China Reform Monitor: No. 1018

February 15:

The Financial Times has published a multipage expose implying that China’s telecoms giant Huawei was behind the mysterious death of a young American electronics engineer in Singapore. Shane Todd was found hanging in his apartment last spring. Singapore police say it was suicide, but his family believes he was murdered. Todd had feared a project he was working on for his employer IME and Huawei on a gallium-nitride powered amplifier device (GaN) was compromising U.S. national security. He expressed concern to his family, accepted a new job in the U.S., and gave his 60-day notice at IME. Todd died the day before he was set to return to the U.S. His backup hard drive was discovered with the 2012-2014 plan for the IME-Huawei GaN project, which appears to have been accessed after his death. GaN technology can be used in high-powered radar, signal jamming, and offensive military weaponry.

The day before the nationwide celebration of late leader Kim Jong-il’s birthday, Chinese customs officials at the North Korean border have stepped up vehicle inspections. About 40 trucks, nearly double the usual number, arrived in Dandong, Liaoning from North Korea to collect large amounts of fruits and flowers for the nationwide holiday. To “thoroughly” inspect them for undeclared goods, the customs office in Dandong, Liaoning (one of the North Korea’s key gateways for Chinese goods) has doubled the number of customs officials, Yonhap reports. Thanks to lax inspection protocols, traders regularly transport Chinese goods to the North without customs declarations. Increased Chinese inspections will slow bilateral trade and hurt Pyongyang’s procurement of some Chinese products. Beijing has previously used similar temporary non-tariff barriers as punishment for DPRK nuclear tests and rocket launches.

February 17:

The 14th naval squad of the People’s Liberation Army (PLA) Navy has departed Qingdao, Shandong en route to the Gulf of Aden off the East African coast for anti-piracy escort missions. The squad, comprising three ships from the North China Sea Fleet - the missile destroyer Harbin, the frigate Mianyang, and the supply ship Weishanhu - carrying two helicopters and 730 troops, will succeed the 13th escort fleet currently conducting anti-piracy missions in Somali waters. At the farewell ceremony, Ding Yiping, deputy commander of the PLA Navy, said that the Somali pirates in the Gulf of Aden have become more deceptive and violent making it increasingly difficult for foreign navies to track them and rescue hostages, the official Beijing Review reports. Since December 2008, 14 PLA navy squads have been set to the Gulf of Aden to escort 5,046 Chinese and foreign ships, of which 50 ships were rescued or assisted.

February 18:

The New York Times reports that “an overwhelming percentage of the [cyber] attacks on American corporations, organizations and government agencies originate in” a nondescript building in the Shanghai suburbs – home to the 2nd Bureau of the PLA General Staff Department’s 3rd Department – aka Unit 61398 or Comment Crew. The Crew, which in 2006 began conducting thousands of intrusions draining untold terabytes of data from U.S. companies, is now focused on critical infrastructure – the power grid, gas lines and waterworks. To date it has attacked American corporate and government computer networks in 20 industries including military contractors, chemical plants, mining companies and satellite and telecoms firms. The group generally stays inside a network for a year or more stealing technology blueprints, manufacturing processes, clinical trial results, pricing documents, negotiation strategies etc. Its most troubling attack was on Telvent, which lost detailed blueprints on 60 percent of the oil and gas pipelines in North and South America to the Chinese hackers.

February 20:

China had planned to use a drone to kill drug warlord Naw Kham in Myanmar’s Golden Triangle, a Chinese anti-drug agent told the official Global Times. “Our plan was to use a drone to carry 20 kg of TNT to bomb the area,” said Liu Yuejin, commander of the Yunnan-based Chinese anti-drug force. “The plan was rejected because the order was to catch him alive and put him on trial.” If the drone attack had been carried out, China’s Beidou navigation satellite system would have guided the unmanned aerial vehicle (UAV) to its target in Myanmar, the South China Morning Post reports. Liu’s comments mark the first time a Chinese official has spoken openly about China’s offensive drone capacity. Liu said that for China it is a question of “when” not “if” its military will use UAVs for attacks, the Bangkok Post reports.

[Editor’s Note: Naw Kham, a Shan drug lord with close relations to dealers in China, became China’s most wanted fugitive after he masterminded the killing of 13 Chinese sailors in Thailand in 2011. Last April, Chinese police discovered that Naw planned to cross from Myanmar into China and sent a joint force of Chinese and Laotians to capture him. Within days of his arrest, he was on Chinese TV confessing before the Yunnan Higher Court, which sentenced him to death.]