China and Supercomputers

China and Supercomputers

US Supercomputer Sales to China	Silicon Graphics Controversy	Sun Microsystems Controversy
Recent Progress	China's Indigenous Supercomputer Development

US Supercomputer Sales to China:

China has been accused of diverting some of the supercomputers purchased from the United States from civilian to military applications. Two specific cases include the sale and possible diversion of two Silicon Graphics supercomputers and the unauthorized sale of one Sun Microsystems supercomputer to Chinese entities. The computers were reportedly diverted to facilities conducting military R&D and production. In addition, in December 1994, Digital Creations Corporation (DCC) plead guilty to the charge of illegally exporting a Digital Equipment Corporation VAX model computer to China in 1993. The Digital Equipment Corporation and International Business Machines Corporation (IBM) have also sold supercomputers to China.

According to US export guidelines which were recently revised on 1 February 2000, companies planning to sell supercomputers to "Tier Three" countries such as China (which present proliferation risks) face certain restrictions. For computer exports to civilian end users in China, US companies must apply for an individual validated license (IVL) for computers with a capability above 20,000 million of theoretical operations per second (MTOPS). This was raised from a level of 12,300 MTOPS set in 1999. For computer exports to military end-users in China, US companies must apply for an IVL for computers with a capability of 12,500 MTOPS; this was changed from a level of 6,500 MTOPS set in 1999. Below these levels, US companies do not have to apply for a license to export computers to Chinese entities. In accordance with the 1998 National Defense Authorization Act (NDAA) companies must submit an application to the Commerce Department's Bureau of Export Administration indicating the computer's end-user. The Commerce, State and Defense Departments then have 10 days to object to the pending sale.

Silicon Graphics Controversy:

In 1996 the US firm Silicon Graphics came under investigation for its sale of two supercomputers with a 6,000 million theoretical operations per second (MTOPS) capability to the Chinese Academy of Sciences (CAS). The CAS reportedly conducts nuclear weapons and missile-related research. Both Silicon Graphics and the Chinese Foreign Ministry deny any wrongdoing and the case has still not been brought to a conclusion. A company spokesman stated, "Our (Silicon Graphic's) people have actually been to the facility and seen the system in use. It's not in any kind of secured area, the way you would expect something with a military use." The company spokesman also said that Silicon Graphics has complied with export regulations. ["Albright Says U.S. Investigating Supercomputer Sales to China," The San Francisco Chronicle, 12 June 1997, p. A6]

On 12 June 1997, Chinese Foreign Ministry spokesman Cui Tiankai said:

[Benjamin Kang Lim, "China: US-Made Supercomputers for Research," Reuters, 12 June 1997.]

Despite these denials, on 10 June 1997, US Secretary of State Madeleine Albright said that the United States was conducting an investigation of the supercomputer sales to China. The same day, US State Department spokesman Nicholas Burns stated: "We are reviewing right now some of the supercomputer sales for possible diversion…We suspect there may have been some diversions in some cases." But Burns stated that it would be difficult for China to use the computers to modernize its nuclear arsenal, stating: "Our own scientists believe it would be very difficult through computer modeling to have any kind of confidence…We believe it would be very difficult through computer modeling to acquire confidence in the redesign of nuclear weapons without testing".

Sun Microsystems Controversy:

In addition to the unresolved Silicon Graphics case, a 2,700 MTOP Sun Microsystems computer was determined to have been diverted to a military and scientific research institute in Changsha, Hunan Province called the Changsha Institute of Science and Technology or the University of Science and Technology for National Defense. On 29 June 1997, during a meeting with Chinese Foreign Minister Qian Qichen, US Secretary of State Albright complained about the diversion of the supercomputer which was discovered by the United States on 19 June. China denied the allegation. It was determined that in February 1997, the supercomputer was sent to the China Scientific Institute in Beijing, but was instead diverted through a Hong Kong firm, and then sent to the Changsha Institute. Sun Microsystems was apparently told that the computer would be sent to the China Scientific Institute in Beijing. Michael Sweeny, a Sun Microsystems spokesman, said that "Sun did not sell this computer directly to the end user in question, nor did Sun know that the ultimate user of the computer was not approved by the government until we learned last week". [Jeff Gerth, "US Complains to China About Supercomputer Use," New York Times, 2 July 1997.]

In response to the allegations, Chinese Foreign Ministry spokesman Tang Guoqiang stated that the supercomputers acquired from the United States were being used for weather forecasting, earthquake prediction, and other scientific research, and that "This is completely normal and commercial…The Chinese side did not violate any of the relevant controls agreed upon by the two countries."

However, on 12 September 1997, the US State Department announced that China's Trade Ministry agreed to return the supercomputer sold by Sun Mircosystems. Undersecretary of Commerce William Reinsch stated: "We think that this incident with China shows that the system works...Through the safeguards we have in place today, we detected this diversion. And the Chinese worked with us in resolving the issue." [David E. Sanger, "China to Return Computer It Had Diverted to Military," New York Times, 12 September 1997.]

