Special Report: How China's weapon snatchers are penetrating U.S. defenses
Craig Healy holds up seized radiation hardened integrated circuits in his office at the Export Enforcement Coordination Center in Northern Virginia
By John Shiffman and Duff Wilson
OAKLAND, California (Reuters) - Agents from Homeland Security sneaked into a tiny office in Oakland's Chinatown before sunrise on December 4, 2011. They tread carefully, quickly snapping digital pictures so they could put everything back in place. They didn't want Philip Chaohui He, the businessman who rented the space, to learn they had been there.
Seven months had passed since they'd launched an undercover operation against a suspected Chinese arms-trafficking network - one of scores operating in support of Beijing's ambitious military expansion into outer space.
The agents had allowed a Colorado manufacturer to ship He a type of technology that China covets but cannot replicate: radiation-hardened microchips. Known as rad-chips, the dime-sized devices are critical for operating satellites, for guiding ballistic missiles, and for protecting military hardware from nuclear and solar radiation.
It was a gamble. This was a chance to take down an entire Chinese smuggling ring. But if He succeeded in trafficking the rad-chips to China, the devices might someday be turned against U.S. sailors, soldiers or pilots, deployed on satellites providing the battlefield eyes and ears for the People's Liberation Army.
Entering He's office at 2:30 that December morning, the agents looked inside the FedEx boxes. The microchips were gone. The supervisor on the case, Greg Slavens, recoiled.
"There are a bunch of rad-chips headed to China," Slavens recalls thinking, "and I'm responsible.'"
In the past 20 years, the United States has spent trillions of dollars to create and deploy the world's best military technology. It also has enacted laws and regulations aimed at keeping that technology away from potential adversaries such as Iran, North Korea and the nation that poses perhaps the most significant long-term threat to U.S. military supremacy, China.
China's efforts to obtain U.S. technology have tracked its accelerated defense buildup. The Chinese military budget - second only to America's - has soared to close to $200 billion.
President Xi Jinping is championing a renaissance aimed at China's asserting its dominance in the region and beyond. In recent weeks, Beijing has declared control over air space in the contested East China Sea and launched China's first rover mission to the moon.
As China rises to challenge the United States as a power in the Pacific, American officials say Beijing is penetrating the U.S. defense industry in ways that not only compromise weapons systems but also enable it to secure some of the best and most dangerous technology. A classified Pentagon advisory-board report this year, for instance, asserted that Chinese hackers had gained access to plans for two dozen U.S. weapons systems, according to the Washington Post.