Congressional investigations document China’s massive acquisition of US technology. The China Problem

n 1992, US intelligence agencies has detailed years of systematic PRC started to become concerned spying, outraging many members about China’s designs for its of Congress. It might well have an next-generation nuclear weap- impact on the relationship between ons. A series of explosions Washington and Beijing for years I monitored by the West suggested to come. that the People’s Republic of That US companies, through their China was working on smaller, own laxity or greed, may have speed- lighter thermonuclear warheads, with ed the loss of secrets is faint comfort an increased yield-to-weight ratio. to Washington. China has obtained US officials did not think Chinese everything from US nuclear data to science was advanced enough to crucial help in missile upgrades and produce such sophisticated weapons US computers and machine tools far on its own. They suspected something more powerful than domestic Chinese else—that the PRC had stolen US models. nuclear secrets. Many of the details alluded to in Three years later the US received the House report remain classified apparent confirmation of such thefts and beyond public view. In general, from the Chinese themselves. An however, purloined US technology unsolicited Chinese individual—a and data could allow the Chinese to “walk-in,” in the argot of espionage— produce state-of-the-art nuclear weap- turned a pile of PRC documents over ons, upgrade their combat aircraft and to the CIA. Among them was a paper submarines, conduct more extensive stamped “secret” which contained and effective anti-submarine warfare, design information on perhaps the equalize battlefields via information most advanced warhead in the US warfare, and improve their command- arsenal, the Trident II’s W88. and-control capabilities, according to Since then, the CIA has come to the Congressional study. believe that the walk-in was a plant, “The PRC seeks foreign military someone who in fact worked for PRC technology as part of its efforts to intelligence. The US conclusion is place the PRC at the forefront of na- that China, for some reason known tions,” concludes the House Select only to its own top officials, had de- Committee on US National Security By Peter Grier cided to flash a glimpse of its stolen and Military/Commercial Concerns knowledge in front of US eyes. If with the People’s Republic of China that is the case, it could turn out to report—more simply called the Cox have been a colossal misjudgment. report. “The PRC’s long-run geopo- The recent report of a special House litical goals include incorporating panel, chaired by Rep. Christopher Taiwan into the PRC and becoming Cox (R–Calif.), on Chinese espionage the primary power in Asia.”

70 AIR FORCE Magazine / August 1999 Use of Western military technol- The report alleges that, at one re- China has focused espionage ac- ogy obtained under questionable cent international arms exhibit, PRC tivities on the relatively open envi- circumstances is not new for China, nationals were seen videotaping every ronment of the US national labs for of course. Its current arsenal of CSS-4 static display and collecting all pos- decades, according to the report of nuclear-tipped ICBMs traces its de- sible brochures. When a contractor the select panel. The penetration sign lineage to the US Titan ICBMs left his booth unattended, Chinese “almost certainly continues today,” of the 1950s, thanks to CSS-4 lead spies stole a display videocassette that claims the study. designer Qian Xuesen, who worked had been playing continual informa- Impetus for the PRC effort came on the Titan program. tion on the US Theater High Altitude following the end of the domestic A Chinese citizen educated in the Area Defense system, a theater mis- chaos of the Cultural Revolution in US during the Japanese occupation sile defense program. 1976, when military planners sat of China, Qian became one of the “Converting the stolen cassette to a back and assessed the state of their world’s top experts on jet propulsion frame-by-frame sequence could yield atomic weapons. PRC warheads of the during World War II. After earning valuable intelligence information to late 1970s were large, multimegaton a PhD at the California Institute of the PRC,” says the select committee devices comparable to US technol- Technology and then working with report. ogy of the 1950s. Officials may have a Cal Tech rocket research group, he Simple purchase of equipment decided that it was time to move to was recruited to join the US mili- plays a part in PRC intelligence more advanced warheads and a new tary’s long-range missile programs. gathering. Chinese front companies generation of ballistic missiles. He received a direct commission