HONG KONG Seizes Armored Vehicles Bound For China

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This is from Stratfor.Com

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Hong Kong Seizes Armored Vehicles Bound for China

Hong Kong customs officials announced on March 30 the seizure of five Soviet-era BTR-70 armored personnel carriers (APC) being smuggled onto the mainland. The armored vehicles were discovered on board a ship sailing from Naples, Italy to Tianjin, with stops in Haifa, Israel and Singapore. There are several intriguing aspects to the attempted smuggling and seizure of the vehicles. Though the exact purpose remains unclear, Stratfor.com found that the ship's operator is in fact a Beijing shipping company with close links to the Peoples Liberation Army.

Hong Kong customs officials announced on March 30 the seizure of five Soviet-era BTR-70 armored personnel carriers, allegedly bound for Tianjin municipality, which borders the municipality of Beijing. The armored vehicles were impounded, as they did not have the proper import license for strategic commodities, according to news reports. While on the surface it appears to be a simple case of Hong Kong blocking the illegal transshipment of military hardware, several aspects of the incident present intriguing possibilities.

While the details remain unclear, the seizure is obviously significant. At the extreme, it could signal preparations for an attempted rebellion against Beijing, or a move by Hong Kong to assert its autonomy from Beijing. It could also represent a failed attempt at secret arms transfers through Italy to North Korea, a simple crackdown on an already controversial shipping company or a move by local Tianjin or Shanghai businesses to create their own private security forces.

According to Hong Kong reports, the BTR-70s arrived in Hong Kong at 8 p.m. local time March 29 on board the Xibohe, a Panamanian-registered container vessel. The armored vehicles, reportedly sold by a Ukranian company to a mainland Chinese firm, sailed on board the Xibohe from Naples, Italy on March 10. The ship stopped in Haifa, Israel and Singapore before arriving in Hong Kong. The ship was apparently to travel from Hong Kong to Xingang, Tianjin and then to Shanghai.

Customs agents found the BTR-70s when one was discovered already unloaded from the ship at 2 a.m. on March 30; the other four remained in plain sight on the deck. None of the armored vehicles were equipped with weapons, and no other military equipment was found on board the Xibohe, according to reports.

This is not the first case of Hong Kong seizing an armored personnel carrier being shipped through its port facilities. In August 1997, just a month after Hong Kong was reunited with mainland China, Hong Kong authorities impounded a Chinese-made WZ551 armored personnel carrier that had been on display in Thailand. The manufacturer, North China Industries (Norinco), had attempted to ship it through Hong Kong to its factory in Chinas southern Guangdong Province without the proper papers. In February 1999, Hong Kong Chief Executive Tung Chee-Hwa denied the companys requests for the return of the APC.

The most recent incident comes less than a month after U.S. Assistant Secretary of State for East Asian Affairs Stanley Roth met with Tung in part to discuss efforts to end arms smuggling through Hong Kong. Following the announcement of the seizure of the five armored personnel carriers, a spokesman for the Hong Kong Customs and Excise Department told reporters, The discovery  proves that Hong Kong is totally committed to the implementation of an effective and comprehensive strategic controls.

While Hong Kong is portraying the seizure of the BTR-70s as a demonstration that it will not allow any form of smuggling, particularly arms shipments, there remain two important questions: who was importing the BTR-70s, and why? Ronald Au Yee-Leung, head of Hong Kong Customs Ship Search and Cargo Command, refused to identify to the press the operator of the Xibohe, telling the Hong Kong Standard only that it was a well-established company not known to be involved in military transportation. In an interview with Reuters, he again refused to name the shipping company.

Upon investigation by Stratfor.com, however, the ships operator was found to be COSCO Container Line Agencies Limited, a Hong Kong branch of China Ocean Shipping (COSCO). COSCO is in fact a Beijing shipping company with close links to the Peoples Liberation Army (PLA). While Au refused to name the operator of the Xibohe, he did nothing to hide the name of the ship, making it easy to discover who was behind the shipment. Further, speaking to Reuters, Au said the seizure of the armored vehicles followed a long period of collecting intelligence and analysis, but added the attempted import of the vehicles was not likely related to arms smuggling syndicates.

With the PLA linked to the incident, the second question arises. Why? Chinas military does not operate BTR-70s, nor any other eight-wheeled armored personnel carriers.

However, a Russian State company, Promexport, signed deals in 1999 worth tens of millions of dollars with several nations, including China, to export Russian army surplus equipment. Among the products Promexport marketed were BTR-70s  though there is no verification these were directed toward China.

Further, if these APCs were part of an arms shipment from Russia, why send them through Ukraine and Italy  only to finally bring them into Hong Kong without the proper papers? It is possible, though unlikely, that the shipment was to a specific rogue PLA unit that was potentially disloyal to the government, but the equipment seems woefully inadequate for such a move. Further, amassing sufficient firepower to stage a successful assault on Beijing is hard to keep a secret.

Another possibility is that the shipment was meant to stop only briefly in China and was part of an illegal arms transfer to North Korea, or another country. North Korea already operates the predecessor to the BTR-70, the BTR-60. If this is the case, the plan merely went afoul amidst Hong Kongs increased crackdown on smuggling.

The seizure of the BTR-70s may also have been a move against Cosco itself, part of the struggle being waged within the government. Coscos Chairman, Chen Zhongbiao, was reportedly briefly arrested in Beijing in 1999, shortly after the Chinese State Council, headed by Prime Minister Zhu Rongji, launched an investigation into Coscos business dealings.

The stop in Haifa, the center of Israels arms industry, suggests another possibility  that the vehicles were just a decoy for more important military weaponry smuggled in from Israel. China and Israel have a long-standing relationship of arms deals, many protested by the United States.

A final option is that the discovery of the vehicles was intentional, meant to placate Washington. It could have been a planned operation meant to signal that Hong Kong is indeed successful at stopping the transshipment of military supplies. This option, however, raises its own questions. Was it a joint Beijing-Hong Kong operation or was Hong Kong operating on its own?

-- Zdude (zdude777@hotmail.com), April 01, 2000

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