What is China Planning for the U.S.?

By in large Americans remain blind to the Chinese threat. While the CHICOM military ratchets up rhetoric about how to beat the U.S., paints U.S. Satellites with lasers, and launches and armed sub to stalk the U.S. Fleet, American remains on a honeymoon cloud, sipping on the sweet wine of economic benefit. Blinded by financial gain, we appear to be so financially intoxicated that the CHICOMS growing threat to our National Security has become an after thought. What is China planning for the U.S.?

Asia Times














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A noted Chinese theorist on modern warfare, Chang Mengxiong, compared China's form of fighting to "a Chinese boxer with a keen knowledge of vital body points who can bring an opponent to his knees with a minimum of movements". It is like key acupuncture points in ancient Chinese medicine. Puncture one vital point and the whole anatomy is affected. If America ever goes to war with China, say, over Taiwan, then America should be prepared for the following "acupuncture points" in its anatomy to be "punctured". Each of the vital points can bring America to its knees with a minimum of effort.

I Electro-magnetic Pulse (EMP) attack
An EMP attack will damage all electrical grids on the US mainland. It will disable computers and other similar electronic devices with microchips. Most businesses and industries will shut down. The entire US economy will practically grind to a halt. Satellites within line of sight of the EMP burst will also be damaged, adversely affecting military command, control, communications, computers, intelligence, surveillance and reconnaissance (C4ISR).

2 Cyber attack
China's new concept of a "people's war" includes IT warriors coming, not only from its military more than 2-million strong, but from the general citizenry of some 1.3 billion people. If we add the hackers and information warriors from Russia, Iran, North Korea, Venezuela, Cuba, Syria and other countries sympathetic to China, the cyber attack on the US would be formidable indeed. So, if a major conflict erupts between China and America, more than a few dozen laptops will be engaged to hack America's military establishment; banking system; stock exchange; defense industries; telecommunication system; power grids; water system; oil and gas pipeline system; air traffic and train traffic control systems; C4ISR system, ballistic missile system, and other systems that prop up the American way of life.

3 Interdiction of US foreign oil supply
A single blow from Iran or China or Russia, or a combination of the three at the Strait of Hormuz can paralyze America. In addition, Chinese and Russian submarines can stop the flow of oil to the US and Japan by interdicting oil tanker traffic coming from the Middle East, Africa and Latin America. On the other hand, US naval supremacy will have minimal effect on China's oil supply because it is already connected to Kazakhstan with a pipeline and will soon be connected to Russia and Iran as well. One wonders: what will be the price of oil if Iran blocks the Strait of Hormuz. It will surely drive oil prices sky high. Prolonged high oil prices can, in turn, trigger inflation in the US and a sharp decline of the dollar, possibly even a dollar free-fall. The collapse of the dollar will have a serious impact on the entire US economy.

4 Attack on the US dollar
China is now the biggest holder of foreign exchange reserves in the world, accumulating $941 billion as of June 30 and expected to exceed a trillion dollars by the end of 2006 - a first in world history. A decision by China to shift a major portion of its reserve to the euro or the yen or gold could trigger other central banks to follow suit. Nobody would want to be left behind holding a bag full of dollars rapidly turning worthless. The herd psychology would be very difficult to control in this case because national economic survival would be at stake.

5 Diplomatic isolation
The US-led war in Iraq was a tactical victory for the US initially, but has resulted in strategic defeat overall. The Iraq war caused the US to lose its principal allies in Europe and be isolated, despised and hated in many parts of the world. Without too many friends and allies, the US is likened to an "emperor with no clothes". So in a major conflict between America and China, isolated America cannot possibly win against a global united front led by China and Russia.

Chinese Front Companies In The U.S.? A second try!

Seems my last post was damaged/hacked. Over half of the articles I posted disappeared after they were posted. We'll try this again, but so you that you now, the articles I post/refer to here are not my words, but simply excerpts from the original documents. I do appreciate when a reader identifies updates or changes to stories that I've posted. Similarly, if you have an issue as to the truthfulness of the article, please address it with the media outlet that published it. As a general rule, Cover For Action, assumes most popular media outlets are acceptable and accurate providers of news.

WASHINGTON TIMES:
U.S. government investigators say the number of cases involving China and its middlemen who have illegally obtained sensitive or classified U.S. weapons technology is growing. In the past few years, Chinese agents illegally purchased or were caught trying to steal night-vision technology, restricted electronic components, embargoed components for precision-guided missiles, radar and electronic warfare, and communications systems, according to Immigration and Customs Enforcement (ICE) officials.

