The General Speaks

The general manager of the company Poly technologies, used to be Wang Jung, the son of Wang Zhen, a very powerful person in the arms trade. Now the general manager is He Peng, a very powerful person in the arms trade. His wife is no longer involved in the business. He is not a general. And He Peng Fei, he was the director, now is the director of the general staff of armaments equipment department, that is a major general.
For these people, they had special privileges, but you had to be at the very top to have the special privileges. Now I was really small potatoes at the company, and began as a translator for the company, only, but later on I was promoted to a project manager. This special privileges were not granted to everyone, of course. These people that I mention by name, on the surface, of course, they didn't earn much more than we did. But actually, in reality, they had all the privileges and access to almost anything that they wanted to have. Like a car, and a nice apartment. They had several apartments for themselves, they wanted perhaps to sleep with one woman tonight and another woman on another night, dividing up night by night and they had those apartments at their disposal. And they had these apartments then at their disposal. While the other girls friends and the wife would have no idea where they spent the night before, naturally. If you look at...well, they had a lot of apartments. And they owned, virtually owned, one car. That was not a very luxurious car, of course, that people would point out. Not like a Rolls Royce, but it would be down a level to a Mercedes Benz. Now he might own one for himself, but he would have access to several others and they would be owned by the company. Now these were really powerful people. That is why arms trafficking in China is really so hard to control. We had special ;business rooms, negotiations ;rooms and business rooms for associations at the various good hotels in Beijing. And the advance reservations were guaranteed at the Beijing Hotel, the Jianguo, the Great Wall, the Sheraton. Poly used to have a permanent suite in the Beijing Hotel, but then it moved to the CITIC building.
How did you get the job. You didn't have to be a party member, that was absolutely not required. Sometimes we had rooms for business negotiations, and we had the advanced reservations for the big hotels, and so on. All the hotels. Our company has...once we had a permanent office we no longer had permanent suites. Then we moved to the CITIC building.
Getting the job. Once you had the party membership, of course, so much the better. But this, in nature, was a business company. This is a company that never worries about money. That is the significant distinction between our company and all the other business companies in China. Government owned companies. We never worried about making a profit. That was unnecessary. That is one of the reasons why I chose to come to the US to study. I really came to hate the company. This is, for example, they spent money almost randomly, just to spend it. For example, if we wished to purchase a wine glass, our job was never to determine which manufacturer made it cheaper or of top quality, all our concern is that we have to spend this amount of money before the end of the year. And the decision that we made, which company we had to purchase it from, was based purely upon which kind of company is offering us personally more profit, or to put it another way, which company is offering us a personal bribe. Do you see that. So to speak.
For example, we are going to purchase a set of glasses and we want to spend $500 but this kind of money must be spent before the end of the year. So we are in a hurry to sign the contract. And on the other hand, we are not looking for quality, really. We are just trying to base our decisions on which company better serves us, personally. If we want to purchase something from west Germany, we send a delegation to that company, and in return this company offers us luxurious hotels, luxurious cars, nice food, women, everything you can imagine. Not drugs, however, Never drugs.
So, you are offered this, and despite the fact that we know that this company is not good at producing quality, but who cares about that, as long as have this glass, it is all right. Nobody is going to question how good it is. If my superior one day comes in and says how good is this glass, I just say, Well, this is good.
What about public officials executed for corruption in China. Why did they do that? Because that individual is a convenient scapegoat. For scapegoat catching you have to look toward one particular type of individual. This individual might just be symbolic. On the surface, he holds a high position, very persuasive to ordinary people. But on the other hand, he holds no real power. Just superficially is he somebody. Once that individual is involved in bribery, this individual is the kind who can very easily be caught and then made a scapegoat, cut his throat, and that will serve to show the public that the government is concerned with bribery. This will show everyone, publicly, that the government is clean and clear, but actually, he is just a scapegoat.
As far as drugs go, there are two lines of business in our company. One is official. That's business. The other is personal. Some of the arms exports, such as the DF5, the missile that we sold to Saudi Arabia, the long range surface to surface missile, we just handled them through underground channels. And underground channel, is this, we received some information from the Saudi Arabian government. They told us that they were shopping for surface to surface missiles at the cheapest price. And the signal was sent, or conveyed to the company through a middle man either in Hong Kong or in Pakistan. Some times from our friends in Iran. We have lots of them. Iranians and sometimes foreign businessmen stationed in Iran in Peshawar or in Rawalpindi in Pakistan. These individual actually gave us a lot of help. We got this information, through a back channel connection, and through the personal connection that our guys maintained with the CMC top officials, the Central Military Commission, the number one organization in China that controls the military. Like Deng Xiaoping used to be the chairman of the commission. Their sons and grandsons part of them actually work for our company. We don't know what happened. We know only that one day someone comes to us, and the word seemed to come through family connections, they had heard at home, that Saudi Arabia had missiles to sell. Now the money that we could make through something like this would serve China. For full modernization drive. And then the fathers would say, All right, that sounds good. Go ahead. Actually, they didn't have to talk to their fathers directly. All they need to talk is to ask his father's secretary, because the father's secretary could be in a very powerful position. So the son could just pick up the telephone and give the equipment department of the army a call, and tell them, all right, now I need three missiles. And I need them at a certain place. And they say, All right, since you are the son of this or that individual, of course, you have permission. Now this happens without written permission, of course. A lot of fields of the arms trade in China, without written permission, without records. Everything was done on the telephone, and the liens could not be tapped. No they, used, when they talk with each other they use secure lines. Secure machines, a big black machine, and once they become clear, secure, two buzzes, and I used these a lot. But the people you are talking to have to have the same machine, otherwise they cannot hear you. First of all, they send a clear, and you say, first I would like to talk to you, so please press. And so the guys press secure at the same time, and if you do not have a secure machine, then all you can hear is something scrambled. Maybe the CIA could tap these lines, but presumably this was clean.
Who pays for the official life style in Poly. Nobody really cares where the money comes from in Poly or when an official has it. What is important is the authority and the profits.
There are many deals. Like Sweden, Kemawa Company, we had business with them. We bought arms from them. That was a ship propulsion system, too. That was the big contractor and there were subcontractors from other countries too. But they were the biggest contractor for destroyer propulsion systems. That was in 1988, but the contract was signed in 1987. We paid a visit to the firm in 1988. In Stockholm, the firm was not there. We invited some people from the General Staff and the CSSC, the China Shipbuilding Company, And they were handpicked by the company, and they just flew them around in helicopters when they were there, to Stockholm, and took them to an island resort, and led them to the mountain tops there and so on. I was in West Germany at that time, since a certain company there was a subcontractor.
As far as I know they did not provide female escorts. They knew that we were from socialist countries and so presumed that we were not interested in women. Souvenirs when left the country. They provided souvenirs that were easy to carry when we left, wristwatches from the companies we did business with, for example. This kind of stuff, for people of middle rank and for translators and so on, then bigger gifts for other individuals.
Nothing romantic in my experience in the arms trade. Not in western European countries. Well, like Asian countries, like Pakistan, Iran, Thailand, yes, they provided women and escorts for visitors.
Kemawa was a big contract. That was below 30 million, about 24 million as I remember it. Contract was signed in Sweden with them.
So the arms sales in the Middle East served two functions. First, of course, it is the most important one, it generated huge revenues for the PLA itself for the modernization drive. We used those profits to purchase high-tech weapons from the US and from Britain. Like the missiles we sold to Saudi Arabia, that was quite advanced missiles, that was in 1985, but negotiations faltered in Washington between the two embassies. At that time it was Han Xu who was the spokesman for the Chinese government to the UN. He was quietly approached by the prince of a Saudi Arabian royal family. But of equal importance China always used these advantageous positions toward foreign policy in the Middle East, it was basically against first the US and then Russia. China's relationship with Middle Eastern countries began, actually, in 1985, during the Bandung Conference in Indonesia. It was at that time that Premier Zhou Enlai met Gamal Abdel Nasser. And these two during the meeting formed a very good personal relationship. But at that time China was clearly a very good ally of the Soviet Union. So, China’s relationship with the two superpowers basically determined its relationship in the Middle East. China, although it was a great power, never defined its international relations and its revolutionary obligations within the borders of other countries. They said, we are also a third world country, we are poor, and we are of equal footage with Middle Eastern countries.
The only reason why were in the middle east is so that we can help you guys. Virtually out of nothing. And a lot of countries in the Middle East bought that idea, that China had nothing to gain in the Middle East except to help its friends. It had no hidden agenda, no secret plan to exploit the friendships. And that is why China retains friendly relationships with middle eastern countries. One of the advantageous positions that China takes is that, ok, they could just very effectively explain to the Middle Eastern countries, explaining that we actually don't depend on the Middle East, unlike the USA and then the Soviet Union, for either oil or strategic position. We have no selfish means there. The US depends on the oil and the Russians depend on the desire from the Czar period, had always cherished the ambition of occupying Eastern countries in order to gain access to warm water ports facing the Indian Ocean. And the guys based upon my experiences having to do with guys stationed in the middle eastern countries like Iran and Iraq, when I talk with them they all agree with me. China is selfless, that is her position. She was seen as a selfless friend, not selfish. But in actuality it was very selfish. They served two functions. Diplomatically, the arms sales position was based on a lock in strategy, procedure. That is, perfect example comes in 1974, after the war against Israel in the Middle East, and Egypt was defeated in the Sinai Peninsula. But at that time, Egypt, in order to win the war, borrowed a lot of money from the Soviet Union. But China was not involved in the process at that time. So, Egypt borrowed arms and lost the battles, then the Russians, then after the war, just did what they did to the Chinese after the Korean War. China was fighting a war for the Soviet Union and for itself, and it borrowed a lot of arms from the Soviet Union. After the war was over, well, the Russians, they refused to clear the deck. They asked us to pay back what they had lent to us with high interest. And that is something that the Chinese never forget, never. So China remembered that after the Korean War. The hundreds of millions of Chinese were forced to tighten their belts for the next three years because of the Russian demands, and they understood that and they did not forget that. Chairman Mao said, "All right, we are going to do that. Because I will be the last one to see us in debt to a foreign country. The people suffered and the children born in that time were ill nourished and suffered from a lack of everything at that time.
