and using Russian military experts. The authors contend China has proceeded in its plan with the help of about 10,000 Russian scientists and technicians -- some of them in China and others communicating through the Internet. Though some of this is official, the Russian government is known to be sharing some very sophisticated weapons technology to assist the PLA, not all of it is. "The Russian military-industrial complex, staffed by some of the world's best (suddenly underemployed and underpaid) minds in military technology, is so corrupt and so desperate for cash that everything seems to be for sale," Munro and Bernstein write. "In 1995, for example, there were reports that Chinese agents, paying bribes to staff members of a Russian base near Vladisvostok, obtained truckloads of plans and technical documents for Russia's two most advanced attack helicopters." The Chinese since have obtained intact nuclear weapons from Russia, according to intelligence reports.
Adm. Joseph W. Prueher, chief of the U.S. Pacific Command, testified before a House National Security Committee in March that China is not yet a threat because its military is about 15 years behind that of the United States. In light of the blow that the U.S. military might have delivered even 15 years ago, say defense experts, that hardly is comforting. And, Waldron says, this can be a dangerous presumption because history indicates it didn't stop Japan in 1941 or Saddam Hussein during the Persian Gulf War. In 1994, a war game at the Naval War College conceptualized a sea battle between the U.S. Navy and the PLA navy off of China's shores in the year 2010. The battle hypothesized that China continued to acquire military technology at a rapid pace. The game, which Pentagon officials have refused to talk about, ended with a PLA victory, according to reports in Navy Times.
"The U.S. Navy is very angry at the Clinton administration for not taking a more robust approach," Waldron says. "We should pay a lot more attention. It's a great mistake to think a country with a military only comparable to ours will not attack. I worry very much about what China will do."
China analysts and national-security officials say the operating officer at the heart of Beijing's master plan to seize hegemony over Taiwan, Japan, Okinawa, Iwo Jima, Saipan, Guam and the Philippines is Wang Jun -- Clinton's Feb. 6, 1996, coffee-klatsch guest who has taken advantage of corporate greed by persuading American investors to pour billions of dollars into joint-venture projects that allow Wang to tap into the U.S. bond market, borrowing millions from American mutual funds, pension funds and insurance companies to support the war chest.
Wang chairs both PolyTechnologies, or Poly, the arms-trading company of the PLA, and China International Trust and Investment Corp., or CITIC, a $23 billion financial conglomerate that Wang says is run by China's government, or State Council. His dual control of CITIC and Poly (the PLA company caught last year allegedly smuggling 2,000 AK-47 assault rifles to U.S. street gangs) makes it difficult for American firms to know whose hand they are shaking. "He's a master of muddying the waters," says James Mulvenon, a China researcher at California-based Rand Corp. "American companies are playing a shell game."
Not surprisingly, CITIC officially has controlled Poly. The relationship dates back to 1984 when the PLA created Poly for arms trading and structured it under the ownership of CITIC in part to conceal Poly's link to the PLA, according to Western analysts. Wang is the son of Red China's late vice president and Long March veteran Wang Zhen. The president of Poly is Maj. Gen. He Ping son-in-law of the late Deng Xiaoping. A former defense expert for the Chinese Embassy in Washington, He Ping is director of PLA arms procurement and chairs CITIC-Shanghai. A second major subsidiary of CITIC is CITIC Pacific in Hong Kong, chaired by Rong Yung, son of China's vice president, Rong Yiren, who founded CITIC. In short, this is a high-level operation of the Beijing government directly connected to the men in charge.
With the help of CITIC-Beijing, He Ping engineered the billion-dollar sale of Chinese arms that included missiles to Saudi Arabia and short-range cruise missiles to Iran during the mid-1980s. deal was assisted by the government-controlled China Northern Industrial Corp., or Norinco, which now is under investigation in the West for selling chemical-weapons materials to Iran for weapons of mass destruction, according to April testimony before a Senate Governmental subpanel. China's sale of nuclear and chemical weapons to the Middle East all are part of a strategic plan to spread out deployment of the US. Navy so the PLA can concentrate on the South China Sea, according to intelligence and diplomatic officials.
But take Wang's word for it, he is far removed from Poly, according to a rare and exclusive interview he gave to the Washington Post. The Post did not question Wang's assertion that he only spends 5 percent of his time with Poly. But Mulvenon, who is researching the PLA empire, laughs at that estimate. "It is more likely 15 to 20 percent," he says. And some defense-intelligence sources tell Insight CITIC is so closely linked to the PLA that professional observers have little doubt that the PLA is calling the shots.
Wang's ability to mask Poly by show-casing CITIC has paid off handsomely for his other enterprises on behalf of Beijing's war plans. In particular, the U.S. bond market already has been an attractive target for CITIC to the tune of $800 million in borrowing. That, of course, begs the question: Why is the high-level Beijing operative Wang Jun allowed to borrow huge sums from Americans when President Clinton says it is "clearly inappropriate" even to meet with this PLA arms dealer? The White House assures that questionable visitors such as Wang no longer will have access to the president because FBI and National Security Council background checks now will expose them in advance. Yet, there is no national-security screening of foreign borrowers in U.S. securities markets from which huge sums are being allowed to float into China's war chest.
Sound incredible? A new book called Dragonstrike: The Millennium War, by British Broadcasting Corp. and Financial Times journalists Humphrey Hawksley and Simon Holberton, presents a scenario on how the Red Chinese military might manipulate the international financial market to raise capital. It's what Roger Robinson, former senior director of International Economic Affairs at the National Security Council, warns already is happening. Robinson, described by President Reagan as "the architect of a security-minded and cohesive U.S. East-West economic policy," claims that these enormous sums may never be paid back.
"This is cash on the bartel," Robinson says. "This is totally undisciplined cash with no questions asked concerning the purpose for the loans. This could be used to fund supplier credits, strategic modernization, missiles to rogue states like Iran and to finance espionage, technology theft and other activities harmful to U.S. securities interests."
Some of the bond money "undeniably" is supporting PLA enterprises, says Orville Schell, a China expert who is dean of the journalism school at the University of California at Berkeley. Schell says that's because "there is no division between government and business" in the PRC, making it nearly impossible to distinguish PLA companies from government-controlled companies. "It means China is going to be exporting and docking at facilities in Long Beach [Calif]" at the former U.S. Navy base there, notes Schell in reference to what some regard as a military concession to go along with its acquisition of control of ports at both ends of the Panama Canal. "It means China is going to be buying U.S. companies. It is going to be doing all of the things that everyone else does. Whether it is a security risk depends on your assessment of China" says Schell. "But one thing for sure. China is the most unsettled country in Asia."
Thomas J. Bickford, a PLA expert and political-science professor at the University Wisconsin at Oshkosh says accessing the US. bond market is just one way the PLA can raise the money to purchase the most modern military equipment. "But it's not in just the bond market, it's also in consumer sales" with 10,000 to 20,000 companies, he says (see "PLA Espionage Means Business," March 24). Many of those PLA enterprises are losing money and in essence promoting corruption in the ranks, says Bickford, as some PLA business operatives personally are pocketing profits to purchase luxury cars or resorts, while others are fully engaged in smuggling operations. "The corruption is so high it goes all the way up to the generals" Bickford says. "That gives you an idea how much rot exists."
Where large profits from PLA companies do occur, much goes toward purchasing food and housing for some 3.2 million Red troops, says Bickford. This suggests the bond market may play a bigger role for the PLA than most people expect because that money could be going to support a defense budget the U.S. government claims to be as high as $26.1 billion a year. And Munro and Bernstein claim it really is about $87 billion a year when profits from PLA businesses are calculated in the total.
Deeply concerned about all of this, Robinson advocates creating a nondisruptive national-security screening process to help the Securities and Exchange Commission identify and exclude PRC fund-raising operations disguised as business ventures. The process would be similar to security checks now conducted at the White House, or the seven-day waiting period for a background review required to purchase a handgun. He says it would weed out dangerous foreign business partners such as PLA gunrunning companies and the Russian Mafia.
"Russia thinks the water is fine" Robinson says. "They are going to have as many as 10 to 12 bond offerings in the next 18 months -- and some of those might involve organized crime. So there is every reason to be concerned because there might be bad actors among the Russian bond offering. We don't want terrorists, drug dealers, an organized criminal syndicate, gun smugglers or national military establishments borrowing on the securities markets with impunity."
Bickford says Robinson's solution would "catch the obvious" PLA players, but it won't stop all the diverting of money to the military because many of the PLA enterprises have joint ventures with Chinese government-controlled companies -- making it nearly impossible to track the bad seed. "The PLA businesses are very good about hiding themselves," Bickford warns.
But Robinson says the National Security Council knows who the bad actors are and could effectively knock out the threat. "We need to get national security back in the picture," Robinson insists. "We are not trying to discourage investing in the market, but this is too fertile a territory for potential abuse. We just need to get additional protection for the American investment community via U.S. intelligence in a secure, nondisruptive manner."
Robinson has uncovered $6.75 billion in Chinese government-controlled bonds floated on the U.S. and international securities markets between September 1989 and December 1996. China also has placed $17.2 billion in bonds with Japan. About 65 percent of the U.S. money, or $4.4 billion, was issued to the PRC, the Bank of China and Wang's CITIC. The PRC raised $2.7 billion on six bond issues from October 1993 to July 1996. The Bank of China raised $850 million on four bond issues from October 1992 to March 1994. CITIC raised $800 million on five bond issues from March 1993 to October 1994.
Robinson says all three areas could be suspect: The PRC because that money could go anywhere, Wang because of his direct link to the PLA and the Bank of China -- a company that has flooded the Washington radio market with an advertising and public-relations campaign -- because it now has been directly linked into the fund-raising scandal.
What is the link? For one, the Wall Street Journal recently reported that the Bank of China transferred hundreds of thousands of dollars in $50,000 and $100,000 increments to Clinton friend Charlie Trie in 1995-96. Trie and Harold Green, another Clinton friend who assisted Wang with getting security clearance, dumped similar amounts of cash into the Democratic National Committee and Clinton's legal defense fund shortly after Wang was permitted access to the president.
John N. Stafford, chief judge of the Department of Interior in the Reagan administration who publishes a highly respected national investment newsletter, says the relative ease with which China can tap into the U.S. bond market by using intermediaries such as the Bank of China is based largely on American greed. Stafford says businessmen are following the lead of Henry Kissinger and Alexander Haig who are players in U.S.-China trade (see "Lion Dancing With Wolves" April 21).
