Bloomberg News

Chinese Espionage Campaign Targets U.S. Space Technology

April 18, 2012

China is stealing U.S. military and civilian space technology in an effort to disrupt U.S. access to intelligence, navigation and communications satellites, according to a report from the State and Defense Departments.

“China’s continuing efforts to acquire U.S. military and dual-use technologies are enabling China’s science and technology base to diminish the U.S. technological edge in areas critical to the development of weapons and communications systems,” the report released yesterday found. “Additionally, the technologies China has acquired could be used to develop more advanced technologies by shortening Chinese R&D cycles.”

Two U.S. intelligence officials said that while the Chinese military isn’t preparing to fight a major land war, its goal is to deny the U.S. military access to the other four arenas in which a war might be fought -- the seas around China, the airspace surrounding the country, space, and cyberspace. The officials spoke on condition of anonymity because intelligence matters are classified.

Because China’s closed political system discourages the independent thinking that spawns innovation, the Chinese rely heavily on stealing and reverse-engineering new technologies from Europe and America, both officials said.

“Economic espionage, supported by extensive open-source research, computer network exploitation and targeted intelligence operations also enables China to obtain technologies to supplement indigenous military modernization efforts,” the State and Defense departments said in an appendix to yesterday’s report. The agencies said China should be excluded from recommendations they made to ease restrictions on exports of communications and remote-sensing satellites and equipment.

Chinese Denial

Chinese officials have denied their government is behind cyber espionage or hacker attacks on computer systems, calling such assertions a “Cold War ghost.”

Citing the Pentagon’s Defense Security Service, the U.S. departments said yesterday that “countries from the East Asia and Pacific region” are focusing their efforts on information systems technology used in military command, control, communications, and computers, as well as in intelligence, surveillance and reconnaissance applications.

In one episode cited, Chi Tong Kuok from Macau, China, was convicted in September 2010 of conspiring to export U.S. encryption technology used by U.S. and North Atlantic Treaty Organization forces to China through Hong Kong.

‘Blind and Deafen’

The U.S. Departments of Commerce and Justice also have identified at least 26 major cases since 2006 in which China has tried to acquire power amplifiers with military applications, space-launch technical data and services, Delta IV rockets, information on cruise-missile design and military grade accelerometers, which are used in designing and testing aircraft, missiles, and other military equipment, according to the report.

The Chinese People’s Liberation Army’s goals are clear, according to the report, which cited PLA writings about the necessity of “destroying, damaging, and interfering” with reconnaissance and communications satellites in order to “blind and deafen the enemy.”

The same PLA analysis of U.S. and allied military operations says that “destroying or capturing satellites and other sensors ... will deprive an opponent of initiative on the battlefield and (make it difficult) for them to bring their precision-guided weapons into full play,” according to the U.S. report.

Navigation Satellites

In designing its constellation of navigation satellites, the PLA is using the same downlink frequencies as Europe’s Galileo Global Navigation System, according to the report, which said that doing so will enable China to jam the common satellite communications channels and global-positioning system (GPS) receivers.

Thanks in part to its successful espionage efforts, which included obtaining the plans to America’s now-retired space shuttle, China has made a great leap forward in space, the report found. China had a national record of 15 space launches in 2010, compared with 14 by the U.S., including nine new remote-sensing satellites that can be used for both military and civilian purposes.

This year, China is expected to complete work on the Wenchang Satellite Launch Center on the southern Hainan Island, the U.S. departments said.

Beyond space technology, China has been cited by the U.S. as a center for computer hacking to steal information or compromise corporate and government systems.

Two Chinese nationals were charged by the U.S. for illegally exporting technology to their home country and pirating software from U.S. companies including Agilent Technologies Inc. (A:US), federal officials said yesterday.

Xiang Li, 35, and Chun Yan Li, 33, a married couple from Chengdu, China, were indicted by a federal grand jury in Wilmington, Delaware, according to a statement by the U.S. Immigration and Customs Enforcement agency.

To contact the reporter on this story: John Walcott in Washington at jwalcott9@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net


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