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East Asia
Chinese students suspects in espionage
2003-08-05
Two Chinese students studying in the United States supplied China’s military with American defense technology that allowed Beijing to produce a special metal used in sensors and weapons, according to a Pentagon report. "This is a classic example of how the Chinese collect dual-use military technology," an FBI official said. "Students come here; they get jobs; they form companies."

The espionage, subject of an ongoing investigation, allowed China’s military to develop a version of the substance known as Terfenol-D, which cost the Navy millions of dollars in research to create. One of the Chinese students attended Iowa State University, where he worked closely with the Department of Energy’s Ames Laboratory on the school’s campus. The lab developed the material invented by the Navy in the 1970s. The other student attended Pennsylvania State University. The Terfenol-D data were stolen within the past three years in a computer hacking incident, the FBI official said.
Racial Profiling! Wen Ho Lee!
In its annual report on Chinese military power made public last week, the Pentagon stated that "one of the Chinese students admitted sending this information [on Terfenol-D] to the [PeopleÂŽs Liberation Army]."
Ohhhh. Nevermind
The Pentagon noted that "usually the connections between [Chinese] academic, commercial, and military organizations are not so clear cut." The FBI official said a Chinese company linked to the theft of the Terfenol-D data, Gansu Tianxing Rare Earth Functional Materials Co. Ltd., known as TXRE, is directly connected to the Chinese military. TXRE was set up by a Chinese official who studied with one of the two Chinese students. TXRE’s promotional literature states that it has developed a substance that U.S. officials say is Terfenol-D. Terfenol-D is a high-tech material that changes shape in response to magnetic energy, and can be used in both sensors and mechanical devices. Because it has both commercial and military applications, any sale of the technology is strictly controlled and requires an export license. The Navy uses Terfenol-D in an advanced sonar system designed to track enemy submarines. The material also has applications for advanced aircraft and spacecraft. U.S. officials said it could be used by the Chinese in a multiple warhead missile stage and in "smart" aircraft wings.
Just great
The sole U.S. manufacturer of Terfenol-D is Etrema Products Inc., a private company in Ames licensed to produce it. A company spokeswoman declined to comment on the Chinese acquisition of Terfenol-D. Last week’s report was the U.S. government’s first public admission that the Chinese military had obtained the defense technology. Details of the Chinese acquisition of Terfenol-D were reported by Insight magazine in October. "The close relationships between the personnel and organizations involved often makes it difficult to separate the research, funding and cooperation triangle among Chinese universities, government institutes and businesses," the report said.

The Pentagon report stated that China is using students and scientists to develop its military technologies. "Husband-wife teams" also are employed, the FBI official said. According to the report, Beijing’s China Defense Science and Technology Information Center is the key collector of foreign technology and is part of the military’s General Equipment Department (GED). The GED "oversees a complex web of factories, institutes and academies that are subordinate to China’s nuclear, aeronautics, electronics, ordnance, shipbuilding and astronautics industries," the report said. "Each of these institutions has an import/export corporation to facilitate the import of technology and knowledge." The FBI official said China’s government uses people who study advanced technology in the United States to infiltrate U.S. companies to gain access to sensitive information. The collectors then return to China and set up their own companies or provide the information to the military, the official said.

In another case, two Chinese students in the United States were caught sending submarine-related technology to China to a relative working for the Chinese military. About 50,000 Chinese students currently study in the United States. U.S. officials said a small percentage are involved in intelligence and technology-gathering work for the Chinese government. "Our position is that the intelligence threat is asymmetrical, and it is all over the United States — in Iowa, Mississippi, Maine or Alabama," the official said. The FBI responded to the foreign threat by putting counterintelligence squads in all FBI field divisions
Posted by:Frank G

#4  The good thing about doing counter-espionage on Chinese spies is that they're readily identifiable in a way that Soviet spies were not, meaning we'll have an easier time tracking them and their contacts.

Not all Chinese collaborators are foreign nationals.

The traitor scum at Lockheed and Boeing, protected by a phony National Security policy mandating a 'dual contractor system for Pentagon aquisitions, play all sides when it comes to weapons and technology sales.

Russia is continually rewarded with new arms contracts with American companies (Boeing, Lockheed), direct aid, technology exchanges (International Space Station), and continued access to weapons labs, NATO functions, and high level G-8 meetings.

Why do we tolerate this?

Russia continues to manufacture large quantities of its second-best weapons systems for export to China, Iran, India, Syria, Egypt, Cuba, North Korea, and various smaller allies in Africa and Latin America. These weapons include millions of small arms, tanks, and artillery, as well as submarines, destroyers, fighters, ballistic missiles, and anti-aircraft/missile defense systems for the wealthier nations. Russia exports nuclear, biological and chemical weapons technology to a few select allies as well. It is the secret supplier of choice to all major terrorist groups in the world, though often Middle Eastern middlemen handle the actual transactions. Yet, the US continues to claim that Russia is an ally in the ‘war against terror.’

The second largest proliferator of missile and weapons technology to enemies of the West is China, often working as a surrogate for Russia.

Russia and China play "competing adversaries" in order to effectively deal with nations who may have some antipathy for either Russia or China.

Those nations that dislike Russia (like Pakistan) deal with China, and those that dislike China (India) deal with Russia. Often China takes charge of the proliferation when Russia wants to appear as if it is "in compliance" with various treaties or wishes to cozy up to the US.

That is why currently China is taking Russia’s traditional place as weapons and technology supplier in North Korea, Cuba, Panama and Venezuela. Both Russia and China are supplying Iran.

The US State Department accuses Lockheed Martin of giving sensitive rocket technology to China in breach of US export controls. 1999

Corporate apologists, defend your traitors.
Posted by: Anonymous   2003-8-6 12:33:25 AM  

#3  Goodness, spread some disinformation around. Let the Chinese have a few incidents due to faulty design, and they'll learn to do their own damned R&D.
Posted by: Ray   2003-8-5 5:43:11 PM  

#2  Having foreign nationals working with sensitive information and technology is an invitation for trouble, especially when they are from China, the main military adversary of the U.S.

The problem, as usual, is from professors who won't cooperate. They don't care about national security - all they worry about is writing that next research paper and getting tenure.

At the same time, I wouldn't exaggerate the scale of the threat from Chinese espionage. During the late 40's and early 50's, the Soviets had many highly-placed spies in the State Department and in the defense research establishment - all of far higher caliber than the crop of Chinese spies who have been unearthed to date. Guess who won the Cold War? The good thing about doing counter-espionage on Chinese spies is that they're readily identifiable in a way that Soviet spies were not, meaning we'll have an easier time tracking them and their contacts.
Posted by: Zhang Fei   2003-8-5 12:47:43 PM  

#1   The FBI responded to the foreign threat by putting counterintelligence squads in all FBI field divisions

Yeah, that's reassuring. Why don't these pointy-headed government types create and implement procedures to weed out security risks? Having foreign nationals working with sensitive information and technology is an invitation for trouble, especially when they are from China, the main military adversary of the U.S. If access to this type of work has to be restricted to citizens to improve security then this needs to be done without delay. Who knows what other spies are lurking in other venues where similar research is being performed?
Posted by: Bomb-a-rama   2003-8-5 12:32:20 PM  

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