Bill Gertz
THE WASHINGTON TIMES

     China is shipping arms and explosives to Cuba in a sign of increased military cooperation between Beijing and Havana, The Washington Times has learned.
     At least three arms shipments were traced from China to the Cuban port of Mariel over the past several months. All the arms were aboard vessels belonging to
the state-owned China Ocean Shipping Co. (Cosco), according to U.S. intelligence officials.
     Intelligence officials who spoke on the condition of anonymity said details of the arms shipments are sketchy but all involved a "known Chinese arms dealer" who
arranged the transfers.
     One of the cargoes was described as dual-use explosives and detonation cord. The explosives were said to be "military-grade" material.
     The latest shipment took place in December. That arms delivery coincided with the visit to Cuba in late December by China´s military chief of staff, Gen. Fu
Quanyou. Gen. Fu signed a military cooperation agreement with Havana aimed at modernizing Cuba´s outdated Russian weapons.
     The arms shipments to Cuba could lead to the imposition of economic sanctions on China and Cosco, according to U.S. officials.
     A 1996 amendment to the 1962 Foreign Assistance Act requires that economic sanctions be imposed on any nation or company that provides lethal military
assistance to a nation designated as a state sponsor of terrorism. Cuba is on the State Department´s list of nine nations designated as supporters of global terrorism.
     Sanctions would disrupt a major portion of the U.S.-Chinese shipping market controlled by Cosco, whose business lines include port terminals and warehousing,
insurance, real estate and hotel management.
     Cuba has been increasing its ties to China in recent months. In April, Chinese President Jiang Zemin traveled to Havana and signed agreements worth about $400
million in loans to Havana.
     Other Chinese activities in Cuba include electronic eavesdropping on the United States and Chinese government radio broadcasting, according to U.S. officials
familiar with intelligence reports. China also recently agreed to modernize Cuba´s telecommunications network.
     A CIA spokesman declined to comment on the arms shipments.
     Spokesmen for Cosco could not be reached for comment.
     Wei Jiafu, Cosco group president and chief executive officer, told reporters and editors of The Washington Times on June 2 that the shipping line has no
connection to the Chinese military and is only interested in making money.
     Mr. Wei insisted during the interview that the People´s Liberation Army had no influence on the company´s operations or global business strategy.
     However, the shipper´s only shareholder is the Chinese government.
     Mr. Wei and other Cosco officials were in the United States to meet port officials in Massachusetts, where they had reached an agreement with the
Massachusetts Port Authority to begin a weekly shipping service between Shanghai and Boston beginning next year.
     Cosco has been linked in the past by U.S. intelligence agencies to illegal smuggling and international arms trafficking.
     James Mulvenon, a China analyst with the RAND Corp., said that the Chinese Communist Party´s military organ approved establishment of Cosco as an arm of
the Chinese navy in 1985.
     Mr. Mulvenon stated earlier this year, in his book "Soldiers of Fortune," that Cosco´s establishment "legitimized the use of navy ships for civilian shipping and thus
provided a legal cover for the navy´s smuggling."
     The Chinese navy was linked in 1985 to illegal smuggling in foreign cars, vans, TVs and VCRs out of Hainan island in the South China Sea, he wrote.
     In 1998, U.S. intelligence agencies tracked a Cosco freighter from Shanghai to Karachi, Pakistan, with a load of weapons-related goods, including specialty
metals and electronics used in the production of Chinese-designed Baktar Shikha anti-tank missiles.
     The shipment was carried aboard a vessel owned by the company subsidiary Cosco Tianjin.
     The arms transfers by Cosco ships contradict statements to Congress made in 1997 by National Security Adviser Samuel R. Berger, who told senators there was
no credible evidence linking Cosco to illegal activity, including arms smuggling.
     Edward Timperlake, a former House committee investigator, said a Cosco executive was among a group of Chinese officials who were granted access to the
White House and to Mr. Clinton´s weekly radio address in 1995 -- days after Democratic Party fund-raiser Johnny Chung made a large payment to the White
House for the president´s re-election campaign.
     The visit was checked by White House National Security Council aide Robert Suettinger, who wrote in a memorandum that giving White House photographs to
the group of Chinese officials and Chung, who in 1998 pleaded guilty to making illegal campaign contributions, would not cause "any lasting damage to U.S. foreign
policy."
     Mr. Suettinger, who described Chung as a "hustler," also stated in a White House memo: "And to the degree it motivates him to continue contributing to the
[Democratic National Committee], who am I to complain," Mr. Suettinger said.
     "Cosco is the merchant marine arm of the PLA Navy," Mr. Timperlake said. "If the Chinese military ever mobilized troops for action against Taiwan, Cosco
would be part of the operation."
     Cosco ships would provide arms and logistics support for Chinese military operations, U.S. officials said.
     Al Santoli, a national security aide to Rep. Dana Rorhabacher, said Cosco is well-known for worldwide support of Chinese weapons sales.