Electronic Telegraph June 15, 1997

China Plots to Bug West's Defences

By Ivo Dawnay in Washington

CHINA is creating an elite military corps charged with devising ways of planting disabling computer viruses into American and other western command and control defence systems.

The existence of the corps, set up by Beijing's Central Military Commission in April as part of a redoubled warfare effort, is revealed in a little-noticed report to the US House of Representatives' task force on terrorism and unconventional warfare. Moves to deploy the disabling devices stem from a report to the People's Liberation Army high command in January that concluded: "Conducting warfare with computer viruses is more effective than using nuclear weapons."

The exercise will further fuel alarm among a number of US military experts and politicians. They fear that America's preoccupation with China's human rights abuses is blinding it to the more urgent threat - the rapid technological know-how being gathered by the PLA.

As European, Russian and Israeli arms firms scramble for contracts, analysts in Washington believe the US is failing to show leadership in controlling the trade and China's proliferation of sophisticated weaponry to pariah states. Several times recently the American press has reported Chinese abuses of trade agreements. Last week alone it emerged that US intelligence believes 43 American-made supercomputers, sold after a softening of trade rules in 1995, are been used by Beijing to perfect its nuclear weapons technology.

Last month, the State Department discreetly confirmed to Congress that China has supplied Iran with cruise missiles capable of targeting shipping in the Gulf. Under US law, that alone requires the Clinton administration to impose sanctions on China. The government has failed to do so, presumably for fear of alienating Beijing.

In Congress this week, a joint economics committee is expected to hear of startling new breaches of arms sale regulations. Yet the main headlines will centre on the annual battle over whether China's "most favoured nation" trading status - its access to the US market - should be curtailed in punishment for its systematic abuse of its citizens.

For Richard Fisher, a senior Asia policy analyst at the Heritage Foundation think tank, there is now indisputable evidence that China's great leap forward in military hardware is far more advanced than most think. "As the Clinton administration looks the other way," he wrote recently, "the world is witnessing perhaps the most geo-strategically dangerous transfer of power since Germany and other states helped create the early Soviet Union's military-technical base."

The Chinese are taking delivery of the Sukhoi Su-27, a Russian fighter that can outmanoeuvre America's top plane, the F-15. They are negotiating with Russia for hard-to-detect Kilo-class nuclear submarines, with Britain for sophisticated anti-missile technology and with France to buy the aircraft carrier Clemenceau with technological upgrading. Beijing is also close to perfecting a highly mobile cruise missile delivery system with a 5,000-mile range that could target multi-warhead missiles on California.

No one contends that China's military spending - perhaps as high as $30 billion (?18.75 billion) annually - can compete globally with America's $160 billion and far superior technical edge. But, although a superpower, the US is already stretched to meet its declared aim of being capable of fighting two regional wars simultaneously. China is seeking the more modest and attainable goal of regional hegemony.

Other specialists in East Asia's balance of power broadly confirm Mr Fisher's gloomy thesis. What is in dispute is how to respond. Washington officialdom insists that the revamping of China's armed forces is not necessarily threatening. It is wholly natural, the argument goes, that the PLA should demand its slice of the burgeoning economy to re-equip.

Experienced arms negotiators such as Richard Perle, Ronald Reagan's combative assistant Defence Secretary, believe there is a middle path between cutting off America's $53 billion in annual trade with China and doing nothing. A selective sanctions policy could nudge Beijing down more peaceful paths, he told The Telegraph.

"The Chinese are keen to develop their civilian satellite launching business," Mr Perle said. "We should tell them, 'Either you supply missiles to Libya and Iran or you sell us your satellite service - but you can't have both'."

Even without an overt threat, China's new military hardware is already paying dividends in East Asia while US influence is waning. Opposition to the US armed forces' presence in South Korea and the Japanese island of Okinawa has been mounting. China's menacing shadow may lie behind the refusal by America's old ally Thailand to be a staging post for US Navy supply ships in the event of a crisis in Korea.

Alongside the global security issues, the impassioned debate over China's deplorable human rights record and its trading rights are arguably a sideshow.