China - US Relations

Reports that General Motors, after being saved from bankruptcy by $15.4 billion in taxpayer-funded U.S. government loans, plans to sell cars imported from China in the U.S. by 2011 did not sit well with U.S. Sen. Sherrod Brown (D-Ohio).

"What’s good for GM is no longer good for America,” said Sen. Brown in a press release. “This idea is a slap in the face to American auto workers and American taxpayers. If officials at General Motors think that U.S. taxpayers will finance cars made in China while American plants are closing, they’re either tone deaf or short-sighted.”

According to a USA Today report, GM officials have told members of Congress that the company planned to import 17,335 Chinese-made vehicles starting in 2011, growing to 51,546 vehicles in 2014.

Pointing out the now undeniable fact that the future of the U.S. auto industry depended on small, fuel-efficient vehicles, Sen. Brown said, “There is no excuse for GM to use taxpayer funds for Chinese imports -- not when there are American workers ready to build these cars and idled U.S. auto plants prepared to produce them.”

http://usgovinfo.about.com/b/2009/05/19/gm-plan-to-import-chinese-cars-irks-senator.htm

The dreaded wait for Chinese-made cars to hit America's shores may end in two years.

General Motors is telling U.S. lawmakers that it plans to import cars from China starting in 2011, Automotive News reports citing a planning document circulating in Congress. GM would become the first major automaker to bring Chinese cars to the U.S. It would import 17,335 the first year, tripling that volume to 51,546 in 2014, according to the report, dated last Tuesday.

http://content.usatoday.com/communities/openroad/post/2009/05/66670925/1

America's auto titans are dismantling their global empires. But across the Pacific, it's as if the global economic forces that have pummeled Detroit never struck. Chinese auto sales are up, and this year China is projected to displace Japan as the world's largest car producer.

http://www.chinapost.com.tw/business/asia/b-china/2009/05/20/208867/China-emerges.htm

In a torrent of filings at the U.S. Bankruptcy Court in Manhattan, GM's mind-numbing scale is evident: It has 463 subsidiaries and has built 450 million cars and trucks over the years. It employs 235,000 people world-wide. This includes 91,000 in the U.S., which it pays $476 million each month, and 493,000 retirees with various benefits. It spends $50 billion a year buying parts and services from 11,500 vendors in North America.

http://online.wsj.com/article/SB124390140895474595.html

Switching all that over to China should give them another boost up the latter....

The new tariff [2002] that the government of the United States imposed on Canadian lumber and the closing of borders to Canadian beef etc are "staged events" produced by mega-corporations to switch Canada and USA from economic dependence on each other to dependence on China. China will become our new market and we'll become theirs. On COSCO ships (China Oceans Shipping Company) we'll export our resources and buy them back manufactured into every conceivable commodity. There will be no high paying jobs for North Americans. The work force will be slave-labourers in China, creating maximum-profits for International corporate owners.

The pitiful show put on by the government of Canada to defend our markets is just that, a pitiful show. By the closing of markets betwen Canada and the USA, North American resources, companies and consumers are being herded, like sheep, into Communist pens.

http://www.orwelltoday.com/chinawages.shtml

Clinton's trouble with China began before his re-election in 1996. To defeat the Republicans, the Democratic party needed a quick infusion of cash to pay for campaign ads. Clinton turned to his Chinese connection, old friends Johnny Chung, John Huang, and Charlie Trie. They headed a shadowy cast of characters that funneled millions of dollars into democratic campaign coffers.

Bill Clinton took contributions he knew came from China, and played another angle as well. US companies wanted to sell China military technology, but the sales were prohibited by law. Economic sanctions for the Tiananmen square massacre and restrictions on technology exports prevented these companies from selling China the armaments they wanted.

In return for campaign contributions, the President shifted regulation of technology exports from the State Department to the free-wheeling Commerce department. The administration also relaxed export controls and allowed corporations to decide if their technology transfers were legal or not. When easing restrictions wasn't enough, Clinton signed waivers that simply circumvented the law. The President's waivers allowed the export of machine tools, defense electronics, and even a communications system for the Chinese Air Force.

