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FRIDAY, OCTOBER 8, 2010
N. Korea pressing forward on nuclear program, report says
Movement seen on uranium enrichment; construction resumed
BY JOHN POMFRET North Korea appears to be
moving forward with a program to enrich uranium for nuclear weapons, a development that would enhance its ability to pro- duce bombs and sell its nuclear weapons technology abroad, ac- cording to a report to be released Friday. The report, “Taking Stock:
PHOTOS BY URIEL SINAI/GETTY IMAGES
Ultra-Orthodox Jewish men take part in a burial ceremony for Torah scrolls damaged in a fire caused by an electrical short-circuit at the Vizhnitz synagogue in Bnei Brak, Israel, over the Sukkot holiday. Thousands gathered for the full funeral ceremony, mandated by Jewish lawand custom for scrolls that no longer can be used. Bnei Brak is a suburb of TelAviv.
North Korea’s Uranium Enrich- ment Program” by the Institute for Science and International Se- curity, comes as a senior South Korean official warned that North Korea’s nuclear program is “evolving even now at a very fast pace.” The official, Kim Tae-hyo, deputy national security adviser to President LeeMyung-bak, told the South Korean JoongAng Dai- ly on Thursday that “NorthKorea is currently operating all its nu- clear programs, including highly- enriched uranium processing,” adding that the danger from the North’s nuclear program is now at an “alarming” level. Earlier this week, ISIS and
GlobalSecurity.org reported that North Korea had also resumed construction activity at its Yong- byon nuclear facility, where the country produced plutonium. It was unclear exactly what North Korea was doing there, both orga- nizations said, but the activity took place near a nuclear cooling tower thatNorthKorea destroyed in 2008 as part of a deal with the United States and other coun- tries. U.S. intelligence analysts first
concluded in July 2002 that North Korea had embarked on a large-scale program to produce highly enriched uranium for use in weapons, with a key piece of evidence being North Korea’s purchase of 150 tons ofaluminum tubes from Russia in June 2002. The George W. Bush administra- tion’s accusation that Pyongyang had a clandestine program led to the collapse of a 1994 agreement that resulted in a freezing of activity at the Yongbyon reactor. After the 1994 agreement fell
apart, the North Koreans were able to reprocess 8,000 spent fuel rods — which had been held in a cooling pond and monitored by U.N. inspectors — to acquire enough plutonium for as many as 10 weapons. A uranium program would have required Pyongyang to build a facility with thousands of centrifuges to obtain the highly enriched uranium needed for a weapon. The new ISIS report, based on
information gleaned from intelli- gence agencies, government offi- cials and media reports, con- cludes that North Korea “has moved beyond laboratory-scale work” and is now capable of building a “pilot plant” of centri- fuges to enrich uranium. David Albright, a co-author of the re- port, said that based on data aboutNorth Korea’s purchases of equipment around the world, he believes the North could possess 500 to 1,000 centrifuges. To make enough enriched uranium for a bomb, experts generally agree that North Korea would need 3,000. U.S. officials did not respond to
requests for comment. But the presence of an enhanced urani- um-enrichment program would complicate any new moves to negotiate with North Korea. In the past, U.S. negotiators have focused first on the plutonium program and left the uranium- enrichment activities for later. “But this would indicate that
uranium must be included in the engagement no matter what,” Al- bright said. He said that North Korea had
several options as it produced more highly enriched uranium. A supply of the material would allow North Korea to build a supply of fission weapons to go with its plutonium-based weap- ons. But it also could combine the two to make a more powerful weapon or create a thermonucle- ar device. “A growing concern,” the re-
port added, “is that North Korea would provide centrifuge equip- ment, facilities, and technical know-how or even HEU [ highly enriched uranium] to other coun- tries or groups.” North Korea is a known weapons proliferator. It sold a nuclear reactor to Syria, which was destroyed by an Israeli raid in 2007. It passed nuclear
equipment to Libya, and U.S. officials are concerned that it is cooperating with Burma as well on weapons-related technology. The Obama administration
has held no significant talks with the North since taking office. North Korea conducted its sec- ond nuclear test on June 12, 2009. And it is widely believed to have torpedoed a South Korean war- ship inMarch, killing 46 sailors. U.S. officials have said that
they want to let South Korea dictate the pace of any new talks and that both countries and Ja- pan want to seeNorth Korea take significant steps to undo its nu- clear program before any new negotiations begin. South and North Korea have recently begun a tentative resumption of ties after the Cheonan sinking. North Korea began its en-
riched uranium program in the 1980s; the program was acceler- ated in the 1990s with the help of Pakistan and one of its lead scien- tists, Abdul Qadeer Khan, in ex- change for North Korean missile technology. In 2002, a CIA fact sheet announced that the agency had obtained “clear evidence in- dicating that North Korea had begun constructing a centrifuge facility.” But then leads dried up, Khan’s network unraveled and, in early 2007, Christopher R. Hill, then assistant secretary of state, expressed doubts that the pro- gram had ever gotten off the ground. The most recent U.S. assess-
ment on the issue did not address the question of whether the North has a program now. On Feb. 2, 2010, then-Director of National Intelligence Dennis Blair told the Senate that North Korea had a uranium-enrich- ment capability “in the past.” But according to Albright’s re-
port, North Korea continued work by establishing front com- panies, some based in China, that bought equipment often from Eu- ropean companies. Albright and others have said
the biggest unanswered question is the location of North Korea’s centrifuges. “The best comment,” Albright said citing a Western intelligence official, “was, ‘Look, there are thousands of sites in North Korea and it could have been any of them.’ ’’
pomfretj@washpost.com
Company is symbol of lack of U.S. trust in China china from A1
setback forHuawei, the history of the company and its founder demonstrates a determination to prevail. Huawei sells equipment, soft-
ware and services to 35 of the world’s 40 biggest telecom com- panies. It supplies one-third of the telecommunications equip- ment used in China. It is the leading vendor of such equip- mentin the developing world and number two in Europe. The sun never sets on Huawei’s empire, which stretches from South Afri- ca to Sweden, Bangalore to Bris- bane, Vancouver to Vanuatu. Still,U.S. senators are lobbying
against another potential big Huawei sale. SprintNextel is con- sidering making Huawei’s equip- ment the backbone of its next- generation mobile and wireless technology. If the deal goes through, U.S. officials said, they are concerned that other major carriers will choose Huawei as well.
