How Beijing Gets U.S. Defense Plants; Insiders and Internal Documents Confirm That People's Republic of China Developed a Long-Range Espionage Plan to Acquire U.S. Rare-Earth-Magnet Technology. (the Nation: Military Technology)

Beginning of article

Outraged U.S. technology experts and documents obtained by INSIGHT indicate that the acquisition and subsequent transfer of high-tech rare-earth-magnet equipment and technology to the People's Republic of China (PRC) is the result of a long-range espionage plan by the late "Paramount Leader" Deng Xiaoping directly involving two of Deng's sons-in-law.

The revelations come as Magnequench Inc., a company partially owned by the San Huan New Materials and HiTech Co.--itself at least partially owned by the PRC government--prepares to shut down a factory in Valparaiso, Ind., that produces critical parts for U.S. precision-guided weapons. The company then plans to ship the machine tools to China. INSIGHT has learned from technology experts, plant insiders, internal PRC documents and historical records that the PRC had targeted the U.S. technological advantage in exotic materials and manufacturing and developed a long-term plan to acquire it in the United States and export a crucial U.S. military advantage to the communist-controlled mainland.

In 1995, San Huan New Materials and China Nonferrous Metals Industrial Corp. partnered with a U.S. investment firm to buy Indiana-based Magnequench from General Motors Corp. INSIGHT has learned that the president of China Nonferrous Metals Industrial, Wu Jianchang, is married to Deng Lin, the eldest daughter of the late Deng Xiaoping. The chairman of San Huan New Materials, Zhang Hong, now chairman of …