[Congressional Record Volume 151, Number 90 (Thursday, June 30, 2005)]
[Extensions of Remarks]
[Pages E1401-E1403]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        CHINA: A GROWING THREAT

                                 ______
                                 

                           HON. FRANK R. WOLF

                              of virginia

                    in the house of representatives

                        Wednesday, June 29, 2005

  Mr. WOLF. Mr. Speaker, I would like to bring to the attention of our 
colleagues a two-part series that ran in the Washington Times this 
week, which gives an eye-opening account of the growing military and 
intelligence threat posed by China. As this series makes clear, we are 
naive to view China as simply a trading partner, when in fact they are 
a global superpower with military ambitions directly at odds with the 
United States.

               [From the Washington Times, June 26, 2005]

                         Chinese Dragon Awakens

                            (By Bill Gertz)

       China is building its military forces faster than U.S. 
     intelligence and military analysts expected, prompting fears 
     that Beijing will attack Taiwan in the next 2 years, 
     according to Pentagon officials.
       U.S. defense and intelligence officials say all the signs 
     point in one troubling direction: Beijing then will be forced 
     to go to war with the United States, which has vowed to 
     defend Taiwan against a Chinese attack.
       China's military buildup includes an array of new high-
     technology weapons, such as warships, submarines, missiles 
     and a maneuverable warhead designed to defeat U.S. missile 
     defenses. Recent intelligence reports also show that China 
     has stepped up military exercises involving amphibious 
     assaults, viewed as another sign that it is preparing for an 
     attack on Taiwan.
       ``There's a growing consensus that at some point in the 
     mid-to-late '90s, there was a fundamental shift in the 
     sophistication, breadth and re-sorting of Chinese defense 
     planning,'' said Richard Lawless, a senior China-policy maker 
     in the Pentagon. ``And what we're seeing now is a 
     manifestation of that change in the number of new systems 
     that are being deployed, the sophistication of those systems 
     and the interoperability of the systems.''
       China's economy has been growing at a rate of at least 10 
     percent for each of the past 10 years, providing the 
     country's military with the needed funds for modernization.
       The combination of a vibrant centralized economy, growing 
     military and increasingly fervent nationalism has transformed 
     China into what many defense officials view as a fascist 
     state.
       ``We may be seeing in China the first true fascist society 
     on the model of Nazi Germany, where you have this incredible 
     resource base in a commercial economy with strong 
     nationalism, which the military was able to reach into and 
     ramp up incredible production,'' a senior defense official 
     said.
       For Pentagon officials, alarm bells have been going off for 
     the past two years as China's military began rapidly building 
     and buying new troop- and weapon-carrying ships and 
     submarines.
       The release of an official Chinese government report in 
     December called the situation on the Taiwan Strait ``grim'' 
     and said the country's military could ``crush'' Taiwan.
       Earlier this year, Beijing passed an anti-secession law, a 
     unilateral measure that upset the fragile political status 
     quo across the Taiwan Strait. The law gives Chinese leaders a 
     legal basis they previously did not have to conduct a 
     military attack on Taiwan, U.S. officials said:
       The war fears come despite the fact that China is hosting 
     the Olympic Games in 2008 and, therefore, some officials say, 
     would be reluctant to invoke the international condemnation 
     that a military attack on Taiwan would cause.