to take advantage of US military down- Over the years, the Chinese colonel in the US Army Air Forces sizing to buy surplus high-tech US made major moves on American and began work on what became military goods, including some that national laboratories located at the Titan. However, spy allegations are proscribed from export to all but Los Alamos and Sandia, N.M., dogged Qian, and eventually he lost close allies. Livermore, Cal­if., and Oak Ridge, his security clearances. Negotiations Two years ago, the US Customs Tenn. The effort evidently yielded between the US and the PRC resulted Service seized more than $36 million the PRC a trove of stolen secrets. in his return to China in 1955. After in excess military property being The Cox report says the Chinese serving as chief project manager in shipped overseas illegally. Among the obtained classified information all PRC ballistic missile programs, goods bound for the PRC and Hong on every currently deployed US he became head of the government Kong were 37 inertial navigation Intercontinental Ballistic Missile arm responsible for all aeronautics units for F-117 and FB-111 aircraft, and Submarine-Launched Ballistic and missile development research. Patriot missile parts, 500 electron Missile. Details remain classified, tubes used in the F-14 fighter, and but the study says the warheads on Theft and Diversion 26,000 encryption devices. which the PRC obtained informa- Today, China uses what US intel- Military goods that find their way tion include the W56 warhead for ligence calls a “mosaic” approach to the PRC can be reverse-engineered, the Minuteman II; the W62 for the to the collection of technical data, or copied, for indigenous models. Minuteman III; the W76 Trident which takes small bits of information Thus the PRC’s C-801 anti-ship cruise C-4 SLBM, the W78 Minuteman III collected by many individuals, then missile is thought to be a copy of Mark 12A ICBM; the W87 Peace- pieces them together in the PRC. the French Exocet anti-ship cruise keeper ICBM; the W88 Trident D-5 Classic spying remains a major missile. The Chinese Z-11 helicopter SLBM; and the W70 Lance short- part of this approach. Witness the is a reverse-engineered French Aero- range ballistic missile. case of Peter Lee, a Taiwanese–born, spatiale AS-350 Ecureuil, according In 1996, US intelligence reported naturalized US citizen who worked to the Cox report. that China had stolen technology for at US national laboratories until Because of the decentralized na- the neutron bomb, which is intended evidence of espionage surfaced. In ture of the Chinese collection effort, to maximize radiation damage while 1997, Lee passed China classified Washington finds it very difficult to reducing heat and blast. Such a US developmental research on very track, according to the report. It adds weapon would be a useful tool if its sensitive detection techniques that that, because of the FBI’s historic possessor wished to wipe out human could be used to threaten previously focus on the Soviet Union during the defenders but occupy the battlefield invulnerable US nuclear subs, alleges decades of the Cold War, the US has following conflict and avoid inflicting the Cox report. In 1985, Lee passed never made monitoring the PRC’s destruction on the area. to China data about the use of lasers acquisition activities a priority. The PRC has also stolen data on to create nuclear explosions on a “There is little or no coordina- weapons design concepts, on weap­ miniature scale. tion within the US government of onization features, and on re-entry Mosaic intelligence also takes ad- counterintelligence that is conducted vehicles—the hardened shells which vantage of the relative openness of against the PRC–directed efforts to protect warheads during their plunge US society. PRC nationals attend US acquire sensitive US technology,” back into the atmosphere. universities, host foreign scientific concludes the Cox report. It may have obtained classified delegations, and pump visiting sci- nuclear weapons computer codes. entists for information that is on the Nuclear Weapons Theft of the so-called legacy com- edge of classified. The PRC also gets It is in the area of nuclear weaponry puter codes, such as those used in valuable bits from open forums such that this lack of spy defenses may development of the W88 Trident as arms exhibits and computer shows. have hurt the US the most. warhead, would fill in gaps in Chi-