Stafford says, "We are providing funding for our own self-destruction, especially when money is being used to facilitate efforts to build up China's military and provide weapons of mass destruction to known terrorist countries and sworn enemies of the U.S." A onetime supporter of Robert Kennedy and Scoop Jackson, Stafford turned his support to the Republican Party because he says under President Carter the Democrats gutted national security and had a dismal economic record. He compares China's activity in the bond market to Soviet operations during the Cold War, when he says the USSR diverted billions of dollars of borrowed Western funds to support military activities contrary to U.S. interests.
"This is a replay of Russia in the mid-seventies"' he says. "This is business vs. national security. It is a case where money is more important than human rights. Lenin was right when he said the capitalists will sell us the rope with which we will hang them. That's what is happening here."
These experts say the United States is facing a multibillion-dollar military threat. And, to complicate matters, it is being subsidized by the U.S. bond market, senior national-security officials tell Insight. It is money from American pension funds, insurance companies and securities that may never be paid back.
China's plan is militarily to dominate the first tier of islands to the west of Japan and the Philippines and then project its force to the next "island tier," leaving America's most important allies in the Pacific surrounded by the Chinese military and, short of nuclear war, defenseless.
Foreign diplomats tell Insight the move toward the second tier started two years ago when China's People's Liberation Army, or PLA, set up command posts on uninhabited islands near the Philippines. "They are drawing their line, basically saying this area is Chinese territory," a Philippine diplomat who is monitoring Chinese military movements warns.
An ancillary motive behind China's plan to expand its military hegemony by more than 1,000 miles to the southern part of the South China Sea, say regional experts, revolves around the Spratly Islands, believed to be rich in oil and natural gas. Countries already claiming part of the Spratlys include Taiwan, the Philippines, Malaysia and Vietnam. In addition, China has shown interest in Guam and a set of islands north of the Spratlys, which Japan claims. A further target, says the Philippine diplomat, is control of the Kalayaan Island group, dominating the supply routes to the Philippines and important logistically to resupply other islands.
"They are setting the building blocks to eventually make that power projection," says the diplomat, who asked not to be named. "These are the building blocks for controlling the sea lines on which all the countries in the region such as Taiwan and Japan rely for economic vitality. The Chinese want to constrict trade to break Taiwan and Japan by being able to cut off the oil supply. While they may not be a direct threat to the U.S., they are more than enough of a threat to smaller weaker countries including ourselves and Japan.... The U.S. has done nothing because there is no blood on the water -- yet."
A Japan Embassy official, who spoke for the record but asked not to be named, says Japan has no intention of surrendering claims to its islands in the region. "It is clear the islands [Beijing wants] belong to us " the official says, adding that if China moves in this way Japan expects the U.S. to intervene. "We have been watching China's military very closely," says the official.
Arthur Waldron, a China strategy expert at the U.S. Naval War College in Newport, R.I., says China has wanted to reclaim the South China Sea since 1950, but placed that mission on the back burner because it was trying to defend itself from a possible Soviet invasion. Most of China's troops were deployed along the Soviet border or near Tibet and Vietnam, countries that were armed by Moscow. But now that the Russian threat has been greatly reduced, Beijing strategically has revised its military strategy and reorganized the PLA aggressively to pursue its maritime expansion mission, as was evident last year when Red Chinese missiles were fired over Taiwan as a means of intimidating both Taipei and Washington.
"I think it's absolutely delusionary to think they can achieve that goal by military force, but for us not to take China's military seriously is extremely dangerous," Waldron warns. "That is exactly what the Chinese want us to do. This is such a very dangerous situation that [protection of the South China Sea] should be negotiated and settled by all the parties concerned."
In April, the House Intelligence Committee released a Department of Defense report called "Selected Military Capabilities of the People's Republic of China" which highlights similar concerns. The report claims China has focused on developing nuclear-weapons systems and advanced intelligence, surveillance and reconnaissance capabilities to "develop a capability to fight short-duration, high-intensity wars in the region" and defeat the U.S. Navy.
The report concludes that China will have the capacity "to produce as many as 1,000 new [ballistic] missiles within the next decade" and is developing land-attack cruise missiles as a high priority for strategic warfare.
A naval-intelligence report released in February warned of Beijing's emphasis on obtaining a sophisticated blue-water navy technology to achieve four objectives: First, safeguard what the PRC calls China's territorial integrity and national unity -- this includes China's claim over Taiwan; second, conduct a possible blockade of Taiwan; third, defeat seaborne invasions; and fourth, create intercontinental nuclear retaliatory forces. Meanwhile, two Red Chinese fleets patrol the area -- one within 20 nautical miles of the coast targeting the first tier of islands, and another patrolling the outer reaches of the East China Sea in the area of the Taiwan Strait, the February report says.
In a country with nuclear attack submarines, this could mean trouble. Also, China possesses accurate and stealthy ballistic and cruise missiles with multiple warheads -- some of which are aimed at Los Angeles and either Alaska or Hawaii, according to U.S. intelligence officials. China's force-projection plans also include building modern aircraft carriers.
The architect behind this buildup, say Western intelligence sources, is the Soviet-educated Chinese navy commander, Gen. Liu Huaqing, 79, a hardliner whose family is reported to be heavily involved in international power-projection through trade with the West in the manner of V.I. Lenin's New Economic Plan. To China's neighbors Liu is the "power broker who calls the tunes," which fits with the widespread opinion among security experts that the PLA is the power behind the Chinese government.
Former Time journalists Ross Munro and Richard Bernstein claim in their recently published book, The Coming Conflict With China, that Beijing's primary objective is to become "the paramount power in Asia" by tapping U.S. technology and using Russian military experts. The authors contend China has proceeded in its plan with the help of about 10,000 Russian scientists and technicians -- some of them in China and others communicating through the Internet. Though some of this is official, the Russian government is known to be sharing some very sophisticated weapons technology to assist the PLA, not all of it is. "The Russian military-industrial complex, staffed by some of the world's best (suddenly underemployed and underpaid) minds in military technology, is so corrupt and so desperate for cash that everything seems to be for sale," Munro and Bernstein write. "In 1995, for example, there were reports that Chinese agents, paying bribes to staff members of a Russian base near Vladisvostok, obtained truckloads of plans and technical documents for Russia's two most advanced attack helicopters." The Chinese since have obtained intact nuclear weapons from Russia, according to intelligence reports.
Adm. Joseph W. Prueher, chief of the U.S. Pacific Command, testified before a House National Security Committee in March that China is not yet a threat because its military is about 15 years behind that of the United States. In light of the blow that the U.S. military might have delivered even 15 years ago, say defense experts, that hardly is comforting. And, Waldron says, this can be a dangerous presumption because history indicates it didn't stop Japan in 1941 or Saddam Hussein during the Persian Gulf War. In 1994, a war game at the Naval War College conceptualized a sea battle between the U.S. Navy and the PLA navy off of China's shores in the year 2010. The battle hypothesized that China continued to acquire military technology at a rapid pace. The game, which Pentagon officials have refused to talk about, ended with a PLA victory, according to reports in Navy Times.
"The U.S. Navy is very angry at the Clinton administration for not taking a more robust approach," Waldron says. "We should pay a lot more attention. It's a great mistake to think a country with a military only comparable to ours will not attack. I worry very much about what China will do."
China analysts and national-security officials say the operating officer at the heart of Beijing's master plan to seize hegemony over Taiwan, Japan, Okinawa, Iwo Jima, Saipan, Guam and the Philippines is Wang Jun -- Clinton's Feb. 6, 1996, coffee-klatsch guest who has taken advantage of corporate greed by persuading American investors to pour billions of dollars into joint-venture projects that allow Wang to tap into the U.S. bond market, borrowing millions from American mutual funds, pension funds and insurance companies to support the war chest.
Wang chairs both PolyTechnologies, or Poly, the arms-trading company of the PLA, and China International Trust and Investment Corp., or CITIC, a $23 billion financial conglomerate that Wang says is run by China's government, or State Council. His dual control of CITIC and Poly (the PLA company caught last year allegedly smuggling 2,000 AK-47 assault rifles to U.S. street gangs) makes it difficult for American firms to know whose hand they are shaking. "He's a master of muddying the waters," says James Mulvenon, a China researcher at California-based Rand Corp. "American companies are playing a shell game."
Not surprisingly, CITIC officially has controlled Poly. The relationship dates back to 1984 when the PLA created Poly for arms trading and structured it under the ownership of CITIC in part to conceal Poly's link to the PLA, according to Western analysts. Wang is the son of Red China's late vice president and Long March veteran Wang Zhen. The president of Poly is Maj. Gen. He Ping son-in-law of the late Deng Xiaoping. A former defense expert for the Chinese Embassy in Washington, He Ping is director of PLA arms procurement and chairs CITIC-Shanghai. A second major subsidiary of CITIC is CITIC Pacific in Hong Kong, chaired by Rong Yung, son of China's vice president, Rong Yiren, who founded CITIC. In short, this is a high-level operation of the Beijing government directly connected to the men in charge.
With the help of CITIC-Beijing, He Ping engineered the billion-dollar sale of Chinese arms that included missiles to Saudi Arabia and short-range cruise missiles to Iran during the mid-1980s. deal was assisted by the government-controlled China Northern Industrial Corp., or Norinco, which now is under investigation in the West for selling chemical-weapons materials to Iran for weapons of mass destruction, according to April testimony before a Senate Governmental subpanel. China's sale of nuclear and chemical weapons to the Middle East all are part of a strategic plan to spread out deployment of the US. Navy so the PLA can concentrate on the South China Sea, according to intelligence and diplomatic officials.
But take Wang's word for it, he is far removed from Poly, according to a rare and exclusive interview he gave to the Washington Post. The Post did not question Wang's assertion that he only spends 5 percent of his time with Poly. But Mulvenon, who is researching the PLA empire, laughs at that estimate. "It is more likely 15 to 20 percent," he says. And some defense-intelligence sources tell Insight CITIC is so closely linked to the PLA that professional observers have little doubt that the PLA is calling the shots.
Wang's ability to mask Poly by show-casing CITIC has paid off handsomely for his other enterprises on behalf of Beijing's war plans. In particular, the U.S. bond market already has been an attractive target for CITIC to the tune of $800 million in borrowing. That, of course, begs the question: Why is the high-level Beijing operative Wang Jun allowed to borrow huge sums from Americans when President Clinton says it is "clearly inappropriate" even to meet with this PLA arms dealer? The White House assures that questionable visitors such as Wang no longer will have access to the president because FBI and National Security Council background checks now will expose them in advance. Yet, there is no national-security screening of foreign borrowers in U.S. securities markets from which huge sums are being allowed to float into China's war chest.
Sound incredible? A new book called Dragonstrike: The Millennium War, by British Broadcasting Corp. and Financial Times journalists Humphrey Hawksley and Simon Holberton, presents a scenario on how the Red Chinese military might manipulate the international financial market to raise capital. It's what Roger Robinson, former senior director of International Economic Affairs at the National Security Council, warns already is happening. Robinson, described by President Reagan as "the architect of a security-minded and cohesive U.S. East-West economic policy," claims that these enormous sums may never be paid back.
