China's spying called a threat by US panel
Security feared for tech secrets

By David Cho and Ariana Eunjung Cha
Washington Post / November 16, 2007

WASHINGTON - China's extensive spying inside the United States is the greatest threat to the security of American technology secrets.

more stories like thisAdvances by the Chinese military are catching US intelligence officials by surprise.

And the Defense Department may be inadvertently outsourcing the manufacturing of key weapons and military equipment to factories in China.

These were among the key findings released yesterday by a bipartisan panel commissioned by Congress to study the economic and security relationship between the United States and China. The US-China Economic and Security Review Commission, created by Congress in 2001, has been criticized in the past for taking a hawkish stance on China in its annual reports.

The book-length report, the fifth produced by the panel, said China appears to be reversing its move toward free markets by setting up state-owned enterprises to maintain control over 12 key industries, including oil, telecommunications, shipping, automobiles, steel, and information technology.

The commission also urged Congress to find ways to work with China to reduce its pollution, which is blowing significant amounts of smog into the air over the Western United States, according to new studies quoted by the report. China, it added, is scheduled to build 562 coal plants over the next five years, a rate of about two a week, and may have replaced the United States as the largest greenhouse-gas polluter in the world.

The panel presented 42 recommendations to Congress, and several of them raised questions about whether the Defense Department has been lax in overseeing the production of sensitive military technologies and gathering intelligence on the Chinese military.

The Pentagon is increasingly buying planes, weapons, and military vehicles from private contractors that outsource the manufacturing to plants in China and elsewhere in Asia, the report said. But when questioned by the commission, defense officials said they do not have the ability to track where the components of military equipment are being made.

"As weaponry gets more and more sophisticated . . . I think we'll find ourselves more vulnerable for parts that are being manufactured by an adversary. It's really something the Pentagon needs to look at seriously," said commission member Bill Reinsch, also president of the National Foreign Trade Council, which promotes free trade on behalf of businesses.

Commission members said the group had never delved so deeply into national security issues.

The report said that China's military advances "have surprised U.S. defense and intelligence officials, and raised questions about the quality of our assessments of China's military capabilities."