China Shops
Timmerman, Kenneth R.
......................................... Kenneth R. Timmerman China Shops Thanks to friendly merchants in the Clinton administration,
Peking is stocking up on hi-tech arms at bargain-basement...
...Commerce Department statistics show that from 1985 through 1992 China exploited licensing loopholes to an unprecedented extent, buying more than $21.4 billion of hi-tech goods from U.S...
...warships in the South China Sea...
...Upgrading MiGs One of China's biggest and best suppliers of advanced U.S...
...Such equipment is critical for the Chinese military as it seeks to expand its ability to project power to further distances...
...When it was pointed out that China might be seeking Allison production equipment to enhance its military programs, Wallace replied: "All trade is good...
...DTSA never received a reply...
...According to a government memo on the visits, McDonnell Douglas officials told investigators that "if parts in production were left in machinery during the non-work hour tours, those parts were covered up prior to allowing photographing of the machinery" because of the sensitive defense-related nature of the plant...
...exports to China consists of computers, commercial aircraft, telephone switching gear, highly sensitive microprocessor manufacturing gear, and various types of electronics...
...companies that exported jobs instead of U.S...
...But when Yuchai attempted to ship them to China on May 18, 1994, from Newport News, Virginia, they still had not applied for an export license and the machines were detained by U.S...
...Order your copies of The American Spectator's exclusive reports today...
...While such a forge could conceivably have a civilian use-as could the jet engine machining centers purchased from Heintz-the conjunction of the two has raised eyebrows among law enforcement officials as to Yuchai's true intentions in purchasing second-hand production gear in the U.S...
...China produces military aircraft and civilian jetliners in the same facilities...
...When the documents were finally released in late December 1994, BXA lawyer Eilene M. Albanese had deleted large sections of the docu ments that had earlier been cleared, under the blanket exemption contained in article b(3) of the FO1A...
...Or to eschew military action against the Spratleys, or political intimidation against Hong Kong...
...The case is believed to have been closed sometime in 1994...
...Specifically, over the past two years, Chinese procurement teams have been buying up used aerospace machinery and shipping entire military production lines to China, most often with administration approval...
...interest to help China modernize its economy to serve as a bulwark against the USSR...
...The Clinton administra tion has launched a dramatic expansion of military ties with China that will include the modernization of Chinese military factories, expanded high-technology sales, and even direct U.S...
...Yuchai's parent company, the Yuchai Machinery Group, is China's largest manufacturer of large automotive diesel engines for trucks, buses, and construction equipment, all of which have both civilian and military uses...
...Kenneth R. Timmerman China Shops Thanks to friendly merchants in the Clinton administration, Peking is stocking up on hi-tech arms at bargain-basement prices -and Bill Clinton and Ron Brown could care less...
...Last year, Chinese agents became embroiled in yet another attempt to purchase state-of-the-art military electronics from a Pentagon depot at the Warner-Robbins Air Force Base in Georgia, sources said...
...In addition to CATIC-which maintains an office in El Monte, California-and Brilliance Chinese Auto, a Chineseowned company listed on the New York Stock Exchange, another frequent Chinese buyer at Levy's auctions has been a little-known company based in Cleveland called Yuchai America Corp...
...After initially arguing that the production tools were not sensitive, McDonnell Douglas applied for twenty-four export licenses from the Commerce Department in May 1994...
...In ten years, if they choose to design a new long-range cruise missile around the Garrett engine, as some in the intelligence community fear, no one will be able to stop them...
...Customs...
...machine-tools, and asked the CIA to examine what the Chinese were using them for...
...As promised by the Chinese, an agreement extending the MD-82 program was signed with CATIC in November...
...Pentagon analysts argue that we need to think more about the effect a modernized Chinese military will have on U.S...
...But McDonnell Douglas is not the only major aerospace manufacturer to be selling off plant equipment as it downsizes...
...The rapid modernization of the Chinese military, China's willingness to use force as an arm of foreign policy, and its aggressive procurement of advanced military and dual-use technology in the United States pose a number of foreign-policy questions that so far have gone unanswered by the Clinton administration...