Bernard Schwartz and Michael Armstrong, the CEOs of Loral and Hughes, each donated over one million dollars to Clinton's re-election campaign. These companies had an interest in seeing China develop reliable missiles to loft their satellites into orbit. Clinton arranged direct talks between Bernard Schwartz and a Chinese general to improve China's rocket technology. Michael Armstrong was made head of the Export Advisory Council. Both companies were allowed to upgrade the launching and guidance of China's missiles.

Clinton even involved the Department of Energy, caretaker of our nuclear weapons, in his fundraising schemes. In 1994 and '95 then Energy Secretary Hazel O'Leary accompanied Johnny Chung, John Huang, Charlie Trie, and Bernard Schwartz on trade missions to China. Shortly afterward the DOE relaxed security at US weapons labs. Wen Ho Lee, an ethnic Chinese physicist assigned to Los Alamos, illegally transferred data on nuclear warheads to his private computer files.

In June of 1995, the CIA learned that China had stolen the crown jewels of our nuclear arsenal, including the neutron bomb and the W-88 miniaturized warhead. Later that year National Security Advisor Anthony Lake is briefed on the thefts. He is replaced on the Security Council by Sandy Berger, a former lobbyist for the Chinese government. In June of 1996, before Bill Clinton's re-election, the FBI opens a formal investigation into the theft of US nuclear weapon designs.

Proof of China's military intentions came in March of 1996, on the eve of Taiwan's first democratic elections. China used the threat of force to intimidate the island nation into electing a pro-Beijing candidate. Military maneuvers included bombing runs and launching ballistic missiles that impacted within twenty miles of Taiwan. When the US sent an aircraft carrier into the Taiwan Straits, a Chinese general threatened to "rain down nukes upon Los Angeles".

In 1997, news of the campaign finance scandal reached the press. Clinton claimed he was "appalled" to learn he had received illegal contributions from China. As the Justice Department began investigating, over one hundred suspects fled the country or refused to testify. Despite FBI recommendations and congressional protests, Janet Reno refused to appoint an independent counsel.

Then the press learned that China had stolen nuclear weapon designs from US research labs. The Clinton administration downplayed and even denied reports that any nuclear secrets were stolen, but this scandal was too big to ignore. Congress began a formal investigation by forming the Cox committee. The administration was forced to reveal the extent of China's nuclear espionage, but they insisted Clinton had no previous knowledge. Sandy Berger even swore under oath that the President was not told about nuclear thefts until 1998, three years after the fact.

The Cox Committee report was released early in 1999. It confirmed that China had stolen the neutron bomb design and the W-88 miniaturized warhead. The W-88 would allow China to field smaller, mobile missiles and carry multiple warheads on larger missiles. In addition, the Cox report proved that US companies illegally transferred "missile design information and know-how". Chief among the offenders were Loral And Hughes.
http://www.artistmarket.com/writers/piraino/clintonchina.htm

http://www.salon.com/news/1998/05/29newsa.html

The geniuses at Homeland Security who brought you hare-brained procedures at airports (which inconvenience travelers without snagging terrorists) have decreed that October is National Cyber Security Awareness Month. This means The Investigator -- at the risk of compromising national insecurities -- would be remiss not to make you aware of the hottest topic in U.S. counterintelligence circles: rogue microchips. This threat emanates from China (PRC) -- and it is hugely significant.

The myth: Chinese intelligence services have concealed a microchip in every computer everywhere, programmed to "call home" if and when activated.

The reality: It may actually be true.

All computers on the market today -- be they Dell, Toshiba, Sony, Apple or especially IBM -- are assembled with components manufactured inside the PRC. Each component produced by the Chinese, according to a reliable source within the intelligence community, is secretly equipped with a hidden microchip that can be activated any time by China's military intelligence services, the PLA.

"It is there, deep inside your computer, if they decide to call it up," the security chief of a multinational corporation told The Investigator. "It is capable of providing Chinese intelligence with everything stored on your system -- on everyone's system -- from e-mail to documents. I call it Call Home Technology. It doesn't mean to say they're sucking data from everyone's computer today, it means the Chinese think ahead -- and they now have the potential to do it when it suits their purposes."

