Disturbing News out of China

There are two stories from East Asia today that are disturbing enough by themselves, but are particularly troublesome when read side by side. In the first instance, China has announced that it will be raising military spending 18% this year. But remember, the Chinese routinely lie about the size of their military spending. Expert estimates (such as the Pentagon's latest report on Chinese military strength) suggest that the real figure is two or three times the reported figure.

Simultaneously, a second story has come out, which was surely meant to be read in light of the first. Taiwan's president, Chen Shui-bian, has been warned that Taiwan would pay a dear price for any independence-like moves. This threat is well-timed, of course, to coincide with a referendum in Taiwan on whether or not to press for UN membership, something China routinely blocks for the island.

"If the Chen Shui-bian authorities should stubbornly continue down the path, they will surely pay a dear price," a parliamentary spokesman in China said. "We are fully prepared to repulse any adventurous activities aimed at Taiwan independence, and prevent anyone from separating Taiwan from China."

That's a nice way of saying, "Remember that giant leap in military spending we just announced? We're not afraid to use it."

Chinese Spies Arrested in US

Front page news on today's Financial Times:

The US on Monday announced a series of arrests in cases involving alleged spying by the Chinese government, including one where a Pentagon official was alleged to have helped Beijing obtain secret information.

The Federal Bureau of Investigation arrested Gregg Bergersen, a Pentagon employee with top secret security clearances, for allegedly providing a Chinese government agent with information about US weapons sales to Taiwan. In another case, Chung Dongfan, a former Boeing employee, was arrested for economic espionage involving US military programmes.

The arrests highlight the growing concern in the US about Chinese military and industrial espionage. Kenneth Wainstein, assistant attorney-general for national security, on Monday said the Bergersen case was a “classic espionage operation.”

Mr Wainstein said it involved “a foreign government focused on accessing our military secrets, foreign operatives who effectively use stealth and guile to gain that access, and an American government official who is willing to betray both his oath of public office and the duty of loyalty we rightly demand from every American citizen”.

Mr Bergersen, a 51-year-old Defence Security Co-operation Agency employee, was accused of providing sensitive information to Kuo Taishen, a 58-year-old Taiwanese-born US national who operates a furniture business in New Orleans, who allegedly sent the information to a Chinese government official, sometimes over encrypted e-mail.

The Justice department on Monday released an affidavit from an FBI investigator supporting the criminal complaint against Mr Bergersen, Mr Kuo, and Kang Yuxin, a 33-year-old Chinese woman who allegedly acted as a “cut out”, or intermediary, with the Chinese official, who is referred to as “PRC Official A”.

The affidavit describes a series of phone conversations and e-mails during which Mr Bergersen and Mr Kuo would arrange meetings where the Pentagon official would provide information about US weapons sales to Taiwan. But the affidavit also makes clear that Mr Bergersen appeared not to know that Mr Kuo was a Chinese agent.

The document says the PRC official’s contact details also appeared in the address books of a former US defence contractor, who was separately convicted for acting as a Chinese spy and violating US export control laws.

The Justice department said Mr Kuo cultivated Mr Bergersen and other US government employees, who provided him with classified information. One official said the investigation is ongoing.

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