China also sought to purchase encryption devices that are embargoed for export and computer software used in missile development, ICE officials said. In one recent case, China tried to purchase parts for F-4 and F-5 jets and Hawk missiles from U.S. suppliers that were intended for reshipment to Iran. Officials said one of the most damaging illegal technology exports to China took place in the late 1990s. In that case, China secretly obtained technology related to the Aegis battle management system, used in the most modern U.S. warships. A Chinese front company won a contract from the system manufacturer and then stole details about Aegis, according to FBI counterintelligence officials.

QUESTIA

In one case sketched out by Waultney's boss, John Hensley, before a Senate hearing in July 1997, a Chinese front company managed to purchase 37 guidance kits for F-117A stealth fighters from a Defense Department depot and ship them to China as "scrap."

In another case, brokers working for the Communist Chinese government snatched up an astonishing 26,000 fully operational encryption devices, including computer disk drives loaded up with top-secret technical documents all considered U.S.-government scrap.

A high concentration of Chinese-government front companies continues to operate out of El Monte, a modest working-class suburb located some 10 miles due east of downtown Los Angeles.

Primary among them is the China National Aero Technology Import Export Co., or CATIC. Back in China, CATIC owns factories that develop fighter aircraft and remotely piloted vehicles and contributes to cruise-missile development. In El Monte, CATIC buys paper pulp to be shipped to China for recycling and imports bicycles, electrical parts and hardware for sale in the United States. But it also purchases aerospace systems, which it ships back to China clandestinely for use in military projects.

CATIC is not the only mainland-Chinese company operating in the El Monte area. In one six-floor office building just around the corner at 9300 Flair Dr., no fewer than 150 Chinese trading companies have set up shop, although most of them appear to be little more than mailbox entities. Down in the lobby, which houses a bank and a California state health center, only a half-dozen companies are listed as having offices on the sixth floor of the handsome, black-glass office complex overlooking the freeway. But a quick trip up the elevator to the sixth floor reveals that more than 40 companies actually have hung name plates on the doors -- all of them Chinese.

According to David Su, an attorney who has incorporated dozens of these companies, "there are a few thousand Chinese companies in the Los Angeles area. Most of them were set up by individuals with management positions back in China and are controlled by Chinese state-owned companies." Su acknowledged that many of the companies listing his office suite as their address had no visible operations. Su said that in many cases he had not seen the owners since they filed the initial incorporation papers and returned to China. Although Su wouldn't comment on why they had established the companies in the first place, mailbox companies frequently are used as fronts for illicit business by money-launderers, high-tech bandits and arms dealers -- or more mundanely, by individuals keen on disguising the origins of their wealth.

Communist Chinese Procurement Activities in the United StatesTestimony by Kenneth R. Timmermanbefore the U.S. -China Commission

I have been investigating Chinese high-technology procurement efforts in the United States since I was a Congressional staffer for Rep. Tom Lantos (D, CA) in 1993. Shortly after leaving the Hill, in July 1994, I reported that U.S. Customs officials were investigating Chinese government companies that were attempting to purchase defense production equipment being sold at auction from U.S.

During one of my investigations in California, I personally visited around 150 Chinese front companies, many of them no more than placards on closet offices that came alive to support a particular clandestine deal. I have appended to my written testimony a print-out of just one such network, which includes freight forwarders, bankers, import-export agencies and insurance brokers used to support Chinese military procurement activities in this country.Because the Chinese mastered the whole process, using companies and agents they controlled and communicating almost exclusively in Mandarin, neither the FBI, Customs, or OEE had much success in penetrating these networks. One of these companies operated undetected for more than two years directly above a CIA liaison office in the Los Angeles area. Clearly, we need more Mandarin-speaking agents, and a much active Customs operation to infiltrate and disrupt these procurement networks.

THE WALL STREET JOURNAL

"China is the biggest (espionage) threat to the U.S. today," says Mr. Szady, now 61 years old and the FBI's top counterintelligence official.

Counterespionage experts say the trouble often starts when they are contacted by Chinese government officials or one of the more than 3,000 Chinese "front companies" the FBI alleges have been set up in the U.S. specifically to acquire military or industrial technologies illegally.

The U.S. government is prosecuting about a dozen cases against individuals alleged to have sent technology to China illegally. FBI officials say at least three more will likely go ahead in the coming months. Over the past five years, the total number of such charges has grown by around 15 percent annually, according to some FBI agents.

NBC

intensified campaign by the People's Republic of China to steal military and civilian technology.

U.S. officials say there are now 400 active investigations here involving illegal exports to China — more than any other country.

Undercover video — obtained exclusively by NBC News — shows Bill Moo, an employee of a U.S. defense contractor, inspecting a military jet engine that he planned to secretly buy for China.

Unbeknownst to him, Moo had made the deal with undercover U.S. agents and was later arrested. He pleaded guilty to being an unregistered foreign agent for China.

"The Chinese are very good at using multiple redundant collection platforms," says former FBI Assistant Director Szady, "and by that I refer to students, delegations, visitors, researchers, development, partnerships, business deals and false front companies."