In addition, during a 12 September 1997 press briefing, State Department briefer James Foley stated:

"The Secretary raised this issue with her counterpart Vice Premier and Foreign Minister Qian and he promised to look into the problem. After doing so, the Chinese Government informed us that, while they viewed this as a legal transaction, they understood and were sensitive to our concerns. We are pleased with the rapid response and the cooperation of the Chinese Government, which helped us to identify a mutually acceptable solution to this issue, specifically that the computer is now in the process of being returned to the U.S. vendor. We regard China's willingness to engage on this problem as a positive indicator for future actions with China on technology transfer issues." [US Department of State, daily press briefing, 12 September 1997.]

Despite this apparent cooperation between the US and China, many critics of the sales still argue that China could use supercomputers to conduct secret nuclear tests to modernize its nuclear weapons. China has denied that it has used any US-supplied supercomputers for military use, claiming they have been used in civilian applications such as weather forecasting. However, Stephen D. Bryen, former deputy secretary of defense for export policy, told a Senate panel that China now has between 50 and 100 supercomputers that could be used for military applications. Bryen said that supercomputers will allow China to develop cruise missiles and smaller nuclear weapons that will "enhance China's ability to shift the balance of power in the Pacific." Former deputy assistant secretary of defense for counter-proliferation policy, Mitchel B. Wallerstein, on the other hand, said that supercomputer sales pose no security threat to the Unites States and that the technology cannot be restricted since it can be obtained anywhere. [Senate Told China Has Supercomputers with Military Potential, Inquisit, 10 July 1998.]

Recent Progress:

In order to better verify that supercomputers are exported legally, during the 1998 US-China Summit in Beijing China agreed to allow US Department of Commerce officials to visit end-user sites to verify that supercomputers were being used for non-military applications. The US 1997 Defense Authorization Act had mandated the on-site inspections, but were rejected by the Chinese.

In a report released to Congress in January 1999, the Department of Commerce reported that as a result of the June 1998 US-China Summit one on-site visit during the reporting period and two subsequent on-site visits were made to Chinese end-users. The report also stated that in 1998 the US exported 390 High Performance Computers (HPC) - which are faster than 2,000 Million Theoretical Operations Per Second (MTOPS) - to Tier III countries. Of the 390 computers, 191 were exported to China. Commenting on the report in a press release, Under Secretary of Commerce for Export Administration William A. Reinsch stated:

"The increased volume of HPC exports shows that the performance level of 2,000 MTOPS has already been overtaken by technology. The resultant burden of on-site visits to each computer is an example of good intentions leading to wasteful government expense and no improvement to national security."

"A major goal of this Administration and the Congress is to halt the spread of weapons of mass destruction. However, requiring us to visit every site where an HPC is installed, regardless of what business the end-user is in or how many times it has been visited before, is ineffective. We spend too much time and money disrupting the legitimate business activities of banks, insurance companies, telephone service providers and U.S. subsidiaries. Congress should let us target our enforcement resources where they will do the most good." ["Commerce Report: Growing Demand for U.S. High Performance Computers," US Department of Commerce Press Release, 8 January 1999.]

However, a Congressional report produced by the Select Committee on US National Security and Military/Commercial Concerns with the People's Republic of China (aka The Cox Committee) made a recommendation which was contrary to Secretary Reinsch's statement. The Cox Committee called for:

"Establishment by the PRC of an open and transparent system by September 30, 1999, which provides for effective end-use verification for HPCs sold or to be sold to the PRC and, at a minimum, provides for on-site inspection of the end-use and end-user of such HPCs, without notice, by U.S. nationals designated by the U.S. Government. Failure to establish such a system by that date should result in the U.S. government's lowering the performance level of HPCs that may be exported to the PRC, the denial of export licenses for computers destined to the PRC, or other appropriate measures."

The United States had reportedly proposed 17 site visits in China before May 1999, but talks about the visits were suspended after the bombing of the Chinese Embassy in Yugoslavia. However, as relations began to improve a spokesman for the Ministry of Foreign trade and Economic Cooperation (MOFTEC) announced on 19 August 1999 that site visits would resume and that the United States had already proposed over 40 inspections. ["MOFTEC Lets US Resume Inspections of High-Tech Exports." Beijing Zhongguo Xinwen She. 19 August 1999 in FBIS FTS19990819000547, 19 August 1999.] But it is the high number of proposed inspections that Under Secretary Reinsch believes will make the Congressional mandate unworkable. "One of the ironies is that if you require BXA to visit all of them, you have to pick and choose among the ones the Chinese agree to. If we didn't have to visit them all, it would complicate their lives," he said. ["US-China Export Control Cooperation Resumes," The Export Practitioner, October 1999, p. 17.]

Despite the controversy, on 16 September 1999 the US announced new export regulations for encryption technology which were expected to boost exports of computer technology, including supercomputers, to China. The new regulations, which were implemented on 12 January 2000 state:

"Any encryption commodity or software of any key length can now be exported under a license exception (i.e., without a license) after a technical review, to commercial firms and other non-government end users in any country except for the seven state supporters of terrorism. Exports previously allowed only for a company’s internal use can now be used for communication with other firms, supply chains and customers. Additionally, telecommunication and Internet service providers may use any encryption commodity or software to provide services to commercial firms and non-government end users. Previous liberalizations for banks, financial institutions and other approved sectors are subsumed under this Update. Exports to governments can be approved under a license. " ["Commerce Announces Streamlined Encryption Export Regulations," US Department of Commerce Press Release, 12 January 2000.]

