Sharing Our Defense Budget with China

Episode A08

Host: Dr. Stephen Bryen

Sponsor: SDB Partners LLC ( “Powerful Access to Hard Markets”

by Dr. Stephen Bryen

Our defense budget is doing double duty – for our military and for China’s.

China has access to every manufacturing and technological tool it needs. Today’s

China's New Stealth fighter

restrictions on Western technology transfer to China have all but ceased to exist. If the Chinese wants the latest supercomputers, or the most up to date machine tools, or advanced coating technologies, or hot section technology for fighter jet engines, they can buy it. The US government technology security program is flat lined, dead, kaput, worthless. A total failure.

What China doesn’t buy, it steals. Every time the US government finances a technology – a new missile seeker, a new engine composite – China gets the plans free by tapping the computers of the manufacturing company. It is not a secret and no one can claim – actually, no one does claim – that even technology we want to control is secure.

So China has access to everything it needs and is sharing freely in the massive investment the United States has made in technology by sucking every bit of information about these programs out of our computer systems and networks. Innovations such as cloud computing are only going to make things worse.

It wasn’t always this way.

In 1984, by authority of the Secretary of Defense, DOD issued the Directive “International Transfers of Technology, Goods, Services, and Munitions,” to announce, “It shall be DOD policy to treat defense-related technology as a valuable, limited national security resource, to be husbanded and invested in pursuit of national security objectives.”

The challenge was the exploitation of Western technology by the Soviet Union in the midst of an unprecedented build up of Soviet military power. There was no way that the United States and its NATO allies could afford to match Soviet arms on a one to one basis. The Russians were sinking well over 25% of their GDP into armaments, while the US was in the low single digits, and our allies were below 3%.

So the US exploited its high technology to gain a qualitative, as oppose to a quantitative, edge on the Soviets. Much of the qualitative edge derived from computer technology and microelectronics.

Computers made it possible to design defense products in a new way, where platforms and components were modeled using CAD-CAM and other tools, and manufacturing was done by robotic machine tools using sophisticated multi-axis machine controllers. The famous silent propellers of America’s submarine force were made possible by horizontal, multi-axis controllers manufacturing highly sophisticated shaped blades that could minimize noise and cavitation. Fighter aircraft wings and fuselages were designed in computer wind tunnels and fighter planes optimized so that computers could fly the new generation of planes that, without them, would not fly at all.

Microelectronics made possible very small computers that could be integrated into missiles and smart munitions.

Understood that their only way forward was to steal as much technology as possible from the West and try to copy the computer and microelectronic capabilities of the United States. The Soviet Union created “Directorate T” in the KGB whose job it was, along with military intelligence (the GRU), to penetrate Western companies and steal whatever they could.

They tried – but ultimately failed, presaging the collapse of the USSR and the end of the Cold War. But the “old” idea of technology security remains of vital interest. Only the targets and the perpetrator have changed.

In the 1980’s we were facing the Russian military buildup. Today we are watching the Chinese vastly expand their military abilities. There is a smug notion in Washington that China is decades away from “challenging” the United States, so we do not have to worry – yet.

This, of course, is not far different from the ludicrous predictions the CIA made about the Soviet Union in the 1970’s. Russia, the theory went, was weak, although it had nuclear weapons. So if the US was smart it would engage Russia, negotiate arms control agreements, and open serious trade relations that would help dampen the enthusiasm for Communism. SALT agreements, detente, and major trade deals that pumped more technology into the Soviet Union were born of the theory. Not only did it not change the arms policy of the Soviet Union, the Russians jammed more and more resources into the military and churned out weapons of increasing capability.

China approaches its arms buildup differently, but its objectives are equally clear. It, too, is using espionage to steal whatever it can, as the Pentagon and the CIA know full well but cannot say. China is exploiting the Internet to rob the Pentagon, America’s defense industry and our high technology industry, of just about everything.

And the United States has no plan.

The Pentagon’s cyber security proposals are 20 years too late and much too weak. Classified networks have been compromised, contractors ripped off and valuable technologies stolen. This means trillions (not just billions) of taxpayer-funded R&D dollars have been squandered. Ultimately it means that China can be a credible military superpower much faster than the Washington geniuses say.

Compounding the problem is that we have spent so much domestically and on foreign wars, that major new programs for defense are already being delayed or canceled. Add to that the growing absurdity of our defense priorities, which are focused on tin-pot dictators and small wars rather than strategic defense.

In 1984 the Defense Department and the administration defined the threat and marshaled resources against it. The reverse is the case today.


“What we have witnessed over the past five to six years has been nothing short of a historically unprecedented transfer of wealth,” he writes, “closely guarded national secrets (including from classified government networks), source code, bug databases, e-mail archives, negotiation plans and exploration details for new oil and gas field auctions, document stores, legal contracts, [Supervisory Control and Data Acquisition] configurations, design schematics and much more has ‘fallen off the truck’ of numerous, mostly Western companies and disappeared in the ever-growing electronic archives of dogged adversaries.”


Dr. Stephen Bryen was the founder and first Director of the Defense Technology Security Administration.


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