Focus on Chinese technology scandal is misplaced It is folly to think that the Clinton administration or its predecessors could separate political, commercial and national-security concerns involved in satellite launches or any other business transaction.

July 01, 1998|By David Friedman

SENSATIONAL charges that U.S. lobbyists and Chinese campaign contributions lulled the Clinton administration into unwittingly giving China access to critical missile technology obscure real security challenges facing the United States.

While Washington bickers over which political party was least irresponsible in approving satellite launches on Chinese rockets (Republican administrations allowed nine, Democratic 11), U.S. leaders should focus on far more serious threats arising from the seamless link between commerce and warfare in the post-Cold War era.

National-security concerns

It is folly to think that the Clinton administration or its predecessors could separate political, commercial and national-security concerns involved in satellite launches or any other business transaction. A partnership between U.S. high-tech space companies and Chinese missile makers requires countless technical and engineering exchanges to deploy satellites worth hundreds of millions of dollars. U.S. policy guaranteed that China's launch capabilities would improve.

Administration critics contend that candidate Bill Clinton campaigned against Reagan-Bush policies permitting Chinese launches of U.S. satellites even as China sold missiles to countries in the Middle East. Yet, as president, Mr. Clinton put the Commerce Department in charge of foreign satellite sales, scrapped technology-export controls and ignored continuing evidence of Chinese missile sales. When Washington's attention waned, U.S. satellite makers, exploiting China's low-cost launchers, grew more careless.

In 1996, experts from Hughes Electronics Corp. and Loral Space Communications Ltd., two companies heavily involved with Chinese aerospace, analyzed for insurers the crash of a Chinese missile launching a $200-million U.S. communications satellite. Loral reportedly faxed portions of the report to Chinese officials before obtaining U.S. clearance.

In February, Mr. Clinton allowed Loral to sell China another satellite despite State Department objections that a Justice Department investigation of whether the two U.S. companies divulged militarily sensitive technology to the Chinese in their analysis of the 1996 crash could be compromised. Loral and, reportedly, Chinese government officials were large Democratic Party contributors.

Apart from their possible influence-buying implications, these facts have ignited a debate over whether sensitive military information can be gleaned from complex deals like launch sales. To believe otherwise, however, is sheer fantasy. It's inevitable that transactions like the marriage of U.S. payloads with Chinese Long March missiles affect the balance of power.

The Reagan administration first proposed launching U.S. satellites on Chinese missiles after the 1986 shuttle disaster.

U.S. satellite companies strongly supported the idea. U.S.-Chinese collaboration, furthermore, was consistent with the GOP policy of "engagement," which aimed to transform China through multiplying its economic ties with the West.

But U.S. missile makers opposed the use of cheaper Chinese rockets to hoist American payloads. Security analysts feared that such deals would help China upgrade its nuclear arsenal. Chinese missile sales to countries like Pakistan, Iran and Syria raised proliferation concerns.

A business deal

In late 1988, AsiaSat, a company seeking to buy a refurbished U.S. communication satellite, played a key role as Washington weighed the new policy. A major AsiaSat investor was CITIC, a Chinese investment company.

AsiaSat deployed an army of lobbyists to stifle concerns about China's unfair competition. Under pressure, the State Department concluded that transferring technology about missile structural integrity, dynamics, acoustics and electromagnetic interference to the Chinese would not affect national security.

When CITIC's lobbyists were told by National Security Agency staff that Chinese officials would have to meet "personally" with U.S. officials to allay fears, the Legal Times reported that CITIC passed the information to Chinese Premier Li Peng, who met with U.S. Defense Secretary Frank C. Carlucci and gave "positive indications" that the Chinese would not sell "intermediate-range missiles to volatile areas." The day after Mr. Carlucci returned from Beijing, President Reagan approved AsiaSat's license.

Evidence quickly mounted that China was still selling missile technology to Middle Eastern countries. In June 1989, Chinese hard-liners massacred pro-democracy demonstrators in Tiananmen Square. To sanction China, satellite sales were suspended.

The Bush administration believed deeply in "engagement" and felt it could make nonproliferation pledges stick. In late 1989, Deputy Defense Undersecretary Lawrence S. Eagleburger and national security adviser Brent Scowcroft were secretly dispatched to assure China that satellite technology would be transferred despite sanctions and to plead for arms-sale restraint in return.

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