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Dec. 13, 2018
Notes from the Pentagon

Physicist linked to China program
A noted Chinese-born physicist and Stanford University quantum scientist who died Dec. 1 was linked to Beijing’s major program to corner the world market in key advanced technologies.

Zhang Shoucheng, 55, died in an apparent suicide and had suffered from depression, according to his family.

However, his death came days after a Nov. 30 report by U.S. Trade Representative Robert Lighthizer linking the Silicon Valley venture capital firm Danhua Capital, which Zhang founded and led, to China’s “Made in China 2025” technology dominance program.

The 2025 program was launched in 2015 and has been cited by the Trump administration to show that Beijing is engaged in a strategic program of stealing American know-how. The program is aimed at helping China dominate world markets in advanced technologies, including aerospace, information and communications technology, robotics, industrial machinery, new materials and automobiles.

Stanford said in a statement that Zhang was involved in quantum physics research related to interacting electrons. The research led to predictions of new phenomena and exotic states of matter. He took part in research on novel materials, quantum gravity and artificial intelligence.

The USTR report said China is using venture capital investment companies, including Danhua, as a new means of securing cutting-edge technologies and intellectual property from the United States. From January to May, Chinese venture capital investment reached nearly $2.4 billion, a record level.

The investment focused on artificial intelligence, robotics, virtual reality and financial technology.

“Chinese [venture capital] investment in the United States can play a significant role in technology transfer,” the report said.

The Lighthizer report said the Chinese government has created and backed a web of companies in Silicon Valley “to further the industrial policy goals of the Chinese government.”

The investments include funding dozens and in some cases hundreds of startup companies that are then exploited by the venture capital companies to gain access to their information technology. The access gives the companies “the ability to influence and potentially coerce management,” the report said.

According to the report, Zhang’s company Danhua Capital, operating under the name Digital Horizon Capital, was funded by a state-owned Beijing government enterprise called Zhongguancun Development Group (ZDG).

“Other notable Chinese companies with state connections and strong interests in technology also allocated funds to Danhua Capital,” the report said.

They include iFlyTek, a voice recognition company, and BOE Technology Group Co. Ltd. The controlling shareholder of BEO is the state-owned Assets Supervision and Administration Commission of the Beijing municipal government.

“In total, Danhua lists 113 U.S. companies in its portfolio, and most of those companies fall within emerging sectors and technologies (such as biotechnology and AI) that the Chinese government has identified as strategic priorities,” the report said.

Zhang’s family denied social media reports of foul play surrounding the death or that the death was related to the release of the USTR report.

“There is no police investigation, and the authorities have no suspicions about Professor Zhang’s death,” a representative of the family told the South China Morning Post. “You will read that he committed suicide, and this is true. But you will also read in the family statement that he had periodic bouts with depression.”

The death is suspicious, however, because of its closeness to the release of the USTR report.

Guo Wengui, an exiled Chinese businessman who in the past had close contacts with Chinese intelligence, said he knew Zhang for years and doubted he died in a suicide.

“I knew this guy very well,” Mr. Guo told Inside the Ring. “The guy worked with the [Chinese Communist Party].”

In a broadcast on his internet video outlet, Mr. Guo said Zhang was part of a special Chinese Communist Party program that recruited scientific and technical experts starting in 1995. The secret program was designed to assist China in advancing technology development and involved some 20,000 experts.

According to Mr. Guo, Zhang in the past received research funding from Jack Ma, head of Alibaba, the giant online retailer and conglomerate, and under Chinese President Xi Jinping received a secret national award for his work.

Mr. Guo said he suspects foul play in Zhang’s death because the physicist knew secrets about China’s technology expert program and that he refused to return to China as requested by senior party leaders.

Chinese state media has reported a number of Chinese government officials have died in what were reported as “abnormal deaths,” the official euphemism for suicide.

In October, Zheng Xiaosong, the head of the Chinese government liaison office in Macau, jumped to his death from his apartment building. Beijing said Zheng had been depressed.

In July, Wang Jian, founder and co-chairman of the Chinese conglomerate HNA, died during a fall while sightseeing at a church in southern France.

The Navy and the Pentagon’s Missile Defense Agency conducted a successful flight test of a new SM-3 Block IIA anti-missile interceptor, hitting a simulated intermediate-range missile over the Pacific near Hawaii on Tuesday.

The SM-3 missile also was fired from a new ground-based launcher system called Aegis Ashore, an effort to place Aegis battle management system-equipped missile defenses on land to reduce costs associated with at-sea deployment.

In Tuesday’s test, an intermediate-range ballistic missile target was launched from a C-17 cargo plane “thousands of miles southwest” of the Aegis Ashore launch site at Kauai, Hawaii, the Missile Defense Agency said in a statement. According to the agency, the test involved the use of ground-, air- and space-based sensors and command and control systems.

Lt. Gen. Sam Greaves, director of the Missile Defense Agency, said the successful flight test was “of great significance” in advancing multidomain missile defense operations. The test also supported a critical initial production acquisition milestone for the new Block IIA missile.

The Block IIA missile uses a more powerful motor that gives the interceptor greater capabilities to shoot down enemy missiles. The Aegis Ashore will be deployed in Poland and Romania. Japan also plans to deploy Aegis Ashore.

“This system is designed to defend the United States, its deployed forces, allies and friends from a real and growing ballistic missile threat,” Gen. Greaves said.

The Russian government recently criticized the American military’s use of intermediate-range target missiles, claiming the missiles violate the 1987 Intermediate-range Nuclear Forces treaty banning ground-launched missiles with ranges of 310 miles to 3,420 miles. Intermediate-range missiles have ranges of 1,864 to 3,418 miles.

The treaty, however, states that “non-weapon-delivery vehicles” are not covered by INF.

The Trump administration announced recently that it will withdraw from the INF treaty unless Russia returns to compliance in 60 days. The administration has charged that Russia’s deployment of a new ground-launched cruise missile, the SSC-8, is a material breach of the agreement.

Secretary of State Mike Pompeo criticized Russia’s deployment this week of two Tu-160 Blackjack nuclear-capable bombers to crisis-torn Venezuela.

Mr. Pompeo said in a tweet that Moscow sent bombers halfway around the world to Venezuela.

“The Russian and Venezuelan people should see this for what it is: two corrupt governments squandering public funds, and squelching liberty and freedom while their people suffer,” he said.

The Russian Foreign Ministry criticized the secretary’s tweet as a violation of “diplomatic ethics.”

“What the secretary of state said is inadmissible, not to mention that it is absolutely unprofessional,” the ministry said.

The two bombers landed at an airfield near Caracas on Monday in a show of Moscow’s support for the leftist government of President Nicolas Maduro, who has warned that the United States is planning an invasion.

The Maduro regime has driven the economy of Venezuela into free fall with hyperinflation, power cuts, and food and medicine shortages. The crisis has sent millions of Venezuelans fleeing the country.

It was not the first time the Russians sent Blackjacks to Venezuela. Similar deployments took place in 2008 and 2013. The bombers were accompanied by an An-124 transport and Il-62 passenger jet.

  • Contact Bill Gertz on Twitter via @BillGertz.

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