Missile Technology Plant Moved to China

Scott Wheeler ^ | March 4, 2003 | Insight

[gettheUSoutoftheUN]

Missile Technology Plant Moved to China By Scott Wheeler Insight on the News | March 4, 2003

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], Insight has learned.

Indianapolis-based Magnequench Inc. has not yet publically announced the closing of its Valparaiso, Ind., factory, but Insight has confirmed that the company will shut down 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, raising heavy security issues related to the transfer of military technology to the PRC. The factory uses rare earths to produce sintered neodymium-iron-boron permanent magnets that have many industrial applications but are essential to the servos critical to precision-guided munitions. According to documents obtained by Insight, Magnequench UG currently is producing thousands of the rare-earth magnets for "SL Montevideo Tech," a Minnesota-based manufacturer of servos. That company confirmed to Insight that it holds a Department of Defense [DoD] contract to produce the high-tech motors for the precision-guided JDAM.

The Valparaiso-based manufacturer, originally known as UGIMAG, became Magnequench UG when it was acquired by Magnequench Inc. in August 2000. Magnequench Inc. had been purchased in 1995 by a consortium that included the China-based San Huan New Materials and Hi-Tech Co., created and at least partially owned by the Chinese Academy of Sciences in Beijing. Magnequench was a spin-off company of General Motors Corp. [GM], and at the time of the buyout was headquartered in Anderson, Ind.

Clyde South was a negotiator for the United Auto Workers Local 662 representing the workers at Magnequench when the consortium began negotiating to buy the company in 1995. In an interview with Insight, South says that worker concern about PRC influence over the consortium led to an "agreement with GM" that the plant would remain in Anderson for at least 10 years According to South, the buyers made the same agreement with the union, but since he had doubts about their intentions he took his concerns to Washington. Warnings fell on deaf ears. In August 2001, the sixth year of the 10-year agreement, South's distrust was validated when the consortium's managers "told us they intend to close the plant" and eliminate roughly 400 jobs.

The Magnequench plant in Anderson transforms neodymium, iron and boron into powder using a unique patented process that produces the exotic rare-earth magnets. Following the buyout in 1995, the production line at Anderson was "duplicated in China" at a facility built by the PRC company. According to South, after the company "made sure that it worked, they shut down" the Anderson facility. South says he suspects the buyout was about getting the technology, adding, "I believe the Chinese entity wanted to shut the plant down from the beginning. They are rapidly pursuing this technology."

Meanwhile, says the union negotiator, "They told us, 'We are going bankrupt,'" and therefore had to close the Anderson facility. This was not long after the consortium purchased UGIMAG in Valparaiso, according to critics, telling the workers there that they planned to keep the factory running. But, according to some sources, Magnequench Inc. had "refused to buy the buildings or the property" on which the factory was located, "suggesting a temporary arrangement." South said of his experience, "You just couldn't believe anything they told you."

The plant workers at Magnequench UG are organized by the United Steelworkers of America. Insight contacted union official Michael O'Brien, who confirmed negotiations with Magnequench UG regarding the company's future, but declined to comment further.

The transfer to Communist China of technologies that make rare-earth permanent magnets also is a matter of concern for defense and national-security experts, says Peter Leitner, a senior strategic-trade adviser to the DoD. Leitner says 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 tells Insight why the PRC's need for this type of technology is urgent, noting 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."

Since the 1995 buyout of Magnequench by the consortium of two Chinese companies and a cooperating U.S. firm, it has in turn bought at least two more high-tech companies that deal in rare-earth magnets. In addition to UGIMAG in 2000, which became Magnequench UG, it has bought GA Powders, which was a spin-off company of the Idaho National Engineering and Environmental Laboratory, a U.S. national lab. An insider tells Insight that "Magnequench UG is the last American company making these rare-earth magnets. When it moves to China, there are none left." Leitner sees a pattern. He says the Chinese "have targeted the manufacturing process through a variety of suspicious business activities and have been furiously transferring the manufacturing technology to China, thereby becoming the only source. They are purchasing U.S. companies, shutting them down and transferring them to China."

