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Before September 11, the Bush Administration seemed to be treating China as one of the biggest threats that the U.S. faced worldwide. There was the incident of the U.S. spy plane that went down on China's Hainan Island as well as President Bush's talk about doing whatever it takes to defend Taiwan from Chinese aggression. Republicans talked about treating China as a competitor rather than as the partner envisioned by former President Bill Clinton.
After the terrorist attacks, of course, Washington and Beijing tried to put aside their differences, with Bush traveling to Shanghai to praise Chinese President Jiang Zemin for the country's cooperation in the war against bin Ladinism. But in Washington today, it's time to worry about China again.
Jiang is supposed to be visiting the U.S. this fall, around the same time that the septuagenarian steps down from his post as head of the Chinese Communist Party and hands it to his heir, Vice-President Hu Jintao. This would make for the smoothest transition in the country's history and set the stage for a friendly farewell at the Bush ranch in Texas, where Jiang could get a reception similar to the one that George W. offered to his Russian soul mate, President Vladimir Putin.
HANGING ON? One problem: Word from Beijing is that Jiang isn't so eager to go quietly into retirement. Determined to join the pantheon of Communist giants Mao and Deng (both of whom ruled the country well past their sell-by dates), the Chinese President is reported to be scheming to find a way to maintain his grip on power. This raises the prospect of a weak, faction-ridden Chinese leadership, and that could complicate Washington's ability to work with Beijing on everything from Taiwan to terrorism (see BW, 8/05/02, "China: Will Jiang's Power Play Set Off Political Unrest?").
Meanwhile, on Capitol Hill, the China hawks are spreading their wings. Exhibit A: The release early this month of the first annual report of the U.S.-China Security Review Commission. The commission, which calls itself the USCC for short, got its start in 2000 with an act of Congress and is supposed to "monitor, investigate, and report to Congress on the national security implications of the bilateral trade and economic relationship between the United States and the People's Republic of China."
The picture isn't bright, says the USCC. "China's leaders believe that the U.S. is a declining power with important military vulnerabilities that can be exploited," the commission reports, adding that Beijing -- far from being an ally in the war on terrorism -- instead "provides technology and components for weapons of mass destruction and their delivery systems to terrorist sponsoring states, presenting an increasing threat to U.S. security interests, in the Middle East and Asia in particular."
TECH-HUNGRY. Of course, alarms about China are nothing new. Back in 1999, another congressional commission warned about Chinese efforts to acquire technology from the U.S. Indeed, the 1999 commission reported China's "appetite for information and technology appears to be insatiable."
How were the Chinese doing this? "The PRC employs all types of people, organizations, and collection operations to acquire sensitive technology: Threats to national security can come from PRC scientists, students, businesspeople, or bureaucrats, in addition to professional civilian and military intelligence operations."
It was easy for many people to dismiss such reports. After all, the commission had a Republican tilt, and critics contended that its political agenda was clear, with the GOP eager to use China as a club to hit Clinton. Yet this time, the commission's finding might reach wider acceptance. After all, Clinton is living in Westchester County, N.Y., not the White House, and the commission seems to boast solid bipartisan credentials.
NEARLY UNANIMOUS. Senate Majority Leader Tom Daschle appointed several members, including the chairman, C. Richard D'Amato. Likewise, Minority Leader Trent Lott named some members, including vice-chairman Michael A. Ledeen. House Speaker Dennis Hastert and Minority Leader Richard Gephardt got their picks, too. And this collection of Republican and Democratic appointees didn't have a hard time reaching agreement. Out of the dozen members, 11 signed on to the conclusions in the final report.
Still, when it comes to China, it's hard to avoid accusations of politics. The lone dissenter, William A. Reinsch, is a Democratic appointee put on the commission by Daschle. But Reinsch is also president of the National Foreign Trade Council, so it's easy to accuse him of being biased toward Beijing, since so many American companies see trade with China as a key to profitability.
However, it may be reasonable to take Reinsch's criticisms of the report seriously. According to the USCC, China "continues to target sensitive and controlled technology abroad." Consider the commission's mention of a Florida company, Means Come, based in Mickey Mouse's backyard of Orlando, Fla., allegedly implicated in a scheme to transfer sensitive technology to China.
SOUNDS OF SILENCE. On May 3, 2001, officers from U.S. Customs and the Commerce Export Control Enforcement Dept. raided the company's offices. According to the commission's report, "the firm was investigated for the illegal export of radiation-hardened integrated circuits to China without appropriate export licenses. These chips are particularly critical for missile and satellite development programs."
Sounds scary, doesn't it? However, nothing in the report indicates what happened as a result of that investigation. According to an article in the Orlando Sentinel shortly after the raid took place, nobody was arrested or charged at the time. What happened in the year since then? I don't know. Neither, apparently, does the U.S.-China Commission, since its report is curiously silent.
Clearly, Beijing has ambitions to develop its tech abilities so China can compete against the U.S. Just as clearly, U.S. companies have ambitions to sell technology to China so they can compete globally. The conflict is obvious, which means regardless of whether bin Laden is dead or alive, we'll be hearing a lot more alarms about China in the months and years ahead.
Einhorn covers technology from Hong Kong for BusinessWeek. Follow his weekly Online Asia column, only on BusinessWeek Online
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Copyright 2002, by The McGraw-Hill Companies Inc. All rights reserved.
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