                           Army of the future

       In the past, some defense specialists insisted a Chinese 
     attack on Taiwan would be a ``million-man swim'' across the 
     Taiwan Strait because of the country's lack of troop-carrying 
     ships.
       ``We left the million-man swim behind in about 1998, 
     1999,'' the senior Pentagon official said. ``And in fact, 
     what people are saying now, whether or not that construct was 
     ever useful, is that it's a moot point, because in just 
     amphibious lift alone, the Chinese are doubling or even 
     quadrupling their capability on an annual basis.''
       Asked about a possible Chinese attack on Taiwan, the 
     official put it bluntly: ``In the '07-'08 time frame, a 
     capability will be there that a year ago we would have said 
     was very, very unlikely. We now assess that as being very 
     likely to be there.''
       Air Force Gen. Paul V. Hester, head of the Pacific Air 
     Forces, said the U.S. military has been watching China's 
     military buildup but has found it difficult to penetrate 
     Beijing's ``veil'' of secrecy over it.
       While military modernization itself is not a major worry, 
     ``what does provide you a pause for interest and concern is 
     the amount of modernization, the kind of modernization and 
     the size of the modernization,'' he said during a recent 
     breakfast meeting with reporters.
       China is building capabilities such as aerial refueling and 
     airborne warning and control aircraft that can be used for 
     regional defense and long-range power projection, Gen. Hester 
     said.
       It also is developing a maneuverable re-entry vehicle, or 
     MARV, for its nuclear warheads. The weapon is designed to 
     counter U.S. strategic-missile defenses, according to 
     officials who spoke on the condition of anonymity. The 
     warhead would be used on China's new DF-31 long-range 
     missiles and its new submarine missile, the JL-2.
       Work being done on China's weapons and reconnaissance 
     systems will give its military the capability to reach 1,000 
     miles into the sea, ``which gives them the visibility on the 
     movement of not only our airplanes in the air, but also our 
     forces at sea,'' Gen. Hester said.

[[Page E1402]]

       Beijing also has built a new tank for its large armed 
     forces. It is known as the Type 99 and appears similar in 
     design to Germany's Leopard 2 main battle tank. The tank is 
     outfitted with new artillery, anti-aircraft and machine guns, 
     advanced fire-control systems and improved engines.
       The country's air power is growing through the purchase of 
     new fighters from Russia, such as Su-30 fighter-bombers, as 
     well as the development of its own fighter jets, such as the 
     J-10.
       Gen. Hester compared Chinese warplanes with those of the 
     former Soviet Union, which were less capable than their U.S. 
     counterparts, but still very deadly.
       ``They have great equipment. The fighters are very 
     technologically advanced, and what we know about them gives 
     us pause for concern against ours,'' he said.
       Missiles also are a worry.
       ``It is their surface-to-air missiles, their [advanced] 
     SAMs and their surface-to-surface missiles, and the 
     precision, more importantly, of those surface-to-surface 
     missiles that provide, obviously, the ability to pinpoint 
     targets that we might have out in the region, or our friends 
     and allies might have,'' Gen. Hester said.
       The advances give the Chinese military ``the ability . . . 
     to reach out and touch parts of the United States--Guam, 
     Hawaii and the mainland of the United States,'' he said.
       To better deal with possible future conflicts in Asia, the 
     Pentagon is modernizing U.S. military facilities on the 
     Western Pacific island of Guam and planning to move more 
     forces there.
       The Air Force will regularly rotate Air Expeditionary Force 
     units to Guam and also will station the new long-range 
     unmanned aerial vehicle known as Global Hawk on the island, 
     he said.
       It also has stationed B-2 stealth bombers on Guam 
     temporarily and is expected to deploy B-1 bombers there, in 
     addition to the B-52s now deployed there, Gen. Hester said.


                            Projecting power

       China's rulers have adopted what is known as the ``two-
     island chain'' strategy of extending control over large areas 
     of the Pacific, covering inner and outer chains of islands 
     stretching from Japan to Indonesia.
       ``Clearly, they are still influenced by this first and 
     second island chain,'' the intelligence official said.
       The official said China's buildup goes beyond what would be 
     needed to fight a war against Taiwan.
       The conclusion of this official is that China wants a 
     ``blue-water'' navy capable of projecting power far beyond 
     the two island chains.
       ``If you look at the technical capabilities of the weapons 
     platforms that they're fielding, the sea-keeping 
     capabilities, the size, sensors and weapons fit, this 
     capability transcends the baseline that is required to deal 
     with a Taiwan situation militarily,'' the intelligence 
     official said.
       ``So they are positioned then, if [Taiwan is] resolved one 
     way or the other, to really become a regional military power 
     as well.''
       The dispatch of a Han-class submarine late last year to 
     waters near Guam, Taiwan and Japan was an indication of the 
     Chinese military's drive to expand its oceangoing 
     capabilities, the officials said. The submarine surfaced in 
     Japanese waters, triggering an emergency deployment of 
     Japan's naval forces.
       Beijing later issued an apology for the incursion, but the 
     political damage was done. Within months, Japan began 
     adopting a tougher political posture toward China in its 
     defense policies and public statements. A recent Japanese 
     government defense report called China a strategic national 
     security concern. It was the first time China was named 
     specifically in a Japanese defense report.


