An IDC Analysis


New Delhi, 12 September 2005

In earlier articles we had projected that in time to come the Indian and Chinese Navies interests are likely to clash in the Indian Ocean region. It was reported that the last US Naval Institute Proceedings editorial had stated in its first line, “China is at war with USA and USA will lose” and that was call to USA to wake up. China is pumping dollars into USA and in turn USA is increasing its deficit and pouring most of that money into emerging markets and India is on top of the list. Economists can study this new cold peace phenomenon, as we highlights two articles. First how China is snooping on the world and India and the article states Indian Navy and Singapore approached Taiwan for collaboration. This has been in the air and needs verification. The developments and articles should be of interest.

China Cracks Secret MEA Communications


Using by and large Indian software, the Chinese PLA’s cyber warfare unit called “Web Army” has been regularly intercepting Indian foreign office communications to and from its missions abroad, and our penetrated embassies include those in Washington DC, Paris, Berlin, Rome, Brussels, Singapore and Beijing, the high commissions in London, Islamabad and Colombo, and most of the major consulates in the US and other countries.

The Chinese were remiss in alerting Indian intelligence to the interceptions, when China sent a note about two months ago protesting an “undesirable” meeting in Singapore between the Indian and Taiwanese navies, and while first suspicions were of a human leak, such was the detailed charge against India, that it became apparent the entire communications of the top secret naval meeting had passed to the Chinese.

More than a year ago, through friendly back-channels, a third country had alerted Indian officials to Chinese cyber interception, but the tip-off was forgotten or dismissed, but it now transpires China’s so-called “Web Army” has employed nearly four thousand software companies and twenty-two thousand personnel for cyber warfare, cyber attack, passive penetration of communication systems, and cyber encryption.

Although reputed US and European software companies have not taken up “Web Army” contracts because of their military end use, rogue firms have signed up for commercial reasons, plus smaller but advanced software-making entities in India, South Korea, Singapore, Malaysia, Ireland and Israel and top sources said China has been downloading at the rate of three thousand pages a month of top secret Indian foreign office communications.

Sources said the Chinese PLA pays out a software royalty of between $5–$50 per downloaded page, and the interception is passive, in the sense that information can be extracted from local area networks even after they are shut down.

Because of the sensitivity, the third country that alerted India could not share details without compromising its own operations, and India has been greatly embarrassed by the leak of the sensitive meeting between the Indian and Taiwanese navies while not being able to protest about it either.

Secret Weapon Inside Pentagon

A scholar shapes views of China

Beijing, Mr. Pillsbury says, sees U.S. as Military Foe

An Optimist Turns Gloomy, His Direct Line to Top Aides



September 8, 2005

WASHINGTON -- Michael Pillsbury, influential Pentagon adviser and former China lover, believes most Americans have China all wrong. They think of the place as an inherently gentle country intent on economic prosperity. In that camp he lumps the lower ranks of the State Department, the Central Intelligence Agency, most U.S. investors and the majority of American China scholars, whom he chides as "panda huggers." Mr. Pillsbury says his mission is to assure that the Defense Department doesn't fall into the same trap. "Beijing sees the U.S. as an inevitable foe, and is planning accordingly," warns the 60-year-old China expert. "We'd be remiss not to take that into account." [Michael Pillsbury]

Mr. Pillsbury's 35-year China odyssey, from fondness to suspicion, parallels Washington's own hot and cold relations with Beijing –– from the diplomatic warming of the 1970s, through the shock and disillusionment of the post-Tiananmen Square era, to today's growing economic and political tensions. That's hardly a coincidence: Whether in public or in the policy-making shadows, Mr. Pillsbury has been a persistent force in shaping official American perceptions of a nation increasingly seen as the world's fastest-rising power.

Washington these days is a welter of emotions on China, many of them heightened by the recent furor over Cnooc Ltd.'s failed bid to buy American oil company Unocal Corp. President Bush came to office calling China a "strategic competitor." He now calls relations with China "good" but "complex." Secretary of State Condoleezza Rice has lately taken a dimmer view of China than her predecessor, Colin Powell, saying it remains unclear whether China will play a positive role in the world.

Thanks in part to Mr. Pillsbury's nudging, the Pentagon has staked out a particularly wary view of Beijing's global intentions. "We must start with the acknowledgement, at least, that we are unprepared to understand Chinese thinking," Mr. Pillsbury says. "And then we must acknowledge that we are facing in China what may become the largest challenge in our nation's history."