"This is cash on the bartel," Robinson says. "This is totally undisciplined cash with no questions asked concerning the purpose for the loans. This could be used to fund supplier credits, strategic modernization, missiles to rogue states like Iran and to finance espionage, technology theft and other activities harmful to U.S. securities interests."
Some of the bond money "undeniably" is supporting PLA enterprises, says Orville Schell, a China expert who is dean of the journalism school at the University of California at Berkeley. Schell says that's because "there is no division between government and business" in the PRC, making it nearly impossible to distinguish PLA companies from government-controlled companies. "It means China is going to be exporting and docking at facilities in Long Beach [Calif]" at the former U.S. Navy base there, notes Schell in reference to what some regard as a military concession to go along with its acquisition of control of ports at both ends of the Panama Canal. "It means China is going to be buying U.S. companies. It is going to be doing all of the things that everyone else does. Whether it is a security risk depends on your assessment of China" says Schell. "But one thing for sure. China is the most unsettled country in Asia."
Thomas J. Bickford, a PLA expert and political-science professor at the University Wisconsin at Oshkosh says accessing the US. bond market is just one way the PLA can raise the money to purchase the most modern military equipment. "But it's not in just the bond market, it's also in consumer sales" with 10,000 to 20,000 companies, he says (see "PLA Espionage Means Business," March 24). Many of those PLA enterprises are losing money and in essence promoting corruption in the ranks, says Bickford, as some PLA business operatives personally are pocketing profits to purchase luxury cars or resorts, while others are fully engaged in smuggling operations. "The corruption is so high it goes all the way up to the generals" Bickford says. "That gives you an idea how much rot exists."
Where large profits from PLA companies do occur, much goes toward purchasing food and housing for some 3.2 million Red troops, says Bickford. This suggests the bond market may play a bigger role for the PLA than most people expect because that money could be going to support a defense budget the U.S. government claims to be as high as $26.1 billion a year. And Munro and Bernstein claim it really is about $87 billion a year when profits from PLA businesses are calculated in the total.
Deeply concerned about all of this, Robinson advocates creating a nondisruptive national-security screening process to help the Securities and Exchange Commission identify and exclude PRC fund-raising operations disguised as business ventures. The process would be similar to security checks now conducted at the White House, or the seven-day waiting period for a background review required to purchase a handgun. He says it would weed out dangerous foreign business partners such as PLA gunrunning companies and the Russian Mafia.
"Russia thinks the water is fine" Robinson says. "They are going to have as many as 10 to 12 bond offerings in the next 18 months -- and some of those might involve organized crime. So there is every reason to be concerned because there might be bad actors among the Russian bond offering. We don't want terrorists, drug dealers, an organized criminal syndicate, gun smugglers or national military establishments borrowing on the securities markets with impunity."
Bickford says Robinson's solution would "catch the obvious" PLA players, but it won't stop all the diverting of money to the military because many of the PLA enterprises have joint ventures with Chinese government-controlled companies -- making it nearly impossible to track the bad seed. "The PLA businesses are very good about hiding themselves," Bickford warns.
But Robinson says the National Security Council knows who the bad actors are and could effectively knock out the threat. "We need to get national security back in the picture," Robinson insists. "We are not trying to discourage investing in the market, but this is too fertile a territory for potential abuse. We just need to get additional protection for the American investment community via U.S. intelligence in a secure, nondisruptive manner."
Robinson has uncovered $6.75 billion in Chinese government-controlled bonds floated on the U.S. and international securities markets between September 1989 and December 1996. China also has placed $17.2 billion in bonds with Japan. About 65 percent of the U.S. money, or $4.4 billion, was issued to the PRC, the Bank of China and Wang's CITIC. The PRC raised $2.7 billion on six bond issues from October 1993 to July 1996. The Bank of China raised $850 million on four bond issues from October 1992 to March 1994. CITIC raised $800 million on five bond issues from March 1993 to October 1994.
Robinson says all three areas could be suspect: The PRC because that money could go anywhere, Wang because of his direct link to the PLA and the Bank of China -- a company that has flooded the Washington radio market with an advertising and public-relations campaign -- because it now has been directly linked into the fund-raising scandal.
What is the link? For one, the Wall Street Journal recently reported that the Bank of China transferred hundreds of thousands of dollars in $50,000 and $100,000 increments to Clinton friend Charlie Trie in 1995-96. Trie and Harold Green, another Clinton friend who assisted Wang with getting security clearance, dumped similar amounts of cash into the Democratic National Committee and Clinton's legal defense fund shortly after Wang was permitted access to the president.
John N. Stafford, chief judge of the Department of Interior in the Reagan administration who publishes a highly respected national investment newsletter, says the relative ease with which China can tap into the U.S. bond market by using intermediaries such as the Bank of China is based largely on American greed. Stafford says businessmen are following the lead of Henry Kissinger and Alexander Haig who are players in U.S.-China trade (see "Lion Dancing With Wolves" April 21).
Stafford says, "We are providing funding for our own self-destruction, especially when money is being used to facilitate efforts to build up China's military and provide weapons of mass destruction to known terrorist countries and sworn enemies of the U.S." A onetime supporter of Robert Kennedy and Scoop Jackson, Stafford turned his support to the Republican Party because he says under President Carter the Democrats gutted national security and had a dismal economic record. He compares China's activity in the bond market to Soviet operations during the Cold War, when he says the USSR diverted billions of dollars of borrowed Western funds to support military activities contrary to U.S. interests.
"This is a replay of Russia in the mid-seventies"' he says. "This is business vs. national security. It is a case where money is more important than human rights. Lenin was right when he said the capitalists will sell us the rope with which we will hang them. That's what is happening here."
Thursday, 7 August 2008
Sanya base to float Chinese naval ambition
China is set to challenge US dominance in the Pacific by 2050.
ACCORDING to naval intelligence sources in London and Washington and a recent MI6 briefing to Jane's Intelligence Weekly, China is building a massive, highly secure naval base at Sanya on Hainan Island.
This has been independently confirmed, using commercially available satellite imagery, by the Federation of American Scientists.
It turns out the EP-3 incident in April 2001, when a US reconnaissance plane was harassed and forced to land in Hainan, was all about Sanya.
It had been the EP-3's surveillance target. That's why the Chinese were so concerned about the matter.
The question is, should we be concerned about Sanya? The answer: Yes.
The naval base centres on a huge underground complex even the most sophisticated spy satellites cannot penetrate.
It is being prepared with berths for up to 20 of the most advanced Chinese submarines, the C94 Jin-class boat, which will be capable of firing both anti-satellite and nuclear-tipped missiles.
It is also being fitted out to house several aircraft carriers — something China does not even have yet.
In short, Sanya is a very clear signal of the scale of China's emerging blue-water naval ambitions.
We are very used to Anglo-American naval dominance and to China not even having a significant blue-water navy. Moreover, American naval dominance remains overwhelming.
Sanya, however, raises the twofold question: will that dominance endure and what would be the consequences if it did not?
We need to put Sanya in geopolitical and historical perspective, and we need to remind ourselves that the future could take any one of several paths from here, whatever the intentions of China's current leaders might be.
Several episodes in modern history show us, by analogy, what Sanya could signify: the development of German naval power in the 1910s to rival British dominance; the rise of Japanese naval power in the 1920s to rival Western naval dominance in the Pacific; and the attempt by the Soviet Union, in the 1970s and early 1980s, to build a blue-water navy that could challenge American dominance of the world's oceans.
None of those attempts succeeded, but they were part of what became the First World War, the Second World War and the last anxious phase of the Cold War.
Consider the case of Germany 100 years ago.
The intention of the Germans, when they began their naval build-up, was not to fight Britain but to develop enough naval muscle to apply pressure on Britain in a possible future crisis that would induce Britain to come to terms and make concessions. The Kaiser's Navy Laws of 1898 and 1900 gave navy secretary Alfred von Tirpitz a mandate to develop a fleet of short-range battleships that could challenge the Royal Navy in the North Sea.
It was also hoped that the naval build-up would rally conservative interests and the new middle classes around the flag and buttress the legitimacy of the monarchy.
Sanya, on the South China Sea, is about China being able to put enough pressure on the United States in a possible crisis to extract concessions from it.
The aim may also be to rally Chinese citizens around the Communist Party, whose dubious legitimacy depends more and more on nationalism rather than communism.
In the 1910s there were many people in Britain who did not see the rise of German naval power as necessarily a cause for alarm.
There are plenty today who will be inclined to say: Why shouldn't China have a blue-water navy? Doesn't it have legitimate interests in sea lines of communication and maritime claims it has a right to defend? Wouldn't a rising great power naturally build such a capability?
Yes, it does, and yes, it probably would.
But consider where all this could lead and do not rest on your laurels or your cynicism.
Admiral Liu Huaqing designed a long-term naval strategy for China from 1985. He was appointed by Deng Xiaoping as military mentor to Jiang Zemin in the 1990s.
He fell out with Mr Jiang a decade ago, but the strategy is slowly maturing.
It has a clear objective: to dominate the waters around the first island chain — the great chain of islands that runs from the Kuriles through Japan and Taiwan to the Philippines — and then to challenge US dominance in the Pacific by 2050.
As Alan Wachman has shown in his monograph Why Taiwan (Stanford University Press, 2007), this is why China seeks to assert sovereignty over Taiwan.
It is not because of any historical sentimentality about old imperial territories or "unequal" treaties.
It no longer seeks sovereignty over the vastly larger territories of Mongolia or the Russian Far East that also belonged to the old Manchu empire, but it does seek Taiwan — because of its pivotal place in the first island chain, its strategic position straddling the trade pipeline that is the Taiwan Strait, and its first-class harbours with their direct access to the wide waters of the Western Pacific.
The Sanya naval base is a key move in the grand plan — and we should all sit up and take note.
ACCORDING to naval intelligence sources in London and Washington and a recent MI6 briefing to Jane's Intelligence Weekly, China is building a massive, highly secure naval base at Sanya on Hainan Island.
This has been independently confirmed, using commercially available satellite imagery, by the Federation of American Scientists.
It turns out the EP-3 incident in April 2001, when a US reconnaissance plane was harassed and forced to land in Hainan, was all about Sanya.
It had been the EP-3's surveillance target. That's why the Chinese were so concerned about the matter.
The question is, should we be concerned about Sanya? The answer: Yes.
The naval base centres on a huge underground complex even the most sophisticated spy satellites cannot penetrate.