...restricts the sale of such equipment to Russia and to the other republics of the former Soviet Union, but has far fewer restrictions on sales to China...
...Yuchai America is a self-described Chinese procurement front...
...production gear, one analyst said, "because it is better than anything the Russians currently offer...
...Although the shipments were eventually blocked by U.S...
...military gear, because of its continued development of nuclear weapons...
...As a consequence, Japan, as well as Taiwan and South Korea, may consider a nuclear weapons approach as the most prudent...
...A visit by this reporter to the facility revealed row upon row of production tools and jigs, stacked in neat rows fifteen feet high, waiting to be sold...
...From reverse-engineering, they now seem more confident and have "entered joint ventures with aircraft manufacturers in the U.S., and are taking our excess manufacturing capability and transferring it back to China," Levy says...
...The licensable part of the FADEC is little more than a computerized "black box" that controls the fuel mixture, throttle, and rings of movable metal vanes inside the engine core itself...
...The Garrett Engine Case The most dramatic sale is also the most questionable: a potential $2 billion deal to sell gas turbine engines made by Garrett Engine Co., a subsidiary of AlliedSignal, directly to the Chinese military...
...government investigators probing a potential security breach, a team of Chinese procurement agents inspected the sprawling McDonnell Douglas C-17 plant in Columbus, Ohio, previously used by Rockwell to assemble the B-1 bomber, from September 1119, 1993...
...Even trade with bad guys is good...
...U.S...
...Defense Downsizing Because of dwindling Pentagon orders, McDonnell Douglas is selling off a huge inventory of "surplus" plant equipment and tooling once used for military production...
...While Kenneth R. Timmerman, director of the Middle East Data Project and a former professional staff member of the House Foreign Affairs Committee, is the author of, among other books, The Death Lobby: How the West Armed Iraq (Houghton-Mifflin...
...Yuchai purchased a large amount of foundry equipment, Kavada said, which could be used in casting large parts for engine blocks...
...Since 1985, Allison has been purchasing parts for its popular T63 helicopter engine from CATIC instead of making them at home...
...Deleted by Albanese were all descriptions of the Garrett engine, all ref erences to intelligence reports linking the engine to a suspected Chinese cruise missile program, and refer ences to the administration's refusal to take the case, as required, to COCOM, the Paris-based Coordinating Committee on Multilateral Export Controls, where such exports must receive prior approval from U.S...
...In one 1992 case, for instance, Cincinnati Milacron applied to sell a five-axis profiling machine-similar to the ones McDonnell Douglas recently sold from its Columbus plant-and was turned down after the case was reviewed by the Pentagon and the CIA...
...companies...
...Despite the 1989 Tiananmen massacre, however, sensitive trade with China has actually increased...
...The vast majority of the over $10 billion per year of U.S...
...As the Clinton administration continues to loosen licensing requirements, more and more of these exports have been funneled directly into Chinese military establishments with no prior U.S...
...So don't say the Chinese don't have territorial ambitions...
...These and our other best-selling articles make ideal gifts for friends, colleagues, teachers, local news editors-and your political representatives...
...Since June 1990, the company has slashed its work force nearly in half, from 130,000 to the current level of 67,000...
...Made by West Homestead Engineering in Homestead, Pennsylvania, this forge was used to make the 16-inch guns for all the Iowa-class battleships, the biggest guns ever made for the U.S...
...It just all depends on how badly they need a particular piece of equipment, and who they are...
...This Chinese military expansion occurs at a time when most other nations, including the U.S...
...joint-venture partners, and has begun discussions with former race-car driver Roger Penske of Detroit Diesel...
...In addition, the CRS report states, "sensitive technology transfers, including advanced missile and nuclear technology, may be taking place through at least 1,000 Russian military and scientific experts recruited to work for China...
...The company was seeking to get out of that line of business and consolidate its efforts in metrology, so it sold off machine-tool production gear as well as new machine-tools...
...They, too, received no reply...
