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The Chinese army is open for investment, seeking Western money to
improve its military space complex. On May 29, the Chinese army’s Second
Artillery Corps moved into Western economic markets when Hong Kong based
Asian Star Development Corporation announced an exclusive deal to become
the “agent” for the “Chinese Academy of Space Technology.”

“Asian Star Development, Inc. (NASD OTC BB: ASTV), is pleased to
announce the appointment, dated May 29, 2000, by the Chinese Academy of
Space Technology (China’s equivalent to NASA in the United States),
naming Asian Star Development, Inc. as the agent for the Academy,” noted
the official statement by Asia Star Corporation.

Stephen Chow, president of Asian Star, stated, “We are extremely
excited and most honored to be appointed for this prestigious
undertaking. Asian Star firmly believes that it is beneficial to China
and the rest of the world to have the Academy actively participate in
the explosive new technological era we are entering.”

To Western investors, the term “Academy of Space Technology” brings
dancing visions of young students, working on peaceful science. Thus,
helping these young students make their way into
the cosmos is a wonderful way of diverting swords into plowshares, and,
accordingly, the official statement from Asia Star Corporation purrs
like an investment kitten.

Asia Star “will represent the Academy in introducing and promoting,
on an international basis, the Academy’s various commercial products,
such as satellite communication networks, global positioning systems and
all other commercial products developed by the Academy. China continues
to launch satellites for commercial purposes and last year successfully
completed its first unmanned space shuttle mission.”

Yet, space is not all flowers and doves of peace. The Academy also
recently launched a navigation and communications satellite for the
People’s Liberation Army Second Artillery Corps. The Asia Star
assessment of the Chinese Academy of Space Technology as the “equivalent
to NASA in the United States” is somewhat colored by deception, but the
“explosive” part is closer to being correct.

According to the Defense Intelligence Agency, the Chinese Academy of
Space Technology helps to maintain and operate the Chinese army nuclear
ballistic missile force pointed at America. Those missiles are built by
Great Wall Industries and maintained by engineers from the “Academy.”
Recent moves within the Second Artillery include tests of the new Dong
Feng 31 and the Dong Feng 41 missiles. Both weapons can deliver nuclear
warheads on American soil with pinpoint accuracy.

According to a report by Lt. Col. Dennis Blasko, U.S. military
attaché to Beijing, the Academy of Space Technology is actually part of
the China Aerospace Corporation and directly under the
control of the Chinese Ministry of Aerospace. The Academy of Space
Technology is part of China Aerospace’s empire of over 75 commercial
enterprises plus research institutes and factories,
including Great Wall Industries and the Shanghai Academy of Spaceflight
Technology.

Nor is the China Academy alone among the China Aerospace gems of
military-academic manufacturing excellence. Its sister — the “Shanghai
Academy of Spaceflight Technology” is also a major player in the Chinese
army manned-flight program. However, the Shanghai Academy has another
product a bit more challenging for the average space student.

In December 1996, Shanghai Academy of Spaceflight Technology senior
engineer Liu Xinamin revealed a project that he and his students had
been laboring on for over five years. His announcement came during a
Beijing arms show. Liu introduced Shanghai Academy’s best-known young
communist student achievement to date — the LY-60 air defense missile,
designed to “process up to 40 targets, track 12 and distinguish the
three that present the highest threat.”

The LY-60 is a “hit-to-kill” interceptor missile, with a maximum
speed of 1,165 mph, designed to destroy aircraft, cruise missiles and
helicopters. It is 15 feet long, 10 inches in diameter with a single
solid propellant motor and can maneuver up to seven Gs.

Shanghai Academy engineer Liu said the LY-60 had been under
development for five to six years and completed testing in 1996. The
Academy designed anti-air missile is currently being deployed by the
People’s Liberation Army and has been exported to the Middle East.

The LY-60 is not the only curious product from China Aerospace. China
Aerospace is currently under U.S. government investigation, along with
American defense contractor Boeing/Douglas, for the illegal export of
missile manufacturing equipment. The equipment was sold to China
Aerospace for a “civil” airliner project and shipped from Long Beach in
late 1994.

In 1994, Commerce Secretary Ronald H. Brown visited China Aerospace
to promote the sale of U.S. products, and helped persuade top officials
finally to move forward on a renegotiated airliner production deal with
Boeing/Douglas. Two weeks later, the Commerce Department approved sale
of the machines. In the end, despite opposition to the sale by some
military officials, the Pentagon itself did not oppose it.

In March 1995, Boeing/Douglas officials discovered that six of the
machines had not been sent to the agreed-on commercial plant in Beijing,
but 800 miles away to the Nanchang Aircraft Co., which makes cruise
missiles and jet fighters. Investigators have evidence that they believe
suggests the machines were intended for military use all along. In 1993,
while Chinese officials swore the machines would be used only for
civilian purposes, U.S. spy satellite photos showed construction of the
huge building at the Nanchang military plant where the six machines were
later installed.

Despite this historic act of deception, China Aerospace is best known
for adding a page to Bill Clinton’s presidential legacy. The crowning
jewel of China Aerospace scandals was the donation
of $300,000 to the 1996 Clinton/Gore campaign. Col. Liu Chao Ying, a
China Aerospace executive, arranged for convicted Chinagate figure
Johnny Chung to meet Gen. Ji of the People’s Liberation Army. Gen. Ji,
head of Chinese army intelligence, had a few things to pass on to Mr.
Chung, including a check for Bill Clinton.

“It was my 57 trips to the White House that attracted the Chinese
army’s attention,” stated Johnny Chung during a recent WorldNetDaily
interview. “Attracted Colonel Liu Chao Ying. At first, all I knew was
she was the daughter of a famous Chinese general. I did not know she too
was a Chinese officer. I thought she was no different than say the
daughter of General Colin Powell. She said she would help my business.”

China Aerospace Col. Liu’s first act was to arrange for Johnny Chung
to meet Gen. Ji in the basement of a Hong Kong restaurant. According to
Chung, Ji “told me three things: ‘We really like your president. We
would like to see him re-elected. I will give you $300,000 U.S. dollars
and you give it to the president and the Democrat Party.’”

“Let my banking records speak for themselves,” concluded Chung. “My
banking records are the proof the money came from the Chinese army. I
gave all my records to the Department of Justice but they have yet to
give them to Congress.”

Janet Reno and Justice have done nothing to deter China Aerospace
from conducting business as usual in the United States. Even so, the May
2000 Asia Star Corporation’s statement did contain a curious legal
caveat about the Chinese army space business:

“The above statements in regard to Asian Star Development, Inc. and
the Chinese Academy of Space Technology which are not purely historical
are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including Asian Star
Development, Inc.’s beliefs, expectations, hopes or intentions regarding
the future,” noted the announcement.

“It is important to note that actual outcome and the actual results
could differ materially from those in such forward-looking statements.
Factors that could cause actual results to differ materially include
risks and uncertainties such as technological, legislative, corporate
and marketplace changes.”

One other factor that could cause actual results to differ is
deception. Three thousand years ago the Chinese warlord Sun Tzu wrote,
“All war is based on deception.” War in the 21st century may be fought
in space but — when it comes to China Aerospace — Master Sun’s first
rule of combat still applies.


Source documents:

China’s Defense Industrial Trading Companies:
Defense Intelligence Reference Series
VP-1920-271-90

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