[Congressional Record Volume 143, Number 80 (Tuesday, June 10, 1997)]
[Extensions of Remarks]
[Pages E1171-E1173]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
MFN
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HON. BENJAMIN A. GILMAN
of new york
in the house of representatives
Tuesday, June 10, 1997
Mr. GILMAN. Mr. Speaker, today, I received a copy of an excellent
paper from Frank Gaffney with the William J. Casey Institute of the
Center for Security Policy. The paper makes the excellent point that:
``While MFN is a blunt instrument * * * it is also the only measure
currently on the table that is remotely proportionate to the magnitude
of the danger Beijing is creating, to a considerable degree with
resources it is garnering from trade with the United States.''
I ask that my colleagues read the paper and request that the full
text be printed at this point in the Record:
Non-Renewal of MFN for China: A Proportionate Response to Beijing's
Emerging, Trade-Subsidized Strategic Threat
Washington, DC.--Congress is expected shortly to consider
President Clinton's proposal to renew for an additional year
China's Most Favored Nation (MFN) status. While there are
many compelling reasons for opposing such a renewal, the
William J. Casey Institute of the Center for Security Policy
believes that there is one overarching factor that demands
this step: Communist China is utilizing much of the huge
trade surplus that it enjoys thanks to this privileged
trading status to mount a strategic threat to the United
States and its vital interests in Asia, the Middle East and
beyond.
While MFN is a blunt instrument--affecting, if it is
denied, millions of innocent Chinese workers, the economy of
Hong Kong, U.S. jobs associated with exports to and imports
from China, etc.--it is also the only measure currently on
the table that is remotely proportionate to the magnitude of
the danger Beijing is creating, to a considerable degree with
resources it is garnering from trade with the United States.
China's Offensive Strategy
In the Summer 1994 edition of Orbis, Ross H. Munro reported
that, in 1993, the West was afforded ``an unprecedented--and
at times disturbing--inside look at how important elements in
China's armed forces view neighboring countries as well as
the United States.'' This insight was obtained when a Western
diplomat serendipitously obtained a copy of a book entitled
``Can China's Armed Forces Win the Next War?'' that had been
published by the People's Liberation Army (PLA) for internal
consumption only.
According to Munro, this book provided ``virtual
confirmation of reports . . . that the Chinese leadership in
general and the senior Chinese officer corps in particular
view the United States as China's principal adversary now and
for decades to come.'' This view has become even more
entrenched during the intervening years. As Munro and co-
author Richard Bernstein put it in their own, critically
acclaimed book published earlier this year, ``The Coming
Conflict with China.''
``China's harsh rhetoric and incidents like [a dangerous
U.S.-Chinese naval encounter in October 1994] in the Yellow
Sea are not so much temporary responses to a temporary
situation but products of a fundamental change in the Chinese
attitude toward the United States. The use of the words
`hegemonism,' `subversion' and `interference' with regard to
the United States signals a change in China's strategic
thinking. Before, Beijing saw American power as a strategic
advantage for the PRC; now, it has decided that American
power represents a threat, not just to China's security but
to China's plans to grow stronger and to play a paramount
role in the affairs of Asia.
``China, in short, has determined that the United States--
despite the trade, the diplomatic contacts, the technology
transfers, the numerous McDonald's and Kentucky Fried
Chickens open in the People's Republic, despite even the
limited amount of cooperation that still existed between the
two countries--is its chief global rival.''
The enormous impetus behind China's determined effort to
acquire a modern military capable of decisively projecting
power derives from this zero-sum view of the U.S.-PRC
relationship.\1\ The Chinese leadership believes, after all,
that it must be able not only to dominate the nations of East
Asia and the South China Sea. It sees China as having to
exercise control over the Pacific out to what the Chinese
call ``the second island chain'' (i.e., the Philippines,
Japan and even the U.S. territory of Guam).\2\ The larger
purpose appears to be even more ambitious: to render the
United States incapable of exercising influence in Asia that
would compete with, let alone counter, Chinese hegemony in
the region.
Implementing the Strategy
The Chinese are pursuing a multifaceted campaign to
accomplish these strategic objectives. The following are
among the means the PRC is pursuing toward such ominous ends:
Strategic Force Modernization: The Washington Times
recently reported that China is expected to begin deploying
by the year 2000 an advanced intercontinental-range ballistic
missile, designated the Dong Feng-31 (DF-31). This missile
will give Beijing the ability to deliver nuclear warheads
with great accuracy throughout the Pacific and parts of the
western United States.
