Decisive moves by China in the past few months to invest in western companies dealing with dual use technology items at a time when most firms are reeling under the effects of the economic crisis have come as a warning signal to countries like India. For largely political reasons,Beijing had been finding it increasingly tough in the past to do business in these areas but now its taking advantage of the changing times. Just last month,a 150-member strong Chinese business delegation headed by Chinese Commerce Minister Chen Deming sealed procurement deals worth $15 billion in a quick European trip to Berlin,Zurich,Madrid and London. The bulk of these 37 procurement deals,amounting to about $13 billion,were signed with German companies. While some of them were regular automobile deals with German majors,most deals were in engineering and electronic equipment with a strong emphasis on high-end dual use technology. This approach,sources said,flows from a policy paper prepared by Chinas State Administration for Science,Technology and Industry for National Defence (SASTIND) that judged the urgent need for foreign capital in cutting edge companies in the US and Europe after these governments were strained by big bailout packages. Washington too has assessed that it needs to accommodate China. In his statement on the Annual Threat Assessment on March 10 before the Senate Armed Services Committee,US Director for National Intelligence Dennis Blair said China can exert a stabilising influence and that the present crisis has given China an opportunity to increase its prestige. That defence would be a key area where China aims to make use of this opportunity was clear in the assessment of the US Defence Intelligence Agency,which informed the Senate committee that the Chinese military spending in 2008 was $120-175 billion. This is only set to increase given their modernisation plans. According to the DIA assessment,China is increasingly building its sophisticated aircraft,surface combatants,submarines and weapon systems while still purchasing select systems from overseas. Since the signs of a larger economic crisis were imminent in Washington by mid-2008,Beijing moved quietly but quickly in its identified strategic areas. Consider this: n China Great Wall Industry Complex that was placed under sanctions in 2006 under the Iran Non-Proliferation Act was removed from the prohibited list. With fresh investments,this company is now up and running,dealing in a range of hi-tech areas like satellite launches and space research. w China is said to have renewed its bid to join the International Space Research Station after its successful manned mission to space. US,which had resisted Chinese collaboration with NASA for security reasons,is now more open and a NASA team even visited China few months backs to discuss the issue further. w Chinas SUFA company,a subsidiary of state-run China National Nuclear Corporation,struck a deal this month to be the lead partner in a joint venture with a US firm Flowserve Corp to make valves for nuclear reactors. A new plant will be set up in Shanghai. w The Xinghou group of China is in talks to acquire the French-American Soma group,which is one of the oldest manufacturers of high-speed gears and machines that have wide application in aviation,space and the defence industry. The US-China Economic and Security Review Commission,which has always suggested ways to force greater transparency from Beijing,too is said to have now asked the US Administration to enhance cooperation with China in all sectors. While all eyes are trained on China,which is advocating against economic protectionism in the debate on the ongoing economic crisis,sources said it is also clear that China has identified key strategic areas in which it wants to invest and is looking to make it count during the crisis. This is also the time when Western governments are likely to be less punitive on Chinas political excesses and so despite consequences it has to face from the crisis,Beijing seems to be determined to push its own strategic agenda.