                         Energy supply a factor

       For China, Taiwan is not the only issue behind the buildup 
     of military forces. Beijing also is facing a major energy 
     shortage that, according to one Pentagon study, could lead it 
     to use military force to seize territory with oil and gas 
     resources.
       The report produced for the Office of Net Assessment, which 
     conducts assessments of future threats, was made public in 
     January and warned that China's need for oil, gas and other 
     energy resources is driving the country toward becoming an 
     expansionist power.
       China ``is looking not only to build a blue-water navy to 
     control the sea lanes [from the Middle East], but also to 
     develop undersea mines and missile capabilities to deter the 
     potential disruption of its energy supplies from potential 
     threats, including the U.S. Navy, especially in the case of a 
     conflict with Taiwan,'' the report said.
       The report said China believes the United States already 
     controls the sea routes from the oil-rich Persian Gulf 
     through the Malacca Strait. Chinese President Hu Jintao has 
     called this strategic vulnerability to disrupted energy 
     supplies Beijing's ``Malacca Dilemma.''
       To prevent any disruption, China has adopted a ``string of 
     pearls'' strategy that calls for both offensive and defensive 
     measures stretching along the oil-shipment sea lanes from 
     China's coast to the Middle East.
       The ``pearls'' include the Chinese-financed seaport being 
     built at Gwadar, on the coast of western Pakistan, and 
     commercial and military efforts to establish bases or 
     diplomatic ties in Bangladesh, Burma, Cambodia, Thailand 
     and disputed islands in the South China Sea.
       The report stated that China's ability to use these pearls 
     for a ``credible'' military action is not certain.
       Pentagon intelligence officials, however, say the rapid 
     Chinese naval buildup includes the capability to project 
     power to these sea lanes in the future.
       ``They are not doing a lot of surface patrols or any other 
     kind of security evolutions that far afield,'' the 
     intelligence official said. ``There's no evidence of [Chinese 
     military basing there] yet, but we do need to keep an eye 
     toward that expansion.''
       The report also highlighted the vulnerability of China's 
     oil and gas infrastructure to a crippling U.S. attack.
       ``The U.S. military could severely cripple Chinese 
     resistance [during a conflict over Taiwan] by blocking its 
     energy supply, whereas the [People's Liberation Army navy] 
     poses little threat to United States' energy security,'' it 
     said.
       China views the United States as ``a potential threat 
     because of its military superiority, its willingness to 
     disrupt China's energy imports, its perceived encirclement of 
     China and its disposition toward manipulating international 
     politics,'' the report said.


                        `mercantilist measures'

       The report stated that China will resort ``to extreme, 
     offensive and mercantilist measures when other strategies 
     fail, to mitigate its vulnerabilities, such as seizing 
     control of energy resources in neighboring states.''
       U.S. officials have said two likely targets for China are 
     the Russian Far East, which has vast oil and gas deposits, 
     and Southeast Asia, which also has oil and gas resources.
       Michael Pillsbury, a former Pentagon official and 
     specialist on China's military, said the internal U.S. 
     government debate on the issue and excessive Chinese secrecy 
     about its military buildup ``has cost us 10 years to figure 
     out what to do.''
       ``Everybody is starting to acknowledge the hard facts,'' 
     Mr. Pillsbury said. ``The China military buildup has been 
     accelerating since 1999. As the buildup has gotten worse, 
     China is trying hard to mask it.''
       Richard Fisher, vice president of the International 
     Assessment and Strategy Center, said that in 10 years, the 
     Chinese army has shifted from a defensive force to an 
     advanced military soon capable of operations ranging from 
     space warfare to global non-nuclear cruise-missile strikes.
       ``Let's all wake up. The post-Cold War peace is over,'' Mr. 
     Fisher said. ``We are now in an arms race with a new 
     superpower whose goal is to contain and overtake the United 
     States.''
                                  ____