This action had been preceded by an administration decision on 1 July 1999 to raise the licensing level of HPC to Tier III countries from 2,000 to 6,500 MTOPS for military end-users and from 7,000 to 12,300 MTOPS for civilian end-users and NDAA notification level from 2,000 to 6,500 MTOPS. On 1 February 2000, the White House citing the fact that the speed of general purpose microprocessors used in standard personal computers and business applications had increased by a factor of eight since 1995, decided again to raise the licensing levels of HPC to Tier III countries from 6,500 to 12,500 MTOPS for military end-users and to raise the licensing level from 12,300 to 20,000 MTOPS for civilian end-users. The changes took effect immediately for civilian end-users and in six months for military end-users. The President's decision also raised the NDAA notification level from 6,500 MTOPS to 12,500 MTOPS. Congress has six months to review the President's decision.["Fact Sheet: Export Controls on Computers," The White House, 1 July 1999 and 1 February 2000]

While new export regulations may make it easier to export information technology, the argument over how to maintain a balance between security and commerce continues and is complicated by the rapidly increasing capability of computers. The Department of Commerce now concentrates on controlling the export of the 500 fastest American-made computers. However, as computer speeds nearly double each year, the issue of the export of computers that may harm US national security becomes blurred. Computers which may not be among the 500 fastest but still can perform military applications may not be able to be controlled, bringing into question the efficacy of supercomputer export controls.

China's Indigenous Supercomputer Development:

In January 1996, it was reported that China included the Dawn-3000, a new model of its Dawn-series mass parallel programming (MPP) supercomputers, as part of its ninth "Five-Year Plan" (1996-2000). The Dawn-3000 will have a 3,000 MTOPS capability.

In June 1996, China announced the Yinhe (Galaxy)-3, a new high-performance supercomputer developed by its military. The Yinhe-3 has a 13,000 MTOPS capability, and is equipped with an expandable multiple processor parallel system. The Yinhe-3 is 10 times more powerful than the earlier Yinhe-2, but only one-sixth the size.

China has also developed the Yinhe Super-Simulation Computer (YHSSC), successor to the Yinhe All-Digital Simulation Computer System Type-2 (YH-FZ2). The YHSSC has been used by the China Aerospace Corporation (CASC) for simulations to improve its rocket systems; by the Southwest Research Engineering and Design Academy (First Academy) to design the Qinshan-2 power reactor; and by the China Aviation Industries Corporation (AVIC) to develop a next-generation unmanned aerial vehicle (UAV).

In January 2000, the State Intelligent Machinery Research and Development Center of the Chinese Academy of Science Computer Institute announced the development of the Shuguang 2000-II SuperServer. The supercomputer is reported to be capable of performing 110,000 MTOPS.

The Changsha Institute of Science and Technology (aka the University of Science and Technology for National Defense), located in Changsha, Hunan Province, develops China's Yinhe (Galaxy)-class computers (possibly the end-user of the Sun Microsystems supercomputer sale). The Institute has also developed advanced kernel algorithm software programs for numerical weather forecasting, earthquake mechanization research, quantum chemistry study, and pneumatic power study.

[Sources: John J. Fialka, "Silicon Graphics Sold Computers to China," Wall Street Journal, 27 February 1997; "Russia-Weapons Computers," Associated Press, 16 April 1997; "Chinese Supercomputer Underscores US Questions," Wall Street Journal, 20 June 1997, p. A12; Jeff Gerth, "China Buying US Computers, Raising Arms Fears," New York Times, 10 June 1997, pp. A1, A8; "US Probing China Computer Diversions," Reuter, 10 June 1997; Eduardo Lachica, "Clinton is Pressured to Monitor Supercomputer Sales to China," Wall Street Journal, 12 June 1997; "Albright Says China Broke Export Rules By Using US Computer At Military Site," Wall Street Journal, 1 July 1997; Jonathan S. Landay, "Is China Diverting High Technology to US Foes?" Christian Science Monitor, 11 July 1997, p. 1; Xinhua, 31 January 1996, in FBIS-CHI-96-024, 31 January 1996; "Galaxy-III Super Computer," Beijing Review, 11-17 August 1997, p. 31; Michael Laris, "China Exploits US Computer Advances: American Export Trade Raises National Security Concerns," Washington Post, 9 March 1999, p. A1; Jia Xiping and Yang Jian, "China Academy of Science Develops New Supercomputer," Beijing Renmin Ribao in Chinese 29 January 2000, p.1, in FBIS CPP20000204000009.]

This material is produced independently for NTI by the James Martin Center for Nonproliferation Studies at the Monterey Institute of International Studies and does not necessarily reflect the opinions of and has not been independently verified by NTI or its directors, officers, employees, agents. Copyright © 2007 by MIIS.