...The Chinese were allowed to photograph production lines inside the huge multi-story hangars, and sought technical documentation on a wide variety of advanced production technology, much of it classified...
...According to Nicholas Eftimiades, a DIA counterintelligence analyst and author of Chinese Espionage Operations, "The Chinese are engaged in a massive military buildup, and are buying and stealing everything they can in the United States...
...But advanced machine-tools are winding up in Chinese factories nonetheless, and many of them are American-built, despite the fact that the U.S...
...A separate December 1994 assessment by the Joint Chiefs of Staff concluded that China is an "emerging threat," and voiced concerns that China could use its new-found naval power to interfere with maritime traffic through chokepoints such as the Straits of Malacca, through which virtually all of Japan's oil imports must pass...
...Does anyone have a plan for getting the Chinese to "play ball" on such issues as North Korea...
...The company is also seeking U.S...
...regional partners Japan and South Korea...
...government had a public ban on direct contacts with the Chinese military...
...While McDonnell Douglas insists the Chinese will only be using the equipment to make civilian airliners, NBC News reported in September 1994 that the Chinese purchaser, CATIC, had written to McDonnell Douglas in October 1993, threatening to curtail further purchases of civilian airliners from the company if it did not supply the production gear...
...The Congressional Research Service estimates that in 1991-1992 alone, China purchased $2 billion worth of advanced weaponry from Russia, including Sukhoi-27 interceptors, 11-76 heavy transport aircraft, T-72 tanks, Mi-17 helicopters, S-300 missile interceptors (dubbed the "Patriotski"), and rocket engines...
...Q 38 The American Spectator March 1995...
...government intelligence analysts are worried they could be used to make an improved Chinese cruise missile: The sale was negotiated and approved in the wake of the Tiananmen massacre, when the U.S...
...According to one analytical paper circulated at the Pentagon and on Capitol Hill last year, there has been no strategic review of U.S...
...Still, regional powers should pay more attention to the Chinese...
...technical assistance...
...Japan no longer looks upon the United States to guarantee its own security...
...Is this administration policy...
...Yes, the Chinese are aiming to modernize their Air Force, their navy, and their strategic missile corps," said one, "but they are starting from very deep in the hole...
...The Commerce Department ruling considered the engines separately from their "brain," known as the Full Authority Digital Engine Control (FADEC...
...Israel...
...The closure of the C-17 plant in Columbus in March 1994 put 1,200 workers out of jobs...
...Company president Blake Wallace tersely acknowledged Wallace was unconcerned that China might seek to re-export Allison engines to Chinese clients such as Iran, which is currently subject to a total ban on high technology exports from the United States...
...Defense Conversion or Modernization...
...According to Chong Pin-Lin, a China analyst at the American Enterprise Institute, official Chinese defense spending has increased by 230 percent since 1989...
...Research and development is not included in the budget, nor are most expenditures for the People's Armed Police, the military academies, civilian employees of the ministry of defense, and many 'extra-budgetary' expenditures, including the December 1992 purchase of Sukhoi-27's from Russia...
...It will probably be swept under the rug...
...Licensing records show that Commerce has rejected many proposed sales of advanced production gear over the past three years...
...and Japanese sources said, after a team of Japanese industrialists toured Chinese factories and discovered the extent of U.S...
...products...
...companies of encryption technology and equipment to manufacture fiber-optic cable has raised the hackles of the intelligence community, which suspects the Chinese are aiming to protect their military communications from elec tronic eavesdropping...
...Daniel Wattenberg's "Love and Hate in Arkansas" copies of Terry Eastland's "Rush Limbaugh: Talking Back" copies of "The Incredible Shrinking AIDS Epidemic" copies of Lisa Schiffren's "The Unauthorized Clinton Financial Audit" copies of David Brock's "Living With the Clintons" copies of David Brock's "The Real Anita Hill" copies of David Brock's "The Travelgate Cover-Up" copies of David Brock's "Strange Lies" Sub-Total VA residents add 4.5% sales tax Name: Address: ~ City: State: 36 Zip CodeP93 J I Total Enclosed $ Henggao, chairman of the Commission of Science Technology and Industry for National Defense (COSTIND), the driving force behind the Chinese military industry and the export sales of such items as M-11 missiles to Pakistan...
