Of Chinese Balloons

Manufacturers Face Restrictions

Courtesy of Wikimedia Commons

The news last week was all abuzz about the Chinese spy balloon that made its way across the United States and was finally shot down by US forces off the coast of South Carolina. All my social media contacts all of a sudden became experts on spy balloons, intelligence gathering, and—of course—the operation that shot down the balloon and the subsequent investigation.

I’m not an expert on any of the above, but I became curious about the companies involved in the manufacturing of these devices, given that the Commerce Department’s Bureau of Industry and Security (BIS) took quick steps to target six Chinese aerospace companies that support China’s military reconnaissance balloon program, immediately after another “high-altitude object” was shot down by an F-22 on Friday.

The six entities have all been added to the BIS Entity List because the “PLA is utilizing High Altitude Balloons (HAB) for intelligence and reconnaissance activities,” threatening US national security and foreign policy interests. US companies are barred from transacting with these entities without a license from the Commerce Department.

• Beijing Nanjiang Aerospace Technology Co., Ltd.;

• China Electronics Technology Group Corporation 48th Research Institute;

• Dongguan Lingkong Remote Sensing Technology Co., Ltd.;

• Eagles Men Aviation Science and Technology Group Co., Ltd. (EMAST);

• Guangzhou Tian-Hai-Xiang Aviation Technology Co., Ltd.; and

• Shanxi Eagles Men Aviation Science and Technology Group Co., Ltd.

So I decided to do a quick glance at these entities, just to see what I could unearth in a short amount of time.

Beijing Nanjiang Aerospace Technology is apparently owned by an entity called Huali Family Innovation Investment Co., Ltd. An individual named Wang Lixun is the executive director, manager, and legal representative for Huali, according to a Chinese registry, but interestingly, the now-restricted entity doesn’t have a robust online presence.

The 48th Research Institute, however, does have a website, and is involved in the production of electronic components, semiconductors, and other items relevant to what could be a reconnaissance program. Its website, however, refused to connect when I attempted to take a look.

Yangjie Technology last year apparently acquired 40 percent of semiconductor manufacturer, Hunan Chuwei Semiconductor Technology Co., Ltd., from the 48th Research Institute. Neither of the entities is restricted—at least for now—but the document does provide some insight into the 48th Research Institute. It’s main lines of business are listed as “research on semiconductor process equipment and promote the development of electronic technology; research and development of semiconductor micro-processing equipment; research and development of semiconductor thermal equipment; research and development of semiconductor component equipment; research and development of semiconductor furnaces and sensors.”

Don’t be fooled by the name “Research Institute.” The “Military-Civilian Fusion” (MCF) strategy—a Chinese plan to develop the People’s Liberation Army (PLA) into a "world class military" by 2049—is reorganizing and controlling science and technology innovation and research to ensure that new innovations simultaneously advance economic and military development, according to the US State Department.

A “research institute” of this sort is more likely than not tied to the PLA and almost certainly part of China’s MCF strategy.

The Dongguan Lingkong Remote Sensing Technology Co., Ltd. vaguely lists “all other business support services” as its line of business.

I was thoroughly amused to find out that I apparently pose a threat to the website when I tried to do a search about it.

A couple of other attempts listed sites that are apparently not available to visitors outside of mainland China. Someone certainly doesn’t want anyone digging too deeply into this entity.

I did, however, find a limited description of the entity as being “affiliated to the Research Institute of Beijing University of Aeronautics and Astronautics in Dongguan. It is a private military enterprise mainly engaged in the scientific research and production of heavy-duty and long-endurance airships.” The description certainly makes sense if one were to assess that the entity is linked to production of reconnaissance balloons.

Eagles Men Aviation Science and Technology Group is quite obviously an aerospace company in China. The name alone would be enough to make it a jurisdictional and business line list if I were deciding whether or not to transact with this firm. The company lists two aliases: Beijing Yige Siman Aviation Technology Group Co., Ltd.; and -EMAST. Both would have to be searched for a complete insight into this company.

The name Guangzhou Tian-Hai-Xiang Aviation Technology should present a red flag for export controls, even if there was no adverse media reporting on the recent inclusion on the Entity List. There are also two aliases, according to the list—Guangzhou Tianhaixiang Aviation Technology Co., Ltd.; and -THX Aviation—that need to be researched for a comprehensive look at this company.

Guangzhou Tianhaixiang Aviation Technology Co., Ltd., formerly known as the "Guangzhou Military Region Caili Aviation Technology Development Center" established in December 1993, was jointly developed by the Guangzhou Military Region and the Department of Aeronautics and Astronautics of the National University of Defense Technology to jointly develop vehicle-mounted unmanned reconnaissance aircraft.

The last entity—Shanxi Eagles Men Aviation Science and Technology Group—is almost certainly related to the previous Eagles Men Aviation Science and Technology group. The website listed is www.emast.com.cn, which is linked to the alias, “EMAST” included on the BIS Entity List. There’s no doubt the two entities are linked.

And this is another site, I was not able to reach. A bit sensitive, are we?

This exercise took no time at all, and even without adverse media reporting, finding out about possible regulatory risks these companies pose was easy and required minimal effort.

With US regulators tightening their focus on enforcement of sanctions and export controls, this type of research is relatively easy, but critical. The tough part is digging through Chinese information—especially when it needs to be translated—and ensuring that all name variations and aliases are included when you search for possible hits.

China is already complaining about these six entities being barred from US technologies. Chinese state media is accusing the United States of escalating tension between the two countries, and claiming that the United States engaged in an “indiscriminate use of force” against its “weather balloon.”

We all know better.

Do your research. Avoid the risk.