U.S. Joint Ventures May Be Helping China: Draft

Defense News

10/28/2011

U.S. Joint Ventures May Be Helping China: Draft

By WENDELL MINNICK

TAIPEI - U.S. aerospace companies may unknowingly be helping China's military, according to a rough draft of the annual report on China's military modernization by the U.S.-China Economic and Security Review Commission, to be released in November.

Defense News got an early look at the draft.

The report noted last January's announcement by General Electric and the Aviation Industry Corporation of China (AVIC) that they would launch a joint venture for integrated avionics. It also noted several Boeing-AVIC moves, including April's announcement that the two would double the capacity of the Boeing Tianjin joint venture, which produces composite materials.

"One of the joint venture's customers is Xi'an Aviation Industry Corporation, which manufactures components for civil aircraft and produces aircraft, such as the JH-7A fighter-bomber and the H-6 bomber, for the Chinese military," the report said.

The report said China, which is looking at ways to prevent the U.S. military from using satellites, has a robust, largely military space program of its own: roughly about 70 satellites in orbit, all but 13 controlled by the military. By 2020, China will have its own 35-satellite global positioning system.

Four times in 2007 and 2008, unidentified hackers, possibly Chinese, gained control of two U.S. government earth observation satellites through a Norwegian ground station.

"The techniques appear consistent with authoritative Chinese writings," said the report, but there was no definitive proof the actions were taken by China.

Cyber issues continue to aggravate U.S.-China relations. In 2011, China conducted or supported a range of malicious cyber activities. Although Beijing denies involvement in such attacks, many of them are traced back to Jinan, Shandong province, home to one of China's Technical Reconnaissance Bureaus.

"These entities serve as a computer network exploitation arm for the Third Department of the PLA's General Staff Department, which collects signals intelligence," the report said.

The report said the most compelling evidence was a Chinese TV documentary aired in July. It showed what appeared to be a "PLA 'point and click' distribution-denial-of-service attack launched against a Falun Gong-related website" and powered by software developed by the PLA's Electrical Engineering University, according to the documentary.