...They are seeking to lift the military industrial base from Russia, getting the next generation into China so they can get into the power-projection game [through] producing, manufacturing, [and] research and development in China itself...
...According to the September 12, 1994 issue of Aviation Week & Space Technology, the Chinese purchaser of the engines-China National Aero-Technology Import and Export Co...
...According to U.S...
...Last year, congressional investigators asked the Commerce Department whether it had conducted a review of the strategic impact of the billions of dollars of U.S...
...CATIC)-has reached a preliminary agreement to establish a joint venture company in China with Lucas Aerospace of Britain, whose purpose is to "supply digital engine controls for the K-8 basic jet trainer...
...Transfer of such sophisticated production technology at bargain basement prices could vastly increase China's ability to compete in the world marketplace as a manufacturer of advanced civilian aircraft...
...If I have a machine-tool that could sell for $100,000 to an American buyer, the Chinese might be willing to spend $20,000, or $30,000...
...clients, despite an initial understanding with the Department of Commerce and with the unions that planes assembled in China would be for sale exclusively to the domestic Chinese market...
...Get the full scoop on the tax returns of the president who gave America its largest tax increase in history with Lisa Schiffren's "The Unauthorized Clinton Financial Audit...
...In addition to Columbus, auctions were conducted in 1994 at the company's main plant in St...
...We see the...
...Even today, the U.S...
...Following their visit, the Chinese submitted an eight-page, single-spaced list of equipment they wanted to buy...
...China has also been buying arms and missile guidance equipment from Israel since the early 1980s, a relationship that remained clandestine until the early 1990s...
...hightechnology equipment sold to China over the past decade...
...The reason: Germany is only just beginning to explore the Chinese market, while Japan refuses to sell its best equipment to China, fearing a renascent long-term security threat...
...dual-use technology, much of it highly sensitive...
...This allows them to be shipped under Commerce Department rules, which were unaffected by the ban on military sales...
...The nine-day inspection by the Chinese was considered so sensitive that the company only allowed the inspectors in during the evenings and on the weekends, after the plant's unionized workers had gone home...
...Or is China merely benefiting from the free-trade free-for-all and the administration's apparent desire to convince the American business community that the Democrats will outdo Republicans in favoring U.S...
...and Russia, are engaged in a massive build-down of their defense capabilities...
...Wouldn't that include companies such as McDonnell Douglas, Boeing, Allison, or Pratt & Whitney, which is getting parts for its engines machined in China because of lower labor rates...
...Because of an unusual-and hotly disputed-ruling by the Commerce Department last 32 The American Spectator March 1995 year, the engines will be considered as civilian goods despite their declared military end-use...
...Company officials attempted to prevent access to a rear area where large machine-tools were being stored...
...Some exports, however, remain sensitive...
...government review required...
...Asked about these potential sales to China, a company spokesman replied in writing: "If foreign nationals visit our facilities we routinely review the export licensing requirements and apply for the appropriate licenses...
...The Indianapolis-based Allison Engine Company, the world's largest manufacturer of hi-tech helicopter and small turbofan jet engines, has been auctioning off advanced machine-tools and production jigs, including equipment needed to manufacture the engines used on the Army's C-130 transport...
...In two or three years, they will probably be able to eject other claimants from the Spratleys," the oil-rich islands in the South China Sea claimed jointly by China, Vietnam, and a host of others...
...aid-including a Cray supercomputer to be used directly by the Chinese nuclear weapons establishment to help design newer and safer nukes...
...Perry's Chinese co-chair is none other than Lt...
...technology is McDonnell Douglas, America's largest defense contractor and maker (in addition to its line of MD80 and MD-90 civilian airliners) of the F-15, F-18, and C17 military jets...