AIR FORCE Magazine / August 1999 71 nese knowledge about how advanced For one thing, smaller, more command-and-control installations thermonuclear devices perform when efficient designs could allow the benefit from HPC power. exploded. To successfully produce PRC to deploy missiles tipped with To keep HPCs from being used a W88–like weapon, the PRC may Multiple Independently Targetable for military purposes, the Commerce need dynamic, three-dimensional data Re-entry Vehicle warheads. The Department controls their export. on warhead packaging, primary and Chinese have frequently expressed In general, the sale of HPCs with secondary coupling, and the chemical opposition to US deployment of bal- a performance level of greater than interactions of materials inside the listic missile defenses, and MIRVs 2,000 MTOPS to nations other than warhead over time, according to the might allow the Chinese to put reliable US allies requires some Cox report. heavy stress on, or possibly break degree of Commerce scrutiny and/ Specifics on the leaked codes through, such a shield. or licensing. remain largely classified. However, In addition, smaller, lighter war- Under a law passed by Congress the House report confirms China heads might allow China to extend in the Fiscal 1998 defense authoriza- acquired the MCNPT code, which is the range of their SLBMs, enabling tion bill, Commerce is supposed to useful in determining a system’s abil- them to strike the US from distant perform post-shipment verifications ity to survive electronic penetration; Pacific waters. on all exports of HPCs with greater the DOT3.5 code, which performs Finally, China might not be the than 2,000 MTOPS to so-called similar calculations in a different only nation that gets to take a peek Tier 3 nations, including China, manner; and the NJOYC code, which at the secret US data. “The PRC is Vietnam, and nations of the former acts as a translator between the two one of the world’s leading prolif- Soviet Union. other codes. erators of weapons technologies,” China has long resisted any In the mid-1990s, US intelligence says the Cox study. “Concerns about such inspections of purchased US officials learned that China had the impact of the PRC’s thefts of technology, however. A June 1998 acquired US technical information US thermonuclear warhead design US–PRC agreement on end-use about insensitive high explosives. information, therefore, include the checks holds that China will con- Conventional explosives are the first possible proliferation of the world’s sider requests for such inspections step in the chain reaction which leads most sophisticated nuclear weapons to be nonbinding. If inspections to an atomic blast; insensitive high technology to nations hostile to the are carried out, they will be con- explosives are safer for use on mo- United States.” ducted by one of the PRC’s own bile missiles. Such material can be ministries. dropped, struck, or even shot with a High Performance Computers “The Select Committee has re- bullet but still not detonate. US nuclear secrets are of little use viewed the terms of the US–PRC The House Select Committee be- to Chinese scientists unless they have agreement and found them wholly lieves that the PRC theft of US se- access to modern computers. And the inadequate,” says the Cox report. crets indicates that China will soon House Select Committee judges that At the time the House report was follow the US lead and move toward High Performance Computer equip- written, only one post-shipment veri- a nuclear force that is heavily reliant ment recently acquired from the US fication had actually taken place. Yet on lightweight, mobile, innovative represents a major leap forward in Commerce and Defense Department nuclear weapons. China’s computing power. data indicate that US HPCs have been China is already known to be de- In recent years, US export controls obtained by Chinese organizations veloping several new solid-propellant on HPCs have steadily relaxed. As involved in the research and develop- mobile ICBMs. The road-mobile DF- a result, China now has more than ment of missiles, submarines, aircraft, 31, for instance, is likely to undergo 600 US–origin HPCs, estimates the communications, and microwave and first flight tests in 1999 and may be Cox report. Three years ago, they laser sensors. deployed as early as 2002, accord- had none. US companies have at times abet- ing to House data. The warhead for Furthermore, “the Select Com- ted such technology diversion. Com­ this smaller weapon would likely mittee judges that the PRC has been paq Computer paid a $55,000 civil use elements of the US W70 or W88. using High Performance Computers penalty in 1997 to settle alleged Chinese engineers may not be able for nuclear weapons applications,” charges that it had shipped equip- to precisely match the sophistication of says the report. ment to the PRC without obtaining US warheads, but the difficulties they High Performance Computers— the proper export licenses. Digital face in bending the US information defined as systems able to perform Creations Corp. of New Jersey to their own use are surmountable, 1,500 to 