Then the same thing happened in Egypt. Egypt was very angry, the Russians demanded to be paid back with high interest after they fought the Israelis. At that time the Egyptian Air Force was ready to buy 50 American F5E fighter planes. The contract was signed and everything. So Egypt was very angry. They saw themselves in some ways as a proxy y army. But then, because of the Russian debt, all right, because of the debt, they could not pay for these planes. Interestingly enough, the US, prior to the war, had agreed to provide $1.5 billion in military aid to the Egyptian Air Force to pay for these planes and supplies. But after the war, the US changed its ideas, it didn't want to help a defeated friend, and besides its best friend in the Middle East was Israel. Prior to the war the Egyptian Air force knew they were going to buy these air planes from the Americans. Later on, interestingly, Egypt turned to Saudi Arabia for money. Their military, Saudi, was extremely weak. They to some extent had depended on Nasser, and depends on and Sadat, and they really depend on Egypt for national defense. They were rich and they agreed prior to the war to provide $5 billion US military aid for financial assistance to purchase the fifty airplanes. But after Egypt was defeated, they refused to do that. And so it was at that time, Egypt was in a terrible position, and Sadat was so angry, that he expelled all the Russian military advisors, technicians and diplomats out o f Cairo and sent them back to the Soviet Union. At this point China stepped in. China provided 50 Mig fighter engines, free of Charge and then committed itself to the maintenance and repair of hundreds of grounded Soviet War planes that were lacking parts and needed repairs and so on. The Chinese sent teams of technicians and military experts to help maintain the soviet planes, because they were the one basically that the China used at that time, so they are familiar and they have sufficient parts to supply to the Egyptian air force and they helped keep the Egyptian air force going.
So when Sadat was assassinated, actually, later one, the relationship between the two countries was so close, in fact, that he was assassinated in 1981 in Cairo during a parade. The relationship between China and Egypt was so close, by that time, that the reviewing stand for the VIPs, and Sadat was sitting in the front row, of course, and immediately behind him and sitting in one corner, there were nearly a dozen Chinese military advisors, including a top airplane technicians, one of them, actually, was my classmates father. One of them, he was, the last name was Chou, and he was wounded in that attack. He was later flown back to China, and several others were wounded, also. He returned and he came to our school to see his son, and we had a talk. That shows how close the relationship between the two countries was.
If Saudi Arabia is friendly, then China could gain politically and strategically in the region. Not necessarily economically. China made its maneuver by arranging secret meetings in Washington between the two embassies in a dialogue with the Prince, Prince Bandar Bin Sultan Ibn Abd al-Aziz. Later he visited Beijing, also on a secret trip, and signed a memorandum of understanding or a letter of intention. So the deal was reached, an agreement. And so China begins selling missiles to Saudi Arabia. This is the most significant thing about Poly Technologies. This is what is important about Poly because they are the only company that is entitled to sell arms strategic arms, including nuclear technology, to foreign countries. In this regard, both Norinco and the other defense industrial groups have no power, really. So poly is involved in this and the contract is signed. It was for $3 billion. China earned a lot money from this deal. So starting from 1985 China starts shipping the missiles, called the DF3. East Wind(Deng Fan) a single stage single warhead missiles, originally deployed along the Sino-Soviet border and all of them were targeted on Moscow. Or Leningrad. The range is intermediate range, IRBM, a range of over 1,700 miles. So they are capable of hitting anywhere in Israel. At that time China developed a new series of strategic arms, and nuclear missiles. So these were to be phased out. So, what to do with them? Sell them? Sell to what or to whom? Sell them first of all for money and for profits and secondly sell them for political purposes. They wanted to secure their influence in the last country with which they have no influence in the Middle East. And through Chinese eyes this is the most important country to gain and to win friends from. So this is the biggest political gamble China made since it was founded in 1949. First of all, because first of all this is the first time China took something out of its strategic inventory, which was virtually deployed at that time. It was not something that was sitting in a depot, it was something that was deployed in the field. So China took the missiles out, took the nuclear warheads out and put a dummy warhead on it and said, "OK, you can put what you want in this in the way of conventional explosives," then they shipped the missiles to the Saudi Arabians. By ship.
Technicians and Chinese soldiers, by the thousands, accompanied these missiles, but on a rotation basis. Rotation basis, if 500 people in the first group to go, and later on, after two years, they return to China and they are replaced by another group of 500. It was about a two year rotation. The chief liaison officer was my classmate and had a talk with me in Beijing. So, the reason why I say this, is for the first time we sold strategic arms deployed in the field, to a country, a capitalist country, with whom China has no diplomatic relations. We did not have an embassy there. This is a political gamble China played. But all great secrecy and in silence. The US knew but it didn't protest. The Israeli’s also knew, and they were upset. At that time they quietly approached China.

Poly performs the duties that the General Staff cannot perform. It is not stronger than the General Staff it is the well camouflaged right hand of the general staff, that is why we carry a dagger, too. Cloak and dagger. The iron fist in the velvet glove, that is us.
The Life styles of the individuals in Poly. They have their own cars. But you never know where they got their cars from. Mercedes or Rolls, they are imported from Hong Kong. There are a lot of cars registered with the Army, the license plates are all white.
The life styles of the individuals. It is not related. What are the pers. How many girl friends they have. They can have as many as they want. They have money and power. They don't live like westerners. They behave themselves in China. They have orderly families. Personally I didn't visit their families We never formed close friendships. The friendships were based on consent and understanding.
Apartments were quite luxurious, even by western standards, and when they come to the US they also have good quarters. They have their friends buy homes for them in the US, they are taken care of by friends here in America, under the friends names. But they make a point of not showing these things off in China. They are in control there.
One thing, they are well educated and culture individuals. I consider myself one of them. But they are more civilized than I am. They know how to behave themselves. They are discreet. They are image conscious. But at the same time they know how to have a good time without taking risks. If they want to enjoy themselves, then they go to the west. The dangers. Say, if you own three cars in Beijing, or you commit a lot of crimes, and say you assault or rape a lot of girls. Then someone is going to bring charges. Your enemies will make use of that information, especially when they have evidence. Unless you are extremely powerful you will be vulnerable to one degree. So whenever there is a trial, against misbehavior of the company, not an individual. If you are the boss, and there is a trial, then the influential individual disappears for a time, and another individual is put in that post, and this is the individual who is blamed for all the misbehavior. Once that is over, than then the son returns. This is a practical case.
Basically, what is important in China, if you have a mistress or two or three, there is no problem. Some of the officers have a telephone list. And we would be a dinner and they would bring a young beautiful woman. Nobody bothers about that. You may not accept this. As long as you are in a a good position, we never look into your private life. These women may have children. They may have husbands also. They are simply service people. They make use of each other. I will open a bank account in Hong Kong if you sleep with me, for example.
Clothes, suits, that is not important. I wear certain things that are not expensive. In the high position, of course, it is required that you have a good suit, and shirts and shoes. But who bothers about this, who is envious or surprised. They don't have inexpensive things, let me put it that way. Everything for these individuals is guaranteed by the state. We go to the Army hospital if we are ill. The best medical care. We are not interested in the opera, that is for westerners. That is for tourists. We are interested in naked women, belly dancing. That is the sort of thing we are interested in. This would occur at some of the hotels in Beijing or Guangzhou. These would be Chinese women, I realize the taste of these individuals. They are interested in Mainland girls, not Taiwan, Thailand, Singapore. That is bullshit. We Chinese, think ourselves, from the Northern part, we are the genuine Chinese, the Hans. And we get what we want. There are skirmishes over some women that is what we call them. Skirmishes. Once in the office we are in business and that does not intrude there.
The only thing that could cause you to resign would be an economic scandal. Then a deal exposed to the public would mean that an individual would have to be punished. If an individual womanized too much or drank too much then you would have to step down. But that has never happened. Once in power you know how to control yourself. I know how to control myself also.
There are some powerful women in the company, too. They the women enjoy the power of their husband. They enjoy the conveniences, the travel, and the money.
Disagreements within the company? Of course, many individuals struggling for the same power, what we call the strategic turnover, individuals try to undercut your influence. Within the company, everything is pretty clean, you are not going to change much. But everywhere else we see corruption, bribery, whatever. Why not?
I’m not talking about people from Poly. Private companies, other organizations, these are the places that are dirty. But the higher you are, the more purified you are. Purity is there at the top. The more methodical you are. The more in a position you are that is advantageous, and you form another perspective toward the whole world.
In China people develop in several stages. Lowest class, could be enlightened, agriculture class. Once they are enlightened they become educated. Then they become civilized and then they become cynical. Then there is something beyond that, and that is your break through cynicism, and you develop into responsibility people, beyond cynicism. Nixon and Kissinger were these individuals. That is why they were accepted in China. After you are too cynical, you become more realistic, you want to do something for the world, get things done. These are the people we recruit. These are the people who can look at things philosophically. Then you transcend politics. Then you can form understandings and relationships with individuals no matter what their politics. You share a perception with people who are the same as you. Mao, Zhou and Nixon and Kissinger, talking in private. They had so much in common. They were beyond cynicism. Cynics complain. Those beyond it do things and deal in the realms of pure power. That is what these leaders do. Beyond politics and beyond ideology.
I was chosen by individuals in the company. File evaluated. Interviewed. Hired. There is no family succession in the company. Family employment is there, but not succession. Most important people in the company are still in 50s and 60xs. Their children are not in company but are educated. They do not want to make it too obvious. It is like in the army, when it is not obvious. You take care of my children and I take care of yours. If I am the Beijing Commander and you are the Nanjing Commander, we watch over and take care of each other’s children. That is how it is in the company. Like the Chinese military, that is how poly is. You send your son to me and we take care of each other's families. You promote my son and I promote yours. So people working under me never know exactly where the power threads go. You don't want people to complain about this or know about this every day.