According to Leitner, "The Chinese are clearly trying to monopolize the world supply of rare-earth materials such as neodymium that are essential to the production of the militarily critical magnets that enable precise guidance and control of our most advanced weapons and aircraft." He warns that risks are involved in allowing this kind of technology transfer, adding: "By controlling the access to the magnets and the raw materials they are composed of, U.S. industry in general and the auto industry in particular can be held hostage to PRC blackmail and extortion in an effort to manipulate our foreign and military policy. This highly concentrated control - one country, one government - will be the sole source of something critical to the U.S. military and industrial base."

Intelligence analysts emphasize that the PRC routinely combines espionage operations with business deals. Internal PRC documents refer to this as advancing "economy and i national-defense construction." A 1999 congressional report on PRC espionage states that the Beijing government sees "providing civilian cover for military-industrial companies to acquire dual-use technology through purchase or joint-venture business dealings" as a responsibility of the government. The report lists "rare-earth metals ... for military aircraft and other weapons" as one of the primary targets of the PRC.

So how could this be happening? Because of the PRC's involvement in the 1995 buyout of Magnequench, the deal required the approval of the Committee on Foreign Investments in the United States [CFIUS], which is chaired by the secretary of the Treasury. CFIUS approval of the buyout predated a series of reports by the FBI and congressional committees warning of massive PRC espionage efforts against U.S. businesses and military technology. In one case, which involved the then-struggling McDonnell Douglas Corp., the China National Aero-Technology Import and Export Corp. [CATIC] targeted the U.S. aircraft giant's plant at Columbus, Ohio, according to government sources. Plant 85, as it was known, is where the bodies of the U.S. Air Force C-17 strategic transport plane and the MX intercontinental ballistic missile were made.

In 1994, CATIC made an offer to buy Plant 85 and relocate it to what was to be a civilian aircraft-production facility, according to government documents. The request for an export license for the plant's machine tools touched off a bitter feud among export-control officials at the DoD that still lingers nine years later. Those opposed to the sale argued that once the Plant 85 machine tools were exported to the PRC, they would be used to produce missiles for China's People's Liberation Army [PLA]. Those who favored the sale pointed to the ancillary deal the PRC dangled in front of McDonnell Douglas to purchase more than $1 billion worth of aircraft.

In the end, those in favor of the sale of Plant 85 won out and those opposed almost immediately were vindicated. According to government documents, within months of exporting the plant to China, U.S. officials learned that the sensitive machine tools had been diverted for use in a Chinese factory that makes the Silkworm missile that Beijing has provided to rogue nations. United Auto Workers union official South tells Insight he sees similarities between the cases of McDonnell Douglas and Magnequench, noting that immediately after the consortium's first Magnequench acquisition, "They transferred the patented jet-casting process to China."

In an interview with Insight, Magnequench Inc. President Archibald Cox Jr. initially denied but later confirmed having a contract for the production of rare-earth magnets for the JDAM. When asked about the shutdown of the Anderson plant last year, he acknowledged having a 10-year agreement with GM and the steelworkers, but insists that despite the early termination of that agreement the workers "got a fair deal" when the company bought out their contract. Cox tells Insight the closing of the Valparaiso plant was a matter of economics, and denies that the company is moving equipment to China.

"We are going to sell everything in the plant i unless we can use it somewhere else," says Cox. Insight has obtained evidence that "somewhere else" may mean China. A copy of an internal memo from the Valparaiso plant seems to contradict the "sell or auction" option. A brief memo, dated Jan. 23, states in part, "In the near future you will be seeing people in the plant performing measurements and a variety of estimating and planning activities in preparation for equipment sale and/or removal ... to give the company an idea of cost and logistics." According to eyewitness accounts, all such "people have been from China." Cox also acknowledges that Magnequench Inc. did not purchase the buildings or land where the Valparaiso plant is located, but refuses to characterize reluctance on the company's part: "It just wasn't part of the deal," Cox says.

And, Cox insists, "China is already selling the same products for less money."