40,000 MTOPS (Millions pleaded guilty to criminal charges according to the Cox report. of Theoretical Operations Per Sec- that it had shipped a computer to “Work-arounds exist, using pro- ond)—have a wide array of legitimate China without the required license cesses similar to those developed or civilian applications. They are useful and was sentenced in 1997 to pay a available in a modern aerospace or in everything from financial market criminal fine of $800,000. precision guided munitions industry,” transactions and credit analysis to The Select Committee believes says the House study. “The PRC pos- weather prediction and petrochemi- that China is particularly interested sesses these capabilities already.” cal research. in acquiring the kind of computer The deployment of a new genera- They are also essential building power needed for the simulation of tion of thermonuclear warheads by blocks of modern weapon design. nuclear blasts. As a signer of the China could prove strategically Everything from nuclear weapons to Comprehensive Test Ban Treaty, the troublesome for the US. anti-submarine warfare systems and PRC can no longer legally conduct

72 AIR FORCE Magazine / August 1999 actual tests to judge the performance nuclear weapons applications,” says consumer goods: It is the low-cost of weapons. Yet HPC performance the report. option. Its bids sometimes come in in the millions of MTOPS is needed at half the price of Western launch for adequate computer modeling of Satellite Launches firms, but it is not the high-quality aging nukes. Today’s global market in space option. PRC boosters have been “For this reason, the Select Com- launch services is brutally competi- known to veer off course and slam mittee judges that the PRC is almost tive. China serves the same position into nearby mountainsides, with certain to use US HPCs to perform in this market as it does for many disastrous results. In general, the Cox report casts doubt on the wisdom of allowing Inhofe Pierces Administration “Smoke Screen” US firms to put their satellites on Chinese rockets. The reason is that Ever since the Chinese espionage scandal erupted, harsh criticism has been the boosters used are closely related falling on the Clinton Administration’s team of national security advisors—and the President personally. Their foes in Congress and the media accuse them of to the PRC’s military ballistic mis- incompetence, inattention, poor judgment, and playing low politics with the na- siles. Launches financed by US firms tion’s defenses. and foreign agencies inevitably have Few if any critics have been as fierce or well-informed as Sen. James Inhofe given China the opportunity to refine (R–Okla.), member of the Senate Armed Services Committee. Inhofe’s view: “This President and this Administration are singularly culpable for orchestrating booster reliability. In addition, US a politically inspired cover-up [of Chinese spying] in order to advance policies satellites are poorly guarded once they knew were causing harm to US national security.” they arrive in the PRC and present a Inhofe dismisses as a “smoke screen” the White House’s suggestions that most tempting espionage target. of the cases occurred long ago and that all recent Presidents are equally culpable. To bolster its point that the Chi- “Sixteen of the 17 most significant major technology breaches ... were dis- covered after 1994,” charged Inhofe, citing data uncovered by a Congressional nese military benefits from civilian panel led by Rep. Christopher Cox (R–Calif.). “The notion that Presidents Carter, launches, the Cox report examines Reagan, and Bush knew the extent to which China’s efforts to steal US nuclear two cases in which US contractors and military technology were successful is fantasy.” may have skirted export restrictions In a recent statement posted on his Senate Internet site, Inhofe went on to say, “At least eight (and maybe more) of these breaches actually occurred after 1994. to improve PRC boosters. ... Among these breaches—occurring on the Clinton watch—are many of those These companies—Hughes and that go the farthest in advancing China’s potential as a direct nuclear threat to Loral—were worried about the fate the United States.” of their own satellites. Hughes Space According to Inhofe, the eight breaches are: and Communications, for instance, Transfer of so-called legacy codes containing data on 50 years of US nuclear weapons development, entailing more than 1,000 nuclear tests. attempted in 1992 and 1995 to launch Sale and diversion to military use of some 600 High Performance Computers, communications satellites on Chinese enabling China to enhance its development of nuclear weapons, missiles, and Long March rockets. Both satellites advanced aviation equipment. were lost when their launch