I never questioned what they did for their children. They could provide chances for foreign study for their children. but you never find out how they did this. The son may perform extremely well academically, of course.
It is young and so it is still a two generation business, fathers and sons, and so the two generations stay in the business. But we never know the relationship of individuals. They never in the office question your family background. They know where you are from, somewhere, but they never question it. It is like 1984 with the Inner and the Outer party. This is the Inner Party. We have our own private library, and that is where we keep all the information books publishes in the West, time and Newsweek and Janes Fighting ships. But not Playboy. We are a socialist country. These things are not encouraged openly. But everyone has them at home, under the pillow. They like the Hong Kong version, in Chinese with Chinese women. That is there taste. They do not have western tastes in women.
Saudi Arabia was the perfect deal, the biggest deal that China ever signed. France was a tiny company, deal, spending money does not make you feel glorious. But when you generate revenue, you are a hero. That is the distinction that we always make. Making money is glorious
We keep the commission, officially. And we have the right to that. But the major revenue goes back to the PLA. They use that for the payment of American arms and technology. Like the $500 million deal we signed with Grumman. That is where the F8 is modernized. We bought 50 modification kits. So don't worry we have money to spend in America and we get it in the Middle East. It is also important that the whole PLA delegation went to Grumman. We send delegations back and forth to the defense universities.
The Poly, aside from being unique in the field, also looked after imports, and it is the only company in China authorized to purchase arms for the PLA. No other company can do that. There are many funny stories behind that.

Some other companies have very nice connections. With the overseas defense firms in Britain or in Germany. And through sources they found out what the PLA air force or the Navy needed and they privately or independently approached foreign defense firms, saying that they had a client looking for some product. Then, upon their return to China, they approached the PLAS without approaching Poly, saying that, "We know that you need this and we can get this for you. And due to arrangements we have made, a huge delegation from Germany arrived in Beijing. That company booked hotels and conference rooms for several weeks and they invited individuals from the PLA and from another company. And they introduced their technology and products to the PLA. And this process went on for several months.

So, and all these activities conducted at the expense of the company. They expect a lot out of this. They know that this business can be successful in China, because they knew this company owned something that the PLA really needs. So, there must be a deal later on. They were right. Later on there was a deal. The PLA later on filed a report saying yes, really, this is exactly what we need, and we need hard currency around so many millions and they read their expectations, and the PLA general staff ratified that, saying it was all right, that they would appropriate the money to buy, but the deal could only be made through Poly Technologies. And that meant that from that point on, that company had nothing to do with the deal. Leave it alone. And so they lost whatever time and money they had previously put into it. So Poly guys, and I was involved in this on a couple of occasions, personally, my boss threw some files on my desk, relating the technological specifications and the inquiries and the equipment, which I knew little about, specifications, inquiries, introductions about equipment. So from that point on I am the middle man. I am the man. Who is going to supervise the entire deal. I felt very strange and unique about this, when I stepped into the big conference room with all of the guys there, with the foreigners sitting on one side of the table and the Chinese on the other and they are all in uniform. But I was in a conspicuous position since I was representing Poly, the foreigners were totally boggled. They didn't know what was going on. They asked, "Where are our friends?" They wanted the representatives from the previous company. But they no longer showed up. All of a sudden it was turned over to poly by the General Staff, the individuals who have the money. They said no problem. You need the money. We'll give you the money. But only Poly could spend the money. So that company was left out, and that means seventh months of their activities were in vain. But that is the way it works. When the results are ready to be produced, then Poly steps in and takes over. Now they were extremely angry at this.
The point is that the General Staff, the reason why they did this, was not simply because they wanted Poly to profit, but the second and the most important consideration, was that they wanted to make sure that everyone obeyed the rules, that only Poly is entitled to arms imports and arms production for abroad for the PLA. And that means that only Poly can spend the money for the PLA and for the PLA, buying things from abroad. No other company can do that. There were other countries involved in the feud was that they knew that the PLA had money. Any business company, they tend to look after the rich client, whoever has the money and is a good customer for the company. A lot of people tried to get involved in the business, but they found that they could not.
So, because of that, the other companies were involved in exports, and not imports. And that explains why these companies have been active in the arms export business. Because this is the only channel for their profits. While Poly they could very comfortably spend the money for the PLA.
Competition in selling Arms? Since that was the case, a lot of companies want to proceed. And they said, OK, from now on only Poly will deal with this area. When Poly saw the possibilities of profits from arms sales to the Middle East or the third world, they want to have a hand in that, and take care of extremely sensitive items. Not the ordinary, conventional arms, like the AK47, that isn't a problem. Poly does not want to intervene in those areas. But when it comes to selling things from the PLA inventory or from the PLA equipment itself, in order the General Staff wanted to make a point for that.
So they misperceived, and Poly would only look after the imports, some felt, but Poly perceived potential profits out of arms sales, so they managed to get involved successfully in arms exports too. This resulted in strong competition among all the arms exports companies. Poly had strong backup of the general staff and so was able to win contracts and power. That means they were entitled to selling arms directly out of the PLA arms inventory will look after the selling of sensitive items, such as ballistic missiles to foreign countries. There is one indication, a detailed stor6y, about this.

3. When the war between Iran and Iraq began, it presented, in 1980, a golden opportunity, literally, for Poly Technologies and for Norinco as well. Poly handled the most sophisticated weapons sales, like long range bombers, the H-6 bomber, and intermediate range missiles. Silkworms were sold to both sides by Norinco. They fought each other with Chinese weapons. The Iranians did particularly well with Chinese silk worms hitting many tankers attempting to make a run through the strait of Hormuz.
Exocets were sold by Poly to the Iraqis and Chinese technicians trained them in China and they were trained there for the silkworm and for the electronic countermeasures, and the Chinese also trained the naval personnel from both countries to familiarize them to man and operate the missiles and to train them in conventional naval warfare doctrine, and also to train them to use and operate Chinese manufactured frigates and torpedo boats. And China basically selected two training bases for naval personnel from the two countries. The one training base was located in Qing Huang Dao(Qing Huan Island) at Bo Hai Bay on the Bo Hai Sea. The other training facility was on the island called Ma Shie, close to Zhangjiang, which is the site of the headquarters of the Chinese Southern Sea Fleet. The personnel were rotated between the two bases, each side trained in both places. But China made the point of never training the men together at the same place.
Aside from these two, in Shanghai, the Navy PLA, also has a training base for all of the foreign military personnel and technicians. There they are trained in the technical and tactical aspects of naval warfare. The Pakistani friends and men from the Bangladesh Navy and the Royal Thai military personnel were trained in Shanghai. Especially the three frigates the Chinese navy sold to the Thai Royal Navy were manufactured and launched in Shanghai Naval Shipyards and therefore the Royal Thai Naval Personnel, it was handy for them to be trained close to where the ship was manufactured.
Norinco sold MIGS to both sides, but primarily the Iranians and the pilots were trained in China. China also sold two Romeo class submarines, conventional submarines to Egypt, since Egypt at the time was probably the closest ally to China in the middle east. This was all before Poly was founded. Later on, Poly gained a hand in providing materials like these to foreign friends. So With more and more profits being generated into Norinco system, the PLA was getting anxious to have a direct access to this huge revenue.
The Chinese Aerospace and Aeronautic ministry, as it is called now(then it was called YJ-82). At that time Chinese Aerospace and Aeronautic were separate?)
China was able to clone or reverse engineer or steal the technology from the French exocet and made a copy and then produced their version, calling it the YJ 82, in the west it was called C 801. At that time, in 1984, the ministry really wanted to sell the missiles to Iraq in order to generate profits. But, the PLA intervened. They said the PLA Navy wanted the missiles. So, the ministry had no choice but to sell the missiles to the Navy at the price of 0.97 million renminbe each. And later on, Poly Technologies directly sold these missiles to Iraq at a price of 1.2 million US dollars. That is why the Aerospace related defense industries in China were angry. But they could do nothing. And this is one of the rationales for the establishment of Poly Technologies. Because after all, it is only a trading company. The uniformed military could not do business with foreigners, but a trading company could and then the profits would be channeled directly back into the military through the General Staff. Because Poly basically belongs to the General Staff. In doing the arms trade because of the unique position that Poly held, it was never beaten by any domestic and international rivalries in the arms trade. Until, in the middle of the 1980s, the Shangri La deal. This was a humiliating blow to Poly.
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Ways & Means, Methods & Operations

4.

Ways and Means


"I was watching television news in Beijing with some friends one evening in 1977. Suddenly this individual appeared -- a very strange looking guy -- and he was identified as the National Security Adviser to President Jimmy Carter. We were stunned when we saw him. He was, too us, very strange looking. I remember several of those watching said, `Look at his long nose,' and laughed. And then someone else said, `He looks just like a hawk.' That's when a friend from the Foreign Ministry said, `Well, he is a hawk.' He then explained that the man on television, Mr. Zbigniew Brzezinski, was a political hawk in America. He was called a hawk because of his unfriendly and tough attitude toward the Soviet Union. I remember the exchange because it was the first time I heard the American expression 'hawk' to describe a political position," Li said.
"Brzezinski was interesting to us not simply because of his odd appearance. We were also fascinated by his background. We were told that he had come to the U.S. from Poland -- a communist nation and a Russian satellite. And so we thought that he must know communism and the Soviet Union well. We wondered what his position might be toward China and we discussed it at length.
"Basically, I think, those of us in the military had not had much direct contact with Americans and we thought that most Americans looked pretty much alike. We thought they were tall, had blonde or black hair, and dressed and spoke in the same tone of voice and accent. But Brzezinski did not fit that familiar mold. We knew that when we saw him and then heard his voice.
"Some of my friends from the Foreign Ministry asked if he was a Jew, like Henry Kissinger. Kissinger was considered a great friend of China -- and we believed that all Jews were friends of China. Israel, after all, had been one of the first nations in the world to recognize the People's Republic of China in 1949. And Israel eventually provided us with important technology and training denied us by the U.S. and other western nations.