The DF-31 reportedly is benefitting from SS-18, SS-25 and
Topol-M ICBM technology China is obtaining from Russia and/or
Ukraine. Its lethality--and that of other Chinese strategic
forces--will be greatly enhanced by supercomputers the United
States has provided to Beijing's military-industrial
complex.\3\ And the DF-31 is expected to be fielded on a
mobile transporter-erector-launcher derived from Russian
technology supplied by Belarus. The survivability afforded by
this MAZ launcher, together with advances in Chinese
ballistic missile-launching submarines capable of firing the
DF-31, suggests that Beijing is intent on acquiring a
formidable strategic nuclear capability that cannot be
preemptively destroyed and that will be capable of holding
American cities and other targets credibly at risk.
A foretaste of the use to which China may be willing to put
such a capability can be seen in a report published on the
front-page of the New York Times on 24 January 1996. It
described how a senior Chinese official had signaled
Beijing's willingness to engage in ``nuclear blackmail''
against the United States by suggesting that American
interference in China's coercion of Taiwan could result in an
attack on Los Angeles. In the absence of any deployed U.S.
ability to intercept a Chinese ballistic missile launched at
Los Angeles--or any other target in the United States--such
threats may well have the desired effect.
Build-up of Other Aspects of China's Military: Beijing is
also pouring billions of dollars into what might be called a
``Great Leap Forward'' for other elements of the People's
Liberation Army, notably its power-projection capabilities
(long-range aircraft, blue-water naval units, precision-
guided munitions and unconventional weapons). Such
capabilities pose, most immediately, a danger that China will
be able to control transit of the South China Sea and
access to its energy and other strategic resources.\4\
China's drive to modernize the non-nuclear elements of its
military is also benefitting hugely from imported technology.
Thanks to advanced machine tools, computer-aided design
capabilities, composite materials, chip-manufacturing
technology and the other foreign dual-use technology like--
whether acquired legally or illegally--together with its
purchase of full-up military hardware or components,\5\
Beijing is now obtaining new generations of highly
competitive jet fighters, cruise missiles, attack submarines
and armored vehicles. The threat posed by such weaponry will
not arise from China alone; given past Chinese practices,
such equipment will shortly be available for purchase by
rogue states from Iran to North Korea.
Espionage: The illegal acquisition of U.S. technology--
especially that of the dual-use variety--is a priority
assignment for the hundreds of People's Liberation Army-owned
or -affiliated front companies operating in the United
States.\6\ Together with large numbers of intelligence
operatives, 40,000 graduate and undergraduate students and
Overseas Chinese entrepreneurs doing business in this country
or with its companies,\7\ America faces a literally
unprecedented risk of penetration and espionage and,
consequently, an immense counter-intelligence challenge. In
his new book about economic espionage, ``War by Other
Means,'' John Fialka declares that China's prime intelligence
agency, the Ministry of State Security, has ``flooded the
United States with spies, sending in far more than the
Russians even at the height of the KGB's phenomenal
campaign.''
Not least is the danger that China's penetration of the
computer and telecommunications industries will translate
into a sophisticated, if not unique, Chinese capability to
wage information warfare (IW) against the United States. This
capability is especially sinister since the vulnerability of
America's computer infrastructure to IW attacks offers
Beijing a means to inflict grave harm on the U.S. economic
and national security in a way that may enable the attacker
to avoid detection, responsibility and retaliation.
Arming U.S. Gangs and Drug Lords: China has been caught
shipping AK-47s and other lethal firepower to criminal
elements in this country with the potential to sow mayhem in
American society. PLA-affiliated companies have offered to
sell undercover U.S. law enforcement officers posing as drug
lords not only automatic weapons--whose lethal effects were
evident when the streets of Los
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Angeles were turned into a war zone by bank robbers wielding
AK-47s manufactured by the Chinese firm Norinco \8\--but
rocket-propelled grenade launchers, light armored vehicles
and shoulder-fired surface-to-air missiles.
China is also believed to be active in supplying narcotics
from Southeast Asia to the U.S. market. Its merchant marine--
the Chinese Ocean Shipping Company (COSCO)--has been
implicated in smuggling drugs as well as guns and other
contraband into the United States. President Clinton has
nonetheless personally intervened no fewer than three times
on COSCO's behalf in connection with the effort this arm of
the PLA has been making to take over the U.S. Navy's vast
Long Beach Naval Base. This is all the more extraordinary
since, according to a senior Soviet military intelligence
officer who defected to the United States, China is likely
collaborating with Russia in utilizing COSCO assets and
facilities for signals intelligence and other espionage
activities, pursuant to the two nations' bilateral
intelligence cooperation agreement of 1992.
Financial Penetration: Since 1988, China has issued some
eighty bonds on the U.S. and Western securities markets.
