The China Chronicles

U.S. Secretary of Commerce Donald Evans went to Beijing in October to criticize Communist China's trade policies. He chided the Chinese for failing to live up to their market-opening commitments made in December 2001 when China joined the World Trade Organization (WTO). "Time is running out," Evans said. "We need to see results. . . . We have been patient, but our patience is wearing thin."

American manufacturers are complaining that China keeps its exports to the United States low-priced, and its imports from the U.S. high-priced, by artificially undervaluing Chinese currency up to 40%. China's excuse for this currency manipulation is that its banks have too many bad loans to allow money to move freely.

Bush officials are demanding that China clamp down on counterfeiting and piracy of American films, software and other U.S. products. The Bush Administration is pressing for greater access to Chinese markets for U.S. companies and an end to subsidies for unprofitable state-owned companies.

U.S. manufacturers are upset about the "rampant piracy of intellectual property, forced transfer of technology from firms launching joint ventures in China, trade barriers and capital markets that are largely insulated from free-market pressures." Secretary Evans told how the Chinese steal Wrigley's copyrights. China sells pirated chewing gum, copies the design of the Wrigley distribution trucks and drives them over the very same routes.

Some of Communist China's behavior is much more dangerous than refusing to buy our chewing gum. The Commerce Department says that Chinese companies refuse to cooperate in allowing checks on whether American dual-use goods sold to Beijing are diverted to military purposes. Under Secretary Kenneth R. Jester said that we conduct such "end-use" verification visits without any difficulties in over 85 countries, but China restricts our ability to carry out this routine activity. Last year, China bought $2.8 billion worth of goods that have both civilian and military applications, up from $515 million in 2001.

It's no secret that China wants America's sensitive defense technology, cutting-edge computer software, and scientific research of all kinds. The FBI reported in August that China has more than 3,000 "front" companies in the United States whose real purpose is to use thousands of Chinese business and student visitors to carry out espionage tasks for the Chinese government.

The FBI ranks Communist China as the greatest espionage threat to the United States over the next 10 to 15 years. Director Robert Mueller told Congress that this situation can "greatly undermine U.S. national security and U.S. military and economic advantage."

China says it plans to buy more goods from the United States. When Evans was in Beijing, China made a big deal out of the ceremonial signing of contracts to buy $100 million worth of U.S. rail equipment, but that will remedy less than one percent of our trade deficit with China, now running at over $120 billion a year.

Update on National Security

A Chinese F-8 fighter pilot was to blame for a controversial April 2001 mid-air collision with a U.S. Navy surveillance aircraft over the South China Sea, according to an official report obtained exclusively by Jane's Defence Weekly under the U.S. Freedom of Information Act (FOIA). The U.S. plane did not commit any dangerous maneuvers, did not cause the collision, and was not negligent.

China detained the 24-person U.S. aircrew for 11 days, only releasing them after Washington issued the formal apology demanded by China. The aircraft was returned to the U.S. in a disassembled state after three months in Chinese custody. The plane's mission and much of its equipment were classified.

It took the Navy nearly two years to respond to the FOIA request for a copy of the Judge Advocate General Manual investigation of the collision. The collision and subsequent Chinese pilot's death appear to have brought China significant benefits in terms of access to highly sensitive and classified U.S. equipment and information.

The crew destroyed some classified material in flight by throwing it out of the plane and by smashing equipment with the onboard axe, plus some hand-shredding. However, "compromise by the People's Republic of China of undestroyed classified material on PR-2 is highly probable and cannot be ruled out," according to the report. www.janes.com, 9-15-03

Update on Human Rights

China is calling for a renewed "fight until the end"against the banned Falun Gong spiritual movement, which has attracted millions of followers with a mix of calisthenics and doctrines drawn from Buddhism, Taoism and the ideas of its founder Li Hongzhi, a former government clerk. China banned it in 1999, calling it an "evil cult," and has since arrested thousands of followers. Critics say many have been tortured and even murdered. Associated Press, 9-8-03

U.S. Rep. Los-Lehtinen introduced H.Con.Res. 304 calling on the Chinese government to end its brutal persecution of Falun Gong in China and to stop all activities against Falun Gong practitioners inside the United States. It also calls on the U.S. Attorney General to investigate incidents of harassment and violence in the U.S., and calls on local government bodies to report illegal acts. www.faluninfo.net, 10-30-03

Mary Kay Corp.'s operations in China have been pressured by Chinese authorities to force employees and sales consultants to sign a statement guaranteeing they will neither practice nor advocate for Falun Gong. Mary Kay Corp., which employs more than 120,000 women in China, is being forced to choose between its business and becoming an accomplice to Jiang Zemin's regime of persecution. www.faluninfo.net, 10-17-03

Update on Space Plans

China is estimated to spend $45 to $65 billion annually on its military. China can easily afford this because of its $100+ billion trade surplus with the United States. A new report by the Secretary of Defense to Congress shows how this money is being spent.

China has 450 short-range ballistic missiles already deployed and is adding about 75 more each year, all believed to be targeted at Taiwan. China is replacing all 20 of its intercontinental ballistic missiles (capable of reaching the U.S.) with even longer-range versions. China is also working on a submarine-launched ballistic missile.

China is developing anti-access, the ability to prevent U.S. vessels' access to certain areas and to prevent U.S. planes' access to certain airspace. China's first two Sovremennyy-class guided missile destroyers from Russia have been integrated into China's fleet, and two more are on order from Russia.

China stresses computer and network warfare. China places an "unusual emphasis on a host of new information warfare forces" instead of on "information superiority" and other approaches used in the U.S.

China has an aggressive space program that experts say could challenge the U.S. in space exploration within a decade, including a physical presence on the moon and strategic positioning. FoxNews.com, 9-10-03