"We learned that Brzezinsky was not a Jew. Yet he proved to be a very good friend of China. A very good friend, indeed.
"After Brzezinski's 1978 visit to Beijing and all of the help and the promise of help that he provided -- and which he eventually delivered -- I talked about him with my superior -- a high-ranking military officer who had conferred with the long-nosed Polish-American hawk. He spoke at length about what a great friend of the Chinese people Brzezinski was. My superior had spoken in the same tone many times before about our "American friends" -- usually referring to the overseas Chinese who resided in America and who were always eager to help their homeland. He told me that he trusted those American friends even though they were not members of the Communist party. I asked him how this could be. And he replied that those who serve the people and the party, I would discover, were often outside the party. But their heart was in the right place. Mr. Brzezinski might could serve a better function, in this regard. He was an unusual American friend, for sure!
"I think Brzezinski's enthusiasm at first made us suspicious. He was interested in helping us defend ourselves against the Soviet Union. The interests of America and China with regard to the Soviet Union, he indicated, were the same. And so he was interested in assisting us by providing aid in the form of classified American intelligence and very useful -- and much needed -- weaponry. It was really almost unbelievable -- almost too good to be true," Li recalled.
Brzezinski's hostility toward the Soviet Union -- part of it no doubt due to the fate of his native Poland at the hands of the Russia and the Soviet Union in modern history -- led Brzezinski to see in China as the perfect counterbalance to Soviet influence in Asia and indochina. Supported by America, provided with American intelligence, technological assistance, and even, should it come to that, American naval support, the Chinese could contain and punish the transgressions of the most powerful Soviet ally in the region, the Socialist Republic of Vietnam.
In the fall of 1977 the Chinese government invited Brzezinski to Beijing. The next February, in preparation for his trip, the National Security Adviser held several meetings in Washington with the acting chief of the Chinese liaison office in Washington, Han Xu. Brzezinski traveled to Beijing in May with a carefully selected entourage. In meetings with top Chinese officials he demonstrated -- much to their carefully concealed delight -- that his reputation as a hawk was well grounded. He not only brought news of the sincere desire of the U.S. government for cooperation with China to counter the Soviet Union, but he also came bearing gifts designed to impress the political and military leaders of China.
Brzezinski informed his hosts that American regulations concerning sale of "dual-use" technology to China would be relaxed and that the U.S. would no longer oppose arms sales to China by its alliance partners. He also offered the Chinese the "eyes and ears of the West." In the next years, this offer specifically entailed the construction by China and the joint manning and equipping of a special SIGINT(Signal Intelligence) listening post near the Sino-Soviet border to monitor Soviet nuclear and missile testing. Intelligence from the installation has been shared equally by the Chinese and the U.S. intelligence services.
But Brzezinski did not want merely to dazzle the Chinese with promises of future help. He came prepared to share highly-classified American intelligence with them immediately. His companions demonstrated exactly what this entailed.
Samuel Huntington, an NSC staff member, discussed with the Chinese the top secret "Presidential Review Memorandum 10"-- an American assessment of world situation with special attention given to Soviet capability and power. Another of Brzezinski's companions, Morton Abramowitz, the deputy secretary of defense for international security, met privately with a senior Chinese defense official. During that lengthy meeting, Abramowitz -- the first American Defense Department official to visit the PRC -- gave a highly classified briefing to the Chinese on Soviet troop deployment along the Sino-Soviet border and information concerning Soviet strategic weapons. Then, much to the surprise and delight of the Chinese official, he pulled from his briefcase a sheaf of top-secret reconnaissance photographs of Soviet military installations and armor facing China.
All of this transpired prior to the establishment of any formal diplomatic relations between the U.S. and China. Yet this bothered Brzezinski not at all. He behaved and spoke as though any problems between the two countries could be easily worked out or brushed aside. He indicated, moreover, that should the Chinese need additional help -- which they did -- in the form of weapons or American military power -- it was their's for the asking. The Chinese did indeed have concerns and needs. They were concerned, should they go to war with Vietnam, that the Soviet Union would respond militarily. China's own intelligence system spotted a Soviet task force heading toward the South China Sea. China feared that the Soviets intended shell the Chinese installations in the Xisha(Paracel) Islands, south of Hainan. The islands had been seized during a brief fight with the South Vietnamese in 1974. The defenses on the islands were inadequate for a confrontation with the Soviet fleet. The Chinese needed, specifically, state of the art heavy torpedoes -- Mark 46 torpedoes -- for their submarine fleet, as a deterrent against the Soviets. America possessed the torpedoes but was forbidden to sell them to the Chinese. The Chinese indirectly expressed their interest in this specific weapon. It is not known today what specific reply might have been given to their request, repeated in Washington in January during Deng Xiaoping's visit to the capital. There seems little doubt, from what the Chinese military officials indicated to their staffs, that Brzezinski intimated that the U.S. would provide the ways and the means by which China might not only defend herself against the Soviets but also punish Vietnam and support an ally, the Pol Pot Khmer Rouge forces in Kampuchea(Cambodia). And it is known that the torpedoes were delivered -- in a clandestine manner --in February, 1979.
At least one member of the American delegation was troubled by the promises of the National Security Adviser and noted that "Zbig was trying to tantalize the Chinese" by "giving them hints that they could expect a lot more from us." And upon returning to Washington, William Gleysteen wrote a memo attacking Brzezinski's tactic of raising Chinese expectations of obtaining American support that had been neither discussed nor approved at highest level of US government. Brzezinski ignored the memo.
Relations between the Vietnamese communists and China started to come undone in 1972 with the visit of Richard Nixon to Beijing and the gradual move towards normalization of relations with America. The victory of the communist forces in China in 1949 helped swing the military balance toward the Vietnamese communist forces in their struggle against the French. Chinese aid in the form of advisers and materiel had been given generously from that time down through the defeat of the American-backed forces in South Vietnam in 1975.
After that, and following the deaths of Mao Zedong and Zhou Enlai in 1976, differences between Beijing and Hanoi increased in number and severity. Serious disputes arose over title to islands in the South China Sea claimed by both countries, trade along the Sino-Vietnam border, problems between the Khmer Rouge regime in Kampuchea -- which China supported -- and Vietnam, and finally the status of the ethnic Chinese in Vietnam.
In the summer of 1978, the Vietnamese government cracked down on the ethnic Chinese(Hoa) in Vietnam and began expelling them. Ships from the PRC attempting to transport the ethnic Chinese out of Vietnam were denied landing privileges. In June, Vietnam began a secret bombing of Cambodian positions along the common border separating the two countries. China continued to arm the Khmer Rouge and supported them against the Vietnamese. In July, China cancelled all of its remaining aid projects in Vietnam.
But Vietnam had other friends. On November 1, Vietnamese communist party boss Le Duan landed in Moscow where he was greeted by five members of the Soviet Politburo. Two days later the Vietnamese and the Soviet Union signed 25 year Treaty of Friendship and Cooperation. Article Six of the treaty provided the Vietnamese with the insurance they sought against Chinese aggression. "If either side is attacked or exposed to the threat of attack, the two signatory powers will immediately confer with each other in order to remove this threat and take appropriate and effective steps to safeguard the peace and security of both countries," the article stated. The Soviet military forces were granted the use of Vietnamese air and naval facilities, including the American-constructed facilities at Cam Ranh Bay.
Two days later Deng Xiaoping arrived in Bangkok where he denounced Soviet "hegemonists" and suggested in private that "Phnom Penh will fall." He confided that although he did not like the brutal policies of Pol Pot, he nonetheless would not allow Kampuchea to be ruled from Hanoi. Several days later in Singapore he said of the Vietnamese, "These ungrateful people must be punished. We gave them $20 billion of aid, Chinese sweat, and blood and look what happened." When Prime Minister Lee Kuan Yew asked him how he would punish them, Deng said, "We have ways and means."
An understanding the Chinese experience in Vietnam in 1979 is central for any understanding of later national defense developments in China. The need for modernization of the military was brought home to the Chinese dramatically and tragically in Vietnam.
In Beijing in November and early December, Deng consolidated his control over the Chinese Communist Party and arranged for his supporters Zhao Ziyang and Hu Yaobang to be given increased power. And as China prepared for war with Vietnam, Deng again and again cited American military intelligence estimates of the troop strength and deployment of the Soviet Union along China's border. When he was informed that the army was not prepared for such a war, he said that the war would be good, even if all military objectives were not achieved. If only 70 percent were attained, the 30 percent failure could be used as a stimulus for future miliary modernization and improvement.
"Mr. Deng knew that the PLA was not really ready to fight that war," Wang believes. "But the reason he wanted the fight was because he knew that even if China suffered, that would then provide a reason to boost national defense spending, because he could tell his other colleagues, `See the war has showed that after all of these years of peace we lacked military training, our equipment was not advanced enough.' The Vietnamese war, served as an excuse to give more money and attention to the military -- and it that sense it was an unqualified success." In time, Poly Technologies was formed as a result of the lessons of the Vietnam War.
Chinese-American relations were normalized on December 15, 1978. War came to Indochina nine days later, on December 24th, with Vietnam's attack on Kampuchea. Vietnamese forces quickly shattered the Khmer Rouge forces and on January 7th, as Deng had predicted, Phnom Penh fell.
"There was no concern at that time, keep in mind, with what the Khmer Rouge were doing to their own people in Cambodia," Li explained to me. "None at all. No matter how brutal they might be within their own border, they were still friends to China. They were, in fact, our only friends in Indochina. That is the only thing we cared about. Our relations with them involved a regional strategical balance and not internal policies. We want to see our friends in power. As to what they do in power, with power, well that is the internal affair of any foreign country. It's not our business. That should by no means be interfered with by an outside power. China included. What you do is your own business. So long as you are my friend, that is important.