               [From the Washington Times, June 27, 2005]

            Thefts of U.S. Technology Boost China's Weaponry

                            (By Bill Gertz)

       China is stepping up its overt and covert efforts to gather 
     intelligence and technology in the United States, and the 
     activities have boosted Beijing's plans to rapidly produce 
     advanced-weapons systems.
       ``I think you see it where something that would normally 
     take 10 years to develop takes them two or three,'' said 
     David Szady, chief of FBI counterintelligence operations.
       He said the Chinese are prolific collectors of secrets and 
     military-related information. ``What we're finding is that 
     [the spying is] much more focused in certain areas than we 
     ever thought, such as command and control and things of that 
     sort,'' Mr. Szady said.
       ``In the military area, the rapid development of their 
     `blue-water' navy--like the Aegis weapons systems--in no 
     small part is probably due to some of the research and 
     development they were able to get from the United States,'' 
     he said.
       The danger of Chinese technology acquisition is that if the 
     United States were called on to fight a war with China over 
     the Republic of China (Taiwan), U.S. forces could find 
     themselves battling a U.S.-equipped enemy.
       ``I would hate for my grandson to be killed with U.S. 
     technology'' in a war over Taiwan, senior FBI 
     counterintelligence official Tim Bereznay told a conference 
     earlier this year.
       The Chinese intelligence services use a variety of methods 
     to spy, including traditional intelligence operations 
     targeting U.S. government agencies and defense contractors.
       Additionally, the Chinese use hundreds of thousands of 
     Chinese visitors, students and other nonprofessional spies to 
     gather valuable data, most of it considered ``open source,'' 
     or unclassified information.
       ``What keeps us up late at night is the asymmetrical, 
     unofficial presence,'' Mr. Szady said.
       ``The official presence, too. I don't want to minimize that 
     at all in what they are doing.'' China's spies use as many as 
     3,200 front companies--many run by groups linked to the 
     Chinese military--that are set up to covertly obtain 
     information, equipment and technology, U.S. officials say.
       Recent examples include front businesses in Milwaukee; 
     Trenton, N.J.; and Palo Alto, Calif., Mr. Szady said.
       In other cases, China has dispatched students, short-term 
     visitors, businesspeople and scientific delegations with the 
     objective of stealing technology and other secrets.
       The Chinese ``are very good at being where the information 
     is,'' Mr. Szady said. ``If you build a submarine, no one is 
     going to steal a submarine. But what they are looking for

[[Page E1403]]

     are the systems or materials or the designs or the batteries 
     or the air conditioning or the things that make that thing 
     tick,'' he said. ``That's what they are very good at 
     collecting going after both the private sector, the 
     industrial complexes, as well as the colleges and 
     universities in collecting scientific developments that 
     they need.''
       ``One recent case involved two Chinese students at the 
     University of Pennsylvania who were found to be gathering 
     nuclear submarine secrets and passing them to their father in 
     China, a senior military officer involved in that country's 
     submarine program.