It is being prepared with berths for up to 20 of the most advanced Chinese submarines, the C94 Jin-class boat, which will be capable of firing both anti-satellite and nuclear-tipped missiles.
It is also being fitted out to house several aircraft carriers — something China does not even have yet.
In short, Sanya is a very clear signal of the scale of China's emerging blue-water naval ambitions.
We are very used to Anglo-American naval dominance and to China not even having a significant blue-water navy. Moreover, American naval dominance remains overwhelming.
Sanya, however, raises the twofold question: will that dominance endure and what would be the consequences if it did not?
We need to put Sanya in geopolitical and historical perspective, and we need to remind ourselves that the future could take any one of several paths from here, whatever the intentions of China's current leaders might be.
Several episodes in modern history show us, by analogy, what Sanya could signify: the development of German naval power in the 1910s to rival British dominance; the rise of Japanese naval power in the 1920s to rival Western naval dominance in the Pacific; and the attempt by the Soviet Union, in the 1970s and early 1980s, to build a blue-water navy that could challenge American dominance of the world's oceans.
None of those attempts succeeded, but they were part of what became the First World War, the Second World War and the last anxious phase of the Cold War.
Consider the case of Germany 100 years ago.
The intention of the Germans, when they began their naval build-up, was not to fight Britain but to develop enough naval muscle to apply pressure on Britain in a possible future crisis that would induce Britain to come to terms and make concessions. The Kaiser's Navy Laws of 1898 and 1900 gave navy secretary Alfred von Tirpitz a mandate to develop a fleet of short-range battleships that could challenge the Royal Navy in the North Sea.
It was also hoped that the naval build-up would rally conservative interests and the new middle classes around the flag and buttress the legitimacy of the monarchy.
Sanya, on the South China Sea, is about China being able to put enough pressure on the United States in a possible crisis to extract concessions from it.
The aim may also be to rally Chinese citizens around the Communist Party, whose dubious legitimacy depends more and more on nationalism rather than communism.
In the 1910s there were many people in Britain who did not see the rise of German naval power as necessarily a cause for alarm.
There are plenty today who will be inclined to say: Why shouldn't China have a blue-water navy? Doesn't it have legitimate interests in sea lines of communication and maritime claims it has a right to defend? Wouldn't a rising great power naturally build such a capability?
Yes, it does, and yes, it probably would.
But consider where all this could lead and do not rest on your laurels or your cynicism.
Admiral Liu Huaqing designed a long-term naval strategy for China from 1985. He was appointed by Deng Xiaoping as military mentor to Jiang Zemin in the 1990s.
He fell out with Mr Jiang a decade ago, but the strategy is slowly maturing.
It has a clear objective: to dominate the waters around the first island chain — the great chain of islands that runs from the Kuriles through Japan and Taiwan to the Philippines — and then to challenge US dominance in the Pacific by 2050.
As Alan Wachman has shown in his monograph Why Taiwan (Stanford University Press, 2007), this is why China seeks to assert sovereignty over Taiwan.
It is not because of any historical sentimentality about old imperial territories or "unequal" treaties.
It no longer seeks sovereignty over the vastly larger territories of Mongolia or the Russian Far East that also belonged to the old Manchu empire, but it does seek Taiwan — because of its pivotal place in the first island chain, its strategic position straddling the trade pipeline that is the Taiwan Strait, and its first-class harbours with their direct access to the wide waters of the Western Pacific.
The Sanya naval base is a key move in the grand plan — and we should all sit up and take note.
The history, structure und function of the global surveillance system known as Echelon
Inside Echelon
Since 1998, much has been written and spoken about the so-called Echelon system of international communications surveillance. Most of what has been written has been denied or ignored by US and European authorities. But much of what has been written has also been exaggerated or wrong. Amongst a sea of denials, obfuscations and errors, confusion has reigned. This review by Duncan Campbell, author of the European Parliament's 1999 "Interception Capabilities 2000" report[1] , is intended to help clear up the confusion, to say what Echelon is (and isn't), where it came from and what it does. Echelon, or systems like it, will be with us a long time to come.
Menwith Hill, Photo: Duncan Campbell
Echelon is a system used by the United States National Security Agency (NSA) to intercept and process international communications passing via communications satellites. It is one part of a global surveillance systems that is now over 50 years old. Other parts of the same system intercept messages from the Internet, from undersea cables, from radio transmissions, from secret equipment installed inside embassies, or use orbiting satellites to monitor signals anywhere on the earth's surface. The system includes stations run by Britain, Canada, Australia and New Zealand, in addition to those operated by the United States. Although some Australian and British stations do the same job as America's Echelon sites, they are not necessarily called "Echelon" stations. But they all form part of the same integrated global network using the same equipment and methods to extract information and intelligence illicitly from millions of messages every day, all over the world.
The first reports about Echelon in Europe[2] credited it with the capacity to intercept "within Europe, all e-mail, telephone, and fax communications". This has proven to be erroneous; neither Echelon nor the signals intelligence ("sigint") system of which it is part can do this. Nor is equipment available with the capacity to process and recognise the content of every speech message or telephone call. But the American and British-run network can, with sister stations, access and process most of the worlds satellite communications, automatically analysing and relaying it to customers who may be continents away.
The world's most secret electronic surveillance system has its main origin in the conflicts of the Second World War. In a deeper sense, it results from the invention of radio and the fundamental nature of telecommunications. The creation of radio permitted governments and other communicators to pass messages to receivers over transcontinental distances. But there was a penalty - anyone else could listen in. Previously, written messages were physically secure (unless the courier carrying them was ambushed, or a spy compromised communications). The invention of radio thus created a new importance for cryptography, the art and science of making secret codes. It also led to the business of signals intelligence, now an industrial scale activity. Although the largest surveillance network is run by the US NSA, it is far from alone. Russia, China, France and other nations operate worldwide networks. Dozens of advanced nations use sigint as a key source of intelligence. Even smaller European nations such as Denmark, the Netherlands or Switzerland have recently constructed small, Echelon-like stations to obtain and process intelligence by eavesdropping on civil satellite communications.
Girokonto + 3,66% Zinsen
Jetzt Top Tagesgeld eröffnen mit 3,66% Zinsen ab dem ersten Euro. Kostenlos dazu: Top Giro.
Auto günstig versichern?
Die Kfz-Versicherung ab 35 Cent am Tag! Bis zu 20% extra sparen mit dem Vorteilsprogramm.
Privater Top-Schutz
So günstig kann privat versichern sein! Der rundum Top-Schutz der DKV schon ab 196,83 € mtl.!
During the 20th century, governments realised the importance of effective secret codes. But they were often far from successful. During the Second World War, huge allied codebreaking establishments in Britain and America analysed and read hundreds of thousands of German and Japanese signals. What they did and how they did it remained a cloely-guarded secret for decades afterwards. In the intervening period, the US and British sigint agencies, NSA and Government Communications Headquarters (GCHQ) constructed their worldwide listening network.
The system was established under a secret 1947 "UKUSA Agreement," which brought together the British and American systems, personnel and stations. To this was soon joined the networks of three British commonwealth countries, Canada, Australia and New Zealand. Later, other countries including Norway, Denmark, Germany and Turkey signed secret sigint agreements with the United States and became "third parties" participants in the UKUSA network.
Besides integrating their stations, each country appoints senior officials to work as liaison staff at the others' headquarters. The United States operates a Special US Liaison Office (SUSLO) in London and Cheltenham, while a SUKLO official from GCHQ has his own suite of offices inside NSA headquarters at Fort Meade, between Washington and Baltimore.
Danish Interception Station, Photo: Ekstrabladet
Under the UKUSA agreement, the five main English-speaking countries took responsibility for overseeing surveillance in different parts of the globe[3] . Britain's zone included Africa and Europe, east to the Ural Mountains of the former USSR; Canada covered northern latitudes and polar regions; Australia covered Oceania. The agreement prescribed common procedures, targets, equipment and methods that the sigint agencies would use. Among them were international regulations for sigint security[4] , which required that before anyone was admitted to knowledge of the arrangements for obtaining and handling sigint, they must first undertake a lifelong commitment to secrecy. Every individual joining a UKUSA sigint organisation must be "indoctrinated" and, often "re-indoctrinated" each time they are admitted to knowledge of a specific project. They are told only what they "need to know", and that the need for total secrecy about their work "never ceases".
Everything produced in the sigint organisations is marked by hundreds of special codewords that "compartmentalise" knowledge of intercepted communications and the systems used to intercept them. The basic level, which is effectively a higher classification than "Top Secret" is "Top Secret Umbra". More highly classified documents are identified as "Umbra Gamma"; other codewords can be added to restrict circulation still further. Less sensitive information, such as analyses of telecommunications traffic, may be classified "Secret Spoke".
The scale and significance of the global surveillance system has been transformed since 1980. The arrival of low cost wideband international communications has created a wired world. But few people are aware that the first global wide area network (WAN) was not the internet, but the international network connecting sigint stations and processing centres. The network is connected over transoceanic cables and space links. Most of the capacity of the American and British military communications satellites, Milstar and Skynet, is devoted to relaying intelligence information. It was not until the mid 1990s that the public internet became larger than the secret internet that connects surveillance stations. Britain's sigint agency GCHQ now openly boasts on its [extern] web site that it helps operate "one of the largest WANs [Wide Area Networks} in the world" and that "all GCHQ systems are linked together on the largest LAN in Europe ... connected to other sites around the world". The same pages also claim that "the immense size and sheer power of GCHQ's supercomputing architecture is difficult to imagine".
The UKUSA alliance's wide area network is engineered according to the same principles as the internet[5] , and provides access from all field interception stations to and from NSA's central computer system, known as Platform. Other parts of the system are known as Embroidery, Tideway and Oceanfront. The intelligence news network is Newsdealer. A TV conference system, highly encrypted like every other part of the network, is called Gigster. They are supported by applications known as Preppy and Droopy. NSA's e-mail system looks and feels like everybody else's e-mail, but is completely separate from the public network. Messages addressed to its secret internal internet address, which is simply "nsa", will not get through.
The delivery of NSA intelligence also now looks and feels like using the internet. Authorised users with appropriate permissions to access "Special Compartmented Intelligence"[6] use standard web browsers to look at the output of NSA's Operations Department from afar. The system, known as "Intelink", is run from the NSA's Fort Meade HQ. Completed in 1996, Intelink connects 13 different US intelligence agencies and some allied agencies with the aim of providing instant access to all types of intelligence information. Just like logging onto the world wide web, intelligence analysts and military personnel can view an atlas on Intelink's home page, and then click on any country they choose in order to access intelligence reports, video clips, satellite photos, databases and status reports.[7]
In the early post war years, and for the next quarter century, there was little sign of this automation or sophistication. In those years, most of the world's long distance communications - civil, military or diplomatic - passed by high frequency radio. NSA and its collaborators operated hundreds of remote interception sites, both surrounding the Soviet Union and China and scattered around the world. Inside windowless buildings, teams of intercept operators passed long shifts listening into silence, interspersed with sudden periods of frenetic activity. For the listening bases on the front line of the cold war, monitoring military radio messages during the cold war brought considerable stress. Operators at such bases often recall colleagues breaking down under the tension, perhaps fleeing into closets after believing that they had just intercepted a message marking the beginning of global thermonuclear war.