While the bulk of these have been yen-denominated bonds, the
total amount of dollar-denominated Chinese bonds (primarily
issued in the U.S. market) has now reached at least $6.7
billion.
This preferred borrowing venue provides major Chinese
state-owned enterprises and banks intimately connected with
the PLA and Beijing's security services with access to large
sums of undisciplined, unconditioned and inexpensive cash.
This money can be easily diverted to finance activities
inimical to U.S. security interests--not to mention American
principles and values. Worse yet, in the process, Beijing is
successfully recruiting numerous politically influential
constituencies in this country that will have a financial
vested interest in ensuring that China is not subject to
future U.S. economic sanctions, containment strategies or
other forms of isolation and/or penalties.
A sense of the implications of such financial operations
can be gleaned from the case of one of the conglomerate's run
by Wang Jun, the arms dealing Chinese ``princling'' who was
invited to attend a Democratic fund-raising coffee klatch at
the Clinton White House last year. The Chinese International
Trade and Investment Corporation (CITIC) has, thus far,
floated $800 million in dollar-denominated bonds--financial
instruments that are now in the portfolios of U.S. pension
funds, securities firms, insurance companies and other
prominent players in the American investor community.
While the full dimensions of China's efforts to utilize the
political access afforded by its financial and other business
operations in the United States are, at this writing, far
from clear--and currently the subject of intensive
congressional and Justice Department investigations, one
thing is certain: Beijing has had a keen interest in shaping
U.S. policy in various ways, notably by: gaining access to
supercomputer and other militarily relevant technology;
preventing the exploitation of American deposits of ``clean''
coal; facilitating the sale of securities in the American
market--to say nothing of discouraging close U.S. ties with
Taiwan, etc. It adds insult to injury that Chinese efforts to
suborn or otherwise influence this country's elected leaders
must have been underwritten, at least in part, by the
proceeds of undisciplined bond sales to American companies
and citizens.
Proliferation: Beijing has, for years, been aggressively
and irresponsibly facilitating the spread of weapons of mass
destruction (WMD) and other deadly ordinance to rogue states
capable of using them against U.S. personnel, interests and/
or allies. Worse yet, it seems safe to assume that open
source data concerning China's proliferation activities are
but the tip of the iceberg. If so, the picture that emerges
is one of a nation systematically seeding the Middle East,
Persian Gulf and South Asia with chemical, biological and
nuclear weapons technology--together with ballistic and
cruise missiles with which such arms can be delivered over
increasingly long ranges.
This danger is only increased by the prospect that the
Peoples Republic of China regards these transactions as more
than simply a valuable means of generating hard currency,
securing energy supplies and garnering influence around the
world. If Beijing is also using proliferation as an integral
part of a campaign to diminish U.S. presence and influence in
the Western Pacific, the possibility that its clients might
use Chinese-supplied arms to precipitate conflict in regions
far removed from Asia could seen as desirable by the Chinese
leadership. After all, it would almost certainly preoccupy
the United States--substantially tying down and drawing down
its military, political and strategic resources.
A Prescription For U.S. Policy Toward China
The United States can no longer indulge in the delusion
served up by some of Beijing's paid advocates--namely, that
it is up to America whether China will become an enemy. In
fact, their writings for internal consumption, their policies
and programs make it clear that the Chinese leadership
decided to view the U.S. in that way years ago.
The available evidence suggests that it is foolish to
discount the implications of China's strategy for U.S.
security out of some confidence that Western capitalism's
``engagement'' with Beijing will ensure that the PRC is
transformed, over time, into a benign international power.
Americans' ironic embrace of this variation on the Marxist
concept of economic determinism not only disregards the
practical effects of such ``engagement'' to date; it also
overlooks the dangers that are likely to arise in the
interim.
Accordingly, while the United States would prefer to avoid
confronting China, it has no responsible choice under present
and foreseeable circumstances but to stop engaging in
activities that are having the effect of making it yet more
difficult and more dangerous to challenge the PRC. The
William J. Casey Institute of the Center for Security Policy
believes that the place to start is by non-renewal of MFN for
China.
This action should be complemented, however, by a number of
other, critically important initiatives. These include:
Denying PLA-front companies and other inappropriate Chinese
borrowing entities the opportunity to sell bonds in the U.S.
market. This step can be taken in a non-disruptive fashion
(e.g., by creating a security-minded screening mechanism for
these prospective bond issuers) without fear of jeopardizing
U.S. exports, jobs or ``people-to-people'' contacts
unaffected by such transactions.
Blocking Chinese access to strategic facilities (in the
U.S. and elsewhere, notably at the eastern and western ends
of the Panama Canal).