Sen. Jon Kyl (R-Ariz.) and sev-
en other senators are accusing the company of links to the Peo- ple’s Liberation Army and Iran’s Revolutionary Guards Corps. In an Aug. 18 letter, they wrote: “Huawei’s position as a supplier of SprintNextel could create sub- stantial risk for U.S. companies and possibly undermine U.S. na- tional security.”
Why pick on Huawei? Inthe past six months,Huawei
has hired lobbyists, consultants and a public relations firm in Washington. Its executives have announced a program to have independent companies check Huawei’s software and equip- ment for potential national secu- rity problems. On Capitol Hill, Huawei’s backers have charged that much of the criticism of Huawei is protectionism. Most telecommunications equipment, they sasy, is manufactured in China, so why pick onHuawei? To counter suspicions that the
PLAcontrols part of thecompany, Huawei last year released share- holding information for the first time, reporting that its 60,000
employees held 98.58 percent of the shares. Founder and chief executive Ren Zhengfei holds the remaining 1.42 percent.Aconser- vative valuation of his shares would put their value at about $1 billion. “In the past, one of our short- comings was that we weren’t transparent enough,” Guo Ping, the company’s chief of strategy, said in an interviewat the compa- ny’s chrome-and-glass campus in Shenzhen. “We understand that in America we need to increase our transparency, to show people who isHuawei, what isHuawei.” Ren is the man driving Hua-
wei’s growth. A 64-year-old for- merPLAtechnician,Renfounded Huawei in the 1980s and began selling telephone equipment. In the cities, the big Chinese state- ownedcompanieswouldn’t touch Ren’s wares. But in rural areas, Huawei’s cheap, easy-to-use products were popular. Ren hewed to a military strategy of Mao Zedong: Surround the cities with the countryside. “Rats were chewing through
the wires, and the electricity didn’t always work,” saidKenHu, a senior executive who was one of a team of engineers who traveled to every one of China’s 2,800 counties to market Huawei’s products. “We had to devise sys- tems that would deal with that. It was a challenge.” Although Huawei is technical-
ly a private firm, it has long benefited from an intimate rela- tionship with the Chinese state. Small-time telephone companies that wanted to buy Huawei’s equipment didn’t always have the money to pay. So the state-run China Construction Bank loaned the companies the money, said a Shenzhen-based consultant who negotiated the deal. It is unclear whether the local companies re- paid the loans, said the consul- tant, who insisted on anonymity out of fear that he would lose business. “China Construction took the hit, but Huawei boomed.”
‘Keep cool’ Huawei’s growth paralleled the
herky-jerky rise of many Chinese
firms. To achieve smoother ex- pansion, Ren set aside his Mao and looked to America. In a visit to the United States in 1997, Ren spent weeks interviewing the cor- porate titans on the secrets of their success. Guo, the Huawei strategist, said Ren traveled by bus, lugging a briefcase full of cash becauseChinese thenhadno credit cards. Ren declined to be interviewed
for this article. Ren established a close rela- tionship with IBM, which for more than a decade has helped him reshape Huawei’s corporate culture and streamline its inno- vation processes. Huawei has grown into one of themost profit- able telecommunications compa- ny in the world; last year Hua- wei’s revenue hit $22 billion, with profits at $2.7 billion.