OAKLAND TRIBUNE

One day last June, FBI agents swooped into two affluent Silicon Valley homes and arrested two engineers. Lan Lee and Yuefei Ge stand accused of stealing proprietary chip designs and software

Lee and Ge allegedly set up a front company backed by a Beijing venture-capital firm with links to China's military, and planned to go into business with the Chinese government.

"Silicon Valley is a hotbed" of economic espionage, said Don Przybyla, who heads an FBI counterintelligence unit in San Jose. The valley is home to many of the estimated 3,000 Chinese front companies nationwide set up to steal secrets and acquire technology, according to the FBI.

March 17, 2006
Statement by
John J. Tkacik, Jr.
Senior Research Fellow in Asian Studies
The Heritage Foundation
Before the
The U.S.-China Economic and Security Review Commission
Hearing on Chinese Military Modernization and Export Control Regimes

It was and is my impression that Chinese security officials inform all Chinese science and technology workers visiting the U.S. that they could be given specific collection tasks while in the U.S. The case of two Chinese academics at American University, Ms.Gao Zhan and her husband, Xue Donghua, is instructive. Apparently, Ms. Gao and Mr. Xue had received such a tasking and reportedly managed to export as much as $1 million in radiation-hardened microchips to a military laboratory in Nanjing before being arrested in 2001.

Gao and Xue were emblematic of vast Chinese government effort to collect industrial and technical secrets. A year ago, in March 2005, FBI Assistant Director Dan Szady, commented on the existence of an estimated 3,000 Chinese front companies operating in the United States in order to facilitate illegal technology transfers to the Chinese government.

In September, Michelle Van Cleave, the national counterintelligence executive, told the House Judiciary subcommittee on immigration, border security and claims that Chinese "state-directed espionage remains the central threat to our most sensitive national security technology secrets." She said Chinese intelligence agents are "very aggressive" in business and "are adept at exploiting front companies."

Chinese Front Companies in the U.S.? You decide!

There seems to be some question, or concern about Chinese front companies operating within the U.S. There has been some doubt to the veracity of the report, which was first mentioned in the Cox document. But, what is the official and most legitimate position on the Front Companies? Seems to me that the U.S. intelligence community would have the best understanding of this, since they work on the issue daily.

Of course, some random journalist or reporter can post whatever they want, but their not really close to the issue. Below are just a few reports since Cox. You decide, are there front companies operating in the U.S.? Before you respond, and I know someone will jabber about the 3000 front companies. The info is coming from the Director of the FBI. If you have an issue with it's truthfulness, take it up with the him, I'm simply using it to support the other reports. Oh ya, and his statement was given under oath during testimony to the U.S. Congress. Use that as weight when you judge its veracity!

CNN
State Metal Industries, a Camden, New Jersey, company convicted in June of violating export laws over a shipment of AIM-7 Sparrow missile guidance parts it bought from Pentagon surplus in 2003 and sold to an entity partly owned by the Chinese government. The company pleaded guilty to an export violation,

THE WASHINGTON TIMES
U.S. government investigators say the number of cases involving China and its middlemen who have illegally obtained sensitive or classified U.S. weapons technology

U.S. Friend or Enemy?

Every time I read something about a cyber security risk, hack, or intrusion I can count on it originating from one place: China. Seems like every report out there details ties to Chinese security forces who are either attacking critical U.S. infrastructure or worse, stealing critical U.S. technology.

US, China behind two-thirds of computer security threats( AFP)Updated: 2007-01-23 08:48
WASHINGTON - The United States and China host nearly two-thirds of spam, viruses and other computer security threats delivered around the world in 2006.

Computer security firm Sophos said 31 percent of the so-called malware last year originated from China.

washingtonpost.com

Hackers Attack Via Chinese Web Sites: U.S. Agencies' Networks Are Among Targets

Web sites in China are being used heavily to target computer networks in the Defense Department and other U.S. agencies, successfully breaching hundreds of unclassified networks, according to several U.S. officials.

"The scope of this thing is surprisingly big," said one of four government officials who spoke separately about the incidents.

It's not just the Defense Department but a wide variety of networks that have been hit," including the departments of State, Energy and Homeland Security as well as defense contractors, the official said. "This is an ongoing, organized attempt to siphon off information..."

Network attack disables Naval War College

Computer and e-mail systems are off-line at the Naval War College following a network intrusion Nov. 15. After the attack, the Defense Department raised its information warfare awareness level to Information Condition (Infocon) 4.

According to a news report, Chinese hackers are responsible for the attack. One professor told his class Nov. 27 that they took down the entire college network, the report states.

Chinese attacks on DOD systems are far more widespread than is publicly known, Paller said, but almost all attacks remain classified. “The problem is thousands of times bigger than what you hear,” he said.