...Box 549, Arlington, VA 22216-0549 Yes, please send me: copies of James Ring Adams's "Beyond Whitewater" $ copies of James Ring Adams's "The Whitewater Obstructionists" copies of John Corry's "The MIA Cover-Up" copies of Michael Fumento's "This Magic Moment" copies of Daniel Wattenberg's "Gunning for Koresh" copies of Daniel Wattenberg's "Lady Macbeth of Little Rock" copies of...
...companies...
...If the Chinese are using the Russians to get the United States to continue providing technology to modernize its military, they have been successful, but our policy has not...
...Dual-Use Equipment In addition to weapons, China is also purchasing billions of dollars of U.S...
...intelligence analysts for its central role in Chinese espionage activities in the U.S.-such as the theft of nuclear secrets from the Lawrence Livermore National Laboratory in 1986-that are believed to have been used by China to design the neutron bomb it tested two years later...
...for the purchase and evaluation of equipment and technology to be shipped back to China for our parent company...
...With a new, non-American supplier of the FADEC, the Chinese are well on their way to acquiring the capability to manufacture these engines in China with no restrictions whatsoever...
...According to a recent Pentagon "nonpaper," "China no longer can be viewed as a counterbalance to the military might of the Russian military, as it once was...
...China's stated end-use for the engines was to power the single-engine K-8 military jet trainer, which it was developing jointly with Pakistan (also banned from purchasing U.S...
...Charles, Missouri...
...While Wallerstein now denies this-and the company insists that only around thirty engines have actually been shipped-it now appears that the Pentagon may have facilitated a backdoor deal with the Chinese to get around the restrictions on the FADEC...
...Most of the equipment being offered for sale is currently housed in a disused company warehouse called Plant Ten, located on Luett Street in a working-class suburb of Indianapolis...
...What happened to candidate Bill Clinton's pledge to withdraw foreign tax credits from U.S...
...these purchases have gotten scant attention because of their relatively low dollar value, they have an immense strategic importance...
...Indeed, there is mounting evidence that the Russians and Chinese are increasingly cooperating in the military arena...
...While claiming publicly that these sales will not enhance China's military potential, the administration appears to have turned a blind eye to what congressional and academic experts have identified as a concerted Chinese effort to become the predominant military power in Asia by the year 2010...
...And besides, who cares about a few machine-tools, or a few supercomputers...
...They want U.S...
...Just before the Heintz purchase, Yuchai attended another Norman Levy auction, this time on the premises of the White Farm company in Charles City, Iowa...
...allies, if at all...
...The sale by U.S...
...One: $5 Twenty-five: $75 Five: $20 Fifty: $130 Ten: $35 One hundred: $250 (Quantity discounts apply only to orders for the same report...
...Ding 35 The American Spectator March 1995 American Spectator Investigative Reports Available David Brock's "Strange Lies" reveals the truth behind Jane & Jill's sham attack on Clarence Thomas-and it's now available to TAS readers as a special report...
...Meanwhile, Commerce Secretary Ron Brown has been touting the Chinese market as the next export bonanza for U.S...
...The Chinese didn't buy the production gear, but the new machine-tools," he said...
...But since the hardware has been designed around it, the engine would not be able to function without it...
...China has shown a great willingness to use industrial espionage when attempts to legally purchase hi-tech equipment fail, according to DIA analyst Eftimiades and other government investigators...
...This is an indictable case," the official said...
...The company has had a commercial relationship with CATIC for the past ten years...
...The irony of the Israeli-Chinese relationship has not been lost on Israeli analysts...
...We would be better off trading with Iran directly," he said...
...authorities have reacted similarly in other cases, some of them involving Chinese diplomatic personnel based in the U.S...
...Sources at the Commerce Department and at the Pentagon confirmed that these allegations were serious enough to warrant the opening of a Commerce Department Inspector General investigation in January 1993...
...37 The American Spectator March 1995 In another case that came to light after a six-and-a-half-year investigation by the FBI, a Chinese agent named Yengming Gao attempted to purchase F404 fighter engines and Mk48 advanced capability torpedoes...
