'Fake chips' cause fury in US Senate
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Two US senators are ramping up calls for an on-site investigation in China after locally produced substandard computer chips allegedly became components of advanced US weapons systems, posing a severe security concern for Washington.
However, Chinese analysts have claimed that the accusations hold little water and appear to be merely part of a conspiracy for the US army to help bargain for a bigger defense budget as well as impair Beijing.
At a press conference on Tuesday in Washington, US Senate Armed Services Committee Chairman Carl Levin said counterfeit electronics had "infiltrated" the Pentagon's supply chain, including microprocessors for the F-15 fighter jet and microcircuits for US Missile Defense Agency hardware, citing a 2010 report by the Government Accountability Office.
The Armed Services Committee launched a probe back in March, during which it interviewed a range of US military contractors and consumer electronics makers. Their results "almost totally and exclusively" pointed to China, and more specifically to Shenzhen, as the source of the counterfeit electronic parts, according to Levin.
The senator said weeks had been spent trying to secure visas for investigators to visit Shenzhen for one or two days but that these efforts had been continuously rebuffed. The committee staff investigators are now in Hong Kong, and are being kept from entering Shenzhen in Guangdong Province, he said.
The committee blamed Chinese authorities for being uncooperative during the investigation into how "counterfeit" electronics had successfully been shipped into the US and installed in core military systems.
Levin was joined by Senator John McCain at the press meeting, who said both China and the US shared a common interest in stopping all counterfeiting.
China demanded that it accompany US investigators during their stay in Shenzhen, Levin claimed, but the committee refused, saying that the "pre-condition" was a "non-starter."
The US senators, however, did not finger any Chinese firm for the counterfeiting charges.
The latest case saw a federal court try Shannon Wren and Stephanie McCloskey of a company called VisionTech in September 2010 for selling more than 10,000 counterfeit computer chips to the US Navy and its weapons contractors, according to The Washington Post.
The integrated circuits were knockoffs made in China, with fake chips potentially "putting lives and property at risk" by being defective or containing "electronic Trojan horses" that would allow hackers to disable them or track their use, according to the indictment.
US Commerce Department figures reveal that the number of counterfeit incidents discovered by the US military and its suppliers more than doubled, between 2005 to 2008, to 9,356 cases, The Washington Post reported.
The demand for chips and circuit-boards in weapons, vehicles and communications systems in the US has surged as it fights wars in Afghanistan and Iraq, which has left its armed services vulnerable to fakes, the paper said.
Zhang Zhaozhong, a professor with the People's Liberation Army University of National Defense, told the Global Times that both China and the US "are very prudent when trading arms with each other, as this requires approval from the defense ministries."
The US failed in its procurement inspections, and it would not be fair to instantly blame China, Zhang said.
"Even if the US military signed a contract directly with any foreign producers, investigations must follow relevant trade procedures. The US Senate Arms Service Committee is not supposed to launch a probe into another sovereign country," Zhang said.
Song Xiaojun, a Beijing-based military expert, told the Global Times that the committee's targeting of the Chinese government may have a simpler purpose, namely finding evidence to derail a proposed military budget cut.
"The main purpose is to obtain concrete proof that Chinese suppliers are manufacturing substandard products for the US military, and then return with a more powerful say in opposing the military budget reductions," Song said.
Nonetheless, the US will maintain its reliance on overseas manufacturers for computer chips as the US has almost abandoned the chips manufacturing industry, Song said.
A US House of Representatives subcommittee passed a fiscal defense budget of $530 billion for 2012, $170 billion less than for the current fiscal year.
A Chinese foreign ministry spokesperson said yesterday that they did not possess any relevant information while Reuters reported that the Chinese Embassy in the US did not respond to an inquiry regarding the senators' remarks.
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