China's Missile-In A-Box Incident
China Wages Unconventional War
By Charles R. Smith
Chinese authorities in Hong Kong were alarmed recently when they found a MiG-29 Fulcrum jet fighter inside shipping containers destined for the United States. The MiG-in-a-box was not armed, did not have working engines and lacked avionics.
What the Chinese had actually discovered was a Ukrainian MiG-29 being shipped to a U.S. museum for static display. The shipper, unable to handle such specialized cargo, simply did not have the proper paperwork on file to alert the PRC authorities.
Still, the boys in Beijing were quite upset and had to confirm the deal with Ukrainian authorities before releasing the MiG for transport to America.
This episode stands in stark contrast to the reaction that Chinese authorities had when an armed air-to-air missile was found inside a jetliner full of passengers.
In 1996, Hong Kong Customs officials intercepted an AA-11 ARCHER air-to-air missile being shipped by the China National Aero-Technology Import and Export Corporation, or CATIC ­ aboard a commercial air carrier full of paying customers, Dragonair.
China International Trade and Investment Company (CITIC), the most powerful and visible PRC-controlled conglomerate, then owned Dragonair along with the Civil Aviation Administration of China (CAAC) and Indonesian billionaire Moctar Riady.
Unlike the MiG incident, the missile was considered an active and dangerous weapon. The missile was intentionally mislabeled in its box as machine parts bound for Israel. The weapon was fully operational and carried a live warhead.
The Chinese shipper ­ CATIC ­ is also a company known to be under the control of the Chinese military and has frequently been cited for export violations.
The missile-in-a-box incident violated several international laws against the transport of live munitions with live passengers. Previous illegal arms shipments on passenger planes have had disastrous results. For example, a South African shipment of artillery shells stashed in the belly of a Boeing 747 detonated over the Indian Ocean, killing everyone on board.
Still, Chinese authorities did not apologize or even acknowledge the missile-in-a-box incident despite the serious consequences.
Beijing Arming Terrorists
This is not the first time that Chinese authorities have threatened airline security. China has been linked to previous attempts to smuggle man-portable anti-aircraft missiles into the United States.
In 2005, two men were indicted in Los Angeles on charges of attempting to illegally import Chinese-made missiles into the United States. Chao Tung Wu, 51, of La Puente, Calif., and Yi Qing Chen, 41, of Rosemead, Calif., were charged with conspiracy to import Chinese-made surface-to-air missiles (SAMs).
Law enforcement officials said Wu and Chen were caught in a sting developed out of the large-scale federal investigation in Los Angeles known as "Smoking Dragon." Wu and Chen were charged with conspiracy to import Chinese-made "Qianwei-2" anti-aircraft missiles and launchers.
The "Qianwei[Advance Guard]-2" missile is capable of destroying civilian airliners and military aircraft. According to the Chinese developers, the "Qianwei-2" is the world's most effective one-man shoulder-launched ultra-low-altitude air defense missile, surpassing the U.S. "Stinger" and the French "Mistral" in performance.
The conspiracy involved a deal between an undercover U.S. federal agent and Wu and Chen, along with officials at the Xinshidai Corporation, a Chinese state-owned weapons maker, and an un-named Chinese general.
Law enforcement officials confirmed that the missile deal involved unindicted co-conspirators in China, forged papers from a foreign defense ministry, and illegal payoffs to the relative of a foreign president, who was not identified.
U.S. law enforcement officials identified the missile manufacturer as the Xinshidai Group, a conglomerate of Chinese state-run manufacturers that is currently under sanction by the U.S. government for arms sales to Iran.
According to the Defense Intelligence Agency, Xinshidai is actually a state-owned arms maker controlled by the Chinese People's Liberation Army.
During the alleged conspiracy, Wu and Chen referred the undercover agent to a foreign "general" with whom the undercover agent had contact regarding the purchase of weapons. The indictment further alleges that Wu sold the undercover agent a bogus passport to assist him in negotiating overseas the purchase of the weapons.
After Wu and Chen were arrested during the takedown of Smoking Dragon, the undercover agent had additional contacts with a foreign individual who said he wanted to complete the weapons deal even without Wu or Chen.
The Bush administration refused to identify the foreign individual, the Chinese General or the third country involved in the sting. Yet the undercover agent involved noted that he clearly stated that he intended to purchase the missiles for terrorist operations inside the United States against civilian airliners.
Counterfeit Money
The missile sting added a further complication on the Smoking Dragon operation. Smoking Dragon uncovered an entire network of operatives here in the U.S. who are involved in smuggling and counterfeit $100 bills from North Korea.
It is estimated that the counterfeit currency alone adds over $200 million a year to the pocket of Kim Jong-il, the crackpot dictator of North Korea. The real spin behind the sting was that Kim Jong-il is peddling his fake $100 bills through Chinese banks.
One such bank was identified as the Bank of China, a financial institution controlled and operated by the communist central government in partnership with Chinese billionaire Li Ka-Shing.
Again, the Bush administration has refused to pursue the Bank of China connection to the top of Beijing's leadership chain. Instead, the Bush administration elected to concentrate on the North Korean end of the counterfeit ring and allow Bank of China to seek U.S. investors.
According to a Wall Street Journal article by Glenn Simpson, Gordon Fairclough and Jay Solomon, former "North Korean traders and financiers who have fled their country say North Korean banks and commercial enterprises must rely on foreign banks, especially Bank of China, to conduct nearly all international transactions."
"Every North Korean bank has accounts at the Bank of China" through which money is moved, said one former North Korean businessman.
Chinese President Hu Jintao is scheduled to arrive in Washington on April 20. Perhaps he can explain how a Chinese general, a major PLA arms firm and a state-owned Chinese bank could become involved in a terrorist plot to destroy American airliners.
Of course, Hu could also pay for the entire trip with fake $100 bills.



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