Chinagate all over again: the disastrous transfers of military technology to Communist China continue apace, much as they did under Clinton. (Cover Story: Business).

One of the flagrant offenses of the Clinton administration's treasonous rampage known as "Chinagate" involved the sale of McDonnell-Douglas Plant 85 in Columbus, Ohio, to Communist China. In addition to the 1,000 American workers who lost their jobs at the plant, the U.S. suffered a major blow to national security and military capability. In late 1994, Chinese workers dismantled the entire plant's production machinery and hauled it away in an enormous convoy of over 275 semi trucks. The hi-tech booty was trucked to Long Beach, California, loaded on China's COSCO ships, and taken to China.

Later, this incident became a major cause celebre for Republican critics of the Clinton administration's many Chinagate scandals that involved transferring critical military technology to Beijing--in exchange for massive, illegal campaign contributions. Clinton critics pointed out that China had been keenly interested in obtaining the plant because of its very sophisticated computer-controlled, five-axis profiling machines, which would allow China to greatly enhance their ability to produce ultra-modern warplanes and missiles. Pentagon security analysts had attempted to block the sale due to these considerations. But the Clinton White House and Commerce Department overrode these objections, claiming the machinery was being sold to China for non-military purposes. Soon it was discovered (surprise, surprise!) that some of the McDonnell-Douglas machines had been diverted to a People's Liberation Army (PLA) company--Nanchang Aircraft Co.--to manufacture Silkworm cruise missiles.

Similar Chinagate scandals erupted, revealing transfers of restricted military-use technologies to China by Clinton corporate cronies, such as Loral, Hughes Electronics Corp., and Boeing Satellite Systems. Another heated battle arose over Clinton's efforts to lease important piers at the Port of Long Beach (California), including the former Long Beach Naval Station, to the China Ocean Shipping Company (COSCO), a branch of the PLA and a critical component of Red China's global military plans.

Where are the Chinagate critics now? Many of the Republican members of Congress who screamed so loudly about selling out U.S. technology to dangerous enemies in Beijing seem to be suffering from laryngitis. Why? The flow of critical technology they decried during Clinton's tenure may actually be accelerating under President Bush.

Bush's Chinagate Replay

Consider the recent sale to Communist China of a key General Motors Corp. (GM) defense plant in Valparaiso, Indiana. "An important U.S. high-tech manufacturer is shutting down its American operations, laying off hundreds of workers and moving sophisticated equipment now being used to make critical parts for smart bombs to the People's Republic of China (PRC)," wrote Scott L. Wheeler of Insight magazine, in a January 31st article that broke the story.

The plant in question is a factory owned by GM subsidiary Magnequench Inc., which uses rare-earth elements to produce powerful hi-tech magnets with important military applications. Insight reports that the company plans to shut down the factory "this year and relocate at least some of its high-tech machine tools to Tianjin, China. Word of the shutdown comes as the company is producing critical parts for the U.S. Joint Direct Attack Munition (JDAM) project, more widely known as smart bombs."

Insight interviewed Dr. Peter Leitner, a senior strategic-trade adviser to the Department of Defense, concerning the implications of this pending transfer. As a key figure at the Pentagon's Defense Technology Security Administration, Dr. Leitner played an important role in exposing the Clinton Chinagate scandals. In the Insight interview, he noted that rare-earth magnets "lie at the heart of many of our most advanced weapons systems, particularly rockets, missiles and precision-guided weapons such as smart bombs and cruise missiles." He also pointed out that "China has an ongoing high-priority effort to produce a long-range cruise missile. They are trying to replicate the capabilities the U.S. has, such as with the Tomahawk (cruise missile], as part of their power projection, and expanding their ability to strike targets at long distances."

Unless the public applies significant pressure on President Bush and Congress to nix this deal, China will end up gaining yet another "great leap forward"--courtesy of American know-how. Why is this happening? It is happening because President Bush is pushing forward the same pro-Beijing policies of his predecessors, Republican and Democrat, going back to the Nixon-Kissinger era. Despite constant White House rhetoric about stopping the transfers and proliferation of weapons technology, things may be as bad as (or worse than) ever under Team Bush.

