Bradlay said he was alarmed at the element of surprise exacted by China after so much material was in the public domain. Secretary Fischer replied that the lobby of businessmen and the public relations machine of the Chinese government had been a far more persuasive force than defence analysts.
The meeting was interrupted by a flash telegram from the US Ambassador to Malaysia.
Five American oil workers escaped with Malaysian troops in the first few minutes of the attack on the Malaysian-claimed territory. They report that their naval patrol boat came under fire from the Chinese. There were Malaysian, but no (repeat no) American casualties. However, the Chinese opened fire when they stormed the atoll. The oil workers believe that some of their colleagues may have been hit. The Malaysians had been under standing orders to leave if confronted by overwhelming enemy forces. The oilmen will not (repeat not) be available to the press. Both they and the company believe they can go back to work once the conflict has ended.
Fischer responded that Malaysia would not be expected to react without consulting its neighbours from the Association of South-East Asian Nations (ASEAN). ASEAN itself would probably take a non-confrontational line. He did not expect a military response from these nations. Even collectively they were no match for China. The wealth in those countries was controlled by Chinese businessmen. They might live away from China, but they cultivated contact with the Communist leadership in order to win contracts. The Secretary of State reminded the President that one such Chinese/Malaysian family was a large investor in financial services in Maine, the President's own state, and that they had attended his inauguration only one month earlier.
The overriding threat of the Chinese adventure was to Japan. Its total European and South-East Asian trade traversed the South China Sea. Moreover, Japan was a big oil importer with no supply of its own. Three-quarters of its oil came from the Middle East, and the rest from Brunei, Indonesia, and Australia. The major issue, the Secretary said, was the security treaty with Tokyo. The consequences of any American equivocation on the issue would almost certainly end the treaty and unleash on Asia a more militarily assertive Japan.
`Mr President, it is my considered advice that we move very carefully in this area. We have had a military alliance with Japanese since 1960. One should not discard a relationship like that lightly. I know there are those who will say China matters more deed, some at this table but the Japanese have been good friends to the United States.'
President Bradlay then turned to Martin Weinstein, the National Security Adviser, who confined his report to the intelligence-gathering activities of both governments.
`We put a network of satellites over the region when the military exercises began. We've had AWACS in the air and we've got Aegis cruisers with a carrier battle group off the Philippines. Not much moves there without us knowing it. I'm happy with our IMINT and SIGINT [imagery and signals intelligence]. The Chinese have their own satellites, but the technology is faulty and outdated. We can assume they don't watch everything. But we don't know what they're missing.
`The flaw in our operation is HUMINT [human-source intelligence]. We do not have any quality operatives on the ground in Beijing. We have no one inside Zhongnanhai. We don't know what Wang Feng is thinking. Are there divisions between him and the other powerful players in the government? How supportive is MOFTEC [Ministry of Foreign Trade and Economic Cooperation] towards the PLA action, which has extreme economic risks? In most countries, including the Soviet Union when it existed, we had scraps of the jigsaw thrown out to us. We ran agents. We had good networks. We don't have that anywhere important in China. Zhongnanhai is an impenetrable citadel. The best we get is information mainly from the children of the officials who live there. A lot of them fly over here and our agents befriend them. But it's gossip. Occasionally, one will leak a document to the New York Times or somebody.'
`What do they have on us?' asked the President.
Weinstein referred to his notes: `Their espionage operation is run through the Ministry of State Security or MSS. We believe in the United States itself the MSS draws upon the services of 1,500 Chinese diplomats and commercial representatives, 90 other Chinese establishments and offices, and 20,000 Chinese students arriving annually. They are either recruited to gather intelligence while here or debriefed back in China. If they don't comply their families are put under pressure; loss of job, home, medical care. That sort of thing. On top of that we have 15,000 representatives travelling through in about 3,000 delegations a year. The same happens to them. And there's an ethnic Chinese community of several million. In short, Mr President, if we enter into hostilities with the People's Republic of China they could have agents in every city.'
Bradlay turned to Peter Ray, the Director of the CIA. `So far, can you tell me what they know that they shouldn't know?'
`I can tell you the type of material. Two years before Richard Nixon redrew our China policy, the Communists knew of his desire to open diplomatic relations with them. In 1970 one of our analysts, Larry Chin Wu-tai, gave them a classified document which outlined his plan. They were able to adjust their foreign policy accordingly. We thought we were surprising them. They were across us all the time. Larry Chin worked for the CIA for thirty-seven years. He was indicted in 1981.'
`Are you telling me they have agents in our government?'
`I'm telling you, Mr President, that we don't have anyone with them. We don't know if they have anyone with us. The MSS actively seeks to penetrate American intelligence and policy-making agencies. Just recently, we had to bring out a communications officer from the embassy in Beijing. They had tried to recruit him. If they had succeeded, they would have had access to all embassy communications. We can be damn sure they'll be turning on all the taps today. We're watching. But HUMINT in Chinese society is very difficult.
`The other thrust of their intelligence operation is for technology. The South China Sea air strikes today could have been made possible by American technology. And you have to admire their nerve. The China Aero-Technology Import & Export Company, CATIC, bought a Seattle company which made aircraft parts, called Mamco Manufacturing Inc., in the late 1980s. Mamco had technology which could provide the Chinese air force with in-flight refuelling capabilities. In February 1990 we closed the operation down. But you look at the number of American engineering and technology companies now owned by Chinese firms. All those companies are ultimately responsible to the Communist Party. This is the policy of trade, interdependence, and constructive engagement. But tonight it reads to me like one of enemy infiltration.
`One point which also comes under the Joint Chiefs,' he said, winding up. `PLA intelligence activities have increased across the land border with Vietnam. In the past month, there have been low-level assassinations, the laying of mines, the killing of livestock. All no more than five miles across. A Vietnamese soldier was captured and tortured to try to get the Vietnamese order of battle. He escaped.'
`What are you saying?'
`We're watching that border, Mr President.'
Bradlay asked the Chairman of the Joint Chiefs to give his assessment.
`There's no doubt that the United States has the capability to regain control over the oil facilities in the Spratlys and the Paracels and to reopen the South China Sea to international navigation. Two carrier battle groups are close enough by to be there in a day.
`The Chinese have taken control of the oil-production facilities with Marine commandos. To retake them would not be easy. The best estimate is that at least several wells would be destroyed Iraqi-style, which could lead to an environmental disaster.