...Starting with their invasion of Tibet and intervention in Korea in 1950, China has attacked India (1962), attacked islands belonging to Taiwan, engaged in border clashes with the USSR (1969), invaded Vietnam (1979), and created and supported insurgencies in the Philippines, Malaysia, Indonesia, and Cambodia...
...In 1985 this policy was translated into a complex series of export licensing regulations which eased restrictions on a broad range of products for sale to China (COCOM's China Green Line...
...American exporters can expect $100 billion in Chinese business by the end of the century, Brown said during a recent trip to China...
...Tokyo is so worried about a potential threat from China that Japan officially protested U.S...
...The Commerce Department approved the licenses in August, McDonnell Douglas confirmed...
...Government intelligence analysts believe the Chinese are intending to use the five-axis profiling machines from Columbus to beef up an assembly line for the Russian-made MiG-31 long-range fighter, a purchase they have already negotiated with Russia...
...More serious are the strategic ramifications of a modernized Chinese military...
...His company, which he says is "probably America's oldest and largest industrial auction house," has handled numerous auctions over the past three years at defense companies such as GE Aerospace, Unisys, Burroughs, McDonnell Douglas, and the Heintz Corporation, as well as at Chrysler and Fastem Airlines...
...If America doesn't sell, somebody else will...
...objectives in China since 1983, when President Reagan designated China as a "friendly, non-allied" country, and defined it as in the U.S...
...A Freedom of Information Act request filed by this reporter in April 1994 was completed within two months but was subsequent ly blocked when political appointees at Commerce and at the Bureau of Export Administration (BXA) were apprised of it, according to sources at the IG offices...
...It has also established an investment group, which includes capital from Goldman Sachs in the U.S., with the intent of making a public offer on the New York Stock Exchange...
...Indeed, a corporate spokesman confirmed that McDonnell Douglas signed an agreement in April 1993 to buy back five of its Chinese-assembled MD-82 airliners for TWA...
...Or is it merely an accident of export decontrol and defense downsizing...
...They received no reply...
...COSTIND is also notorious among U.S...
...But these are just the official figures," says Pin-Lin...
...It is indeed ironic that, in the name of defense conversion, the U.S...
...Auctioning Off Security Robert Levy, president of Norman Levy Associates Inc., has seen his business with U.S...
...So are James Ring Adams's blistering reports on the Whitewater scandal, as well as Brock's "Living With the Clintons," the inside story of Troopergate that the mainstream media didn't want you to know, and Daniel Wattenberg's "Lady Macbeth of Little Rock," a no-holds-barred portrait of the first co-president of the United States...
...Navy...
...Indeed, Defense Secretary William Perry helped establish a joint Sino-American commission on defense conversion, and during his October 1994 visit to Peking, he promised his Chinese partners extensive U.S...
...If those had been Soviet intelligence agents," says Eftimiades, "we would have clobbered them...
...In November 1993, Yuchai attended a Norman Levy auction in Philadelphia and acquired two five-axis machining centers from the Heintz Corporation, a defense contractor that makes jet engines for the Pentagon...
...By early in the next century, given China's ability to acquire advanced pro duction technology from the United States, Russia, Europe, and Israel, the Chinese will be able to build "an F-16 class fighter," these experts said, in addition to a "naval task force capable of remaining at sea for two to three months," instead of the two to three weeks of current capabilities...
...As the company's only American-born officer, Mike Kavada, said in an interview, "We were set up in the U.S...
...Former assistant secretary of defense James Lilley warned of China's military efforts in May 20, The American Spectator March 1995 1993 testimony before the House Foreign Affairs Committee...
...But Plant Ten also houses U.S...
...Allison is also selling an entire production line to manufacture gears for aircraft and truck transmissions, which includes machines built as recently as 1991...
...Chinese agents subsequently attempted, but failed, to procure up to 40,000 of the devices on the black market...
...In a letter dated March 21, 1994, deputy assistant secretary of defense Mitchel B. Wallerstein noted that the "carve out" of the FADEC from the engines "would allow sales of the 2A-2A engine to [China], including its military, without prior [U.S...