                               Bit by bit

       To counter such incidents, the FBI has been beefing up its 
     counterintelligence operations in the past 3 years and has 
     special sections in all 56 field offices across thy country 
     for counterspying.
       But the problem of Chinese spying is daunting.
       ``It's pervasive,'' Mr. Szady said. ``It's a massive 
     presence, 150,000 students, 300,000 delegations in the New 
     York area. That's not counting the rest of the United States, 
     probably 700,000 visitors a year. They're very good at 
     exchanges and business deals, and they're persistent.''
       Chinese intelligence and business spies will go after a 
     certain technology, and they eventually get what they want, 
     even after being thwarted, he said.
       Paul D. Moore, a former FBI intelligence specialist on 
     China, said the Chinese use a variety of methods to get small 
     pieces of information through numerous collectors, mostly 
     from open, public sources.
       The three main Chinese government units that run 
     intelligence operations are the Ministry of State Security, 
     the military intelligence department of the People's 
     Liberation Army and a small group known as the Liaison Office 
     of the General Political Department of the Chinese army, said 
     Mr. Moore, now with the private Centre for 
     Counterintelligence Studies.
       China gleans most of its important information not from 
     spies but from unwitting American visitors to China--from 
     both the U.S. government and the private fector--who are 
     ``serially indiscreet'' in disclosing information sought by 
     Beijing, Mr. Moore said in a recent speech.
       In the past several years, U.S. nuclear laboratory 
     scientists were fooled into providing Chinese scientists with 
     important weapons information during discussions in China 
     through a process of information elicitation--asking 
     questions and seeking help with physics ``problems'' that the 
     Chinese are trying to solve, he said.
       ``The model that China has for its intelligence, in 
     general, is to collect a small amount of information from a 
     large amount of people,'' Mr. Moore said during a conference 
     of security specialists held by the National Security 
     Institute, a Massachusetts-based consulting firm.


                         In the learning phase

       Mr. Szady acknowledges that the FBI is still ``figuring 
     out'' the methods used by the Chinese to acquire intelligence 
     and technology from the United States.
       Since 1985, there have been only six major intelligence 
     defectors from Chna's spy services, and information about 
     Chinese activities and methods is limited, U.S. officials 
     said.
       Recent Chinese spy cases were mired in controversy.
       The case against Katrina Leung, a Los Angeles-based FBI 
     informant who the FBI thinks was a spy for Beijing, ended in 
     the dismissal of charges of taking classified documents from 
     her FBI handler. The Justice Department is appealing the 
     case.
       The case against Los Alamos National Laboratory scientist 
     Wen Ho Lee, who was suspected of supplying classified 
     nuclear-weapons data to China, ended with Mr. Lee pleading 
     guilty to only one count among the 59 filed.
       The FBI has been unable to find out who in the U.S. 
     government supplied China with secrets on every deployed 
     nuclear weapon in the U.S. arsenal, including the W-88, the 
     small warhead used on U.S. submarine-launched nuclear 
     missiles.
       ``I think the problem is huge, and it's something that I 
     think we're just getting our arms around,'' Mr. Szady said of 
     Chinese spying. ``It's been there, and what we're doing is 
     more or less discovering it or figuring it out at this 
     point.''
       Mr. Bereznay said recently that Chinese intelligence 
     activities are a major worry. FBI counterintelligence against 
     the Chinese ``is our main priority,'' he said.
       In some cases, so-called political correctness can 
     interfere with FBI counterspying. For example, Chinese-
     American scientists at U.S. weapons laboratories have accused 
     the FBI of racial profiling.
       But Mr. Szady said that is not the case.
       China uses ethnic Chinese-Americans as a base from which to 
     recruit agents, he said.
       ``They don't consider anyone to be American-Chinese,'' Mr. 
     Szady said. ``They're all considered overseas Chinese.''
       So the answer he gives to those who accuse the FBI of 
     racial profiling is: ``We're not profiling you. The Chinese 
     are, and they're very good at doing that.''