"I know at that time," Li said, "we felt somewhat ashamed, as far as I saw it, because we knew that our Navy was not strong enough and we were unable to support the Khmer Rouge when they were under fire. So we just hated the Vietnamese for their actions. We were proven to be helpless. We saw the Vietnamese occupying everything. And we knew we had to do something."
Deng now moved to line up his own allies in the coming fight with Vietnam. In mid-January he traveled to Washington.
He found policy makers there worried over the indifference of the Soviet Union to American expressions of concern over Soviet-Cuban activity in Africa and the Middle East and increasing Soviet involvement in Vietnam and Afghanistan. At the same time the President Carter was anxious resolve other problems by moving ahead on a Salt II agreement with the Soviets. On the eve of Deng's visit Carter received a concerned message from Leonid Brezhnev expressing serious concern over any possible American arms sales to China. Brzezinsky responded to the message two weeks later by pointing out to Brezhnev that every country had the right to sell defensive weapons to China, and China had the right to buy them.
Deng arrived in Washington on January 28 while at the same time a Chinese army of 225,000 men was being deployed near the Sino-Vietnamese border. In private meetings with American leaders -- including, of course, President Carter --the Chinese vice-premier pointed out that the US and China had a common enemy in the Soviet Union and he asked for close collaboration in dealing with this enemy. He let it be known that China was ready to retaliate against Vietnam for invading Cambodia and deposing the Khmer Rouge. Deng insisted that "we consider it necessary to put a restraint on the wild ambitions of the Vietnamese and to give them an appropriate limited lesson."
The American provided a dual response -- part public and part secret. Publicly, the President's sought to distance the U.S. from the coming conflict. In a hand-written letter to Deng, Carter stressed the importance of restraint and the likelihood of adverse international reaction to the Chinese action.
But Deng found support in other places. He was encouraged by House Speaker Tip O'Neill, who compared the Vietnamese invasion of Cambodia to the German invasion of Poland, an odd comparison, since the Vietnamese had just deposed one of the bloodiest regimes in the 20th century -- the Khmer Rouge. Brzezinski, too, was an admirer of Deng's tough talk and wrote, "I secretly wished that Deng's appreciation of the uses of power would also rub off on some of the key U.S. decision makers, "
O'Neill, like Brzezinski, was not bothered much by the Khmer Rouge who were, after all, the allies of the Chinese and enemies of the Vietnamese and the Russians. They were armed and directed in fighting by the Chinese. Animosity for the Soviet Union and its allies tended to blind American policy makers at that time to the sins not only of our friends but also to those of the friends of our friends.
Brzezinski wrote later of Carter's position that "I felt that this was the right approach, for we could not collude formally with the Chinese in sponsoring what was tantamount to overt military aggression." And so there was no formal collusion. But there was informal and covert collusion. Deng returned to Beijing with important assurances of this from his American friends.
Upon his return to China, Deng briefed his military and party leaders on the success of his visit to the U.S. The Chinese military immediately began receiving daily deliveries of NSA photographs of Russian troop deployment along the China-Soviet border and of the deployment of Vietnamese forces along the Sino-Vietnamese border. Chinese military strategists concluded from the photographs, that the Soviets were not responding to the Chinese buildup along the Vietnam border with a buildup along their own souther border with China.
"When Mr. Deng returned from Washington," Yvonne recalled, "We were told that he had achieved an important understanding with the White House and the NSA would providing cooperation and aid in the punishment of Vietnam. We were very encouraged by this statement.
"Remember, the Vietnamese at that time occupied not only Kampuchea, but they also had infiltrated into Laos and used it as a base, and from Laos they fired on Thailand. The border area between Laos and Thailand was actually under fire by the Vietnamese. But Thailand was the closest American ally in the region at that time and they were on very good terms with China, since China supplied the Khmer Rouge, through Thailand. So, after the invasion of Kampuchea, we began supplying arms to the Thai army, too. So there was a tighter relationship formed between the two countries. You see, the feeling was that nobody was going to defend the Thais against the Vietnamese. And both sides knew it. The Americans would never again commit themselves to a Vietnam war. So the only force left to protect Thailand from the Vietnamese was China.
"It seemed to us that Vietnam was expanding -- running wild -- all over Indochina, and China was not happy about that. The only way to save Thailand and to teach Vietnam a lesson was to attack Vietnam. Of course we were very concerned about the response of the Soviet Union from the North -- especially after the Vietnamese treaty with the Soviet Union, We could surely not fight two wars at the same time. The Russians, of course, supported the Vietnamese."
"We were so relieved when the Americans began providing daily satellite photographs of the Vietnamese and the Soviet military maneuvers along the Sino-Soviet border and the Sino-Vietnam border," Li recalled. The photographs "gave us confidence because they indicated that although the Soviet union expressed their concern about what we were doing they were not preparing an attack along the border.
"Yet, by their naval actions they seemed to be saying, 'All right, even if you are going to invade Vietnam, we are not going to do nothing at all because Vietnam is our friend, and we cannot let our friend just be punished by you without doing something.' By this time both the Chinese and the Americans were tracking the movement of the Soviet task force. The Chinese were very alarmed by this.
"We expected some type of Soviet retaliation, but we were not sure where and how. We guessed it would be by air or water because a major ground attack would certainly be far too costly for them. And if it was by water, then we assumed it would be against our bases in the Xisha Islands, which were vulnerable" Li said.
"While the Chinese army assembled near the Sino-Vietnamese border, all general commanders of the PLA Navy were dispatched to Zhian Jiang, headquarters of the South Sea Fleet to supervise naval operations. The destination of the Soviets, it was concluded, was without doubt the Xisha islands. At this same time, at the six-story, marbled naval headquarters compound on Fuxing road in a western suburb of Beijing, in the second floor naval operations center where communications and intelligence for naval operations are deciphered and analyzed, in the charting room, officers followed the latest information on the movements of the US Seventh Fleet and the Soviet naval task force heading toward the Tsushima Strait, between Korea and Japan. The movement of the Soviet force was detected by the Chinese navy's own monitoring posts along China's south coast line as well as through photographs delivered to the naval operations center by the Third Department of the General Staff. The Third Department was the organization that actually received the American satellite photographs. The photos were delivered from the US defense attache and his staff in Beijing. They received the appropriate satellite communications directly through special deciphering technologies and demodulation devices for the high resolution photographs taken by what we called the U.S. Black Birds, which were actually watching the movements of the Soviet fleet and the ground troops in formation along the Sino-Soviet border."
In early February, Soviet intelligence-gathering and escort ships were in the South China Sea near Vietnam and the Vietnamese warned that if China engaged the forces of Vietnam the Chinese would also have to confront the Soviet fleet. Yet the Soviet response to the attack was surprisingly slow. One week after the invasion, a Soviet naval task force led by a the flagship of the Pacific Fleet, the guided missile cruiser Admiral Senyavin sailed south through the Strait of Tsushima and into the East China Sea. The task force then turned south, away from the Chinese coast, and headed toward the Philippines to avoid Chinese detection. But then the task force turned north and sailed into the South China Sea. By February 28, eight Soviet ships were deployed in the South China Sea and three in the East China Sea. The Americans also responded and the carriers Midway and Constellation sailed into the South China Sea. And as the Soviet ships neared the Xisha islands, an American battle group spearheaded by carrier Coral Sea, as the Chinese expected, moved into position behind them.
The Chinese attack came on February 17. In the first phase of the attack, Chinese artillery opening up with a ferocious cross-border barrage of Vietnamese positions. An American reporter who was some distance from the action, wrote that it sounded like a B52 strike. The major difference was, he wrote, that the air attacks seldom lasted for more than a minute, while this barrage lasted for twenty minutes. Then 85,000 Chinese troops, supported by armor, poured across the Sino-Vietnamese border at 26 different points.
The sixteen-day "pedagogical war"(February 17 to March 5) -- as China eventually referred to the conflict -- was a bitter and bloody military encounter. Although statistics for the brief incursion into the northern provinces of Vietnam are sketchy, in fact, some of the soldiers who were there suggest --after insisting that the official statistics are "more or less bullshit" -- that based upon their experiences in Vietnam and upon later analyses published for China's military leaders -- Chinese losses in the war may have come close to American losses in Vietnam during more than a decade -- 58,000. "It was incredibly bloody," Li recalled. "And savage. Those of us who had not been in Korea or India and who had never seen war before, we never dreamed it would be like that. Never.
"Many of the troops sent to Vietnam were not well prepared for the war and not adequately armed. And they paid for that with their lives.
"The only good thing to come out of the conflict -- the best thing, actually -- for the soldiers themselves, I think, was the destruction that I saw of Liang Xian(Lang Son), which I witnessed personally. We took great delight in that, it was our revenge, or, as one of our leaders said, it was a "goodbye kiss" to the Vietnamese, something that they could see and always remember us by. The same thing happened to other towns in the northern Vietnam. And we do not regret it now, in retrospect. Not one bit. My only regret is that we could not go on and do the same thing to Hanoi and Haiphong.
Troops along the border had been harrassed for weeks by the Viethnamese. "There were so many troops at the border who were involved in the attack, and they reported that they were constantly fired upon by the Vietnamese, who seemed to us to be inviting an attack. Our commanders reported that they were fired upon daily in border region by Vietnamese troops in the border region. Also, Vietnamese soldiers disguised themselves as peasants and they crossed the border to carry out sabotage against military and communications installations.
"Those of us stationed near the border," Wang said, became really angry by this. The point of it all seemed to be that the Vietnamese believed that they were strong enough to be a rival to China and to do whatever they wished. They claimed that their military was the third largest in the world. And they wanted to prove that they were the strong and the dominant force in Indochina and that now they alone would call the tune there.
"In analyzing what happened, in our so-called after action reports," Li recalled, "we were really upset by the huge costs of the victory. Basically, the PLA was not well prepared for the war.
