THE United States' suspicions about China's military technology aired in the Cox report are being mirrored by Chinese fears about US military might on display in the war in Yugoslavia. Mainland newspapers contend that the Cox report is nothing but a list of unsubstantiated allegations unsupported by proof or arrests. The charges, commentator Yan Xuetong says in the China Daily, are 'only supported by logical deduction based on a hypothesis'. On the other hand, the awesome advances in US military technology are beyond dispute and a cause for alarm. The Yugoslav army, with more advanced air defences than China, has been helpless and unable to inflict a single casualty on Nato forces during two months of air raids. China's leadership is reacting with genuine concern to the evidence of the yawning gap between the two militaries. China's generals have relied on Soviet 1950s technology and a willingness to tolerate huge numbers of casualties, which enabled them to fight the United States-led forces to a standstill first in Korea and then in Vietnam. On Friday, all mainland newspapers carried articles highlighting President Jiang Zemin's 1995 visit to a Chinese naval base with the message that military rearmament is going ahead and requires modern technology. 'Jiang Zemin cares about the modernisation of the Chinese navy,' the People's Daily said, reminding readers that the navy now has new weapons including a new missile destroyer and a new fighter bomber. 'History shows that China needs control of the air and sea to maintain its own safety,' the Guangming Daily said. Each day the People's Liberation Army Daily has been full of articles either calling for more advanced technology or praising the great advances made by troops and their higher education levels. One highlighted the Guangzhou military district for creating the first automated command system to co-ordinate army, naval and air force battlefield information. Another shows general staff officers practising at rows of computers 'an information war exercise in which they resist an attack by computer hackers'. 'The army must be fully prepared for military struggle in the new era,' says a PLA Daily editorial. 'The Kosovo war shows that the 'knowledge' military era is looming.' The paper quoted soldiers as saying: 'Through the air war in Kosovo, we can see that air attack and anti-air attack have become the basic form of regional war. It will be terrible if we hold outdated military views and thus have no way to deal with hi-tech wars.' While China has lambasted the Cox report as so much slander and McCarthyism, it illustrates how the earlier Gulf War triggered a renewed drive to acquire American military technology. Mr Jiang has been personally behind the plan after the PLA was shocked by the ease with which the US-led forces beat the battle-hardened Iraqi army. The US lost no more than 100 troops with the help of a new armoury of smart bombs, Stealth bombers, cruise missiles and Patriot anti-missile defence batteries. 'The most important thing is to carry out Jiang's order to strengthen the army with science and technology,' the PLA Daily reminded troops last week. The Iraqi tanks were easily picked off from the air and even the underground bunkers of Iraqi leader Saddam Hussein were destroyed by new smart bombs. Under Mao Zedong, China expended vast resources on building underground bunkers all over the mainland to hide tanks, planes, even warships, as well as factories and civilians. The Gulf War showed smart bombs could now penetrate these bunkers and destroy hidden forces. In the 1970s, the PLA absorbed half the country's GNP, even more than the 30 per cent of GNP taken up by the Soviet military. Now, China's vast arsenal of ships, planes and tanks has become 'the world's largest military museum for obsolete weapons', as one expert put it. By the mid-1990s, the Chinese navy was made up of 50 submarines and 1,100 ships with 360,000 soldiers, larger numerically than the US navy. And there were more than 5,000 combat aircraft, the world's third-largest air force and nearly 10,000 tanks with about two million infantry. But even the world's largest standing army may only amount to just 275,000 combat-ready troops of which only a part are equipped with and trained to use modern weapons. Most of China's military hardware, based on designs acquired in the 1950s, is out of date because China lacks an industrial base strong in electronics, computers and satellite technologies. Yet in the 1980s the PLA employed 16 million people in 29,000 factories and accounted for 60 per cent of the electronics industry and the entire aviation industry. Almost all industrial research was carried out at the 200 research institutes run by the PLA which employed an estimated 300,000 scientists, engineers and technicians. In the mid-1990s, the central Government was forced to announce that at least a third would be shut down and the rest would have to fend for themselves in the marketplace. Last week, vice-premier Li Lanqing announced a new reform of these research centres and declared that from July 1 all of them would 'operate under market-oriented management systems'. In the coming