Firm alleged to be conduit for theft of US technology
Report links students accused of taking military materials to a Gansu company
A magnetic materials company has been identified as the agent co-ordinating the alleged theft of US military technology by Chinese students, according to a US media report.
The Washington Times reported yesterday that the Gansu Tianxing Rare Earth Functional Materials Co was involved in the Chinese military's acquisition of top-secret data on the production of a special metal known as Terfenol-D, which is heavily used in US naval and aerospace sensors and weapons.
A company official contacted by the South China Morning Post last night rejected the accusations.
'We have no relations with the Chinese military and we are not involved any spying activities,' said the manager.
The theft of the metal was alleged in a US Defence Department report on Chinese military capabilities released last week. According to the report, two Chinese students at two US universities had gathered the data and sent it to the Chinese military.
'Although one of the Chinese students admitted sending this information to the PLA, usually the connections between academic, commercial and military organisations are not so clear-cut,' the Pentagon report said.
Citing FBI officials, the Washington Times yesterday said the Gansu-based company, which was the conduit for the transfer, had been set up by a Chinese official who had studied with one of the two students and that the data was stolen within the past three years by computer hacking.
The report identified the universities the students attended as Iowa State University and Pennsylvania State University.
The Iowa State graduate had worked closely with a US government laboratory, which was run by the university. The university had developed the material.
'This is a classic example of how the Chinese collect dual-use military technology,' an FBI official was quoted as saying.
'Students come here; they get jobs; they form companies.'
A Washington-based military analyst said that while the allegations might have substance, he questioned the timing, purpose and balance of the Washington Times report.
The reporter was known to have close ties to the US military's anti-China elements.
'The content of the report is selective, with the caveats left out,' the analyst said.
'This is designed for political purposes'.