"They did not have much time, first. And so many units after getting up at 6:00 am were simply told to pack everything and the following day they were in battle. They were poorly trained and ill prepared for the conflict. And just look at some of the supplies of the ammunition they were asked to use against the Vietnamese. It had long-ago expired. As a consequence, a lot of shells, even though they hit the targets, didn't explode." [This is illustrated in the popular Chinese film "Garlands at the Foot of the Mountain," in which Chinese troops sacrifice much because of bad ammunition, which had been stockpiled in inventory for too many years, finding in overrun Vietnamese positions, an abundance of the very latest equipment supplied by the PLA].
The effectiveness of the Chinese advance was hindred by the lack of reliable ordnance. "A lot of ammunition used against the Vietnamese at that time was manufactured in the 1950s," Wang remembered. "There was a period of usefulness and it had passed, expired, and that means that if you did not fire this sort of weapon or this explosive shell, then the due period was passed and the effectiveness had expired. And that is why a lot of soldiers were killed using anti-tank rockets. They had to stand up to use it, and when they stood up and fired, and the shell hit the tank it didn't explode. It showed the Chinese were stupid to try to use this kind of weapons in the first place, but in the second place, you knew that this was a very good way for Deng to show that we had old weapons and ammunition and we needed military modernization quickly.
"It is very unfortunate that we never learned from the American experience in Vietnam. We believed that the Americans lost only because they did not believe in what they were doing. Despite an army having the latest equipment, if it does not believe in its cause, it cannot win. That is what Mao taught us. And so our military planners very simply dismissed the Americans and their war.
"We believed, we really believed, that if we applied the full force of the PLA that the Vietnamese would be shattered in a matter of hours, that we would be in Hanoi and Haiphong within a day or two. Then, at that point we would withdraw, having punished these ungrateful and arrogant people.
"But the truth turned out to be very unfortunate. And it was a costly victory. "One big problem in the war had to do with the deployment of armor. One guy who came out of the Vietnam war as an Army hero is Xu Yenbing. He is the son of Xu Guangda, who was the father of the Chinese armored corps. Like Mr. Xiao, he had been handpicked for his position by Mao. Mr. Xu had been the general commander of the Chinese armored corps, or what we call the Drung Jabing, for maybe more than ten years.
"Xu Yenbing was a regimental tank commander at the time of the Vietnam War. But one of the things he failed to realize was that the terrain in northern Vietnam is not suitable for the use of tanks. I mean Americans learned that in Vietnam, but the Chinese simply refused to learn anything from the American experience. Stupid. And so they did commit the tanks to battle, battalions and regiments, to the battle, early, and they were not a big help.
"Just across the border, a single Vietnamese female sniper, in one well-documented and very unfortunate case, took out seven tanks, one by one. I mean that is one of the silly and tragic things that happened to the tank regiments.
"There was another instance where the tanks in the advance groups were ordered to cross over a bridge. They were in a hurry. The never calculated the load capacity of the bridge. They simply assumed, stupidly, that a bridge would support the weight of several tanks. And so when the tanks were crossing the bridge, it collapsed, and the tanks fell into a river -- several of them fell together. At most, a single tank should have been on that bridge. Apparently the Chinese tank commander thought the Vietnamese were great engineers, but they weren't that great. In yet another instance, there was a steep hill, yet still the tank commanders ordered the tanks to climb up the hills and advance quickly. The incline was too great and the tanks turned over and tumbled backward on their top. Still the commander ordered the tanks to advance, assuming it was the problem of the drivers of the tank, not a problem of the commander. A half dozen tanks were put out of commission in this way. The commander of that particular unit was arrested and court martialed later.
"In fact, there were many courts martial because of the Vietnam war, many right in the field. Later news from these court martials was circulated but only within the military. And a lot of problems became apparent. This was, of course, never circulated in the public.
"The manpower losses were considered great but not significant, ironically. Both in terms of personnel and in supplies. The biggest and most important loss in the war was considered to be, naturally, the loss of prestige. The weaknesses of the PLA was exposed. There was also a problem in terms of discipline and obedience.
"Disobedience was made most apparent at a road junction running between the Chiense border and the military objective of Liang Xian(Lang Son)," Wang recalled, "where there was an intersection of mountain roads. Because roads at the time were critical to the movement of the troops, when different units of the army approached this intersection at the same time, nobody listened to anybody else, and they literally started to fight for the damned road. This is true. At that time, the PLA did not yet have official ranks and so there were not any insignia on the uniforms to distinguish between commanders and lower officers. Since this was the People's Army, this practice was intended to emphasize that in one sense all soldiers were equal. So we had problems with that right away. On this occasion -- and this was published and circulated among the military later on -- the commander of the 41st corps of the PLA was on the spot, standing at the middle of a road junction, just like General Patton once did with his Third Army in Europe -- directing all his forces to advance. He thought he could do that, but there were several junior officers -- also without insignia on their uniforms -- from another unit who wanted the right of way in the road. And they shouted at him, "What the fuck are you doing? Who are you to think you can direct the forces here?"
And he said, "I am the corps commander."
And the junior officers replied, "How do we know that you are the corps commander? " They couldn't believe that the corps commander was standing there in person directing the forces. And one of them shouted, "If you are the corps commander, then I am the general commander in chief!" And another added, "And I am Deng Xiaoping!"
At that moment, the general's aids, who had been in the rear, came running up and a fistfight broke out -- a serious fight with these officers rolling around in the mud -- it was raining at the time. In a few minutes all of these men were covered with mud and they were swearing at each other and kicking and slugging it out. Then another senior officer came up and actually recognized the corps commander and shouted out that indeed this was the man in charge. And only then did the fighting stop. Now remember, this is a true story.
"This story was immediately related to Mr. Deng, and this was one of the things that helped him make up his mind that the Chinese army needed to adopt the rank system again. So within two years we had ranks again and insignia, thanks to the Vietnam experience.
"The problem of a lack of insignia was also manifested in the artillery units in Vietnam. They could never identify themselves. And in one case a small group overslept and was left behind when their unit departed. Very simply they woke up in the morning and found they were alone. They quickly set out to find their units. But the artillery corps was heavily protected by other units, security was high. If you did not belong to the unit, you could never get in. So these guys, perhaps two days later caught up with their unit but they were not allowed to rejoin it. They said they belonged to the artillery, but without the proper identification -- in the Chinese army we didn't have that sort of identification -- they were not allowed past sentry posts.
"There were many deaths also from friendly fire. A lot of artillery shells rained down on our own forces in Vietnam. First, we had a very serious ranging problem. The men in the field were unable to target the enemy properly either because they were poorly trained or there was no forward observer for them or both. So sometimes the artillery was fired randomly, actually. And that was a problem. The root of this problem was lack of communication between field commanders.
Another problem was the logistical support. Part of this problem was because China may have committed just too many troops to the fight. We didn't need that many men fighting against the Vietnamese. I don't know what American military commanders learned in fighting against the Vietnamese, but fighting against the Vietnamese really requires more expertise by well trained units rather than a huge number of personnel committed to combat on the ground. Another problem was that the Chinese air force never ever committed itself to battle. Some were afraid of the very considerable SAM defense system on the Vietnamese side -- supplied by the Russians. They were very accurate. They could actually hit and kill B52s. So there was a great concern for this. The air force was therefore not committed to the fight. Secondly, we thought we could do it without air power.
Also, when the war came, because of the lack of communication and coordination among the various forces, sometimes they found that there were, for example, two entire divisions fighting for a small town at the same time without either being aware of this. This happened where there was not even enough space to commit one regiment, and yet they crowded in two divisions. Three divisions attacked the town of Liang Xian. Many troops were lined up with nothing to do because there was no room for them to maneuver at that time. There were few helicopters for the commanders to stay in touch with the various units and nobody was sure how large the enemy forces were. Sometimes when there was no longer any Vietnamese resistance, as in Liang Xian(Lang Son),the Chinese kept firing away because of bad intelligence work.
"We thought there was a strong post of Vietnamese defenders there in the town, so we fired hundreds of thousands of shells into the city. It literally rained artillery on Liang Xian for 8 hours. And then we invaded. All we found were piles of the dead and a few hundred dazed survivors wandering around. The survivors, I remember, seemed strange to us since all of them were deaf -- due to the tremendous artillery barrage. We put them all out their misery.
"There were counterattacks by the Vietnamese. There are stories of course, like that of Chinese battalions and smaller units trapped and holding some of the remote mountain tops. These were strategically important positions for us and for the Vietnamese too. And so they reorganized their troops and tried to retake the hills. It was just like what happened in Korea at Shangan Ling, what you called "Porkchop Hill" -- in Korea. There was this fierce battle, this tug-of-war struggle for the high ground and for other strategic points. And so there was severe fighting, but the Vietnamese were basically on the defense, and they were retreating.
The fiercest fighting by the Vietnamese came from their local forces or the paramilitary forces and not from their regular units. We had very serious problems with these people. They went into tunnels and caves and hid there until our units passed and then they came out and attacked us from behind or from the flanks. We really had a lot of problems in getting the Vietnamese out of underground tunnels and caves. Later on we learned from the American experience, and simply threw whatever we had into the tunnels and killed everyone there -- flamethrowers and grenades were fired directly into them.
"At other times the troops became very angry --enraged, actually -- and they became savage in their actions. They did almost anything.
"For example, they had with them very powerful large caliber anti-aircraft guns, sometimes 37 mm guns, very rapid firing guns, and they used these against the Vietnamese on the ground, because they thought that in fighting against the Vietnamese they had to commit everything. While the military doctrine tells them that this is purely for anti-air purposes and nothing else, still, in their frustration, they just leveled the barrel and shot at targets on the ground.
"Migs circled overhead, but primarily on the Chinese side. Sometimes they flew over Hanoi, but not often. They wanted to impress upon the Vietnamese that we had air superiority. So the Mig 21 sorties were constantly in the air, but were never committed to battle. This was just to scare off Vietnamese fighters. And this worked.
"The Vietnamese concentrated their forces to defend Hanoi. They knew that we could take Hanoi. They knew that from their military instincts. Hanoi was, my God, in terror. If the Chinese wanted to, they could have taken it, in a matter of hours.
