America's Future Update on China

Update on Trade with China

A company run by the son of Chinese President Hu Jintao, who is closely tied with the Communist Chinese government and does business with Iran, Cuba and Venezuela, was hired a year ago for $1.9 million to X-ray cargo being loaded onto cruise ships in Los Angeles. The company, Nuctech Inc., was the low bidder. Now critics are suggesting that there were motivations other than monetary. They suggest Nuctech wanted the deal primarily to get its high-tech scanning machines into a major U.S. port. Maybe it even thought it could get access to our Department of Homeland Security's databases.

Rep. Dana Rohrabacher (CA-R) says, it's "the fault of the federal government for not setting standards to prevent us from being dependent on our adversaries to provide equipment used for national security.... What we have here is symptomatic of China trade policy which as a whole has worked against the long-term interests of the United States, both economically and in terms of national security." World Net Daily, 12-14-08

Update on Chinese Spying

A scientist pleaded guilty in U.S. District Court in Norfolk in November to selling U.S. rocket technology to China and bribing Chinese officials to secure a lucrative contract for his high-tech company. Shu, an expert in cryogenics, sold technology to China for the development of hydrogen-propelled rockets. Shu faces up to 10 years on each arms count and five years for the bribery charge, plus fines of up to $2.5 million. Shu is president of AMAC International Inc. of Newport News, VA. He is a naturalized U.S. citizen who was born in Shanghai.

The Chinese government is developing a space launch facility in the southern island province of Hainan that will house liquid-propelled launch vehicles designed to send space stations and satellites into orbit. U.S. officials have warned about Communist China's increased espionage efforts during the last year. Federal authorities in recent years have prosecuted more than a dozen cases of either traditional spying or economic espionage. Associated Press, 11-17-08

Update on Outsourcing Pharmaceuticals

Outsourcing pieces of drug discovery has become a common cost-cutting measure in the biotechnology industry. With research and development costs rising, corporations think that outsourcing makes sense. China has been called a hot spot for outsourcing the early stages of drug development because China has lower costs, lower wages for skilled workers, and a large patient population on which clinical trials can be conducted.

Critics of outsourcing warn that some cost benefits to individual companies would be detrimental to the biotech sector as a whole. They say that Chinese industry standards are not up to Western quality standards in service provided or intellectual property protection. Critics warn about the risk of contamination of products, managing distant relationships, communication delays, and management having to go to China to keep things on track. In moving jobs overseas, we lose the opportunity to employ people trained by our own education system. Also, teaching the Chinese how to do innovative drug discovery and development would create the biggest competitive threat to our current innovative pharma industry. Biotechnology Focus, July 2008