vehicles Compromise of nuclear warhead simulation technology, thus enhancing China’s ability to perfect miniature nuclear warheads without actual testing. exploded. Compromise of advanced electromagnetic weapons technology useful in the An internal Hughes investigation development of anti-satellite and anti-missile systems. located the problem as being the Long Transfer of missile nosecone technology that enables China to substantially March’s hammerhead fairing—a improve reliability of its ICBMs. sheath that protects the satellite as the Transfer of missile guidance technology enabling China to substantially improve the accuracy of its ballistic missiles. rocket roars into orbit and then splits Compromise of supersecret space-based radar technology, which would give away as the payload is pushed into China the ability to detect our previously undetectable submerged submarines. space. US engineers believed that the Compromise of some other “classified thermonuclear weapons information” rivets that held the fairing together which “the Clinton Administration ... has determined ... cannot be made public.” Inhofe is especially incensed at the way that President Clinton’s national security were not strong enough. They also advisor, Sandy Berger, has cast his role in the infamous W88 nuclear warhead thought the shape was slightly off case. China’s theft of the design of the W88 miniaturized warhead happened in and was vulnerable to strong winds the 1980s and was discovered in 1995. It was an “enormously significant” event, during ascent. said Inhofe. However, Berger claims he didn’t tell the President about the theft The Chinese did not want to hear until perhaps as late as early 1998. “The idea that Sandy Berger, ... who was fully briefed about the W88 technol- these points, at least not at first. ogy breach in April 1996, did not immediately communicate this information to They were very reluctant to admit the President is preposterous,” said Inhofe. fault in their boosters. However, Inhofe went on, “The President had to have known about the W88 breach no commercial insurers were reluctant later than April 1996, well before the 1996 election. The President deliberately withheld this vital national security information from key members of Congress to back more Hughes launches in for obvious political reasons. He withheld it for almost three years—a cover-up China unless changes were made. that is nothing less than a scandal of gigantic proportions.” So Hughes conveyed their findings Inhofe charges that the underlying source of Administration action was the to the Chinese in a formal manner, desire to maintain close relations—especially trade relations—with China. and eventually the Long March 2E “Notra Trulock, the Energy Department’s former director of intelligence who had first briefed Berger in April 1996, testified [that] he was prepared to brief fairing was improved through such members of the House and Senate Intelligence Committees as late as July 1998 measures as an increase in the nose but was denied permission to do so by acting Energy Secretary Elizabeth Moler, cap attachment screws. a political appointee. Moler reportedly ordered Trulock not to conduct the briefing Fairings are not necessary with because she said the information would be used to hurt Clinton’s China policy.” single-warhead ICBMs. But multiple- warhead missiles use them to shroud

AIR FORCE Magazine / August 1999 73 re-entry vehicles, and the knowledge review team formed to answer ques- the PRC tried to advance its cruise Hughes conveyed to China could help tions about the Long March. “This, missile program by buying the Wil- speed their development of MIRVs, in turn, could increase the PRC’s liams FJ44 civil jet engine. This believes the House Select Committee. future ballistic missile reliability.” compact turbofan was derived from There is evidence that US govern- It is also possible that China the power plant for the US Tomahawk, ment officials improperly approved at has gleaned valuable technical in- so the purchase was denied. least some of the fairing discussions formation from the mere presence Others succeed. In 1993, a PRC between the US firm and the PRC. of US–built civilian satellites at company joint venturing with Mc­ Committee members allege, however, Chinese launch sites. US firms are Don­nell Douglas to produce civil- that Hughes knew that transferring responsible for launch site security ian airliners was allowed to buy 19 the knowledge in question required in the PRC, but buildings in which advanced US machine tools for its additional review by the State De- the satellites are prepared have nu- manufacturing plant. There were partment. merous security weak points, from warning signs—the number of airlin- “Hughes deliberately acted with- underground