                           Pushing an agenda

       China's government also uses influence operations designed 
     to advance pro-Chinese policies in the United States and to 
     prevent the U.S. government from taking tough action or 
     adopting policies against Beijing's interests, FBI officials 
     said.
       Rudy Guerin, a senior FBI counterintelligence official in 
     charge of China affairs, said the Chinese aggressively 
     exploit their connections to U.S. corporations doing business 
     in China.
       ``They go straight to the companies themselves,'' he said.
       Many U.S. firms doing business in China, including such 
     giants as Coca-Cola, Boeing and General Motors, use their 
     lobbyists on behalf of Beijing.
       ``We see the Chinese going to these companies to ask them 
     to lobby on their behalf on certain issues,'' Mr. Guerin 
     said, ``whether it's most-favored-nation trade status, [World 
     Health Organization], Falun Gong or other matters.''
       The Chinese government also appeals directly to members of 
     Congress and congressional staff.
       U.S. officials revealed that China's embassy in Washington 
     has expanded a special section in charge of running influence 
     operations, primarily targeting Congress. The operation, 
     which includes 26 political officers, is led by Su Ge, a 
     Chinese government official.
       The office frequently sends out e-mail to selected members 
     or staff on Capitol Hill, agitating for or against several 
     issues, often related to Taiwan affairs.
       Nu Qingbao, one of Mr. Su's deputies, has sent several e-
     mai1s to select members and staff warning Congress not to 
     support Taiwan.
       The e-mai1s have angered Republicans who view the influence 
     operations as communist meddling.
       ``The Chinese, like every other intelligence agency or any 
     other government, are very much engaged in trying to 
     influence, both covertly and overtly,'' Mr. Szady said.


                           Taking technology

       The real danger to the United States is the loss of the 
     high-technology edge, which can impair U.S. competitiveness 
     but more importantly can boost China's military.
       Immigration and Customs Enforcement (ICE), a part of the 
     Department of Homeland Security, is concerned because the 
     number of high-profile cases of illegal Chinese technology 
     acquisition is growing.
       ``We see a lot of activity involving China, and I think it 
     would be fair to say the trend is toward an increase,'' said 
     Robert A. Schoch, deputy assistant director in ICE's 
     national security investigations division.
       Mr. Schoch said that one recent case of a South Korean 
     businessman who sought to sell advanced night-vision 
     equipment to China highlights the problem.
       ``We have an awesome responsibility to protect this 
     sensitive technology,'' he said. ``That gives the military 
     such an advantage.''
       ICE agents are trying hard to stop illegal exports to China 
     and several other states, including Iran and Syria, not just 
     by halting individual exports but by shutting down networks 
     of illegal exporters, Mr. Schoch said.
       Another concern is that China is a known arms proliferator, 
     so weapons and related technology that are smuggled there can 
     be sent to other states of concern.
       ``Yes, some of this stuff may go to China, but then it 
     could be diverted to other countries,'' Mr. Schoch said. 
     ``And that is the secondary proliferation. Who knows where it 
     may end up.''
       As with China's military buildup, China's drive for 
     advanced technology with military applications has been 
     underestimated by the U.S. intelligence community.
       A report prepared for the congressional U.S.-China Economic 
     and Security Review Commission found predictions that China 
     was unable to advance technologically were false.
       In fact, the report by former Pentagon official Michael 
     Pillsbury highlights 16 key advances in Chinese technology--
     all with military implications--in the past six months alone.
       The failure to gauge China's development is part of the 
     bias within the U.S. government that calls for playing down 
     the threat from the growing power of China, both militarily 
     and technologically, Mr. Pillsbury stated.
       ``Predictions a decade ago of slow Chinese [science and 
     technology] progress have now proved to be false,'' the 
     report stated.
       Unlike the United States, China does not distinguish 
     between civilian and military development. The same factories 
     in China that make refrigerators also are used to make long-
     range ballistic missiles.
       At a time when U.S. counterintelligence agencies are facing 
     an array of foreign spies, the Chinese are considered the 
     most effective at stealing secrets and know-how.
       ``I think the Chinese have figured it out, as far as being 
     able to collect and advance their political, economic and 
     military interests by theft or whatever you want to call 
     it,'' Mr. Szady said. ``They are way ahead of what the 
     Russians have ever done.''

                          ____________________