A source with detailed and specific information about the internal operations of the company tells Insight that "the company set up their own competitors by transferring the machines and technology to China. Once the Chinese companies bought into Magnequench, they created their own competition."

According to company officials, Mangnequench asked for and received clearance to export equipment it has shipped to the PRC.

Meanwhile, employees of Magnequench UG have placed their hope in an unlikely labor-union ally. The one surefire deterrent to Magnequench UG's move to China would be for President George W. Bush to exercise his authority under the 1988 Exon-Florio amendment to the Defense Production Act and order San Huan New Materials to divest its holdings in this strategic U.S. company. In his State of the Union Address, the president offered a glimmer of hope for Magnequench employees by declaring his administration's intent to "strengthen global treaties banning the production and shipment of missile technologies." If so, say the workers, this may be a very good place to begin the process.

[Enemy Of The State]

.Gee, I just cant imagine how China manages to continually get their hands on all of our high technology.
Capitalism helped make our country great, will it also contribute to our downfall?

If you say no, Just remember that one of the many requirements of China allowing US companies to invest in their markets is that they make technology transfers. Two US companies have already had their export licenses suspended for transferring defense technology to China in contribution to their space program.

Soon there will be no need for China to fight a war with the US, The US will sell itself to China because too many of our Congressmen have Chinese hands in their pockets!! Slick Willy just got caught!!

[Enemy Of The State]

Post Above!

[gettheUSoutoftheUN]

ALEX

[Enemy Of The State]

Correction! They may have their export licenses revoked for transfering technology to China in conjunction with their space program. I believe they were fined though!

[Enemy Of The State]

I have just one word that should frighten everyone NATIONALIZE

[FreeSpeechZone]

High-Tech Transfers To China Continue

Insight Magazine 07/08/02: Zoli Simon

Original Link: http://www.insightmag.com/main.cfm/include/detail/storyid/257504.html

The Bush administration has been "as bad, if not worse" than the Clinton administration when it comes to the transfer of sensitive technologies to the People's Republic of China (PRC), claims Tom Fitton, president of Judicial Watch, a nonpartisan public-interest law firm. Fitton says the Bush administration even has "relaxed the rules put in place during the Clinton years." Specifically, he tells Insight, the administration has allowed the transfer of "computer technology [whose] only practical purpose is for nuclear-weapon design." Fitton says that from the beginning the administration went "full-speed ahead" with China trade and efforts to get the PRC into the World Trade Organization (WTO), which Fitton tells Insight only gives China more opportunities to modernize its military and "get cash" with which to buy high-tech weapons elsewhere.

While few have gone so far as Fitton with such complaints, criticism of U.S. transfers of sensitive technology to China is growing. Accuracy in Media, another Washington watchdog group, echoes Fitton on computer-technology transfers: "President Bush seems to have no clearer vision of what constitutes a strategically sensitive export than did Clinton. For example, Republicans harshly condemned Clinton for exporting high-performance computers to China, but President Bush has more than doubled the control threshold on these computers despite existing intelligence estimates that demonstrate how China's national security benefits from such acquisitions."

Indeed, in his last days as a lame-duck president Clinton made exports of U.S. supercomputers easier by raising the export threshold from 28,000 millions of theoretical operations per second (MTOPS) to 85,000 MTOPS. Bush raised that limit to 190,000 MTOPS. A General Accounting Office (GAO) official tells Insight that the government hadn't done the necessary pre-export analysis and that an "interagency process" led by the Department of Defense should be in place for export controls.

An April 2002 report by the GAO on computer-chip technology transfers to China claims that the government did not do an adequate analysis of the cumulative national-security effects of chip exports to China either, and that most export applications are simply approved. The policy is to approve applications unless it is shown that the items in question "would make a direct and significant contribution to electronic and antisubmarine warfare, intelligence gathering, power projection and air superiority."

Never mind that, as a Pentagon official told the GAO, these chips can be used to improve China's capabilities for pre-emptive long-range precision strikes, information dominance, command and control and integrated air defense.

Another reason the government got a bad grade from GAO was the fact that the Commerce Department hasn't conducted any end-user checks, so it's unknown if the exported technologies are used for military purposes, though experts guess they are.

