US National Security and Military/Commercial Concerns with the People's Republic of China

931 Pages·1999·7.91 MB·English

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
2d Session } HOUSE OF REPRESENTATIVES { 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. HANSEN
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