Dutch Interception Station: Photo: Netherlands Military Intelligence Service
The Second World War left Britain's agency GCHQ with an extensive network of sigint outposts. Many were fixed in Britain, while others were scattered around the then Empire. From stations including Bermuda, Ascension, Cyprus, Gibraltar, Iraq, Singapore, and Hong Kong, radio operators tracked Soviet and, soon, Chinese political and military developments. These stations complemented a US network which by 1960 included thousands of continuously operated interception positions. The other members of the UKUSA alliance, Australia, Canada and New Zealand contributed stations in the South Pacific and arctic regions.
After the signing of the UKUSA pact, a new chain of stations began operating along the boundaries of the western sphere of influence, monitoring the signals of Soviet ground and air forces. British sigint outposts were established in Germany and, secretly in Austria and Iran. US listening posts were set up in central and southern Germany and later in Turkey, Italy and Spain. One major US sigint base - Kagnew Station at Asmara in Eritrea - was taken over from the British in 1941 and grew to become, until its closure in 1970, one of the largest intercept stations in the world. One of its more spectacular features was a tracking dish used to pass messages to the United States by reflecting them off the surface of the moon.
By the mid 1960s, many of these bases featured gigantic antenna systems that could monitor every HF (High Frequency) radio message, from all angles, while simultaneously obtaining bearings that could enable the position of a transmitter to be located. Both the US Navy and the US Air Force employed global networks of this kind. The US Air Force installed 500 metre wide arrays known as FLR-9 at sites including Chicksands, England, San Vito dei Normanni in Italy, Karamursel in Turkey, the Philippines, and at Misawa, Japan. Codenamed "Iron Horse", the first FLR-9 stations came into operation in 1964. The US Navy established similar bases in the US and at Rota, Spain, Bremerhaven, Germany, Edzell, Scotland, Guam, and later in Puerto Rico, targetted on Cuba.
When the United States went to war in Vietnam, Australian and New Zealand operators in Singapore, Australia and elsewhere worked directly in support of the war. Britain; as a neutral country was not supposed to be involved. In practice, however British operators at the GCHQ intercept station no UKC201 at Little Sai Wan, Hong Kong monitored and reported on the North Vietnamese air defence networks while US B52 bombers attacked Hanoi and other North Vietnamese targets.
Since the end of the cold war, the history of some cold war signals intelligence operations have been declassified. At the US National Cryptologic Museum, run by NSA at its headquarters, the agency now openly acknowledges many of its cold war listening operations. It also describes the controversial use of ships and aircraft to penetrate or provoke military defences in operations that cost the lives of more than 100 of its staff. But another longstanding aspect of sigint operations remain unacknowledged. During the second world war as well as in the cold war and since, British and US intelligence agencies monitored the signals and broke the codes of allies and friends, as well as of civilians and commercial communications around the world. The diplomatic communications of every country were and are attacked.
The stations and methods were the same as for military targets. Within the intelligence agencies, the civilian target was known as "ILC". ILC stood for "International Leased Carrier", and referred to the private companies or telecommunications administrations operating or administrating long range undersea cables or radio stations. Some ILC circuits were rented to governments or large companies as permanent links. The majority were used for public telegraph, telex or telephone services.
Many details of the operation of the English-speaking sigint axis were revealed by two NSA defectors at a press conference held in Moscow on 6 September 1960. There, two NSA analysts, Bernon Mitchell and William Martin, told the world what NSA was doing:
We know from working at NSA [that] the United States reads the secret communications of more than forty nations, including its own allies ... NSA keeps in operation more than 2000 manual intercept positions ... Both enciphered and plain text communications are monitored from almost every nation in the world, including the nations on whose soil the intercept bases are located.
New York Times, 7 September 1960.
The revelations were reported in full in the US, but their impact was soon buried by security recriminations and accusations. Martin and Mitchell revealed that NSA's operations division included two key groups. One group covered the Soviet Union and its allies. The second analysis division was known as ALLO, standing for "all other [countries]". This part of NSA's production organisation was later renamed ROW, starting for "Rest of the World".
Thus, in 1965, while intercept operators at the NSA's Chicksands station in England focussed on the radio messages of Warsaw Pact air forces, their colleagues 200 kilometres north at Kirknewton, Scotland were covering "ILC" traffic, including commercially run radio links between major European cities. These networks could carry anything from birthday telegrams to detailed economic or commercial information exchanged by companies, to encrypted diplomatic messages. In the intercept rooms, machines tuned to transmission channels continuously spewed out 8-ply paper to be read and marked up by intelligence analysts. Around the world, thousands of analysts worked on these mostly unencrypted communications using NSA 'watch lists' - weekly key word lists of people, companies, commodities of interest for the NSA watchers to single out from 'clear' traffic. Coded messages were passed on immediately. Among the regular names on the watch lists were the leaders of African guerrilla movements who were later to become their countries' leaders. In time, many prominent Americans were added to the list. The international communications of the actress Jane Fonda, Dr Benjamin Spock and hundreds of others were put under surveillance because of their opposition to the war in Vietnam. Back power leader Eldridge Cleaver and his colleagues were included because of their civil rights activities in the US.
A short distance to the north at Cupar, Scotland, another intercept station was operated by the British Post Office, and masqueraded as a long distance radio station. In fact, it was another GCHQ interception site, which collected European countries' communications, instead of sending them.
In time, these operations were integrated. In 1976, NSA set up a special new civilian unit at its Chicksands base to carry out diplomatic and civilian interception. The unit, called "DODJOCC" (Department of Defense Joint Operations Centre Chicksands) was targeted on non-US Diplomatic Communications, known as NDC. One specific target, known as FRD, stood for French diplomatic traffic. Italian diplomatic signals, known similarly as ITD, were collected and broken by NSA's counterpart agency GCHQ, at its Cheltenham centre.
Entering Chicksands' Building 600 through double security fences and a turnstile where green and purple clearance badges were checked, the visitor would first encounter a sigint in-joke - a copy of the International Telecommunications Convention pasted up on the wall. Article 22 of the Convention, which both the United Kingdom and the United States have ratified, promises that member states "agree to take all possible measures, compatible with the system of telecommunication used, with a view to ensuring the secrecy of international correspondence".
Besides intercepting ILC communications at radio stations, NSA, GCHQ and their counterparts also collected printed copies of all international telegrams from public and commercial operators in London, New York and other centres. They were then taken to sigint analysts and processed in the same way as foreign telegrams snatched from the air at sites like Chicksands and Kirknewton. Britain had done this since 1920, and the United States since 1945. The joint programme was known as Operation Shamrock, and continued until it was exposed by US Congressional intelligence investigations in the wake of the Watergate affair.
On 8 August 1975, NSA Director Lt General Lew Allen admitted to the Pike Committee of the US House of Representatives that : "NSA systematically intercepts international communications, both voice and cable" He also admitted that "messages to and from American citizens have been picked up in the course of gathering foreign intelligence". At a later hearing, he described how NSA used "'watch lists" an aid to watch for foreign activity of reportable intelligence interest".[8]
US legislators considered that these operations might have been unconstitutional. During 1976, a Department of Justice team investigated possible criminal offences by NSA. Part of their report was released in 1980 It described how intelligence on US citizens, known as MINARET "was obtained incidentally in the course of NSA's interception of aural and non-aural (e.g, telex) international communications and the receipt of GCHQ-acquired telex and ILC (International Leased Carrier) cable traffic (SHAMROCK)" (emphasis in original).
As in the United Kingdom, from 1945 onwards NSA and its predecessors had systematically obtained cable traffic from the offices of major cable companies - RCA Global, ITT World Communications and Western Union. Over time, the collection of copies of telegrams on paper was replaced by the delivery of magnetic tapes and eventually by direct connection of the monitoring centres to international communications circuits. In Britain, all international telex links and telegram circuits passing in, out or through the country were and are connected to a GCHQ monitoring site in central London, known as UKC1000.
By the early 1970s, the laborious process of scanning paper printouts for names or terms appearing on the "watch lists" had begun to be replaced by automated computer systems. These computers performed a task essentially similar to the search engines of the internet. Prompted with a word, phrase or combination of words, they will identify all messages containing the desired words or phrases. Their job, now performed on a huge scale, is to match the "key words" or phrases of interest to intelligence agencies to the huge volume of international communications, to extract them and pass them to where they are wanted. During the 1980s, the NSA developed a "fast data finder" microprocessor that was optimally designed for this purpose. It was later commercially marketed, with claims that it "the most comprehensive character-string comparison functions of any text retrieval system in the world". A single unit could work with:
"trillions of bytes of textual archive and thousands of online users, or gigabytes of live data stream per day that are filtered against tens of thousands of complex interest profiles"[9] .
Although different systems are in use, the key computer system at the heart of a modern sigint station's processing operations is the "Dictionary". Every Echelon or Echelon-like station contains a Dictionary. Portable versions are even available, and can be loaded into briefcase-sized units known as "Oratory" [10] . The Dictionary computers scan communications input to them, and extract for reporting and further analysis those that match the profiles of interest. In one sense, the main function of Dictionary computers are to throw most intercepted information away.
In a 1992 speech on information management, former NSA Director William Studeman described the type of filtering involved in systems like ECHELON[11] :
"One [unidentified] intelligence collection system alone can generate a million inputs per half hour; filters throw away all but 6500 inputs; only 1,000 inputs meet forwarding criteria; 10 inputs are normally selected by analysts and only one report is produced. These are routine statistics for a number of intelligence collection and analysis systems which collect technical intelligence".
In other words, for every million communications intercepted only one might result in action by an intelligence agency. Only one in a thousand would ever be seen by human eyes.
Supporting the operations of each Dictionary are gigantic intelligence databases which contain tables of information related to each target. At their simplest, these can be a list of telephone, mobile phone, fax or pager numbers which associated with targets in each group. They can include physical or e-mail addresses, names, or any type of phrase or concept that can be formulated under normal information retrieval rules.
Powerful though Dictionary methods and keyword search engines may be, however, they and their giant associated intelligence databases may soon be replaced by "topic analysis", a more powerful and intuitive technique, and one that NSA is developing strongly. Topic analysis enables Comint customers to ask their computers to "find me documents about subject X". X might be "Shakespeare in love" or "Arms to Iran".
