PRC Acquisition of U.S. Technology
In this connection, since the 1980s significant portions of the PRC military industry have diversified into civilian production. The production of profit-producing civilian goods helps keep the PRC military-industrial companies financially stable. The majority of them have operated "in the red" for years, bolstered only by extremely generous and forgiving loan arrangements from the PRCs central banks.21
The blurred lines between military and commercial technology that are the hallmarks of the 16-Character Policy have also created some problems for the PRC. An official in the State Planning Commission criticized the 16-Character Policy for an insufficient focus on the most advanced military technologies, particularly in aerospace, aviation, nuclear power, and ship-building. At the same time, the official acknowledged, military industries have been reluctant to share economically valuable technologies with civilian enterprises.22
Pursuant to the 16-Character Policy, the PRCs emphasis on the acquisition and development of military technology is closely related to its interest in science and technology for economic development. At times this has been reflected in tension between modernizing the PLA and developing the economy. The PRCs approach to resolving this conflict has been to seek "comprehensive national power," in which high-technology industries, economic growth, and military modernization are all interrelated.23
Despite the PRCs public claims, it is estimated that their actual military spending is four to seven times greater than official figures. During the 1990s, no other part of the PRCs budget has increased at the rate of military spending. A large portion of this budget is devoted to military research.24
The success achieved by the United States through the use of high-technology weapons in the 1990 Gulf War led PLA leaders to call for a reemphasis on military development. PLA leaders began to call for military preparedness to fight "limited war under high-tech conditions."24
The PLAs call for more attention to military aims appears to have had some impact. In a 1996 speech, Li Peng, second-ranking member of the CCP Politburo and Chairman of the National Peoples Congress,25 said:
We should attach great importance to strengthening the army through technology, enhance research in defense-related science, . . . give priority to developing arms needed for defense under high-tech conditions, and lay stress on developing new types of weapons. 26
Communist Party Secretary Jiang Zemin, in March 1997, publicly called for an "extensive, thoroughgoing and sustained upsurge" in the PLAs acquisition of high technology.27 The PRCs 1998 Defense White Paper pointedly stated that "no effort will be spared to improve the modernization level of weaponry."28
The modernization of the PLA has placed priority on the development of:
- Battlefield communications
- Space-based weapons
- Mobile nuclear weapons
- Attack submarines
- Fighter aircraft
- Precision-guided weapons
- Training rapid-reaction ground forces
These actions, supported by the PRCs overall economic growth, will improve the PLAs military capabilities in ways that enable the PRC to broaden its geographic focus. At the same time, the PRC has shifted its military strategy towards rapid-reaction mobility and regional, versus global, armed conflict. Under this framework, the PRCs avowed military strategy is one of "active defense," a capability for power projection to defend the PRCs territorial ambitions, which extend not only to Taiwan, but also the Senkaku Islands in the East China Sea, and the Spratly and Parcel Islands in the South China Sea.
The PRCs Use of Intelligence Services To Acquire U.S. Military Technology
The primary professional PRC intelligence services involved in technology acquisition are the Ministry of State Security (MSS) and the PLA General Staffs Military Intelligence Department (MID).
In addition to and separate from these services, the PRC maintains a growing non-professional technology-collection effort by other PRC Government-controlled interests, such as research institutes and PRC military-industrial companies. Many of the most egregious losses of U.S. technology have resulted not from professional operations under the control or direction of the MSS or MID, but as part of commercial, scientific, and academic interactions between the United States and the PRC.
Professional intelligence agents from the MSS and MID account for a relatively small share of the PRCs foreign science and technology collection. The bulk of such information is gathered by various non-professionals, including PRC students, scientists, researchers, and other visitors to the West. These individuals sometimes are working at the behest of the MSS or MID, but often represent other PRC-controlled research organizations - scientific bureaus, commissions, research institutes, and enterprises.
Those unfamiliar with the PRCs intelligence practices often conclude that, because intelligence services conduct clandestine operations, all clandestine operations are directed by intelligence agencies. In the case of the PRC, this is not always the rule. Much of the PRCs intelligence collection is independent of MSS direction. For example, a government scientific institute may work on its own to acquire information.
The MSS is headed by Minister Xu Yongyue, a member of the CCP Central Committee. The MSS reports to Premier Zhu Rongji and the State Council, and its activities are ultimately overseen by the CCP Political Science and Law Commission. It is not unusual for senior members of the CCPs top leadership to be interested in the planning of PRC military acquisitions.
The MSS conducts science and technology collection as part of the PRCs overall efforts in this area. These MSS efforts most often support the goals of specific PRC technology acquisition programs, but the MSS will take advantage of any opportunity to acquire military technology that presents itself.
The MSS relies on a network of non-professional individuals and organizations acting outside the direct control of the intelligence services, including scientific delegations and PRC nationals working abroad, to collect the vast majority of the information it seeks.
The PLAs Military Intelligence Department (MID), also known as the Second Department of the PLA General Staff, is responsible for military intelligence. It is currently run by PLA General Ji Shengde, the son of a former PRC Foreign Minister. One of the MIDs substantial roles is military-related science and technology collection.
Methods Used by the PRC To Acquire Advanced U.S. Military Technology
The PRC uses a variety of approaches to acquire military technology. These include:
- Relying on "princelings" who exploit their military, commercial, and political connections with high-ranking CCP and PLA leaders, to buy military technology from abroad
- Illegally transferring U.S. military technology from third countries
- Applying pressure on U.S. commercial companies to transfer licensable technology illegally in joint ventures
- Exploiting dual-use products and services for military advantage in unforeseen ways
- Illegally diverting licensable dual-use technology to military purposes
- Using front companies to illegally acquire technology
- Using commercial enterprises and other organizations as cover for technology acquisition
- Acquiring interests in U.S. technology companies
- Covertly conducting espionage by personnel from government ministries, commissions, institutes, and military industries independently of the PRC intelligence services
The last is thought to be the major method of PRC intelligence activity in the United States.
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