A lanky patrician with bright blue eyes, combed-back gray hair and a ready laugh, Mr. Pillsbury is known around the Pentagon as the Sphinx. Independently wealthy, he spends most days working in his two-story brownstone near the Capitol. He appears on no public Defense Department roster, and top officials decline to speak on the record about his work, noting that he is merely one of hundreds of paid consultants.

Yet Mr. Pillsbury, a fluent Mandarin speaker and author of three esoteric books on Chinese military strategy, has become one of the Pentagon's most influential advisers on China, with a direct line to many of Defense Secretary Donald Rumsfeld's top aides.

After decades spent nurturing contacts within China's military, Mr. Pillsbury has amassed mounds of Chinese-language military texts and interviewed their authors to get a grip on China's long-term military aims. His conclusion has rattled many in Washington: China sees the U.S. as a military rival.

"Mike's core insight has been to plumb the subterranean anti-American feelings within China's military," says Daniel Blumenthal, a China specialist at the Defense Department until late last year and now a scholar at the conservative American Enterprise Institute. "He takes the Chinese at their word, and that has given him real influence within the Pentagon." Mr. Rumsfeld has sharpened his posture on China in recent months. In June, he ruffled feathers in Asia when he used an annual security forum in Singapore to charge that China's military buildup could upset the region's delicate security balance. The Pentagon then upped the ante with a report warning that the Chinese military nurtures ambitions well beyond defending its historical claim to Taiwan.

The report laid out five "pathways" that could lead China to develop "more assertive foreign and security policies" or even provoke small wars to secure its growing energy needs. U.S. China experts noted that these and other passages seemed lifted straight from Mr. Pillsbury's scholarly work.

The Chinese government disputes Mr. Pillsbury's assessments, as well as the Pentagon's assertion that Beijing is dramatically increasing its military spending. Asked to comment on Mr. Pillsbury, the Chinese Embassy in Washington said in a statement that "any words or actions that fabricate and drum up China's military threat are detrimental to regional peace and stability."

Mr. Pillsbury's numerous critics call him a charming but combative China hawk whose work has overblown the thoughts and writings of a small cadre of Chinese military officials. Even admirers note the intensity with which he defends his views. "Michael has played a singularly important role in surfacing Chinese attitudes toward the U.S.," says Kurt Campbell, the Pentagon's top Asia hand during the Clinton administration. "But as with all brilliance, there is also a touch of madness."

Chu Shulong, a leading scholar on US–China relations at Tsinghua University's Institute of Strategic Studies in Beijing, questions Mr. Pillsbury's conclusions. "All these ideas of the rising power and inevitable conflict, I'm afraid, are very out of date," he says, asserting that China is above all intent on assuring its economic well-being.

Mr. Pillsbury, who has nurtured ties with the Chinese military since the early 1970s, insists he remains open-minded. "My core doctrine is that the Chinese think differently than we think they do and that it's imperative we understand what motivates them," he says. Chinese writings, Mr. Pillsbury says, show a military establishment obsessed with the inevitable decline of the U.S. and China's commensurate rise. On the economic front, he cautions that Americans shouldn't be taken in by the profusion of fast-food restaurants in China or other signs that make China look like the West. Beneath the growing trade ties with U.S., he says, runs a nationalistic fervor that could take American investors by surprise.

Mr. Pillsbury got the China bug as an undergraduate in the early 1960s, and later spent two years in Taiwan while earning a doctorate in Chinese studies from Columbia University. In late 1972, just months after President Nixon's famous trip to China, Mr. Pillsbury joined Rand Corp. as a 27-year-old China scholar. At the think tank, he began to do classified work for the U.S. government. By then, Mr. Pillsbury had already made his first contacts with the Chinese military through a friendship with a People's Liberation Army general, Zhang Wutang, who was posted at the United Nations. He used the contact to understand PLA aspirations, and then passed along his conclusions to the Pentagon and the CIA in a series of secret memos. "I was giddy with the Confucian classics and all the magnificence of Chinese culture," he says. He earned his first acclaim –– and a handwritten letter from then California Gov. Ronald Reagan –– with a 1975 essay in Foreign Policy magazine urging the U.S. to deter Moscow by establishing military and intelligence ties with China. At the time, that idea was almost scandalous. Later, under Presidents Carter and Reagan, such liaisons became a standard part of U.S.-China relations.