In a standard US test used to evaluate topic analysis systems, one task the analysis program is given is to find information about "Airbus subsidies". The traditional approach involves supplying the computer with the key terms, other relevant data, and synonyms. In this example, the designations A-300 or A-320 might be synonymous with "Airbus". The disadvantage of this approach is that it may find irrelevant intelligence (for example, reports about export subsidies to goods flown on an Airbus) and miss relevant material (for example a financial analysis of a company in the consortium which does not mention the Airbus product by name). Topic analysis overcomes this and is better matched to human intelligence.
In 1991, a British television programme reported on the operations of one Dictionary computer at GCHQ's London station in Palmer Street, Westminster (station UKC1000). The programme quoted GCHQ employees, who spoke off the record:
"Up on the fourth floor there, [GCHQ] has hired a group of carefully vetted British Telecom people. [Quoting the ex-GCHQ official:] It's nothing to do with national security. It's because it's not legal to take every single telex. And they take everything: the embassies, all the business deals, even the birthday greetings, they take everything. They feed it into the Dictionary."
Among the targets of this station were politicians, diplomats, businessmen, trades union leaders, non- government organisations like Amnesty International, and even the hierarchy of the Catholic church.
The Echelon system appears to have been in existence since the early 1970s, and to have gone through extensive evolution and development. The need for efficient processing systems to replace the human operators who performed watch list scans was first foreseen in the late 1960s, when NSA and GCHQ were planning the first large satellite interception sites. The first such station was built at Morwenstow, Cornwall, and utilised two large dish antennae to intercept communications crossing the Atlantic and Indian Oceans. The second was built at Yakima, in the northwestern US state of Washington. Yakima intercepted satellite communications over the Pacific Ocean.
Also in the early 1970s, NSA and CIA discovered that sigint collection from space was far more effective and productive than had been foreseen, resulting in vast accumulations of magnetic tapes that quickly outstripped the available supply of Soviet linguists and analysts. By the end of the 1970s, one of the main sites processing communications intercepted from space was Menwith Hill, in central England. A document prepared there in 1981[12] identifies intelligence databases used at Menwith Hill as "Echelon 2". This suggests that the Echelon network was already into its second generation by 1981.
By the mid 1980s, communications handled by Dictionary computers around the world were heavily sifted, with a wide variety of specifications available for non-verbal traffic. Extensive further automation was planned in the mid 1980s under two top secret NSA Projects, P-377 and P-415. The implementation of these projects completed the automation of the "watch list" activity of pevious decades. Computers replaced the analysts who compared reams of paper intercepts to names and topics on the watch list. In the late 1980s, staff from sigint agencies from countries including the UK, New Zealand and China attended training courses on the new Echelon computer systems.
Project P-415 made heavy use of NSA and GCHQ's global internet to enable remote intelligence customers to task computers at each collection site, and then receive the results automatically. Selected incoming messages were compared to forwarding criteria held on the Dictionary. If a match was found, the raw intelligence was forwarded automatically to the designated recipients. According to New Zealand author Nicky Hager, [13] Dictionary computers are tasked with many thousands of different collection requirements, described as "numbers" (four digit codes).
Details of project P-415 and the plans for the massive global expansion of the Echelon system were revealed in 1988 by Margaret "Peg" Newsham. Ms Newsham a former computer systems manager, worked on classified projects for NSA contractors until the mid 1980s. From August 1978 onwards, she worked at the NSA's Menwith Hill Station as a software co-ordinator. In this capacity, she helped managed a number of Sigint computer databases, including "Echelon 2". She and others also helped establish "Silkworth", a system for processing information relayed from signals intelligence satellites called Chalet, Vortex and Mercury. Her revelations led to the first ever report about Echelon, published in 1988. [14]
In Sunnyvale, California, Peg Newsham worked for Lockheed Space and Missiles Corporation. In that capacity, she worked on plans for the massive expansion of the Echelon network, a project identified internally as P-415. During her employment by Lockheed, she also become concerned about corruption, fraud and abuse within the organisations planning and operating electronic surveillance systems. She reported her concerns to the US Congress House Permanent Select Committee on Intelligence early in 1988. She also told them how she had witnessed the interception of a telephone call made by a US Senator, Strom Thurmond, while working at Menwith Hill.
The full details of Echelon would probably never have come to serious public attention but for 6 further years of research by New Zealand writer Nicky Hager, who assiduously investigated the new Echelon station that started operating at Waihopai on the South Island of New Zealand in 1989. His 1996 book Secret Power[15] is based on extensive interviews with and help from members of the New Zealand signals intelligence organisation. It remains the best informed and most detailed account of how Echelon works.
Early in 2000, information and documents leaked to a US researcher[16] provided many details of how Echelon was developed for use worldwide. Under a 1982 NSA plan assigned to Lockheed Space and Missiles Systems, engineers and scientists worked on Project P-377 - also known as CARBOY II. This project called for the development of a standard kit of "ADPE" (automated data processing equipment) parts for equipping Echelon sites. The "commonality of automated data processing equipment (ADPE) in the Echelon system" included the following elements:
* Local management subsystem
* Remote management subsystem
* Radio frequency distribution
* Communications handling subsystem
* Telegraphy message processing subsystem
* Frequency division multiplex telegraphy processing subsystem
* Time division multiplex telegraphy processing subsystem
* Voice processing subsystem
* Voice collection module
* Facsimile processing subsystem
* [Voice] Tape Production Facility
The CARBOY II project also called for software systems to load and update the Dictionary databases. At this time, the hardware for the Dictionary processing subsystem was based on a cluster of DEC VAX mini-computers, together with special purpose units for processing and separating different types of satellite communications.
In 1998 and 1999, the intelligence specialist Dr Jeff Richelson of the National Security Archive[17] Washington, DC used the Freedom of Information Act to obtain a series of modern official US Navy and Air Force documents which have confirmed the continued existence, scale and expansion of the Echelon system. The documents from the US Air Force and US Navy identify Echelon units at four sites and suggest that a fifth site also collects information from communications satellites as part of the Echelon system.
One of the sites is Sugar Grove, West Virgina US, about 250 miles south-west of Washington in a remote area of the Shenandoah Mountains. It is operated by the US Naval Security Group and the US Air Force Intelligence Agency. An upgraded sigint system called Timberline II was installed at Sugar Grove in the summer of 1990. At the same time, according to official US documents, an "Echelon training department" was established. With training complete, the task of the station in 1991 became "to maintain and operate an ECHELON site".[18]
The US Air Force has publicly identified the intelligence activity at Sugar Grove as "to direct satellite communications equipment [in support of] consumers of COMSAT information ... this is achieved by providing a trained cadre of collection system operators, analysts and managers". The 1998-99 USAF Air Intelligence Agency Almanac described the mission of the Sugar Grove unit as providing "enhanced intelligence support to air force operational commanders and other consumers of COMSAT information." [19] In 1990, satellite photographs showed that there were 4 satellite antennae at Sugar Grove. By November 1998, ground inspection revealed that this had expanded to nine.
Further information published by the US Air Force identifies the US Naval Security Group Station at Sabana Seca, Puerto Rico as a COMSAT interception site. Its mission is "to become the premier satellite communications processing and analysis field station". These and further documents concerning Echelon and COMSAT interception stations at Yakima, Sabana Seco (Puerto Rico), Misawa (Japan) and Guam have been published on the web.[20]
From 1984 onwards, Australia, Canada and New Zealand joined the US and the UK in operating Comsat (communications satellite) interception stations. Australia's site at Kojarena, Geraldton near Perth in western Australia includes four interception dishes. The station's top targets include Japanese diplomatic and commercial messages, communications of all types from and within North Korea, and data on Indian and Pakistani nuclear weapons developments. A second Australian satcom intercept site, at Shoal Bay in the Northern Territories, mainly targets Australia's northern neighbour, Indonesia. Australian sources say however that Shoal Bay is not part of the Echelon system, as Australia is unwilling to allow the US and Britain to obtain raw intercepts directly.
The New Zealand site, Waihopai now has two dishes targeted on Intelsat satellites covering the south Pacific. In 1996, shortly after "Secret Power" was published, a New Zealand TV station obtained images of the inside of the station's operations centre. The pictures were obtained clandestinely by filming through partially curtained windows at night. The TV reporter was able to film close-ups of technical manuals held in the control centre. These were Intelsat technical manuals, providing confirmation that the station targeted these satellites. Strikingly, the station was seen to be virtually empty, operating fully automatically.
Before the introduction of Echelon, different countries and different stations knew what was being intercepted and to whom it was being sent. Now, all but a fraction of the messages selected by Dictionary computers at remote sites may be forwarded to overseas customers, normally NSA, without any local knowledge of the intelligence obtained.
Information from the Echelon network and other parts of the global surveillance system is used by the US and its allies for diplomatic, military and commercial purposes. In the post cold war years, the staff levels at both NSA and GCHQ have contracted, and many overseas listening posts have been closed or replaced by Remote Operations Facilities, controlled from a handful of major field stations. Although routinely denied, [local] commercial and economic intelligence is now a major target of international sigint activity. Under a 1993 policy colloquially known as "levelling the playing field", the United States government under President Clinton established new trade and economic committees and told the NSA and CIA to act in support of US businesses in seeking contracts abroad. In the UK, GCHQ's enabling legislation from 1994 openly identifies one of its purposes as to promote "the economic well-being of the United Kingdom in relation to the actions or intentions of persons outside the British Islands".
Massive new storage and processing systems are being constructed to provide on-line processing of the internet and new international communications networks. By the early 1990s, both GCHQ and NSA employed "near line" storage systems capable of holding more than a terabyte of data[21] . In the near future, they are likely to deploy systems one thousand times larger. Key word spotting in the vast volumes of intercepted daily written communications - telex, e-mail, and data - is a routine task. "Word spotting" in spoken communications is not an effective tool, but individual speaker recognition techniques have been in use for up to 10 years. New methods which have been developed during the 1990s will become available to recognise the "topics" of phone calls, and may allow NSA and its collaborators to automate the processing of the content of telephone messages - a goal that has eluded them for 30 years.
Under the rubric of "information warfare", the sigint agencies also hope to overcome the ever more extensive use of encryption by direct interference with and attacks on targeted computers. These methods remain controversial, but include information stealing viruses, software audio, video, and data bugs, and pre-emptive tampering with software or hardware ("trapdoors").
