-Caveat Lector-
TUESDAY
SEPTEMBER 28
1999
Squandered loans to China?
by Charles Smith
Newly declassified documents, forced from the
U.S. Commerce Department by a federal
lawsuit, shows that $200 million in World Bank
loans for a "Technology Development Project"
actually went to weapons research labs and
businesses wholly owned by the Chinese army.
The documents reveal that World Bank loans
were used to modernize the Chinese army
defense industry.
"The objective of the project is to support the
(Chinese) Government's continuing reforms in
technology policy and institutions so as to
promote the development of clear,
productivity-enhancing technologies in China's
industries," states a 1995 report written by the
Industry and Energy Operations Division of
the World Bank.
According to the World Bank report, "the
(Chinese) Government will pass on US$194.3
million of the loan proceeds through SPC (State
Planning Commission) to eligible
sub-borrowers in the form of sub-loans, with
the Golden China Corporation acting on its
behalf as a financial agent."
"The first component is designed to assist in
transforming part of the research and
development (R&D) establishment into
market-responsive technology development
corporations," states the World Bank report.
"This component would hive off the most
dynamic technology development and
service-oriented elements of existing research
institutions to create -- through a competitive
selection process -- new, market-oriented
entities, called Engineering Research Centers
(ERCs)."
"The second component comprises
complementary investments in improving
technology public services, including: (i) the
modernization of the National Institute of
Metrology and (ii) a technical assistance
program for a Productivity Center as well as
for several training activities."
However, according to the Defense
Department, "Golden China Corporation" and
many of the so-called "Engineering Research
Centers (ERCs)" supported by the World Bank
loans were actually owned and operated by the
Chinese army unit COSTIND (Chinese
Commission for Science, Technology, and
Industry for National Defense). For example,
the World Bank provided:
$5 million to the Northwest Institute for
Nonferrous Metal Research for "rare earth
materials" used in "chemical, aviation,"
and "nuclear power stations." The
Northwest Institute for Nonferrous Metal
Research is part of the China National
Nuclear Corporation (CNNC), producer
of all nuclear weapons for the Chinese
army.
Over $5 million to the Harbin Research
Institute for "welded steel products" used
in "aviation" and "ship building." Harbin
was identified by the Department of
Defense as a Chinese army front used to
purchase Allied Signal turbo-fan engines
for the People's Liberation Army Air
Force (PLAAF) in 1996.
Over $4 million to the Marine Design &
Research Institute of China for "ship
design software and services." The
Marine Design & Research Institute is
part of the China National Ship Building
Corp. and the primary design facility for
all Chinese warships, including nuclear
powered submarines.
Over $4 million to the Nanjing Radio
Factory for "audio/visual" products used
in "T.V.s, satellite equip., radios, CD
players, etc." The Nanjing Radio Factory
is owned and operated by the Chinese
army. The factory produces a wide
variety of electronics for the PLA
including CRTs, satellite equipment, and
secure military radios.
$3 million to Xi'an Jiatong University for
"fluid machinery" research used in
"turbo-compressors." Xi'an Jiatong
University was identified by the Defense
Department as a major research center for
the Chinese army, sharing facilities with
the PLA chemical and biological
weapons facilities that are located nearby.
The Chinese army loans from the World Bank
also financed several money making ventures
for the Chinese army. For example, the World
Bank provided $5.5 million to the "China
Textile Academy" for "productivity
enhancement."
The World Bank was joined by "Foreign &
Domestic Partners" also seeking to improve the
PLA textile production such as "Toray (Japan);
Dupont (U.S.); Bermag (Germany), the Textile
Academy in Russia; and the Wool Bureau of
New Zealand."
Even the World Bank could not avoid the fact
that Chinese workers are being exploited
under harsh conditions by the Chinese army.
The World Bank report notes that "one-third" of
the "11,000" textile firms associated with the
China Textile Academy are small to medium
size enterprises (SMEs). The report noted that
many of the labor intensive textile "industries
are in urgent need of various properties" such
as "environmental protection" for their
workers.
According to a 1997 Rand Corp. report on the
Chinese defense industry, the profits from PLA
business ventures, such as textile exports, are
split between the PLA generals and the
Chinese army. The Chinese army profits are
used to purchase advanced weapons, build
new barracks for troops and provide medical
services for the PLA officers.
The Chinese generals use their slice of the
profits for "lavish parties," "foreign luxury
automobiles" and "Swiss bank accounts." Thus,
there is little money left to provide
"environmental protection" or improve
working conditions.
Of course, the Clinton administration, claims
that it is impossible to identify Chinese
army-owned companies. Despite the difficulty,
President Clinton is required by law to
perform this task.
Clinton signed the Fowler Amendment into
law Oct. 17, 1998. It requires that a list of
companies controlled by Communist China's
People's Liberation Army be published in the
Federal Register by Jan. 15, 1999. So far, Clinton
has ignored the law and refused to reveal the
PLA-owned businesses in America.
On Friday, Sept. 24, 1999, the ten top leaders in
the House of Representatives wrote a letter to
Clinton, demanding immediate compliance
with U.S. law requiring public disclosure of the
PRC's PLA-owned companies doing business
in the United States.
According to House members, the Clinton
White House claimed in September 1999 to
have assigned the task of identifying the PLA
companies to the Defense Intelligence Agency
(DIA). The DIA, however, has quietly informed
congressional leaders that the White House did
NOT ask them to prepare such a list. Thus, the
identity of the Chinese army front companies
operating inside the United States continues to
go unreported.
Many of the PLA companies that Clinton
refuses to identify are well known to the
Commerce Department. The facts show the
Clinton administration actively courted
business with the Chinese generals. In 1995,
General Ding Henggao sent Ron Brown a
partial list of PLA-owned firms, including a
local Chinese army contact, complete with
phone, fax and address.
"The Clinton-Gore administration's failure to
obey the law is knowing, willful, and
long-standing," said House Policy Chairman
Christopher Cox, who released the letter.
"Eight months after the deadline in the law, it is
essential that the president comply. By
violating this statutory obligation, the
president shows contempt not only for the law
but for congressional oversight and the
national security."
Charles Smith
is a journalist
and President
of SOFTWAR,
a computer
security
company
based in
Richmond, VA.
He writes
frequently
on issues of
national
security
and information
warfare.
� 1999 WorldNetDaily.com, Inc.
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Brothers and Sisters,
How much longer are we going to
endure the theft of our treasure?
You have the Power to bring these
deprivations of our Freedom
to an end.
Bard
http://www.xld.com/public/center/center.htm
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