steam pipe tunnels ers to be built in China was cut by out the required State Department to large unlocked window areas 50 percent, for example—but Mc­ license,” says the Cox report. and paper door seals which can be Donnell Douglas insisted the tools Loral was similarly worried about peeled off, undetected, when cold. were necessary for the PRC plant, so the reliability of the Long March Private US guards aren’t exactly the Commerce Department approved rocket. On Feb. 15, 1996, a Loral the epitome of professionalism, ei- the deal. Space Systems Intelsat 708 satellite ther. They routinely arrive for work Two years later, McDonnell Doug­ was destroyed when a PRC booster drunk and then go to sleep, charges las reported that six of the tools had tipped over even before it cleared the the Cox report. Trips to town to meet been diverted to a factory that made launch tower. The rocket crashed into prostitutes are common. military aircraft and cruise missiles, a nearby hillside after 22 seconds The hunt for hookers became so as well as commercial products. of flight, devastating a village and intense at one point that a Defense Some attempted PRC purchases killing upwards of 100 people, by Department monitor was approached resulted in changes in US policy. some estimates. by a PRC official who told him that In 1991, the Commerce Department A Chinese probe concluded that the one of the guards had been soliciting decided to decontrol a popular series spectacular accident was caused by prostitutes in front of the local police of civilian jet engines manufactured a broken wire within the inner frame department. by AlliedSignal’s Garrett Engine of the guidance system’s Inertial In another incident, a guard pulled Division, the Garrett TFE-731. That Measurement Unit. Loral engineers a table out of line of sight of a video meant that the engines could be thought that explanation did not come surveillance camera, to use it as exported without a license or US close to explaining the rocket’s wild a bed. Since the table blocked the government review. The PRC quickly behavior. A Loral review pointed to room’s door, the Defense Department began negotiating with AlliedSignal two other possible causes: the IMU’s monitor called the room to have it over terms of a coproduction deal. follow-up frame or an open loop in moved back. The guard reportedly Reportedly, the Chinese motivation the feedback path of the guidance responded that he was “not in the was the need for a reliable engine system. furniture moving business.” for its developmental K-8 multirole Loral faxed the report to the PRC One guard even reported for work military aircraft. in May 1996 without prior review carrying a sleeping bag, charges the In July 1992, the Department by any US government authority, Cox study. of Defense learned of the nego- charges the Cox committee. China tiations. The reaction of military eventually concluded that Loral was Technology Transfer officials to the news sparked an right, and that the IMU follow-up Espionage is not the only way the interagency review of the decontrol frame had failed. PRC obtains technological secrets. decision. The co-production deal Improvements in the reliability It also buys them, by relentlessly died after the review concluded that of the Long March guidance system scouring the West for civilian items transfer of such jet engine produc- hurts US security because it is one of that may have military uses. tion capabilities could threaten US the candidates for use in the PRC’s US law theoretically blocks sale national security. next-generation DF-31 ICBM, says of dual-use technology. However, “The PRC has mounted a wide- the House Select Committee. Though determining what can and cannot spread effort to obtain US military not accurate enough to allow more be sold to the PRC is a difficult technologies by any means—legal than targeting of cities, the system process, made harder by the PRC or illegal,” concludes the Cox re- is lightweight and compact. use of numerous front companies port. “These pervasive efforts pose One major danger in these technol- and long-term investments in West- a particularly significant threat to ogy transfers is simply that China ern firms. US export control and counterintel- has learned much about Western Some efforts are rebuffed. In 1990, ligence efforts.” ■ diagnostic processes, according to the Cox study. “This exposure could improve the Peter Grier, the Washington bureau chief of the Christian Science Monitor, is a PRC’s pre- and postflight failure longtime defense correspondent and regular contributor to Air Force Magazine. analysis for their ballistic missile His most recent article, “Roadman on Tri­care,” appeared in the July 1999 issue. programs,” says an interagency

74 AIR FORCE Magazine / August 1999