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10 June 1998
Date: Wed, 10 Jun 1998 17:38:26 -0700 (PDT) Subject: China Ocean Shipping Co. / Terminal Project Furor To: jy@jya.com From: nobody@shinobi.alias.net (Anonymous) Associated Press, Wednesday, 10 June 1998; 4:23 p.m. EDT Terminal Project Caught up in Furor By Michael White, AP Business Writer LONG BEACH, Calif. (AP) -- A Chinese shipping company that has been unloading shoes, clothes, toys and other goods at Long Beach harbor for 17 years may find its expansion plans thwarted by allegations its new terminal could become a platform for espionage and the smuggling of arms and drugs. The China Ocean Shipping Co. wants to lease a $200 million, 145-acre state-of-the-art terminal on the site of the Long Beach Naval Complex, which was closed in 1991 and is scheduled to be turned over to the city of Long Beach in a few weeks. But the project has been caught up during the past year in the furor over illegal campaign donations from Asia and, more recently, whether the Clinton administration allowed a U.S. company to disclose missile technology to China. Reps. Randy Cunningham and Duncan Hunter, Republicans from Southern California, contend that top-secret intelligence shows that the proposed Cosco terminal could become a center for spying and smuggling. "I am not going to stand by and watch a potential enemy have access and control to a former naval security base," said Cunningham, a retired Navy pilot who spent part of his career teaching Chinese fighter tactics at the Navy's so-called Top Gun school. "The hypocrisy of this is that the Chinese are so arrogant they feel they can do almost anything with the U.S. from the quid pro quos the administration has given them." Howard Finkel, assistant vice president for marketing at Cosco's New Jersey headquarters, called the spying concerns ridiculous. "We've been operating in this country in very good faith. We operate just like all the other (steamship) lines in the United States," he said. "This is not politics. We're just trying to do business." Gus Hein, secretary of the Long Beach Harbor Commission, said of the allegations: "There is a lot of anti-China hysteria. There are a lot of irresponsible reports being bantered about by some legislators about spying and carrying illegal drugs." Last year, Congress passed legislation that allows Long Beach to lease the property to Cosco if President Clinton signs a waiver saying that the terminal presents no threat to national security. Earlier this year, however, a House committee added an amendment to the defense authorization bill eliminating that option. If the Senate approves the amendment, the deal will be probably be dead. The vote could take place as early as this week. Long Beach officials are frustrated by the likelihood that, if Congress kills the project, Cosco will simply lease a new terminal being planned by the Port of Los Angeles only a few hundred yards from the Navy base. Congress adopted the special security review for the Long Beach deal only. Lawmakers could try to apply similar security restrictions to the Los Angeles option, and Cunningham said he would intervene there, too. None of the opponents has said specifically how a Cosco terminal would threaten national security. Long Beach officials say the construction plans call for a mostly open-air facility where sealed cargo containers would be removed from ships and loaded onto trucks for transport to inland warehouses. The terminal would actually be operated by an American subcontractor, said Yvonne Avila, a spokeswoman for the port. Only about a dozen Cosco employees would be on hand, and most of them would be U.S. citizens. Cosco carries 12 percent of the Chinese cargo that enters the United States each year. The rest is transported by other steamship companies. At stake for Long Beach -- the nation's busiest harbor -- is $14 million to $18 million a year in lease payments from the new terminal, plus about 1,000 permanent jobs. City officials consider the project a way to regain some of the 60,000 jobs that were lost in the post-Cold War downsizing of the aerospace and defense industries. Cunningham said he is not trying to stop Cosco from operating at U.S. ports but does not want the company to have its own terminal. "Do we need to engage them? Will I probably vote for most-favored-nation status? Yes, because China has changed in recent years," he said. "But at the same time, we've got to hold them at arm's length." Copyright 1998 The Associated Press