Prohibiting the sale of American military production
facilities and equipment to China.
Terminating the ``anything goes'' policy with respect to
the export of dual-use technology to Chinese end-users. In
the interest of obtaining maximum pressure for change in
China, U.S. allies should be offered the same choice they are
currently given under the D'Amato legislation on Iran and
Libya (i.e., foreign companies and nationals must decide
whether to export militarily-sensitive equipment and
technology to China or risk losing their unfettered access
to the American marketplace).
Increasing significantly the resources dedicated to
uncovering and thwarting Chinese espionage, technology theft
and influence operations in the United States. And
Intensifying efforts to provide truthful information and
encouragement to those resisting communist repression
(including greatly expanding the operations of Radio Free
Asia; enforcing the existing bans on the importation of slave
labor-produced goods; imposing penalties for religious
intolerance, etc.) After all, how a nation treats its own
people is a good indicator of how it is likely to deal with
those of other states.
This step can help make clear that the United States is not
an enemy of the Chinese people, but that it steadfastly
opposes the totalitarian government that brutally rules them.
It can also help undercut the nationalist xenophobia that the
Chinese leadership promotes in its bid to retain power.
The Bottom Line
The Casey Institute is under no illusion that the
tremendous course-correction entailed in such steps will be
easily taken by either the U.S. executive or legislative
branches. Still, the nature of the threat posed by China is
in key respects of a greater magnitude and vastly greater
complexity than that mounted by the Soviet Union at the
height of the Cold War. It behooves the United States
correctly to perceive this danger and respond appropriately
before it becomes any harder to do so.
Footnotes
\1\According to a front-page article in the 19-25 May 1997
issue of Defense News; the Pentagon has just released a study
entitled ``Chinese Views of Future Warfare,'' that draws on
Chinese writings to document ``Beijing's doctrinal shift from
a low-technology, personnel-intensive people's war to high-
technology regional warfare based on information deterrence
and possible first-strikes.''
\2\China evidently concluded after Operation Desert Storm
that the traditional strategy of defending its homeland by
retreating into the hinterlands and waging ``people's war''
could not assure victory against a modern military force like
that of the United States. Consequently, the PRC had to adopt
a forward defense--geared toward denying the U.S. the in-
theater bases, logistical facilities and staging points that
were decisive to the Gulf War's outcome.
\3\According to the New York Times of 28 May 1997, the United
States has sold 46 supercomputers to China over the last 18
months, ``giving the Chinese possibly more supercomputing
capacity than the entire Department of Defense.'' Matters are
made worse by former Secretary of Defense William Perry's
decision to redefine what a ``supercomputer'' is: Where in
1992, the standard was arbitrarily increased from 195 MTOPS
(million theoretical operations per second) to 10,000 MTOPS.
As a result, many extremely powerful machines that fall below
the new definition of supercomputer have also been made
available for export to China.
\4\For a frightening illustration of the implications of such
a development, see Dragonstrike: The Millennial War by the
respected British journalists, Humphrey Hawkins and Simon
Holberston.
\5\Two articles documenting China's acquisition of militarily
relevant technology from the United States and other Western
nations are: a front-page Wall Street Journal article by
Robert S. Greenberger which appeared on 21 October 1996 and
was entitled ``Let's Make a Deal--Chinese Find Bargains in
Defense Equipment as Firms Unload Assets''; and ``Unilateral
Armament--Until China's Position in the World is Better
Defined, Western Countries Should Stop Selling Arms to
Beijing,'' by Richard Fisher, Jr. which appeared in the 2
June 1997 edition of National Review.
\6\Insight Magazine's Tim Maier cites Wall Street Journal
reporter John Fialka as estimating that ``about 450 Chinese
companies are under federal investigation for economic
espionage in the United States,'' See ``PLA Espionage Means
Business,'' 24 March 1997, pp. 8-14.
\7\According to Randolph Quon, an investment banker who
formerly worked closely with the Chinese leadership, 150
prominent overseas Chinese
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families--including the Riadys of Indonesia--represent
enormously important economic and strategic assets to the
PRC's leadership. Their huge net worth (measured by some
observers to be in the trillions of dollars), their influence
in their respective countries and their ability to serve as
indigenous surrogates, if not as ``Fifth Columns,'' for
Beijing enormously complicates the task of responding to
China's predations.
\8\According to the London Sunday Times of 6 April 1997,
``Norinco [is] a huge state-run arms manufacturing
conglomerate, which answers to the State Council, China's
cabinet. Norinco has been implicated in the supply to Iran of
strategic materials that could help the Islamic regime
develop weapons of mass destruction. Its ultimate boss is Li
Peng, China's prime minister.''
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