ANALYSIS: Espionage, Corruption Dog China’s Naval Industry

Type 001A, China's second aircraft carrier, is transferred from the dry dock into the water during a launch ceremony at Dalian shipyard in Dalian, northeast China's Liaoning Province, April 26, 2017. (STR/AFP via Getty Images)

Suspicions of espionage and corruption are rife in China’s military shipyards, with a handful of incidents in recent years pointing to key staff members.

Among those incidents was that of Li Jianming, chief accountant and deputy director of the 711 Research Institute of China State Shipbuilding Corporation (CSSC). Li suddenly “died while on business” at the age of 52, according to an obituary released by the 711 Research Institute on May 17, NetEase reported.

The official media’s report about Li’s death was very similar to the recent mass death of celebrities and experts due to COVID infections. It didn’t provide specific details of Li’s sudden death while extensively praising him for his working performance as a “loyal Communist Party member.”

Li was in charge of the defense group’s “treasury” and oversaw vast amounts of money flowing in and out daily. Moreover, the 711 Research Institute, where Li worked, is one of the most sensitive R&D military institutions of the Chinese Communist Party (CCP) and is involved with work on conventional power systems for aircraft carriers and other large ships.

Another recent incident involving a core member of China’s military industry is that of Chen Fusheng, former director of the Huazhong Institute of Optoelectronics Technology (its military industry code: 717), a crucial research arm of the China Shipbuilding Industry Corporation (CSIC). Chen was under investigation for “suspected serious disciplinary violations,” according to an official release by China’s top discipline supervisor on March 16.

“Suspected serious disciplinary violations,” as per CCP practice, is a vaguely worded charge that is usually used to deal with cases involving state and Party secrets rather than general corruption cases, especially since Chen is in such a sensitive and critical position as the leader of a military research institution.

Huazhong Institute of Optoelectronics Technology is reportedly engaged in R&D of optoelectronics and navigation technology based on engineering optics, focusing on laser and infrared technology and large-scale special optoelectronics such as laser weapons.

Chen is a leading scientist in this field. In May 2019, he returned to his alma mater, Jiangsu University of Science and Technology, to lecture on the construction and development direction of optoelectronic systems on Chinese ships and several cutting-edge technologies related to the military industry.

China's first home-built aircraft carrier sets out from a port of Dalian DSIC (Dalian Shipbuilding Industry Co.) Shipyard for sea trials on May 13, 2018 in Dalian, Liaoning Province of China. (Getty Images)

CSIC and CSSC merged in November 2019, approved by the State-owned Assets Supervision and Administration Commission of the State Council, to form a shipbuilding conglomerate, with the combined entity using the name CSSC.

CSIC covers business in the north and the west of China, while CSSC deals with those in the east and south.

Those defense groups are the core research and construction units of the CCP’s military vessels. They are the leading force in the research, design, production, testing, and maintenance of naval weapons and equipment. They cover all the top war equipment of the naval forces, including aircraft carriers and nuclear submarines.

While the public details of these two cases are minimal, there was more in an earlier case involving a general manager at CSIC who was sent to jail for more than ten years.

In June 2018, Sun Bo, the then-CSIC general manager, was discharged. In July of the following year, Shanghai First Intermediate People’s Court pronounced a sentence on Sun to 12 years in jail on charges of “bribery and abuse of power.” The court held an in-camera trial for Sun’s case as it was linked to “state secrets.”

Sun was accused of selling confidential information on the design and specifications of the Liaoning carrier to the U.S. Central Intelligence Agency (CIA) for several years. Sun led efforts to refurbish the Liaoning aircraft carrier, a Soviet-designed vessel bought from Ukraine in 1998.

China's Liaoning (R), arrives in Hong Kong waters on July 7, 2017. (Anthony Wallace/AFP/Getty Images)

Sun also directed the design and construction of the Shandong, the first home-built aircraft carrier after the Liaoning, so there is a rumor that Sun may have given the Shandong design to the CIA as well, Russian news agency Sputnik reported on June 21, 2018.

In May 2020, Sun’s superior Hu Wenming, the former chairman of CSIC, known as the “father of the Chinese aircraft carrier,” was dismissed and interrogated by the Discipline Supervision Commission for “serious violations of law and the Party discipline” and receiving bribes amounting to 5.28 billion (about 740 million).

The case entered court in February 2021, but no further progress has been made in more than two years, according to an article in the Chinese portal Sina.

The Discipline and Supervision Commission did not disclose the specific issues about Hu. However, Radio Free Asia’s report said on May 13, 2020, that Hu may have been “involved in leaking [The key technology of domestic aircraft carriers] to foreign intelligence agencies,” and “the CCP punishes so-called traitors more severely [than corruption].”

A few months after Hu’s apprehension, CSIC issued a notice saying that Huang Qun, deputy director of the subordinate unit of Dalian Research Institute of 760, Song Yucai, head of a test platform, and Jiang Kaibin, chief of mechanical and electrical of a test platform, died in the line of duty on Aug. 20, 2018.

These three people are all in leadership positions, and their deaths were released on the same day. The inside story is fairly questionable.

Three Aircraft Carriers

It has been over a decade since the first carrier was commissioned in September 2012, but the two carrier fleets are still in the training and integration phase, with the key technologies and weaponry already obsolete.

In early April, Taiwan’s President Tsai Ing-wen visited the United States and met with U.S. House Speaker Kevin McCarthy. In response, the Shandong sailed the strait between the Philippines and Taiwan and entered the southeastern waters of Taiwan on April 5. The next day, the CCP added three warships and a Ka-28 anti-submarine helicopter in their efforts to harass and intimidate Taiwan.

This undated photo taken in April 2018 shows J15 fighter jets on the Chinese aircraft carrier, the Liaoning, during a drill at sea. (AFP via Getty Images)

However, the CCP’s showcase of force to intimidate Taiwan has revealed the weakness of its maritime military power. Richard D. Fisher, Jr., a senior fellow with the U.S. think tank International Assessment and Strategy Center, told the VOA that such naval efforts by Beijing are very vulnerable, especially to U.S. attack submarines.

The CCP dispatched the Shandong with its 1,500 crew to southeastern Taiwan, in the deepest waters of the Pacific Ocean, which would be tantamount to “suicide” as it is an ideal area for a U.S. nuclear fast-attack submarine to operate, Fischer said.

If the carrier ever took offensive action against Taiwan, it would quickly sink to the bottom of the sea—it would be a reckless move, according to Fischer.

The CCP’s aircraft carriers are more of propaganda items, said VOA’s report on April 7, citing international military experts as saying that the takeoff and landing of carrier aircraft at night and in adverse weather are crucial routines for aircraft carriers offshore, but these were not included in China’s recent carrier exercises.

Moreover, the CCP navy has not yet developed mature protective screening capabilities, especially for anti-submarine warfare.

Even Chinese military analysts have admitted in dozens of articles published in CCP-affiliated journals the lack of combat capability of China’s carrier formations, and some suggest the carriers are still in training mode, the report said.

The third aircraft carrier, the Fujian, was launched with great fanfare as China’s biggest carrier on June 17, 2022, but “it’s probably not the biggest problem on the minds of U.S. naval commanders right now,” according to a CNN report on June 26, 2022.

Carl Schuster, a former U.S. Navy captain and former director of operations at the U.S. Pacific Command’s Joint Intelligence Center, estimated the Fujian aircraft carrier wouldn’t be operational within another three or four years.

Even when the Fujian is operational, its large size will make it an obvious target, “sinking such an iconic vessel would be as much of a morale blow as a military disaster for China,” the report said.