Richard Fisher, senior fellow with the Jamestown Foundation, tells Insight: "In general, I give the Bush administration great credit for solidifying the U.S. commitment to defend Taiwan, and to begin to increase U.S. defensive deployments to Asia to counter China's military buildup against Taiwan. However, it has yet to begin the logical extension of these policies: seeking to curtail major weapon-systems sales and dual-use technology sales to the PRC. The Bush administration has many officials who are aware of this threat and who are privately very concerned, but policy has yet to be enunciated."

The administration is known to be full of Cold Warriors, and the Pentagon is led by Donald Rumsfeld, the most hawkish secretary of defense since Caspar Weinberger. Yet Undersecretary of Defense for Policy Doug Feith, in his former role as a private-sector attorney, helped move technology transfers as a lawyer for Loral Space & Communications Ltd., one of the two U.S. companies (the other one being Hughes Electronics Corp.) that contributed to the dramatic improvement of Chinese space-launch and satellite capabilities after large contributions to Clinton Democrats. When contacted by Insight, Feith's office would not address the technology-transfer issue.

Fisher, who is editor of the Jamestown Foundation's fortnightly China Brief, also gives credit where one wouldn't expect it. "For all of its actions that aided the transfer of dual-use technologies that helped PLA [People's Liberation Army] modernization, the Clinton administration did endure a political storm to stop Israel's sale of the advanced PHALCON aerial radar to the PLA. The Bush administration has said little to nothing about Israel's more recent sale of communication satellites to the PRC, which definitely will be used by the PLA, or about the much more serious threat of Russian weapons and military-technology sales to the PRC."

And Fisher also is concerned about the "gradual easing of restrictions" on civilian helicopters. He specifically mentioned the Sikorsky S-92, which Sikorsky wants to sell to China and which, Fisher tells Insight, could be mobilized for military purposes. James Lilley, U.S. ambassador to China in the George H.W. Bush administration and currently a senior fellow at the American Enterprise Institute, tells Insight that ever since he got into government there has been a debate going on about where to draw that "blurred line" between civilian-only and dual-use technologies. When Ronald Reagan came into office, "we did relax sales" to arm China against the Soviet Union, Lilley said. Clinton went "much further," however, and "colluded with the Chinese." There was "no real balance or thoughtfulness" to Clinton's approach, Lilley adds. However, there's "no evidence" of a similar lack of balance in the current Bush administration, Lilley tells Insight.

He also says that pressuring Russia to stop arms sales to China wouldn't work and that, since "this administration has not, will not," name China as an enemy, the kind of wholesale blocking of technology transfers that critics want is unrealistic. Lilley adds that trying to rectify Clinton-era mistakes might be like "clos[ing] the barn door after the horse has fled." As Fisher points out, China already is "becoming self-sufficient" in computer technology.

Gary Schmitt, a former Senate Intelligence Committee staffer and executive director of the President's Foreign Intelligence Advisory Board in the Reagan years, tells Insight that while the Bush administration exercises "more care … on a day-to-day level" than the Clinton administration, it's still "on record" supporting the business wing of the GOP on the Export Administration Act (EAA). The original EAA expired in 1994 under the Clinton administration, and was kept alive by executive order. A reauthorization, the Export Administration Act of 2001, has languished in Congress. While the House version of the bill puts more emphasis on national security, the Senate version gives business interests priority, a Capitol Hill source tells Insight. This version would shift the dual-use approval process from the State Department back to the Commerce Department, as in the Clinton days.

As Schmitt, now executive director of the Project for the New American Century, described it, the fight about the EAA has had a small band of Republican senators — including Fred Thompson of Tennessee, Jon Kyl of Arizona, Jesse Helms of North Carolina and Richard Shelby of Alabama — fighting the business wing of the GOP led by Sen. Phil Gramm of Texas. "Most Republicans are as bad as Democrats," Schmitt laments.