sonal data inserted by the author of the code — a Cisco software developer. In July,Motorola sued Huawei, accusing it of helping to establish a dummy corporation that allowed corrupt Motorola engineers to funnel trade secrets toHuawei.Huawei has denied all of the charges in both cases but settled its case with Cisco by agreeing to stop selling the specif- ic product named in the suit. Ren has also been dogged by
accusations that Huawei would ultimately serve the interests of the Chinese Communist Party, not its customers or the market. Ren’s aides reject such charges, but the founder’s writings sug- gest a more complex picture. Al- though Ren professes affection for the United States, he has also called for the dissolution ofNATO and says he thinks the United
“We understand that in America we need to increase our transparency, to show people who is Huawei, what is Huawei.” —Guo Ping, chief of strategy for Huawei
In 2000,Huawei broke into the overseas market by expanding into developing countries. The state-owned China Development Bank has providedHuawei with a $40 billion line of credit to help finance its sales. Huawei’s first Western deal
was in the Netherlands in 2001. Its breakthrough product was a wireless station that could run several communications technol- ogies, such as GSM or CDMA, more efficiently than its competi- tors’ units. Upgrades could be achieved not by replacing the hardware but by switching the software — a huge savings for its customers. Competitors have long ques-
tioned how Huawei obtained its technology. Cisco suedHuawei in 2003, accusing it of stealing soft- ware. Cisco said it had discovered computer code in Huawei’s prod- ucts that contained secret per-
States is engaged in “tricks aimed at undermining China’s interna- tional environment in order to contain it.” Although he has told American
interlocutors that Huawei wants to function purely as a multina- tional, he has written that “Hua- wei’s international marketing policy follows our country’s for- eign policy line” — implying a level of coordination with govern- ment that most multinationals would never acknowledge. In an essay in which he urges
his staff not to cooperate with the media, he writes: “Our workers need to unswervingly keep cool, listen to [the party], follow [the party], and don’t utter anything that they shouldn’t.”
Big players Huawei began its operations in
theUnited States in 2001. Charlie Chen, chief of the North America
section, recalls that he “could barely tell the difference between a hamburger and a sandwich, not to mention a bagel.” It took Chen six months to hire his first Ameri- can employee. Almost a decade later, there’s a
buzz of excitement around the firm’s headquarters in Plano, Tex. Jerry Prestinario, vice presi-
dent in charge of delivery and service, joined Huawei in 2007 after 35 years at Lucent. “I spent the last five years of my career downsizing,” he said. “Now I’m doing several interviews a week. It feels great to be part of a company that it is growing.” Within Huawei there is a de-
bate about how to convince American executives and the U.S. government that its equipment can be trusted. Earlier this year, Huawei hiredMatt Bross, who as chief technology officer of British Telecom supported the purchase of Huawei equipment. Bross, a onetime Missouri farm boy who pushed the Huawei deal over the opposition of British intelligence, has thrown himself into devising a system to calm nerves inWash- ington and beyond. “It’s basically lifting your skirt
and letting them peek,” Bross said. “It should be something our whole industry adopts, not just us.” In the spring, Huawei sought
advice from a Washington firm led by former Defense secretary William Cohen.TheCohenGroup laid out an aggressive program under whichHuawei would build a wall around its U.S. operations, set up a purely American board and create a completely Ameri- can company that would no lon- ger be controlled by its parent in China. In researching Huawei, execu-
tives at the Cohen Group discov- ered that the U.S. government had little idea of the extent of Huawei’s business in the United States. American telecommuni- cations firms are not obligated to inform the government of their purchases of foreign-manufac- tured equipment. Although Huawei has just 2
percent of the U.S. telecommuni- cations market, it is working with
many big players. It is involved with Comcast on a project to provide voice calls through cable lines and is in talks with Verizon. Huawei has supplied the equip- ment for wireless service in Seat- tle and Chicago and will soon do so in San Francisco. Last year it sold $400 million worth of equip- ment in the United States. This year it expects to double its sales. In the United States, Huawei op- erates three R&D centers and eight other service centers and employs more than 1,000 people.
Competitive edge In July, another adviser
emerged with less onerous plan. William Owens, a former vice chairman of the Joint Chiefs of Staff, offered to set up an Ameri- can company to help Huawei sell its wares in the United States without requiring any changes to Huawei’s American manage- ment. The company would check Huawei’s equipment for bugs and install and service the equip- ment.
Owens and Ren also had a
history; when Owens was the chief executive of Nortel in 2004, Ren was interested in buying the firm. “We are close to [Huawei],”
Owens said. “We’ve talked to them about what we think is necessary to establish the confi- dence to get into the American market.” The Cohen Group walked away
from the deal, convinced that the U.S. government would not be satisfied that Owens’s firm could ensure the security of Huawei’s equipment. Underestimate Ren at your
peril, Ren’s competitors say. In- deed, in his writings,Renexhibits the fiercely competitive edge that has propelled Huawei into the world’s top ranks. He waxes phil- osophical about his firm’s pros- pects in theUnited States. “China-U.S. relations will con-
tinually have twists and turns,” he writes, “but that shouldn’t stop us from learning from the American spirit of innovation so thatwecan become richer and more power- ful ever faster.”
pomfretj@washpost.com
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