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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