The reason the Senate version, pushed by "the embedded bureaucracy" and "business groups," is supported by the Bush administration, the Capitol Hill source tells Insight, is probably that the administration "is not getting both sides of the story." If it had taken a serious look at the issue, its approach might have been different, the source says. After Sept. 11, many on Capitol Hill were hoping that the terrorist attacks would be such a wake-up call that technology transfers would stop. But that remained a vain hope, the source adds.

A Republican national-security analyst with whom Insight spoke insists the Chinese can get cutting-edge military technology, such as information warfare and electromagnetic pulse (EMP) weapons from Russia. This defense analyst expresses concern that China could, using the best of Russian and U.S. technology, one day surpass both the United States and Russia in high-tech weaponry. Finally, he stresses the importance of reclaiming "the moral high ground." As he puts it, "We lost the moral high ground with Clinton" and we can't expect other countries not to proliferate weapons systems and technologies if that's exactly what the United States is doing or allowing to happen.

Peter Huessy from the National Defense University Foundation tells Insight that while the Bush administration has done "a fairly good job" so far on proliferation issues, the most crucial factor at play is time. After "eight years of neglect" by an administration that was concentrating on "spin [and] winning the news cycle," the Bush administration needs time to rectify Clinton-era errors, Huessy says.

As Frank Gaffney, president of the Center for Security Policy, has pointed out: "When American companies pay to launch satellites aboard Chinese rockets, they are directly financing the same entity that builds China's intercontinental ballistic missiles." Huessy tells Insight, however, that the Bush administration already has stopped the U.S. satellite launches in China. This is thanks in large part to a Russian-U.S. joint venture that uses Russian Proton and U.S. Atlas rocket technology to put satellites into orbit.

Henry Sokolski, executive director of the Nonproliferation Policy Education Center (NPEC), has both praise and criticism for the Bush administration concerning technology transfers to China. He says Undersecretary of State for Arms Control John R. Bolton has "made a point of enforcing nonproliferation sanctions" [see picture profile, July 22]. He credits Bolton with putting a stop to U.S. satellite launches in China. However, the Chinese firms sanctioned by the Bush administration for proliferation activities never made the Commerce Department's dual-use watch list of companies with which U.S. businesses should avoid dealing, Sokolski tells Insight. This might not be the result of conscious policy decisions, he adds, but at best it reveals a "lack of due diligence."

A big problem, says Sokolski, is that we not only are transferring militarily useful end-products, but that we also are giving the Chinese "the tools for them to be able to make their own." A GAO official tells Insight that in addition to technology we are transferring know-how to the Chinese. However, he can't comment in detail because the GAO review on this problem still is ongoing.

Sokolski also points out that a major cause of the China export troubles is the fact that U.S. companies dealing in high-tech satellites, computers and telecommunications not only see a market in China, but a cheap manufacturing base. Hughes and Loral, two of the main culprits, wanted U.S. satellites to be made in China, Sokolski says. This was blocked, thanks in part to Sokolski blowing the lid on the matter.

Most defense experts with whom Insight spoke for this special report agree that the Bush administration has been far better on national-security issues than the Clinton administration, even on technology transfers. As Jack Spencer of the Heritage Foundation points out, however, the best guarantee of U.S. security in the long run is "a democratic China." But then, as Sen. Helms used to put it, "We'd have some ham and eggs — if we had some ham and if we had some eggs."

[FreeSpeechZone]

High-Tech Transfers To China Continue

Insight Magazine 07/08/02: Zoli Simon

Original Link: http://www.insightmag.com/main.cfm/include/detail/storyid/257504.html

The Bush administration has been "as bad, if not worse" than the Clinton administration when it comes to the transfer of sensitive technologies to the People's Republic of China (PRC), claims Tom Fitton, president of Judicial Watch, a nonpartisan public-interest law firm. Fitton says the Bush administration even has "relaxed the rules put in place during the Clinton years." Specifically, he tells Insight, the administration has allowed the transfer of "computer technology [whose] only practical purpose is for nuclear-weapon design." Fitton says that from the beginning the administration went "full-speed ahead" with China trade and efforts to get the PRC into the World Trade Organization (WTO), which Fitton tells Insight only gives China more opportunities to modernize its military and "get cash" with which to buy high-tech weapons elsewhere.

