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From the breitbart.com article:
A Chinese-born physicist Monday pleaded guilty before a US court to illegally exporting American military space know-how to China, US officials said.

Naturalized US citizen Shu Quan-Sheng, admitted handing over to Beijing information on the design and development of a fueling system for space launch vehicles between 2003 and 2007, the Justice Department said.

Shu, 68, pleaded guilty to violating the Arms Export Control Act by helping Chinese officials based at the space facility on southern Hainan island to develop manned space flight and future missions to the Moon.

He also acknowledged he had sent them in December 2003 a specific military document detailing the design of liquid hydrogen tanks crucial to launching vehicles into space, the Justice Department said in a statement.

Shu, who is the head of a high-tech company, AMAC International, based in Newport News, Virginia, with offices in Beijing, admitted a third charge of bribing Chinese officials to the tune of some 189,300 dollars.

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From the washingtonpost.com article:
China announced Tuesday that it will again sharply increase its military spending this year, budgeting a 17.6 percent rise that is roughly equal to last year’s increase.

Disclosure of plans for a $59 billion outlay in 2008 followed a Pentagon report Monday that raised questions about China’s rapidly increasing military budget, and came less than three weeks before a presidential election in Taiwan, the self-governed island over which China claims sovereignty.

A Chinese government spokesman said the country’s decade-long military buildup does “not pose a threat to any country,” but he warned that relations with Taiwan were at a “crucial stage” and that the island would “surely pay a dear price” if it were to take steps that China viewed as a declaration of independence.

At the same time Taiwanese choose a president, they also will vote on a referendum issue asking whether the island should apply for U.N. membership under the name Taiwan.

China’s reported $59 billion budget is still a fraction of what the United States spends each year on its armed forces. President Bush last month requested $515 billion to fund the Pentagon in fiscal 2009, a 7.5 percent increase, plus $70 billion for the wars in Iraq and Afghanistan.

The United States has pressed China to be more open about its intentions as the scope of its military capabilities and pace of spending increase. At a Pentagon briefing Monday, David Sedney, deputy assistant defense secretary for East Asia, reiterated the U.S. view that China’s defense establishment still severely underreports total spending and has not been clear about its intentions.

“China’s military buildup has been characterized by opacity,” Sedney told reporters, and “by the inability of people in the region and around the world to really know what ties together the capabilities that China’s acquiring with the intentions it has.”

The Pentagon report said China’s near-term focus remains on preparations for potential problems in the Taiwan Strait. But China’s nuclear force modernization, its growing arsenal of advanced missiles and its development of space and cyberspace technologies are changing military balances in Asia and beyond, the report concluded.

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From the article:
The United States is worried that Russia, China and OPEC oil-producing countries could use their growing financial clout to advance political goals, the top U.S. spy chief told Congress on Tuesday.

Such economic matters joined terrorism, nuclear proliferation and computer-network vulnerabilities as top U.S. security threats described by National Director of Intelligence Michael McConnell in an annual assessment.

McConnell said U.S. intelligence agencies had “concerns about the financial capabilities of Russia, China and OPEC countries and the potential use of their market access to exert financial leverage to political ends.”

Russia, bolstered in part by oil revenues, was positioning itself to control an energy supply and transportation network from Europe to East Asia, and the Russian military had begun to reverse a long decline, he told the Senate Intelligence Committee.

China has pursued a policy of global engagement out of a desire to expand its growing economy and obtain access markets, resources, technology and expertise, McConnell said.

It seeks a constructive relationship with the United States and other countries, but as its influence grows “Beijing probably will increasingly expect its interests to be respected by other countries,” he said.

Russia and China have long been able to target U.S. computer systems to collect intelligence, he said. “The worrisome part is, today, they also could target information infrastructure systems for degradation or destruction.”

In the energy sector, a weak U.S. dollar had prompted some oil suppliers, including Iran, Syria and Libya, to ask for payment in other currencies, or to delink their currencies from the dollar, McConnell said. “Continued concerns about dollar depreciation could tempt other producers to follow suit.”

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From the article:
He had all-American cover – born in Iowa, college in Manhattan, army buddies with whom he played baseball.

George Koval also had a secret. He was a top Soviet spy, code named Delmar, trained by Stalin’s ruthless bureau of military intelligence.

Atomic spies are old stuff. But historians say Koval, who died last year in Moscow and whose name is just coming to light publicly, appears to have been one of the most important spies of the 20th century.

On Nov. 2, the Kremlin startled Western scholars by announcing that President Vladimir Putin had posthumously given the highest Russian award to a Soviet agent who in World War II penetrated the Manhattan Project to build the atom bomb.

The announcement hailed Koval as “the only Soviet intelligence officer” to infiltrate the project’s secret plants, saying his work “helped speed up considerably the time it took for the Soviet Union to develop an atomic bomb of its own.”

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From the article:
A Chinese company with ties to Beijing’s military and past links to Saddam Hussein’s army in Iraq and the Taliban will gain access to U.S. defense-network technology under a proposed merger, Pentagon officials say.

Huawei Technologies will merge with the Massachusetts-based 3Com network-equipment manufacturer in a deal announced last week. Huawei has been linked to the U.N. oil-for-food scandal, which involved millions of dollars in payoffs to Saddam’s regime during a time of U.N. sanctions.

The announced merger follows a July computer attack on the Pentagon that U.S. intelligence officials say involved Chinese military hackers. The hackers were detected breaking into Pentagon computers, including an e-mail system close to Defense Secretary Robert M. Gates.

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From the article:
China and Russia are spying on the United States nearly as much as they did during the Cold War, according to the top U.S. intelligence official.

Mike McConnell, the director of national intelligence, says in testimony prepared for a Tuesday congressional hearing that a law passed last month expanding the U.S. government’s eavesdropping power is needed to protect not just against terrorists but also against more traditional potential adversaries, such as those two Cold War foes.

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Diplomacide Mothballed

Diplomacide has been mothballed.
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