In the information age, we need to re-learn a lesson now a century old. Despite the sophistication of 21st century technology, today's e-mails are as open to the eyes of snoopers and intruders as were the first crude radio telegraph messages. Part of the reason for this is that, over many decades, NSA and its allies worked determinedly to limit and prevent the privacy of international telecommunications. Their goal was to keep communications unencrypted and, thus, open to easy access and processing by systems like Echelon. They knew that privacy and security, then as a century ago, lay in secret codes or encryption. Until such protections become effective and ubiquitous, Echelon or systems like it, will remain with us.
United States Targeted by Red Chinese Spies
Intelligence documents confirm longtime espionage activities aimed at the U.S. Experts say Red China's grab for control of Panama ports and Long Beach base are part of these efforts.
In August a Chinese spy visited the Hong Kong branch of the Bank of China to open an account and obtain a loan. The spy had been in Beijing for about 10 months and recently had attended what American intelligence agents call an "orientation course."
Beijing's man was a name dropper. He inadvertently told an undercover American agent that he had access to several political leaders and kept a large sum on deposit at the Bank of China. "The accounts were not personal wealth" he explained, "but rather official funds of the Chinese Communist and North Korean governments that had been appropriated to finance intelligence and propaganda activities"
Sound familiar? Could this be Charlie Trie, the Little Rock restaurateur who dumped thousands of dollars into the Democratic National Committee shortly after conducting transactions at the Bank of China? Could be, but it's not.
This incident occurred 41 years ago and is documented in recently unclassified military-intelligence records released by the U.S. Army covering more than three decades of Chinese espionage beginning in the 1940s.
Insight has obtained hundreds of these onetime "secret" records that include documents from the Defense Intelligence Agency, U.S. Naval Intelligence, Army Intelligence and the Office of Special Investigations for the U.S. Air Force. Most of the documents are reports by American field agents to various U.S. intelligence agencies detailing Red Chinese espionage operations aimed at penetrating U.S. military installations, smuggling narcotics, obtaining economic information and funneling money to worldwide Red Chinese operations through banking institutions.
For example, records detail covert escape operations in 1971, some sponsored officially by Beijing, in which mainland dissidents were helped by "in-border" contacts who sneaked them through the People's Liberation Army's sentry line and left them to try to swim to Macao at night. "They are given no guarantee of success in their venture," a U.S. agent wrote in a report. "A great number drown before they reach Macao."
The state-run smuggling ring involved the Kwangtung Provincial Public Security Department and the Canton City Public Security Bureau. They also smuggled Mao's agents directly into Macao where a Communist cadre provided documents to enter Hong Kong. Young women fluent in English frequently were moved via this route to work as agents in dance halls, restaurants and bars, according to counterintelligence reports.
Records obtained by Insight contain grainy photographs of suspected agents with their names blacked out as well as notes on suspected business fronts that included tailor shops, gift stores, hotels and clubs.
For example, in 1948 a large number of Chinese seamen frequented the Chinese Seamen's Club in Japan, which turned out to be a secret meeting place for Red Chinese agents and local hotel managers to plot smuggling and illegal activities, according to military intelligence records. The club went "bankrupt" and was closed in 1951, during the Korean War.
The records identify Red Chinese fronts for intelligence activities in Japan during the Korean conflict, including the Shu, Shi Tei Agency, a spy operation; O, Bun Sei Agency, which procured war materials for Chinese communists, operating mainly in Osaka and Kobe; and the Central Statistics Bureau, which collected funds in Japan for Beijing's intelligence operations.
Counterintelligence expert Thomas Pickard, assistant director in charge at the Washington bureau of the FBI, explains to Insight why spies frequently are kept under surveillance rather than being rounded up. "By not arresting them, you can recruit them, give them false information and neutralize them." By monitoring their activities, he says, you identify their other connections.
The records indicate a strong presence of Chinese espionage activities in Japan and an attempt to penetrate American universities. Other records show Chinese spies trained in Moscow in 1957 penetrating Italy under the pretense of being cloth salesmen. The records suggest Panama may have been penetrated by Beijing's military spies holding political posts near U.S. military bases, while West Germany and Austria consistently were targets of Beijing's espionage activities.
However, by far the largest identifiable penetration was in Japan, according to the records Insight obtained. One American intelligence agent, alone, identified 27 Chinese spies operating in Japan. Some of these posed as students to gather information about American troop "strength, movements, bases and equipment," according to declassified intelligence documents.
Wall Street Journal reporter John J. Fialka says in his book War by Other Means that using students to conduct economic espionage activities continues. He notes the increasing number of mainland Chinese students enrolling in science and engineering at prestigious U.S. graduate schools. They are called acheng di yu, or fish at the bottom of the sea. "The little fish are sent to the United States to grow, to be activated years, maybe decades later," Fialka writes.
Declassified intelligence records also note that Beijing long has been active in attempts "to gather information of intelligence, economic and scientific value from publication of doctoral dissertations submitted by students and accepted by American colleges and universities when granting degrees." One document says University Microfilms, Inc., an Ann Arbor, Mich., subsidiary of Xerox Corp., had just shipped more than 100 doctoral theses to Red China. Themes of these theses included code analysis, control and guidance systems, computer data, radar, missile failures and qualities of gases and fluids.
Recruiting spies for Red China also has been conducted at international meetings. Beijing recruited 150 spies from the 21st World Overseas Chinese Conference held in Taiwan, according to one of the declassified intelligence reports. Their training consisted of political indoctrination concerning current communist activities on the China mainland and review of alleged Chinese Nationalist failures. They targeted plans for the Taiwan central government and future Nationalist Chinese plans and policies concerning matters military, political and economic.
Beijing's espionage activities consistently have focused on U.S. military installations. A 1957 American intelligence operation called "Project Male Train" uncovered evidence that Red Chinese spies had found employment with businesses near U.S. military installations. The records show that many such spies in fact did obtain employment as tailors, salesmen, bar waitresses and bar hostesses to contact U.S. military personnel.
Japan was a top target, but the schemes were worked worldwide. As one American agent warned in his report, "While working for these tailor shops [Chinese Spy X] had access to various U.S. military installations under the guise of soliciting tailoring business from the U.S. Security Forces personnel. Because of the ability to speak English and his well-rounded knowledge of photography he has been successful in gathering intelligence information relative to United States Security Forces.... This information has been sent, in code, to Communist China via Hong Kong, disguised as measurements for different tailored garments. He is highly regarded as an intelligence agent by the Chinese Communist authorities because he is able to answer desired leads rapidly."
U.S. intelligence experts tell Insight the Chinese spies now have traded in the tailor-type jobs for high-tech studies and careers to conduct economic-espionage activities on American soil. Targets still include military installations. That is why some intelligence experts remain deeply concerned about the Red Chinese taking over key ports including the Long Beach Naval Base in California and at both ends of the Panama Canal.
Retired Lt. Gen. Gordon Sumner Jr., former chairman of the Inter-American Defense Board, warns that control of the Long Beach port would provide an excellent opportunity for the Chinese Communists to conduct espionage operations because of its proximity to a defense industrial zone filled with significant military installations.
President Clinton announced withdrawal of the U.S. military presence in Panama shortly after the Bank of China extended a 15-year, $120 million loan to Panama at 3 percent interest. A Chinese company then grabbed the contracts to run the Panama ports.
"We have given them the capability of controlling the canal" says Sumner, who would like to see at least 5,000 troops remain but believes they most likely will depart this month. "We have created a vacuum and it's being filled by the Red Chinese. We need to keep the [military] communications facility open. Panama is going to become the proxy battleground between Red China and the U.S."
The Clinton administration repeatedly has downplayed the potential threat of Chinese espionage at these ports. So has Navy Secretary John Dalton.
This downplaying of the threat is not new. In 1960 a U.S. Naval Intelligence report downplayed the threat of tailors suspected of being Chinese spies having access to U.S. Navy installations in Europe and Asia. "The potential security threat appears somewhat exaggerated," the report claimed. Hundreds of pages of documented evidence in Insight's hands show not only that this was false but that U.S. intelligence agencies knew it was false. In fact, the intelligence professionals were very concerned about those agents and had reason to be.
Such information is tightly held, which is why it is so unusual that senior U.S. intelligence agents are warning Congress that Chinese agents not only tried to influence the American political elections but are laying the groundwork to penetrate the key U.S. installations at Long Beach and Panama.
In August a Chinese spy visited the Hong Kong branch of the Bank of China to open an account and obtain a loan. The spy had been in Beijing for about 10 months and recently had attended what American intelligence agents call an "orientation course."
Beijing's man was a name dropper. He inadvertently told an undercover American agent that he had access to several political leaders and kept a large sum on deposit at the Bank of China. "The accounts were not personal wealth" he explained, "but rather official funds of the Chinese Communist and North Korean governments that had been appropriated to finance intelligence and propaganda activities"
Sound familiar? Could this be Charlie Trie, the Little Rock restaurateur who dumped thousands of dollars into the Democratic National Committee shortly after conducting transactions at the Bank of China? Could be, but it's not.
This incident occurred 41 years ago and is documented in recently unclassified military-intelligence records released by the U.S. Army covering more than three decades of Chinese espionage beginning in the 1940s.
Insight has obtained hundreds of these onetime "secret" records that include documents from the Defense Intelligence Agency, U.S. Naval Intelligence, Army Intelligence and the Office of Special Investigations for the U.S. Air Force. Most of the documents are reports by American field agents to various U.S. intelligence agencies detailing Red Chinese espionage operations aimed at penetrating U.S. military installations, smuggling narcotics, obtaining economic information and funneling money to worldwide Red Chinese operations through banking institutions.
For example, records detail covert escape operations in 1971, some sponsored officially by Beijing, in which mainland dissidents were helped by "in-border" contacts who sneaked them through the People's Liberation Army's sentry line and left them to try to swim to Macao at night. "They are given no guarantee of success in their venture," a U.S. agent wrote in a report. "A great number drown before they reach Macao."
The state-run smuggling ring involved the Kwangtung Provincial Public Security Department and the Canton City Public Security Bureau. They also smuggled Mao's agents directly into Macao where a Communist cadre provided documents to enter Hong Kong. Young women fluent in English frequently were moved via this route to work as agents in dance halls, restaurants and bars, according to counterintelligence reports.
Records obtained by Insight contain grainy photographs of suspected agents with their names blacked out as well as notes on suspected business fronts that included tailor shops, gift stores, hotels and clubs.
For example, in 1948 a large number of Chinese seamen frequented the Chinese Seamen's Club in Japan, which turned out to be a secret meeting place for Red Chinese agents and local hotel managers to plot smuggling and illegal activities, according to military intelligence records. The club went "bankrupt" and was closed in 1951, during the Korean War.
The records identify Red Chinese fronts for intelligence activities in Japan during the Korean conflict, including the Shu, Shi Tei Agency, a spy operation; O, Bun Sei Agency, which procured war materials for Chinese communists, operating mainly in Osaka and Kobe; and the Central Statistics Bureau, which collected funds in Japan for Beijing's intelligence operations.