While few have gone so far as Fitton with such complaints, criticism of U.S. transfers of sensitive technology to China is growing. Accuracy in Media, another Washington watchdog group, echoes Fitton on computer-technology transfers: "President Bush seems to have no clearer vision of what constitutes a strategically sensitive export than did Clinton. For example, Republicans harshly condemned Clinton for exporting high-performance computers to China, but President Bush has more than doubled the control threshold on these computers despite existing intelligence estimates that demonstrate how China's national security benefits from such acquisitions."

Indeed, in his last days as a lame-duck president Clinton made exports of U.S. supercomputers easier by raising the export threshold from 28,000 millions of theoretical operations per second (MTOPS) to 85,000 MTOPS. Bush raised that limit to 190,000 MTOPS. A General Accounting Office (GAO) official tells Insight that the government hadn't done the necessary pre-export analysis and that an "interagency process" led by the Department of Defense should be in place for export controls.

An April 2002 report by the GAO on computer-chip technology transfers to China claims that the government did not do an adequate analysis of the cumulative national-security effects of chip exports to China either, and that most export applications are simply approved. The policy is to approve applications unless it is shown that the items in question "would make a direct and significant contribution to electronic and antisubmarine warfare, intelligence gathering, power projection and air superiority."

Never mind that, as a Pentagon official told the GAO, these chips can be used to improve China's capabilities for pre-emptive long-range precision strikes, information dominance, command and control and integrated air defense.

Another reason the government got a bad grade from GAO was the fact that the Commerce Department hasn't conducted any end-user checks, so it's unknown if the exported technologies are used for military purposes, though experts guess they are.

Richard Fisher, senior fellow with the Jamestown Foundation, tells Insight: "In general, I give the Bush administration great credit for solidifying the U.S. commitment to defend Taiwan, and to begin to increase U.S. defensive deployments to Asia to counter China's military buildup against Taiwan. However, it has yet to begin the logical extension of these policies: seeking to curtail major weapon-systems sales and dual-use technology sales to the PRC. The Bush administration has many officials who are aware of this threat and who are privately very concerned, but policy has yet to be enunciated."

The administration is known to be full of Cold Warriors, and the Pentagon is led by Donald Rumsfeld, the most hawkish secretary of defense since Caspar Weinberger. Yet Undersecretary of Defense for Policy Doug Feith, in his former role as a private-sector attorney, helped move technology transfers as a lawyer for Loral Space & Communications Ltd., one of the two U.S. companies (the other one being Hughes Electronics Corp.) that contributed to the dramatic improvement of Chinese space-launch and satellite capabilities after large contributions to Clinton Democrats. When contacted by Insight, Feith's office would not address the technology-transfer issue.

Fisher, who is editor of the Jamestown Foundation's fortnightly China Brief, also gives credit where one wouldn't expect it. "For all of its actions that aided the transfer of dual-use technologies that helped PLA [People's Liberation Army] modernization, the Clinton administration did endure a political storm to stop Israel's sale of the advanced PHALCON aerial radar to the PLA. The Bush administration has said little to nothing about Israel's more recent sale of communication satellites to the PRC, which definitely will be used by the PLA, or about the much more serious threat of Russian weapons and military-technology sales to the PRC."

And Fisher also is concerned about the "gradual easing of restrictions" on civilian helicopters. He specifically mentioned the Sikorsky S-92, which Sikorsky wants to sell to China and which, Fisher tells Insight, could be mobilized for military purposes. James Lilley, U.S. ambassador to China in the George H.W. Bush administration and currently a senior fellow at the American Enterprise Institute, tells Insight that ever since he got into government there has been a debate going on about where to draw that "blurred line" between civilian-only and dual-use technologies. When Ronald Reagan came into office, "we did relax sales" to arm China against the Soviet Union, Lilley said. Clinton went "much further," however, and "colluded with the Chinese." There was "no real balance or thoughtfulness" to Clinton's approach, Lilley adds. However, there's "no evidence" of a similar lack of balance in the current Bush administration, Lilley tells Insight.