Mr. Pillsbury came slowly to what he calls his epiphany on China. Through the Reagan and first Bush administrations, he hopped between jobs at the Pentagon and the Senate, working to enhance military and intelligence cooperation with Beijing. In the 1980s, the U.S. began selling China powerful new torpedoes, upgrades for its jet fighters and advanced electronics for artillery –– arms sales that officials say Mr. Pillsbury helped push. Then in early May 1989, Mr. Pillsbury flew to Beijing for a low-key military mission, arriving just as the Tiananmen protests picked up steam. He was unsettled by the ruthless crackdown that ensued, and also by how Chinese authorities blamed the U.S. for helping foment the dissent. "I was stunned," he says. "Even some friends in the Chinese military that I'd known for years began to describe us as a mortal enemy, an evil force."

Following Tiananmen, Mr. Pillsbury's conclusions on China became notably darker. In one 1993 study, he noted: "China has the advantage that many experts on Chinese affairs testify soothingly that China today is a satisfied power, which deeply desires a peaceful environment in which to develop its economy. They put the burden of proof on others, defying pessimists to prove that China may ever become hypernationalistic or aggressive." An inveterate free-lancer, Mr. Pillsbury has never had to worry about steady employment. He's a member of the Pillsbury flour family, and his wealth has allowed him to pursue his research despite a knack for championing unpopular causes and for landing in political scrapes. Once, while helping funnel weapons to anti-Soviet forces in Afghanistan and Angola in the 1980s, he lost and regained his security clearance amid allegations of leaking secret information to the press.

Mr. Pillsbury has also avidly collected high-level protectors, counting Utah Sen. Orrin Hatch and retired North Carolina Sen. Jesse Helms among his patrons. His long-time mentor and current employer is the Pentagon's Andrew Marshall, a mercurial figure who at 83 still runs the department's long-term planning shop, the Office of Net Assessment.

In early 1995, Mr. Marshall sent Mr. Pillsbury to Beijing to gather Chinese military writings. The Pentagon by then was promoting a new generation of heavily computerized military hardware, and Mr. Marshall wanted to see what the Chinese made of this so-called revolution in military affairs. Mr. Pillsbury interviewed dozens of authors, and returned after several trips with crates of books and journals, more than 500 volumes in all. The haul formed the core of his first two books, both published by the Pentagon's National Defense University. Hardly light reading, the books got glowing reviews from several neo-conservative thinkers, including Paul Wolfowitz, Mr. Rumsfeld's former top aide and now president of the World Bank.

In his 1997 "Chinese Views of Future Warfare," Mr. Pillsbury portrays a military hierarchy fascinated with information warfare and the need for weapons systems to deliver "acupuncture" strikes and take out satellites. A particular obsession: what he claims to be the Chinese pursuit of "shashoujian," or a secret "assassin's weapon" that China can use to surprise a more powerful opponent.

"Mike can make a good case that the Chinese are developing submarines to sink our aircraft carriers or missiles to take out our satellites," says James Lilly, a former CIA station chief who served as ambassador to China in the early 1990s. "His whole point is, 'Pay attention. Listen to what they are saying.'" China's long-term strategy, Mr. Pillsbury argues, is to amass its strengths while attracting as little attention as possible. He is increasingly convinced that China's military thinkers and strategists derive much of their guidance and inspiration from China's Warring States period, an era of pre-unification strife about 2,300 years ago. This is the thesis of his latest book, "The Future of China's Ancient Strategy," which the Pentagon plans to publish this fall. Its core assertion is that China's history and culture posit the existence of a "hegemon" –– these days, the United States –– that must be defeated over time.

After President Bush took office in 2001, officials in the Defense Department were quick to embrace Mr. Pillsbury's warnings on China. His prominence became abundantly clear when China's then-vice president, Hu Jintao, stopped by the Pentagon in May 2002 to visit Secretary Rumsfeld.

The State Department had opposed the meeting, arguing that the Defense Department was not the proper place for the visit of a soon-to-be president of China. When Mr. Hu's party arrived, Mr. Rumsfeld dismissed the State Department interpreter and had Mr. Pillsbury do the job instead. Defense Department officials, while declining to elaborate, say that Mr. Pillsbury is now being considered for a full-time post at the Pentagon. Chinese officials are also keeping tabs on Mr. Pillsbury. In June, the Communist Party's People's Daily tagged the China expert as the main force behind the Pentagon's recent report on the Chinese military. "Mike Pillsbury always sits beside Secretary of Defense Donald Rumsfeld," at policy sessions on China, the story said.

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