Discussed theoretically in high-tech security circles as "Trojan Horse on a Chip" or "The Manchurian Chip," Call Home Technology came to light after the Defense Advanced Research Projects Agency (DARPA) launched a security program in December 2007 called Trust in Integrated Circuits. DARPA awarded almost $25 million in contracts to six companies and university research labs to test foreign-made microchips for hardware Trojans, back doors and kill switches -- techie-speak for bugs and gremlins -- with a view toward microchip verification.

Raytheon, a defense contractor, was granted almost half of these funds for hardware and software testing.

Its findings, which are classified, have apparently sent shockwaves through the counterintelligence community.

"It is the hottest topic concerning the FBI and the Pentagon," a retired intelligence official told The Investigator. "They don't know quite what to do about it. The Chinese have even been able to hack into the computer system that handles our Intercontinental Ballistic Missile system."

Another senior intelligence source told The Investigator, "Our military is aware of this and has had to take some protective measures. The problem includes defective chips that don't reach military specs -- as well as probable Trojans."

A little context: In 2005 the Lenovo Group in China paid $1.75 billion for IBM's PC unit, even though that unit had lost $965 million the previous four years. Three congressmen, including the chairman of the House Armed Services Committee, tried to block this sale because of national security concerns, to no avail. (The PRC embassy in Washington, D.C., maintains a large lobbying presence to influence congressmen and their staffs through direct contact.)

In June 2007, a Pentagon computer network utilized by the U.S. defense secretary's office was hacked into -- and traced directly back to the Chinese PLA.

A report presented to Congress late last year characterized PRC espionage as "the single greatest risk to the security of American technologies." Almost simultaneously, Jonathan Evans, director-general of MI5, Britain's domestic security and counterintelligence service, sent a confidential letter to CEOs and security chiefs at 300 UK companies to warn that they were under attack by "Chinese state organizations" whose purpose, said Mr. Evans, was to defeat their computer security systems and steal confidential commercial information.

The Chinese had specifically targeted Rolls-Royce and Shell Oil.

The key to unlocking computer secrets through rogue microchips is uncovering (or stealing) source codes, without which such microchips would be useless. This is why Chinese espionage is so heavily focused upon the U.S. computer industry.

Four main computer operating systems exist. Two of them, Unix and Linux, utilize open-source codes. Apple's operating system is Unix-based.

Which leaves only Microsoft as the source code worth cracking. But in early 2004, Microsoft announced that its security had been breached and that its source code was "lost or stolen."

"As technology evolves, each new program has a new source code," a computer forensics expert told The Investigator. "So the Chinese would need ongoing access to new Microsoft source codes for maintaining their ability to activate any microchips they may have installed, along with the expertise to utilize new hardware technology."

No surprise then that the FBI expends much of its counterintelligence resources these days on Chinese high-tech espionage within the United States. Timothy Bereznay, while still serving as assistant director of the FBI's Counterintelligence Division, told USA Today, "Foreign collectors don't wait until something is classified -- they're targeting it at the research and development stage." Mr. Bereznay now heads Raytheon's Intelligence and Information Systems division.

The PRC's intelligence services use tourists, exchange students and trade show attendees to gather strategic data, mostly from open sources. They have also created over 3,500 front companies in the United States -- including several based in Palo Alto to focus on computer technology.

Back in 2005, when the Chinese espionage problem was thought to be focused on military technology, then-FBI counterintelligence operations chief Dave Szady said, "I think the problem is huge, and it's something we're just getting our arms around." Little did he know just how huge, as it currently applies to computer network security.

The FBI is reported to have arrested more than 25 Chinese nationals and Chinese-Americans on suspicion of conspiracy to commit espionage between 2004 and 2006. The Investigator endeavored to update this figure, but was told by FBI spokesman William Carter, "We do not track cases by ethnicity."

Excuse us for asking. We may be losing secrets, but at least the dignity of our political correctness remains intact.

Oh, and Homeland Security snagged comic icon Jerry Lewis, 82, trying to board a plane in Las Vegas with a gun -- no joke.

http://www.cryptome.info/manchu-chip.htm