He also says that pressuring Russia to stop arms sales to China wouldn't work and that, since "this administration has not, will not," name China as an enemy, the kind of wholesale blocking of technology transfers that critics want is unrealistic. Lilley adds that trying to rectify Clinton-era mistakes might be like "clos[ing] the barn door after the horse has fled." As Fisher points out, China already is "becoming self-sufficient" in computer technology.

Gary Schmitt, a former Senate Intelligence Committee staffer and executive director of the President's Foreign Intelligence Advisory Board in the Reagan years, tells Insight that while the Bush administration exercises "more care … on a day-to-day level" than the Clinton administration, it's still "on record" supporting the business wing of the GOP on the Export Administration Act (EAA). The original EAA expired in 1994 under the Clinton administration, and was kept alive by executive order. A reauthorization, the Export Administration Act of 2001, has languished in Congress. While the House version of the bill puts more emphasis on national security, the Senate version gives business interests priority, a Capitol Hill source tells Insight. This version would shift the dual-use approval process from the State Department back to the Commerce Department, as in the Clinton days.

As Schmitt, now executive director of the Project for the New American Century, described it, the fight about the EAA has had a small band of Republican senators — including Fred Thompson of Tennessee, Jon Kyl of Arizona, Jesse Helms of North Carolina and Richard Shelby of Alabama — fighting the business wing of the GOP led by Sen. Phil Gramm of Texas. "Most Republicans are as bad as Democrats," Schmitt laments.

The reason the Senate version, pushed by "the embedded bureaucracy" and "business groups," is supported by the Bush administration, the Capitol Hill source tells Insight, is probably that the administration "is not getting both sides of the story." If it had taken a serious look at the issue, its approach might have been different, the source says. After Sept. 11, many on Capitol Hill were hoping that the terrorist attacks would be such a wake-up call that technology transfers would stop. But that remained a vain hope, the source adds.

A Republican national-security analyst with whom Insight spoke insists the Chinese can get cutting-edge military technology, such as information warfare and electromagnetic pulse (EMP) weapons from Russia. This defense analyst expresses concern that China could, using the best of Russian and U.S. technology, one day surpass both the United States and Russia in high-tech weaponry. Finally, he stresses the importance of reclaiming "the moral high ground." As he puts it, "We lost the moral high ground with Clinton" and we can't expect other countries not to proliferate weapons systems and technologies if that's exactly what the United States is doing or allowing to happen.

Peter Huessy from the National Defense University Foundation tells Insight that while the Bush administration has done "a fairly good job" so far on proliferation issues, the most crucial factor at play is time. After "eight years of neglect" by an administration that was concentrating on "spin [and] winning the news cycle," the Bush administration needs time to rectify Clinton-era errors, Huessy says.

As Frank Gaffney, president of the Center for Security Policy, has pointed out: "When American companies pay to launch satellites aboard Chinese rockets, they are directly financing the same entity that builds China's intercontinental ballistic missiles." Huessy tells Insight, however, that the Bush administration already has stopped the U.S. satellite launches in China. This is thanks in large part to a Russian-U.S. joint venture that uses Russian Proton and U.S. Atlas rocket technology to put satellites into orbit.

Henry Sokolski, executive director of the Nonproliferation Policy Education Center (NPEC), has both praise and criticism for the Bush administration concerning technology transfers to China. He says Undersecretary of State for Arms Control John R. Bolton has "made a point of enforcing nonproliferation sanctions" [see picture profile, July 22]. He credits Bolton with putting a stop to U.S. satellite launches in China. However, the Chinese firms sanctioned by the Bush administration for proliferation activities never made the Commerce Department's dual-use watch list of companies with which U.S. businesses should avoid dealing, Sokolski tells Insight. This might not be the result of conscious policy decisions, he adds, but at best it reveals a "lack of due diligence."

A big problem, says Sokolski, is that we not only are transferring militarily useful end-products, but that we also are giving the Chinese "the tools for them to be able to make their own." A GAO official tells Insight that in addition to technology we are transferring know-how to the Chinese. However, he can't comment in detail because the GAO review on this problem still is ongoing.

