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House Report 105-851 U.S. NATIONAL SECURITY AND MILITARY/COMMERCIAL CONCERNS WITH THE PEOPLE’S REPUBLIC OF CHINA VOLUME I SELECT COMMITTEE UNITED STATES HOUSE OF REPRESENTATIVES U.S. NATIONAL SECURITY AND MILITARY/COMMERCIAL CONCERNS WITH THE PEOPLE’S REPUBLIC OF CHINA VOLUME I SELECT COMMITTEE UNITED STATES HOUSE OF REPRESENTATIVES 105TH CONGRESS REPORT HOUSE OF REPRESENTATIVES 2d Session } { 105-851 REPORT OF THE SELECT COMMITTEE ON U.S. NATIONAL SECURITY AND MILITARY/COMMERCIAL CONCERNS WITH THE PEOPLE’S REPUBLIC OF CHINA SUBMITTED BY MR. COX OF CALIFORNIA, CHAIRMAN January 3, 1999 — Committed to the Committee of the Whole House on the State of the Union and ordered to be printed (subject to declassification review) May 25, 1999 — Declassified, in part, pursuant to House Resolution 5, as amended, 106th Congress, 1st Session –––––––––– U.S. GOVERNMENT PRINTING OFFICE WASHINGTON : 1999 09-006 A NOTE ON REDACTION The Final Report of the Select Committee on U.S. National Security and Military/Commercial Concerns with the Peoples Republic of China was unanimously approved by the five Republicans and four Democrats who served on the Select Committee. This three-volume Report is a declassified, redacted version of the Final Report. The Final Report was classified Top Secret when issued on January 3, 1999, and remains so today. Certain source materials included in the Final Report were submitted to the Executive branch during the period August–December 1998 for declassification review in order to facilitate the production of a declassified report. The Select Committee sought declassification review of the entire report on January 3, 1999. The House of Representatives extended the life of the Select Committee for 90 days for the purpose of continuing to work with the Executive Branch to declassify the Final Report. A series of further extensions was voted by the House of Representatives until the final declassifica- tion review was completed in May 1999. Following an extended series of negotiations between the House of Representatives and the Executive branch, a number of material dele- tions have been made to the Final Report. As a result of these deletions, a number of significant events, facts, and analyses have been omitted from this declassified Report. In several cases, important factual exam- ples substantiating conclusions in the report have been deleted. In other cases, explicit find- ings of the Select Committee have been suppressed. The Select Committee’s classified Final Report, therefore, remains the definitive product of its investigation and analysis. U.S. Government Printing Office Washington, D.C. Top Secret Report Date: January 1999 Declassified Report Release Date: May 1999 Additional copies of this report may be obtained from the U.S. Government Printing Office, Washington, D.C. 20402 upon written request and payment of document fees and standard shipping costs. Printed in the United States of America Members of the Select Committee United States House of Representatives 105th Congress REP. CHRISTOPHER COX,CHAIRMAN Chairman, House Policy Committee Vice Chairman, Committee on Government Reform and Oversight Vice Chairman, Committee on Commerce, Subcommittee on Oversight and Investigations REP. NORM DICKS,RANKING DEMOCRAT Ranking Member, Permanent Select Committee on Intelligence Ranking Member, Committee on Appropriations, Subcommittee on the Interior REP. PORTER GOSS,VICE CHAIRMAN Chairman, Permanent Select Committee on Intelligence Chairman, Committee on Rules, Subcommittee on Legislative and Budget Process REP. DOUG BEREUTER Vice Chairman, Committee on International Relations Chairman, Subcommittee on Asia and the Pacific Member, Committee on Banking and Financial Services REP. JAMES V. H ANSEN Chairman, Committee on Standards of Official Conduct Member, Committee on National Security Chairman, Committee on Resources, Subcommittee on National Parks and Public Lands REP. JOHN M. SPRATT,JR. Member, Committee on National Security Ranking Member, Committee on the Budget REP. CURT WELDON Chairman, Committee on National Security, Subcommittee on Military Research and Development Member, Committee on Science REP. LUCILLE ROYBAL-ALLARD Member, Committee on Banking and Financial Services Member, Committee on the Budget REP. BOBBY SCOTT Ranking Member, Committee on the Judiciary, Subcommittee on the Constitution Member, Committee on Education and the Workforce VOLUME I All-Volume Overview CHAPTER 1 Commercial and Intelligence Operations: PRC Acquisition of U.S. Technology CHAPTER 2 PRC Theft of U.S. Thermonuclear Weapons Design