On November 7, 2001, several weeks after the 9-11 terrorist attacks, Dr. Gary Milhollin, professor emeritus at the University of Wisconsin Law School, testified before the U.S. Senate Subcommittee on International Security, Proliferation and Federal Services. According to Professor Milhollin:

American export controls are now weaker than ever before in our history. Today's export controls are but a shadow of what they were in the 1980's, when Saddam Hussein was building his mass destruction war machine and we were still in the cold war. Since 1988, applications to the Commerce Department have dropped by roughly 90%. Cases have fallen from nearly 100,000 in 1989 to roughly 10,000 in fiscal year 2000. The reason is simple: fewer items are controlled, so fewer applications are required. When applications do come in, they are almost always approved. In fiscal year 2000. only 398 applications were denied--about four percent of the total received. Perhaps we could put up with this system in a time of peace, but we now know that there are terrorist organizations willing to do us harm, and that weapons of mass destruction in their hands would threaten our way of life.

"There is little doubt," says Dr. Milbollin, "that the present system allows American exports to endanger our security." He cited as a recent example American transfers to Huawei Technologies, the Chinese company caught helping Iraq improve its air defenses by outfitting them with fiber optic equipment.

"The history of Huawei shows how American exports to China can wind up threatening our own armed forces," Milhollin testified. "At about the time when this company's help to Iraq was revealed," he pointed out, "Motorola had an export license application pending for permission to teach Huawei how to build high-speed switching and routing equipment--ideal for an air defense network. The equipment allows communications to be shuttled quickly across multiple transmission lines, increasing efficiency and reducing the risk from air attack."

Dr. Milhollin noted that other American firms have also transferred technology to Huawei through joint operations. For instance:

* Lucent Technologies has set up a new joint research laboratory with Huawei "as a window for technical exchange" in microelectronics.

* AT&T signed a series of contracts to "optimize" Huawei's products so that, according to a Huawei vice president, Hunwei can "become a serious global player."

* IBM agreed to sell Huawei switches, chips, and processing technology.

Milhollin quoted a Huawei spokesman as saying that "collaborating with IBM will enable Huawei to ... quickly deliver high-end telecommunications to our customers across the world." Customers like Saddam Hussein!

This assistance from American hitech firms has been crucial to China's military modernization program. "As a result of deals like these," Dr. Milhollin noted, "Huawei's sales rocketed to $1.5 billion in 1999, to $2.65 billion in 2000, and are projected to reach $5 billion in 2001. These are extraordinary heights for a company that began in 1988 as a $1,000 start-up. Real growth did not begin until the mid- 1990s, when American help started rolling in. Texas Instruments started its assistance in 1994, and by 1997 had set up laboratories to help Huawei train engineers and develop digital signal processing technologies.... These exports no doubt make money for American companies, but they also threaten the lives of American pilots."

These exports, of course, threaten far more than American pilots. Over the past decade, while we have showered Beijing with technological assistance, the PRC has been flexing its growing military muscle and more openly displaying its belligerence. Despite Jiang Zemin and company's toothy smiles, the PRC's Communist government continues to refer to the U.S. in its public and military indoctrination as "Number One Enemy." In 1995, a top PLA strategist threatened using nuclear weapons to vaporize Los Angeles if the U.S. interfered in a Red Chinese attack on Taiwan. In 1999, the PLA published Unrestricted Warfare, considered one of the PRC's seminal books on military doctrine, by Senior Colonels Qiao Liang and Wang Xiangsui. The book makes very clear that the U.S. and the West are Beijing's enemies. Last year that opus' two authors wrote an article explaining the long-term, patient strategy behind Red China's dealings with the West. "Forbearance is the mark of great virtue," the colonels noted. "Such is the goal of Chinese statecraft."