Sokolski also points out that a major cause of the China export troubles is the fact that U.S. companies dealing in high-tech satellites, computers and telecommunications not only see a market in China, but a cheap manufacturing base. Hughes and Loral, two of the main culprits, wanted U.S. satellites to be made in China, Sokolski says. This was blocked, thanks in part to Sokolski blowing the lid on the matter.

Most defense experts with whom Insight spoke for this special report agree that the Bush administration has been far better on national-security issues than the Clinton administration, even on technology transfers. As Jack Spencer of the Heritage Foundation points out, however, the best guarantee of U.S. security in the long run is "a democratic China." But then, as Sen. Helms used to put it, "We'd have some ham and eggs — if we had some ham and if we had some eggs."

[MissAmericanPie]

Another benefit of "free trade" and "foreign ownership"? Who is the major stock holder in the company?

[FreeSpeechZone]

Navy seeks cash for more Tomahawks
By David Rennie in Washington
(Filed: 01/04/2003)


Naval chiefs in America are pleading for emergency funds to build extra Tomahawk cruise missiles after exhausting a third of global stocks in less than a fortnight, it was reported yesterday.

In the two weeks since the air strikes began, some 700 Tomahawks have been fired from vessels in the Mediterranean, Red Sea and Persian Gulf, Pentagon sources told CNN.

That leaves just 1,400 Tomahawks in US arsenals worldwide - many of which must be reserved to cover potential emergencies in Korea and elsewhere.

The navy is seeking urgent supplementary funding to increase production. The missiles, which are built in Arizona at a cost of about £400,000 each, have become a mainstay of American and British naval arsenals.

They first proved their worth in the 1991 Gulf war, and have since become the weapon of choice for US commanders and political leaders wanting to strike targets 1,000 miles away, without risking a pilot's life.

The low-flying missiles are designed to fly close to the ground, guiding themselves to their targets at about 550 mph.

The CNN report said it would take "months" to get arsenals back to full strength.

[FreeSpeechZone]

Who is the major stock holder in America

CHINA

[rightofrush]

This can only mean one thing: GW = Clinton = The sell-out continues.

[CaptIsaacDavis]

Only Libertarians excuse treason with the phrase:"taxes made me do it."

Taxes had absolutely nothing to do with this. The Chinese MIC saw an opportunity and stepped in to acquire Magnequench in 1995, and immediately created a separate operation based on the technology -- state subsidized competition. The company would likely be profitable -- as the SOLE monopoly provider in this niche, were it not for cheap knock-offs coming from China (directly subsidized by the state). They could have cared less what the taxes are in the US. The Chinese government sought a monopoly of the industry, and deliberately acquired businesses with an agenda to drive them to move to China. I have seen this exact same process done in a number of other industry niches over the years.

[rightofrush]

This is happening because the liberals have taxed and regulated them out of business.

Did gettheUSoutoftheUN's #5 slide right past your conscienceousness?

[CyberAnt]

I love challenging you people - you always come up with the real truth about a situation - glad to see you have not failed again to bring reality to the forefront!!

[rightofrush]

The New World Order is so simple, it makes me sick. Why FReepers can figure this out, but our 'leaders' can't is beyond me. Maybe they know all to well what is going on, and feel free to let it happen...

Bingo!

...or maybe, "But I was just following orders."

[Poohbah]

the plant makes the magnets NEEDED for our JDAMS and some auto electronics? last of 3 domestic producers of such magnets?

Go back and reread the article C-A-R-E-F-U-L-L-Y.

It doesn't tie the plant's output to the JDAM program, it just does a wink-and-nudge and lets the reader jump to the conclusion.

[Non-Sequitur]

This has X42's fingerprints all over it

Or Richard Pearle, one of the two.

[Ahban]

outrage bump

[sit-rep]

Now, I say something is REALLY wrong with Bush. If he allows this to happen, My support will go ONLY to the troops...

[FreedomPoster]

Index bump