"Then it was over, suddenly. It was like the war against India in 1962, while having total military victory within our grasp, we withdrew unilaterally. China did that. Our goals had been accomplished. The Vietnamese had been punished. We had no imperialist intentions and we returned to China. But not before leaving behind a lesson for the Vietnamese.
"As the conflict was ending, the entire senior class of the PLA Army engineering school from Nanjing, Gong Cheng Bing Ji Shu Xue Yuan, was summoned to Liang Xian for duty. As a final examination, the school commandant told them, they were ordered to demolish every building in the city. They were extremely skilled at demolition -- and they were trained for it.
So they wired up the whole city, they dug every day. For about a week they did nothing else. They placed explosives here and there and everywhere -- in movie theaters, municipal buildings, civilian houses, so long as there is something standing, they wired it up with explosives. God knows how many tons of explosives were used there. The bodies of civilians killed in the shelling and the fighting were just stacked up in piles everywhere and then wired with explosive charges.
Then the PLA evacuated the city, pressed the buttons and the city of Liang Xian was no longer there. Later on we monitored through our intelligence system, what happened when the Vietnamese came back and saw what we had done. We could hear the talk of the first people back to the site. At that time the prime minister of Vietnam was Pham Van Dong, and he personally went to see Liang Xian. We catually heard his cry on the radio. This guy, we were told, cried only once before, when Ho Chi Minh died, but now, when he saw Liang Xian, he cried again. He said in Vietnamese, and we monitored it and we heard him -- `We never knew the Chinese could be so brutal.' You can imagine what happened to the city. God knows how many bodies were there. They were all blown up. All that we left behind was blood and mud and nothing else. This was at the end of the fighting and the Chinese used up all of their explosives against the Vietnamese. They knew we could not march further down the line, and they knew we were pulling back, and so we wanted to leave them something, to show them, in a sense, "We will never forget you guys." It was the largest city Vietnam had in near the border in the north, and when we left there was nothing there.
"It should be pointed out also that when the war was over, there were not many prisoners. As we advanced south, a lot of soldiers didn't sleep for days, and when they had a chance to stop and rest, the Vietnamese paramilitary would shoot at them from the sides and the back, in ambushes. This was common in the war. And there were booby traps everywhere. Everywhere, killing our men." Some sources reported that the bamboo groves of Thanh Hoa and Nghe Tin had been depleted in the Vietnamese effort to make punji spikes for boobie traps to slow down the Chinese forces.
"Mines injured and killed many men. And when this happened, the Chinese soldiers naturally lost all interest in taking prisoners. They played the Vietnamese game. They began shooting everyone. And of course the Vietnamese did the same thing to the PLA soldiers. And later on, there was a Sino-Vietnamese agreement was an exchange of prisoners. And not many POWs showed up because there were not too many. They'd killed them all.
"One of the things that angered our people was the female snipers. As we marched south, the places we passed we considered safe -- since they were not on the front line. But there were no safe places in Vietnam for us.
"And as the tanks advanced at one point, along a steep mountain road, they came to a sharp hairpin turn, and all the tanks would have to stop and make a maneuver and turn left. The standard tank, the T59, has a small aiming hole in front, and when you make that turn the hole is at a standstill and is vulnerable. Well, a sniper at that point fired into a lead tank and killed the operator. This was a company of tanks unsupported by ground forces. And as others tried to move around the disabled vehicle, the same thing happened to them. This happened as seven tanks tried to make the turn. And so the entire column stopped. They didn't dare go on since they concluded they had encountered stiff resistance on the road to Long San. So we halted the whole operation and reported the appearance of formidable resistance. The tanks that stopped fired randomly in all directions, looking for an enemy. But all that was around them was jungle. A whole company of soldiers moved up to rescue the tanks. They began a search operation and they found a girl, a single girl with a rifle, who was the sniper. They surrounded her and finally captured her alive by jumping on her from behind. How many soldiers she had killed at that point, God only knows. But the troops were really angry and frustrated. A tank commander came up and saw who had killed his men and held up his column and he, too, was enraged. He ordered his men to strip the girl and then tie her up tightly and throw her body in the road. Then he called up a tank and drove the tank over her, back and forth and back and forth until nothing was there any more -- until she was in the ground. The soldiers were so frustrated, they just cheered," Li remembered.
"You can imagine how the soldiers and officers felt at this time. The fact is that the PLA was not only short of modern weapons, but they were psychologically unprepared to fight this war, really. They thought it would be a conventional battle, I guess, and they never knew that anyone who was a civilian would also be a soldier. But Vietnam was a country of civilian soldiers. We simply never learned from the Americans and their experience.
"The Vietnamese women approached the Chinese soldiers as though they were friendly and wanted to greet them. And then one of them would throw a grenade or they would blow themselves up with the soldiers. On one occasion a Vietnamese girl -- a civilian -- was wounded in the chest and was taken to a PLA field clinic for treatment. When she got there, she managed to detonate grenades tied to her back. She killed herslef and all those -- men as well as women -- inside the clinic.
"The brutality of that war was really something. What the Vietnamese did to their Chinese prisoners was incredible. The Vietnamese captured female Chinese soldiers, and as a matter of simple routine, raped and then killed them and left them for us to find. Many female PLA solders were in the battle region and they served as workers in field hospitals and as aids. They were also charged with establishing camps near the front. But at that time, the war swirled around us and the situation was confusing and nobody knew really where the war was. During the day the Vietnamese were farmers at night they were soldiers against us. Just like against the Americans. We should have learned that. At night they ambushed Chinese troops or shelled them. They overran some rear areas, captured Chinese women soldiers. The female soldiers from China in Vietnam had good family backgrounds. Otherwise, they could not have gotten into the military. That means, a lot of commanders in the field had family members with them, women. And some of those women were captured and killed. The Vietnamese put female prisoners together, they stripped them, brutalized them, raped them and pulled barbed wire through their breasts to link them together, one wire linking a half dozen women together so they could not move. And they used the bamboo shoots and had the women sit on them or kicked them up inside them. And then they left them for us to find. They left them like that to die on the ground. My god. With stories like this being told to us, the soldiers were extremely upset by this, outraged in fact. They were the first to see these things with their own eyes. And they could not stand it. They just could not take it. We heard many accounts of this.
"Well, that cannot go unpunished and it did not. My God, they were extremely brutal. When I first heard that story I was really surprised. Really. So we learned then to do the same thing against the Vietnamese. But the Vietnamese did it in the first place, make no mistake about that, please. It was extremely brutal.
"The complete destruction of Liang Xian was the perfect example of our revenge. And that is why when we heard Pham Van Dong cry, we were very happy about it. And believe me, we would do it all over again. I heard that our troops also did the same to the city of Cao Bang. If this is so, I am happier. But I saw Liang Xian blown up. Good. To show them that this is how they would pay, this is what we would do to them," Li said.
"Today, you can imagine how the soldiers feel when they see the foreign ministers of the two nations embrace. That is one of the reasons why I am telling you these stories. The soldiers coming out of the war, when we see full restoration of the bilateral relationship, of course, we all have serious second thoughts. I don't know what is on the minds of our leaders. You can only imagine. But many of the soldiers who fought in Vietnam are extremely angry still. These Vietnamese -- what a fucking country! What a fucking country! Nobody could be more brutal than them. We had pictures of their atrocities, and we published them for limited circulation in the military, for informational purposes. We wanted all the soldiers to know the nature of the enemy and what the Vietnamese did to us. Some of the pictures were the bodies of the girls, raped and killed. It was brutal. They were like the Japanese in World War II. And the psychological impact was tremendous on the Chinese. The Japanese seemed to enjoy themselves when they slaughtered the Chinese. And so did the Vietnamese. That is why we were extremely angry. And when you are enraged all you do is shoot and destroy, set houses on fire, kill all the people. That is what we did gladly. Happily.
"There is a sort of scorched earth policy that we used. There are some phospherous mines were near Liang Xian that are of historical importance to the Vietnamese, we heard. So when we came to them, we knew exactly what to do. Exactly. While we were bombarding Liang Xian, we removed the entire mining facility operation and took it back to China with us -- everything that could be picked up. And what we could not take we destroyed. We destroyed the mines and plowed up the roads leading to the mines. We left nothing behind. Nothing but destruction. We blew up mines, tunnels, buildings, roads, everything.
"While we were advancing on land, another drama was taking place in the South China Sea near the Xisha islands. The Americans were about to protect and then supply Chinese naval forces there," Wang said.
"For years we had been trying to get advanced torpedoes," Li said. "And the top of the line at the time was the American manufactured Mark 46, a very advanced weapon. It was a closed loop torpedo so when it is fired it leaves no trail in the water. It is also fast, running at about 40 knots per hour and it is quiet and does not generate a lot of noise, so it is very difficult to detect and then destroy before it hits its target.
"We had been unable to duplicate the Mark 46. Then the Coral Sea battle group came along and we came to understand how important the agreements made by Mr. Deng in Washington really were. Part of our "ways and means' were provided by the Coral Sea group.
As the Americans neared the Xisha islands, an American submarine that was with the Coral Sea battle group, either fired or dropped several Mark 46 torpedoes near the islands. They beached themselves, unharmed, in the mud near our naval forces. And we were able to salvage them successful and bring them ashore. Quite obviously, they were intended for us, and the object of the Americans was was to provide them to us both secretly and intact. That was done. The two Mark 46s were armed. Everything. They were complete. Although in the Xisha islands we were not privy to arrangements made between Beijing and Washington, we do know when and where they were launched and we do also know that no one in the area from the US Navy ever reported them missing.
"Once we had them, then reverse engineering was the problem to be solved. Years later, that would be 1987, the US Navy sold us two more Mark 46 torpedoes to us. But still it was not enough but still we had difficulty duplicating them.
