China Keeps Espionage in Family of Businesses

0 Comments | Insight on the News, June 28, 1999 | by Kenneth R. Timmerman

Companies seeking to send high-technology goods to China can turn to a variety of freight forwarders in the area, which also are Chinese-controlled. For example, in Alhambra, just west of El Monte, there is Pan Ocean Line, a major shipper of scrap and metalworking machinery to China and Hong Kong. (U.S. Customs officials say that many of the weapons purchased clandestinely by Chinese fronts in the United States were shipped as scrap to Hong Kong and then taken by barge to the mainland.) Of course, as Customs officials hasten to point out, there is nothing illegal about a Chinese national establishing a freight-forwarding service in California. Nor is there anything intrinsically illicit about the operations of Communist China's two major shipping lines, the Chinese Ocean Shipping Co., or COSCO, and the Overseas China Shipping Line, which operate out of Los Angeles' harbor in Long Beach even though COSCO has been involved in numerous weapons shipments on behalf of the Chinese government and is known by U.S. counterintelligence officials to operate electronic-espionage ships off the U.S. coast.

The same goes for the East-West Bank in El Monte, which is used by CATIC, or the Bank of China, which has branches throughout the Los Angeles area that conduct thoroughly legitimate business, despite the discovery by FBI investigators that the Bank of China was used to funnel illegal campaign contributions to both Republican and Democratic candidates as part of a lobbying campaign directed by the top echelons of the Chinese communist leadership.

The problem with all these front companies is that the Chinese government views any Chinese entity operating in the United States as a potential asset that can be used when more discreet and possibly illegal services are required. Because the business is all within the family, it can be kept quiet. And besides, as the Clinton administration has shown time and again, it will go to great lengths to avoid angering the Chinese communist government, even if it means turning a blind eye to obvious misdeeds.

Timmerman is a contributing editor of Reader's Digest and has been investigating Chinese front companies since 1994. Portions of this report appeared in various issues of the American Spectator during the last two years.