knowledge-based era, Mr Li said, they had to turn the fruits of their research into commercial products. In the past two decades, these research institutes have failed to develop new tanks, destroyers, artillery, jet fighters, bombers or submarines. Large sums have been mis-spent trying to develop new fighters as well as civil aircraft, but without real success. Nuclear-powered submarines were built too, but never proved reliable enough to be put to sea. Whole industrial sectors have subsequently teetered close to collapse, like the aviation sector which in 1974 produced 540 military aircraft and in 1994 made less than 80. Since the Gulf War, China has turned to its former enemies in Moscow and started buying modern fighter planes, like the Sukhoi 27. Yet the war in Yugoslavia has driven home how these planes may fare in a war with the US. The PLA Daily has tried to keep up morale. This month, it quoted the 'best jet-fighter in China', Li Suolin, in a discussion with his father, a hero pilot who shot down four American planes during the Korean war. 'The [current] war provides a useful lesson for China to learn how to fight a hi-tech war,' the father tells the son. 'With its successful defence against the Nato attack, Yugoslavia has shattered the myth that hi-tech weapons are invincible.' Some military units are reported to have found ways of hitting cruise missiles or attack helicopters with co-ordinated aircraft guns. But not all soldiers interviewed by the PLA paper are so sanguine about the merits of a people's war. 'The most striking feature of our training is that it is not targeted enough,' said Shenyang military officer Wang Jianmin, in reference to the Yugoslav war. 'Such key scenarios of the future war - high altitude reconnaissance, anti-electronic disturbance, anti-information attack, anti-multi air raid, attack helicopters, cruise missiles and smart bombs have not been given the right emphasis in our training. We have not solved these challenges very well,' he said. 'We shall explore ways to use low-tech weapons against hi-tech weapons, especially against high-precision weapons,' the PLA Daily said. In the 1980s, while China was allied with the US against the Soviet Union, Western powers cautiously sold Beijing some new military technology, but after 1989 that stopped. So after the Gulf War, China - determined to modernise its forces - had to use all means to obtain access to technology. The most visible part of this effort is the 300,000 students sent abroad, primarily to the US. No country in history has before sent so many students to study abroad but the Cox report outlines a much more covert programme of infiltration and highlights the threat now posed by Chinese missiles. In the last 30 years, the most successful part of the military research and development programme has been in developing several new generations of missiles and rockets. The Silkworm missiles, Long March rockets, and Dongfeng ballistic missiles have helped expand China's military and diplomatic reach. By selling or threatening to sell this technology, China had an important bargaining chip, and by firing missiles at Taiwan three years ago, it delivered a threat which its backward navy has never been able to do. As Saddam Hussein has discovered, there is no defence against even standard surface-to-air missiles once they are put on mobile launchers and tipped with nuclear, chemical or germ weapons. China's ability to fire nuclear missiles underpins its big power status and distinguishes it from Yugoslavia and other countries the US has come to blows with. What the Cox report claims, and what China furiously denies, is that advanced missiles technology has been partly stolen and partly given away by US companies keen to launch communications satellites for low prices. The initial successes certainly relied on the information brought over by three ethnic Chinese scientists who defected from America in the 1950s, in particular Qian Xuesen. The first successful missiles were those built by the Nazis, the V2 flying bombs used against London. After the war, the Shanghai-educated scientist led an American scientific delegation to Berlin to copy the technology. Qian was then at the Massachusetts Institute of Technology where he was professor of aerodynamics and jet technology. He also worked as the director of the rocket section of the US National Defence Scientific Advisory Board before departing for China, taking with him 800 kilograms of blueprints and other engineering data. Once in China, Qian guided the scientists trying to use the designs supplied by Moscow in the 1950s and became known as the 'father of China's missile programme'. The Russians had copied the V2, calling it the P2, and China's first missile launch of the Dongfeng-1 was a copy of that and was adapted to carry a nuclear payload and to lift a satellite into space in 1970. The culmination of the scientists' efforts will form the centrepiece of the 50th anniversary of the People's Republic, when China is planning its first staffed space launch. 'This feat would make China the world's third great space nation behind the United States and Russia,' a mainland paper boasted.