Information CHAPTER 3 High Performance Computers CHAPTER 4 PRC Missile and Space Forces VOLUME II All-Volume Overview CHAPTER 5 Satellite Launches in the PRC: Hughes CHAPTER 6 Satellite Launches in the PRC: Loral CHAPTER 7 Protecting Sensitive Information at PRC Launch Sites CHAPTER 8 The Role of Commercial Space Insurance in Technology Transfer to the PRC VOLUME III All-Volume Overview CHAPTER 9 Statutory and Regulatory Controls: The Export of Our Militarily Sensitive Technology CHAPTER 10 Manufacturing Processes: PRC Efforts to Acquire Machine Tool and Jet Engine Technologies CHAPTER 11 Recommendations Appendices SELECT COMMITTEE OF THE UNITED STATES HOUSE OF REPRESENTATIVES VOLUME I: CONTENTS ALL-VOLUME OVERVIEW . i CHAPTER 1 PRC Acquisition of U.S. Technology CHAPTER SUMMARY . 2 THE STRUCTURE OF THE PRC GOVERNMENT . 4 COSTIND: The CCP’s Use of Corporations for Military Aims . 8 CCP Supremacy Over the State, the PLA, and the Economy . 9 DEVELOPMENT OF THE CCP’S TECHNOLOGY POLICIES . 10 The 863 and Super-863 Programs: Importing Technologies for Military Use . 10 Biological Warfare . 11 Space Technology . 11 Military Information Technology . 11 Laser Weapons . 12 Automation Technology . 12 Nuclear Weapons . 12 Exotic Materials . 12 The 16-Character Policy: ‘Give Priority to Military Products’ . 13 The PRC’s Use of Intelligence Services to Acquire U.S. Military Technology . 19 METHODS USED BY THE PRC TO ACQUIRE ADVANCED U.S. MILITARY TECHNOLOGY . 20 The ‘Princelings’ . 22 Acquisition of Military Technology from Other Governments . 25 Russia . .25 Israel . 25 The United States . 26 Joint Ventures with U.S. Companies . 27 Acquisition and Exploitation of Dual-Use Technologies . 30 Front Companies . 33 SELECT COMMITTEE OF THE UNITED STATES HOUSE OF REPRESENTATIVES Direct Collection of Technology by Non-Intelligence Agencies and Individuals . 36 Illegal Export of Military Technology Purchased in the United States . 42 PRC Purchase of Interests in U.S. Companies . 44 Methods Used by the PRC to Export Military Technology from the United States . 46 PRC Incentives for U.S. Companies to Advocate Relaxation of Export Controls . 48 THE PRC’S EFFORTS TO ASSIMILATE ADVANCED U.S. MILITARY TECHNOLOGY . 51 U.S. GOVERNMENT MONITORING OF PRC TECHNOLOGY ACQUISITION EFFORTS IN THE UNITED STATES . 53 CHAPTER 2 PRC Theft of U.S. Thermonuclear Warhead Design Information CHAPTER SUMMARY . 60 PRC THEFT OF U.S. THERMONUCLEAR WARHEAD DESIGN INFORMATION . 66 THE PRC’S NEXT GENERATION NUCLEAR WARHEADS . 69 THE IMPACT OF THE PRC’S THEFT OF U.S. THERMONUCLEAR WARHEAD DESIGN INFORMATION . 72 Mobile and Submarine-Launched Missiles . 72 Acceleration of PRC Weapons Development . 73 Effect on PRC Nuclear Doctrine . 77 Multiple Warhead Development . 77 Proliferation . 78 Russian Assistance to the PRC’s Nuclear Weapons Program . 78 HOW THE PRC ACQUIRED THERMONUCLEAR WARHEAD SELECT COMMITTEE OF THE UNITED STATES HOUSE OF REPRESENTATIVES VOLUME I: CONTENTS DESIGN INFORMATION FROM THE UNITED STATES: PRC ESPIONAGE AND OTHER PRC TECHNIQUES . 80 HOW THE U.S. GOVERNMENT LEARNED OF THE PRC’S THEFT OF OUR MOST ADVANCED THERMONUCLEAR WARHEAD DESIGN INFORMATION . 83 The “Walk-In” . 83 THE PRC’S FUTURE THERMONUCLEAR WARHEAD REQUIREMENTS: THE PRC’S NEED FOR NUCLEAR TEST DATA AND HIGH PERFORMANCE COMPUTERS . 84 U.S. GOVERNMENT INVESTIGATIONS OF NUCLEAR WEAPONS DESIGN INFORMATION LOSSES . 87 Investigation of Theft of Design Information for the Neutron Bomb . 87 Investigation of Thefts of Information Related to the Detection of Submarines and of Laser Testing of Miniature Nuclear Weapons Explosions . 87 Investigation of Theft of Design Information for the W-88 Trident D-5 Thermonuclear Warhead . 90 Investigation of Additional Incidents . 91 THE DEPARTMENT OF ENERGY’S COUNTERINTELLIGENCE PROGRAM AT THE U.S. NATIONAL WEAPONS LABORATORIES . 92 NOTIFICATION OF THE PRESIDENT AND SENIOR U.S. OFFICIALS . 95 CHAPTER 3 High Performance Computers CHAPTER SUMMARY . 98 HIGH PERFORMANCE COMPUTERS . 102 MILITARY OBJECTIVES CONTRIBUTE TO THE PRC’S INTEREST IN HIGH PERFORMANCE COMPUTERS . 106 SELECT COMMITTEE OF THE UNITED STATES HOUSE OF REPRESENTATIVES U.S. HIGH PERFORMANCE COMPUTERS HAVE THE GREATEST POTENTIAL IMPACT ON THE PRC’S NUCLEAR WEAPONS CAPABILITIES . 107 Existing PRC Nuclear Weapons . 107 New PRC Nuclear Weapons . 109 Nuclear Weapons Stockpile Stewardship . 110 TRANSFER OF HPC TECHNOLOGY CAN BENEFIT PRC INTELLIGENCE CAPABILITIES . 112 Sensors for Surveillance, Target Detection, and Target Recognition . 112 Sensor Platforms for Aerial and Space-Based Reconnaissance . 113 Cryptology . ..
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