...They were taking it back home to China to take apart...
...As for further exports, the world market is saturated with similar trainers being offered by France, Spain, Italy, Great Britain, Russia, the Czech Republic, and potentially Ukraine and Georgia...
...As early as 1992, the Defense Technology Security Administration-the Pentagon's export licensing arm and the only agency that reviews the strategic applications of dualuse exports-expressed concern over Chinese purchases of advanced U.S...
...Much of this equipment has gone to known military factories...
...Based in Yulin (Guangxi Province), Yuchai established its Cleveland-based subsidiary in October 1993...
...We would be better off trading with Iran directly, " he said...
...U.S government analysts acknowledged these efforts, but were more circumspect...
...In 1992 a Chinese company attempted to purchase second-generation night vision tubes from a U.S...
...Still, we have sold a lot of machine tools to the Chinese...
...Logistics problems and a lack of training, intelligence, and command and control structures will continue to hamstring China as a world power for years to come, these experts said...
...In 1991, Levy said, the Chinese purchased a large number of machine-tools from Browne & Sharpe, then one of America's largest manufacturers of numerically controlled grinders and screw machines...
...allies...
...Nevertheless, Commerce ruled that only the FADEC computer was covered by national security export restrictions, and allowed the engines-and the production gear needed to manufacture them in China--to be exported freely without a license...
...The Commerce Department has been relatively selective in approving machine-tool exports to China...
...computer manufacturers have been literally flooding China with high-powered computers in recent years, with exports of licensable computers averaging nearly $1 billion per year since 1988...
...Allison executives have boasted of their plans to sell engine and gearbox production tools to the Chinese...
...In one part their report, the Joint Chiefs envisioned a scenario in which the current power vacuum in Asia would tempt China to intervene in support of "oppressed" Chinese minorities in Singapore and Malaysia...
...In 1992, Gerald M. Steinberg, a researcher at Bar Ilan University, told the New York Times that Israel may have helped the PRC develop its made-forexport M-9 missile, which the Chinese subsequently sold to Syria, which in turn pointed it against...
...Is there any quid pro quo to this administration's massive transfer of hi-tech gear to the Chinese military...
...According to a list of equipment obtained from sources in Indianapolis, much of the aerospace equipment would require individual export licenses from the Departments of Commerce and State for export to China...
...Although the face value of the deal was less than $10 million, it constituted the single largest shipment of advanced aerospace production gear ever sold to China, and the Chinese were determined to get it...
...Like many other Pentagon contractors, McDonnell Douglas has turned to auctioneer Norman Levy Associates, Inc., of Southfield, Michigan, for the sell-off...
...Only one month before Wallerstein's letter, Garrett informed the Pentagon of its intent to sell as many as 11,000 of the disputed engines to China, in a deal that would include the manufacturing technology...
...Union leaders argue that many of these jobs have been shipped abroad, and that McDonnell Douglas has even agreed to buy back civilian airliners made in Chinese factories for its U.S...
...Does the United States have strategic objectives that are served by the massive transfer of advanced manufacturing capabilities, computers, and telecommunications equipment to China...
...Policy...
...Louis, and in satellite facilities in Torrance, Culver City, Tulsa, and St...
...According to former chief Republican counsel of the Senate Foreign Relations Committee, William C. Triplett III, China has a solid record of military intervention and adventurism since the 1949 Communist takeover...
...officials said this purchase fit a pattern...
...arms sales, despite the ban on such sales in effect since the 1989 Tiananmen massacre...
...But if they are granted a license now, after the fact, how's that going to look to a judge...
...But neither China nor Pakistan has a requirement for so many jet trainers...
...Chinese snatching up foundry equipment all over the place, even in Canada," one source said...
...has fallen behind both Germany and Japan in machine-tool exports worldwide...
...Since then, Chinese buying patterns have changed...
...Customs agents, the case shows once again that the Chinese will not shrink from outright espionage to obtain items they consider strategically important...