Counterintelligence expert Thomas Pickard, assistant director in charge at the Washington bureau of the FBI, explains to Insight why spies frequently are kept under surveillance rather than being rounded up. "By not arresting them, you can recruit them, give them false information and neutralize them." By monitoring their activities, he says, you identify their other connections.
The records indicate a strong presence of Chinese espionage activities in Japan and an attempt to penetrate American universities. Other records show Chinese spies trained in Moscow in 1957 penetrating Italy under the pretense of being cloth salesmen. The records suggest Panama may have been penetrated by Beijing's military spies holding political posts near U.S. military bases, while West Germany and Austria consistently were targets of Beijing's espionage activities.
However, by far the largest identifiable penetration was in Japan, according to the records Insight obtained. One American intelligence agent, alone, identified 27 Chinese spies operating in Japan. Some of these posed as students to gather information about American troop "strength, movements, bases and equipment," according to declassified intelligence documents.
Wall Street Journal reporter John J. Fialka says in his book War by Other Means that using students to conduct economic espionage activities continues. He notes the increasing number of mainland Chinese students enrolling in science and engineering at prestigious U.S. graduate schools. They are called acheng di yu, or fish at the bottom of the sea. "The little fish are sent to the United States to grow, to be activated years, maybe decades later," Fialka writes.
Declassified intelligence records also note that Beijing long has been active in attempts "to gather information of intelligence, economic and scientific value from publication of doctoral dissertations submitted by students and accepted by American colleges and universities when granting degrees." One document says University Microfilms, Inc., an Ann Arbor, Mich., subsidiary of Xerox Corp., had just shipped more than 100 doctoral theses to Red China. Themes of these theses included code analysis, control and guidance systems, computer data, radar, missile failures and qualities of gases and fluids.
Recruiting spies for Red China also has been conducted at international meetings. Beijing recruited 150 spies from the 21st World Overseas Chinese Conference held in Taiwan, according to one of the declassified intelligence reports. Their training consisted of political indoctrination concerning current communist activities on the China mainland and review of alleged Chinese Nationalist failures. They targeted plans for the Taiwan central government and future Nationalist Chinese plans and policies concerning matters military, political and economic.
Beijing's espionage activities consistently have focused on U.S. military installations. A 1957 American intelligence operation called "Project Male Train" uncovered evidence that Red Chinese spies had found employment with businesses near U.S. military installations. The records show that many such spies in fact did obtain employment as tailors, salesmen, bar waitresses and bar hostesses to contact U.S. military personnel.
Japan was a top target, but the schemes were worked worldwide. As one American agent warned in his report, "While working for these tailor shops [Chinese Spy X] had access to various U.S. military installations under the guise of soliciting tailoring business from the U.S. Security Forces personnel. Because of the ability to speak English and his well-rounded knowledge of photography he has been successful in gathering intelligence information relative to United States Security Forces.... This information has been sent, in code, to Communist China via Hong Kong, disguised as measurements for different tailored garments. He is highly regarded as an intelligence agent by the Chinese Communist authorities because he is able to answer desired leads rapidly."
U.S. intelligence experts tell Insight the Chinese spies now have traded in the tailor-type jobs for high-tech studies and careers to conduct economic-espionage activities on American soil. Targets still include military installations. That is why some intelligence experts remain deeply concerned about the Red Chinese taking over key ports including the Long Beach Naval Base in California and at both ends of the Panama Canal.
Retired Lt. Gen. Gordon Sumner Jr., former chairman of the Inter-American Defense Board, warns that control of the Long Beach port would provide an excellent opportunity for the Chinese Communists to conduct espionage operations because of its proximity to a defense industrial zone filled with significant military installations.
President Clinton announced withdrawal of the U.S. military presence in Panama shortly after the Bank of China extended a 15-year, $120 million loan to Panama at 3 percent interest. A Chinese company then grabbed the contracts to run the Panama ports.
"We have given them the capability of controlling the canal" says Sumner, who would like to see at least 5,000 troops remain but believes they most likely will depart this month. "We have created a vacuum and it's being filled by the Red Chinese. We need to keep the [military] communications facility open. Panama is going to become the proxy battleground between Red China and the U.S."
The Clinton administration repeatedly has downplayed the potential threat of Chinese espionage at these ports. So has Navy Secretary John Dalton.
This downplaying of the threat is not new. In 1960 a U.S. Naval Intelligence report downplayed the threat of tailors suspected of being Chinese spies having access to U.S. Navy installations in Europe and Asia. "The potential security threat appears somewhat exaggerated," the report claimed. Hundreds of pages of documented evidence in Insight's hands show not only that this was false but that U.S. intelligence agencies knew it was false. In fact, the intelligence professionals were very concerned about those agents and had reason to be.
Such information is tightly held, which is why it is so unusual that senior U.S. intelligence agents are warning Congress that Chinese agents not only tried to influence the American political elections but are laying the groundwork to penetrate the key U.S. installations at Long Beach and Panama.
Monday, 21 July 2008
Beijing's red espionage spider's web on us nuclear programme
The fall of the Soviet Union and the end of the Cold War had a profound impact not only on how security and intelligence professionals viewed the world of espionage but also on the motivations of the players and the targets of their espionage activities.
During the height of the Cold War, no other nation could match the desire and ability of the Soviet Union's KGB to steal American corporate and military secrets, particularly technology secrets. That has since changed, however. In today's information age, the People's Republic of China (PRC) has replaced and even improved on the KGB methods of industrial espionage to the point that the PRC now presents one of the most capable threats to US technology leadership and by extension its national security.
What we know, and don't know
What we know thus far about China's espionage activities against US weapons laboratories and other technology development programs is cause enough for concern. The US intelligence community's official damage assessment of Chinese espionage targeting America's nuclear technology secrets tells us this much:
What we know:
During the height of the Cold War, no other nation could match the desire and ability of the Soviet Union's KGB to steal American corporate and military secrets, particularly technology secrets. That has since changed, however. In today's information age, the People's Republic of China (PRC) has replaced and even improved on the KGB methods of industrial espionage to the point that the PRC now presents one of the most capable threats to US technology leadership and by extension its national security.
What we know, and don't know
What we know thus far about China's espionage activities against US weapons laboratories and other technology development programs is cause enough for concern. The US intelligence community's official damage assessment of Chinese espionage targeting America's nuclear technology secrets tells us this much:
What we know:
What we don't know: Yet there is much more to China's quest for US technology. China has obtained a major advantage that the former KGB did not enjoy during the Cold War: unprecedented access to American academic institutions and industry. At any given time there are more than 100,000 PRC nationals in the United States attending universities and working throughout US industries. It is important to note here that these individuals are not assumed to be spies, but given their status as PRC nationals they remain at higher risks of being a major component of the PRC's nebulous industrial intelligence collection operation. In fact, there are very few professional PRC intelligence operatives actively working on collecting US technology secrets compared to the number of PRC civilians who are actively recruited (either by appealing to their sense of patriotism or through other more coercive means) to routinely gather technology secrets and deliver those secrets to the PRC. Thus, the PRC employs a wide range of people and organizations to serve as its "white glove", and do its dirty work abroad, including scientists, students, business executives and even phony front companies or acquired subsidiaries of US companies as evidenced by a string of recent high profile cases. Beijing's 16-character policy Nowhere is the nexus of the military-industrial complex in the PRC more evident than in the codification of the 1997 "16-character policy", which makes it official PRC policy to deliberately intertwine state-run and commercial organizations for casting a cloud of ambiguity over PRC military modernization. In their literal translation, the 16 characters mean as follows: Jun-min jiehe (Combine the military and civil); Ping-zhan jiehe (Combine peace and war); Jun-pin youxian (Give priority to military products); Yi min yan jun (Let the civil support the military). The 16-character policy is important because of what it does for the strategic development of the PRC's industrial and economic espionage program: it provides commercial cover for military industrial companies to acquire dual-use technology through purchase or joint-venture business dealings, and at the same time for trained spies who work directly for the PRC's military establishment, whose operational mandate is then to gain access to and steal the high-tech tools and systems developed by the United States and its Western allies [1]. The two primary PRC organizations involved in actively collecting US technological secrets are the Ministry of State Security (MSS) and the Military Intelligence Department (MID) of the People's Liberation Army (PLA). The MSS, now headed by Minister Geng Huichang, relies on professionals, such as research scientists and others employed outside of intelligence circles, to collect information of intelligence value. In fact, some research organizations and other non-intelligence arms of the PRC government direct their own autonomous collection programs [2]. According to US Federal Bureau of Investigation (FBI) estimates, there are currently more than 3,000 corporations operating in the United States that have ties to the PRC and its government technology collection program. Many are US-based subsidiaries of Chinese-owned companies; while in the past they were relatively easy to identify, recent studies indicate that many have changed their names in an effort to distance themselves from their PRC owners. China's red spider's web China's espionage efforts targeting proprietary technologies developed in the United States stretch back decades. But China's spy craft has evolved rapidly and now presents a serious challenge that many in the West are unprepared to counter. For example, recent cases investigated by the FBI have involved entire families of naturalized American citizens from China, prompting the bureau to take out a Chinese-language advertisement in San Francisco Bay area newspapers urging Chinese Americans to report suspicious activity. In addition, China has clearly taken a long-term view of espionage against the US technology industry, handling some agents for decades. One of the most recent cases, for example, involves a former Boeing engineer who now stands accused of giving China proprietary information about several US aerospace programs, including the space shuttle. The affidavit in the case alleges that Chinese intelligence officials first approached Dongfan "Greg" Chung of Orange, California, with intelligence collection requirements in 1979. Chung was arrested on February 11, 2008, and was scheduled to be sentenced this month. At the same time Chung was arrested and accused of stealing proprietary Boeing information, Chinese businessmen Tai Shen Kuo and Yu Xin Kang were arrested and charged with cultivating several US defense officials, one of whom passed information on projected US military sales to Taiwan for the next five years. Many PRC domestic intelligence activities are directed against foreign businessmen or technical experts. The data elicited from unsuspecting persons or collected by technical surveillance means is used by Chinese state-run or private enterprises. Prominent Beijing hotels, such as the Palace Hotel, the Great Wall Hotel and the Xiang Shan Hotel, are known to monitor the activities of their clientele. Chinese government-owned companies have also been involved in schemes to steal the intellectual property of US companies. They have done this using the corporate equivalent of sleeper cells - foreign executives hired by US companies on work visas, as well as naturalized American citizens who then establish US companies for the purpose of gaining access to the proprietary data of other US firms. |
Subscribe to:
Posts (Atom)