Once the torpedoes were located, they were reported to naval headquarters and divers were dispatched to supervise the salvage operation. The two torpedoes were successful salvaged. This operation was classified by the Navy staff as comparable to the successful salvage of a Soviet tank carried out in 1969 when China was having a border war with the Soviet Union in Heilongjiang Province. At that time, entirely by accident, of course, a Soviet T62 tank broke through the thick ice on the Wusuli River and quickly sank to the bottom. We undertook a major operation of recover this tank, because it sank on the Chinese side of the river. But the Soviets detected our movements, and knew that we wanted to recover it. So they continually shelled the river and the area around it, hoping to drive us off and to destroy the tank. We were in a race against time to pull it out. The navy dispatched special divers who went into the freezing water and connected a cable to the tank, which was then pulled out and saved for our research. The people who carried off this operation were all cited later for their heroism. The tank was studied and then placed in the Beijing military museum, where it was nicknamed "Turtle Shell(Wu Gwei ke). So the successful recovery of the Mark 46 torpedoes, we were told, ranked in significance with the recovery of the Turtle Shell the Soviet Union.
We studied the American torpedoes. We carefully disassembled them and then sent different parts to different research institutes for examination. This enabled the Chinese research institute belonging to the CSSC(China State Shipbulding Corporation) to produce their own copies of the Mark 46. These were constructed for study and then test fired in a pool at a special testing site in a suburb of Kunming. There is a very advanced test facility there. The tests of our copies of the Mark 46 showed that although everything looked exactly the same with the American and Chinese versions, the performance of the Chinese model was inferior to that of the American. But the research continued until China officially obtained more Mark 46s from the U.S. through legal and open channels in 1987.
"Years later," Li said, "I remember very clearly, in the negotations room of the Systematic Engineering Division of the CSSC, which is not far from the naval compound in Beijing, some American friends gave us technical introductions to the Mark 46, advanced version. And the Chinese experts present questioned the American specialists about the possible modifications of the Mark 46 used by the US navy compared to the earlier versions -- say, those used around 1979!. What revoluaionary advances had the US made? The American experts said that none at all had been made. But actually the Chinese experts at the table could hardly hold in their laughter, because they knew the truth. They knew that these Americans were lying. They knew what changes had been made. Yet the Americans in Beijing never knew how Chinese could know this. These experts from the sales department of the Mark 46 manufacturer had never been told that our American friends had delivered two of their products to us in 1979.
In 1979 we were constructing a short airstrip on one of the Xisha islands, which we had captured in 1974 from the Vietnamese. The responsibility for defending the islands was the responsibility of the Navy. And so as the Soviet Task force, a very formidable one, headed into the South China Sea towards the Xisha islands we expected them to attack there. And the Navy had to prepare itself for this despite the fact that all of our major warships were all concentrated in the North, near Liushan and Tsingtao. All they had available to defend the Xisha islands were lighter ships like frigates and a fleet of small missile boats.
So when the Russian fleet moved, Navy was put on full alert. The Soviet Union, we believed, wanted to show that they were loyal to their friends, that we could not push Vietnam around without consequences. So the Navy was extremely concerned. Reinforcements of the fighter forces from the Naval air arm were sent to the area. And emergency measures were taken near Hainan Island and all of the light forces were concentrated and put on red alert.
We had hundreds of small missile boats, each capable of firing four missiles, had a limited range. But they were the most formidable force available to defend the Xishas. They were required to maintain a constant patrol at sea close to the islands. But because of their limited fuel load, these boats, made a sortee out to a certain range then stayed there for about half an hour and returned. They were then rotated in that way and provided a constant shield for the islands.area. Once they the missile boats neared the end of their patrol another group left port to replace them and when these were low on fuel another group replaced them. They used both the Xisha islands and Hainan as their refueling base.
At that time the General Commander and the political commissar of the navy were called to the South from Beijing. This was it. They were ready for a fight with the Soviets. The destroyers, meanwhile, were called down from the North, but it took them a time to get there and the Russians had already converged on the islands. So it was only missile boats and the submarines that were available to defend the islands, along with fighter cover and some frigates. This was all the Navy had available against the Soviet forces that included not only destroyers but also cruisers heavily armed with missiles. The Russian task force was without a carrier, however. So we had only to worry about attacks by surface vessels.
At that time we received regular intelligence information from the U.S. on the movements of the Soviet fleet.
Then there was a fortuitous coincidence. As the Soviets entered the South CHina Sea, an American task force followed them Soviets at a great distance. The center of that task force was the Coral Sea. Even today I can remember the number of the ship -- CVA 43. It was amazing to watch this on radar.
The Chinese navy planners figured that what the Russians probably intended to shell our installations on the islands and scare us and make us think that there would be more to come if we didn't withdraw from Vietnam. But they were surprised, suddenly, to find that the Chinese were working, it seemed, in coordination with the American navy. We tracked this on radar and watched the Americans maneuver behind them.
The Soviets were aware of American force, of course. What happened is that the Americans followed the Soviets. They knew that the Chinese navy was vulnerable at that time. They knew they could knock out part of the Chinese force in the Xishas, but they also knew it would be costly. Just one lost ship would be a significant political loss for them.
For whatever the reason as they approached the Xishas, they suddenly changed course and made a sharp turn to the East and left the zone. What a surprise! And then the Americans quietly departed, too, in another direction. But not before leaving us the Mark 46 torpedoes.
So our Navy was extremely relieved at that time, seeing the Soviets sail away. This was to be the only Soviet response against us for the Vietnam invasion and then suddenly it was terminated and the emergency was over.
"After the Vietnam war there was no disillusionment with the PLA. What is interesting is this is exactly what Mr. Deng wanted, by having his war in the first place. He knew that the Chinese military for many years had no chance to fight a battle and they needed one. Fighting against the Vietnamese and committing our forces to battle really suited Chinese purposes at that time. A lot of serious problems were exposed. China never elaborates on the military victory or success. Success is only something westerners and Vietnamese talk about. Not the Chinese.
Although the Chinese effort in Vietnam in 1979 might appear, at first, to outsiders, and particularly to Americans, who lost the Vietnam war, to be strikingly successful. And in some respects it was. What we came home to study was the problems we had during the war. When the war was over, many of the reconnaissance men were sent to the military schools to study and we spoke to them. I was there and spoke with them, and they were on the battlefield, and they were encouraged to report all that they witnessed, the weak points of the military. The Chinese military was very smart on that. Everyone was talking about the lessons we learned. In what way we need to improve ourselves. So Mr. Deng gained a victory more than the battle against the Vietnamese themselves.
During this time the Iranian revolution was unfolding and the Shah of Iran was toppled --he fled from Teheran on January 16th. The American public and the American media seemed riveted to Iran rather than to Southeast Asia and events occurring there. Of critical importance in the shifting relationship with Iran was the fact that America lost two important listening posts located at Bihshahr and Kapkan in northern Iran. Kapkan as the most important of the two for CIA monitoring Russian missile and space launch activity. The Bihshahr stationed closed in December, 1978, but the Kapkan site operated until Iranian employees mutinied, demanded backpay and held the American technicians stationed there captive. A special ransom was eventually paid and the American CIA employees were flown out and the post fell into the hands of the Iranians .
As a result of this, the Carter administration was shopping around for a new site from which to monitor Soviet activities. The friendship and secret alliance forged with the Chinese provided the opportunity to establish that new site after China's war with Vietnam. The concerns of the Chinese and the Americans over the Soviet Union suddenly coalesced and a new and unlikely alliance was forged.
The Chinese were able to make another deal with the Carter administration when the Americans offered to set up a new listening post in Northwest China at a secret location just outside Urumchi. The undertaking, called Project 851 by the Chinese, began in 1980 with construction of facilities in Xinjiang province close to Tian Mountain ("Sky Mountain"). It involves American software and hardware along with about 30 personnel from the NSA, who are rotated in and out of the post on a regular basis, and a greater number of Chinese military personnel who jointly occupy the post with the Americans and have access to all of the American top-secret materials gathered at the facility. According to a secret agreement between the two countries, China agreed to supply the maintenance personnel for the Project while the US provided the top intelligence experts, and technicians and the hardware and software. The US also agreed to provide it with the most advanced US equipment and at the same time to train the Chinese to operate and maintain the equipment. Project 851, which the Chinese explain to others as an earthquake monitoring station, has been over the years, absolutely undisturbed by the domestic upheavals in China. When I asked if the Tiananmen massacre affected the post, Wang replied, "Come on! It was not affected at all by Tiananmen. Your government is not so stupid as to interrupt something as important as this with politics," Li said. "Your president may deliver a speech, but covert action always transcends politics." As the Chinese say of the post, "politics is politics and business is business." They look on Project 851 as another straightforward business proposition.
Inside the project, uniformed Chinese military officers work with Americans both in uniform and in civilian clothing. The understanding is that those in civilian clothing are employees of the CIA and NSA and those in uniform are from the Army and from the various other military branches in the US.
The Chinese recruited to work at the post are required to be English speakers, and many of them were recruited by the Third Department of the PLA General Staff from the Luoyang PLA Foreign Language Institute, a very famous school. "I have several close friends who are there right now," Li said. "What is pitiful for these guys, both men and women, is that sometimes their marriages had to be arranged when they received the assignment, since once you are in the complex, if you are Chinese, you are not supposed to leave for a certain amount of time. If your marital status is not settled when you get the assignment, the organization finds a woman for you there to marry. That is one of the reasons why they recruit women as well as men for assignment at the base. A very good friend of mine, Liu Jian, a young officer from the Luoyang school, was assigned to Project 851 when he was still single. So, as part of his assignment, he was given a wife at the project. Also, your correspondence with anyone outside the complex had to be read, both incoming and outgoing mail, in order to maintain absolute secrecy about this project. And when you correspond with someone, of course, your mail carried a completely different and misleading return address."
This secret listening post, immune to the tragedies of politics and history, was a child of both the Sino-Vietnam War and the Iranian revolution.
Two other products of the war with Vietnam were an arms trading company, Poly Technologies, and a very profitable military venture in Yunnan province -- the manufacture and marketing of heroin.