...This is the carry-over of COCOM's 1985 China "Green Line," which allowed Western companies to ship higher technology items to China in compensation for restricting such sales to the Soviet bloc...
...33 The American Spectator March 1995 Douglas officials interviewed about the visits insisted that the technical data actually given to the Chinese was "readily available in the public domain...
...aerospace and machine-tool manufacturers boom since 1991...
...It is hard to believe that cost-conscious China would seriously believe it could sell that many trainers in such a market...
...government-owned production tooling that was used for strategic programs over the past thirty years, and that Allison has contracted to store until the government decides to dispose of it...
...high technology equipment sold to China over the past decade...
...Last year, congressional investigators asked the Commerce Department whether it had conducted a review of the strategic impact of the billions of dollars of U.S...
...business interests...
...The U.S...
...The case, which is still under investigation, involves a large volume of radar and electronic countermeasures gear the Chinese attempted to purchase from the Defense Logistics Agency as "scrap" and "surplus" equipment...
...Yuchai's lawyer, Paul Koczkur, maintains no license was needed, but a Customs official familiar with the case disagrees...
...the Commerce Department is approving more export licenses than ever before...
...Kavada says that he and the Chinese engineers scour the U.S., "attending auctions, looking for production technology to update the factory in China...
...sales of sophisticated dual-use production equipment to China two years ago, U.S...
...The company claims the engines will power a Chinese military jet trainer, but U.S...
...After his arrest in December 1993, Gao was simply expelled to China without further sanction...
...is helping the Chinese to expand and upgrade their military at a time when Chinese nuclear submarines have begun playing nuclear tag with U.S...
...It included thirty-one large, computerized machine-tools that the Joint Chiefs of Staff consider to be "militarily-critical" and that normally can only be exported to U.S...
...Ultimately, they could have economic importance, too...
...He was unconcerned that China might seek to reexport Allison engines to Chinese clients such as Iran, which is currently subject to a total ban on high-technology exports from the United States...
...They are even trying to purchase the $36 million forge originally bought by Iraq before the Gulf war...
...may be creating industrial capabilities in China that could cost jobs at home tomorrow...
...As a matter of public policy, the Clinton administration is dedicated to defense conversion in China, just as in Russia and in the United States...
...According to sources engaged in the negotiations, Allison offered to sell an entire production line to the Chinese prior to the public auction held by Norman Levy & Associates on November 2-3, 1994...
...r 1 The American Spectator, P.O...
...Trade-union activists are worried that, in the name of profits today, the U.S...
...company, but the Commerce Department rejected a licensing request...
...In response to questions from the Senate Governmental Affairs Committee in August 1993, then-CIA Director R. James Woolsey estimated that purchases of Israeli weapons systems may have cost China "several billion dollars" over the previous ten years...
...Kavada says Yuchai wanted the sophisticated, computer-driven machine-tools to enhance its production of diesel engines in China, and was willing to provide the government "assurances" that they would not be used for military purposes...
...One avenue of investigation into the Garrett case has been whether Commerce Department licensing officers had engaged in illegal connivance with AlliedSignal or its repre sentatives...
...government] review and approval...
...The Chinese regularly attend our auctions," he said, "but a lot of times they are not willing to pay the price...
...34 The American Spectator March 1995 in an interview that Allison has been doing business in China for more than ten years, and berated the government to "abandon its Cold War mentality and stop the kind of export licensing games that have hampered business in the past...
...CATIC made the parts in accordance with technical manufacturing drawings provided by the company...
...Wallerstein's letter states that AlliedSignal was "seeking approval to export between 1,000 and 2,000" of the engines to China...
...Among these are advanced machinetools, considered to be the building blocks of any modern industrial base, civilian or military...
...The Japanese could develop the bomb "within six months," the paper states...
...McDonnell The nine-day inspection by the Chinese was considered so sensitive that the company only allowed the inspectors in during the evenings and on the weekends, after the plant's unionized workers had gone home...
Vol. 28 • March 1995 • No. 3
