Chinese Army Firms Accused of
Selling Weapons to Iran
By Charles R. Smith
Monday, Jan. 10, 2005
The Bush administration has announced a sweeping new series of sanctions
against several Chinese Army owned companies. The sanctions were imposed
after the PLA firms were linked to advanced missile and weapons sales to
The State Department issued a notice which stated in part that the
Chinese firms would not be allowed to purchase sensitive U.S. technology
including space systems, satellite technology and high speed computer
systems. According to the Bush administration, the sanctions "will
remain in place for two years." The newly imposed Bush sanctions are a
response to the Chinese Army firms selling advanced ballistic and cruise
missile guidance systems to Iran.
Iran has demonstrated the newly acquired Chinese technology with several
test flights of its upgraded Shahab-3 long-range ballistic missile. The
tests showed the missile is now capable of carrying a nuclear warhead
and delivering it accurately to a target over 1,000 miles away.
Three of the sanctioned Chinese firms are well known to many defense
analysts as the same companies that participated in the Clinton-era
China-Gate scandal. The list includes China Aero-Technology Import
Export Corporation (CATIC), China North Industries (NORINCO) and China
Great Wall Industry.
All three PLA owned firms were linked to illegal exports of U.S.
technology during the Clinton administration. All three firms have also
participated in a wide variety of arms smuggling, ballistic missile
sales and sales of WMD technology to Iran, Iraq, Pakistan and Syria.
CATIC, for example, is well known to be a Chinese state owned
corporation, controlled by Generals of the People's Liberation Army. In
1994, CATIC purchased a giant, 5-axis stretch press from the U.S. for
civilian aircraft manufacture.
The Clinton administration approved the sale of the press to CATIC
through the Commerce Department then under Ron Brown. The approval came
just before Mr. Brown left on his whirlwind tour of China in August
In Nov. 2001, the Bush administration imposed one of the largest civil
penalties ever in an export-control case over the 5-axis machine sent to
China. The Commerce Department fined McDonnell Douglas Corp. $2.1
million for selling CATIC equipment that wound up inside a military jet
fighter manufacturing plant.
U.S. spy satellite photos confirmed the machines sold to CATIC for
"civilian" use were diverted to the Nanchang facility for making jet
fighters and missiles. Federal investigators charged the Chinese company
never had any intention of purchasing the equipment for civilian use
because the facility constructed to house the giant machine was put
inside the Nanchang military aircraft plant.
The Nanchang Aircraft Corp. military site was being built even as
Chinese officials told U.S. Commerce officials that the press was bound
for a civilian airliner plant just outside of Beijing. In addition,
Nanchang officials inspected some of the equipment just before McDonnell
Douglas shipped it in late 1993.
Nanchang is China's main producer of advanced warplanes and missiles
capable of nuclear or chemical attack. The U.S. made 5-axis stretch
press is reported to be making the J-11 - China's copy of the Russian
Sukhoi SU-27 (Nato Codename "FLANKER") jet fighter.
CATIC has also been involved in smuggling missile parts on civilian
According to the 1999 Cox report on the China scandal, "The PRC has used
at least one commercial air carrier to assist in its technology transfer
In 1996, Hong Kong Customs officials intercepted air-to-air missile
parts being shipped by CATIC aboard a commercial air carrier, Dragonair.
Dragonair is owned by China International Trade and Investment Company (CITIC),
the most powerful and visible PRC-controlled conglomerate, and the Civil
Aviation Administration of China."
Dragonair was fined for carrying the Chinese missile in the cargo bay of
a L-1011 airliner full of paying passengers. According to Aviation Week
& Space Technology (AW&ST), the missile was bound for Israel, enclosed
in a mislabeled box, partially dismantled, and only found by accident.
Both the volatile solid fuel rocket motor and the deadly explosive
warhead were intact and fully operational.
What the Cox report left out was that in 1996, the Chinese government
then owned only 36% of Dragonair. The remaining 64% lion-share of the
Hong Kong based carrier was then owned by a major Clinton fundraising
scandal figure - Indonesian billionaire Moctar Riady.
NORINCO ARMS SMUGGLING
Another well-known PLA owned firm linked to illegal arms deals is China
North Industries or NORINCO. Norinco came under investigation in 1998
for selling chemical-weapons materials to Iran for weapons of mass
destruction, according to testimony before a Senate Governmental sub
According to a 1997 Rand Corp. report, Norinco was also involved with
the PLA arms firm Poly Technologies in a foiled attempt to smuggle fully
automatic AK-47 rifles into the U.S.
"Poly's U.S. subsidiaries were abruptly closed in August 1996.
Allegedly, Poly's representative, Robert Ma, conspired with China North
Industries Corporation's (NORINCO) representative, Richard Chen, and a
number of businessmen in California to illegally import 2000 AK-47s into
the United States."
"Unfortunately for them," states the Rand report. "Their 'customers'
turned out to be undercover U.S. Customs and BATF agents, posing as
members of a Miami syndicate. Poly's representative, Robert Ma, fled the
country one step ahead of Federal law enforcement officials who had a
warrant for his arrest, and his current whereabouts are unknown."
GREAT WALL MISSILES
Finally, China Great Wall Industry is a major contributor to the Chinese
nuclear tipped ballistic missile force. Commerce Dept. documents show
that "China Electronics Systems Engineering Company (CESEC), a
subsidiary of the People's Liberation Army", owns China Great Wall
In fact, the U.S. government sanctioned China Great Wall twice for
selling advanced missile technology. Great Wall, along with nine other
PLA controlled companies, sold nuclear tipped M-9 missiles to Pakistan.
In response, Great Wall was banned from purchasing U.S. controlled
technology, including space technology.
RADIO AND TV SCHEDULE Charles Smith will be on: The Charlie Smith Show
on the American Freedom Network on Monday, 1/10/5, at 11 a.m. Eastern
time. Show information at http://www.americanewsnet.com/ The Jerry
Hughes Show on Friday, 1/14/5, at 3 p.m. Eastern time. Show information
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