Biden Admin Gives Valuable Defense Contract to China Collaborator

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April 13, 2021

The Biden administration awarded a lucrative defense contract to a Singaporean company that works with Chinese military firms.

On April 6, Singapore-based ST Engineering won a contract alongside defense contractor BAE Systems to build a prototype military ground vehicle for use in Arctic environments. One of ST Engineering's direct subsidiaries does business with the Chinese military industry, ultimately providing maritime and satellite technology to Chinese authorities. The use of a defense company that collaborates with China raises concerns about industrial espionage and could expose vulnerabilities in the Pentagon, one expert on military acquisition said.

A former National Security Council official told the Washington Free Beacon the contract could pose an "attractive" way for Beijing to gain inside knowledge on valuable national security technology.

"My big worry is from a cyber and counterintelligence perspective," he said. "I would worry not only that any collaboration gets back to China, but that [it] also becomes an attractive cyber pathway for [People's Republic of China] exploitation."

ST Engineering oversees iDirect, a technology company servicing the Pentagon while developing technology for China. iDirect is a major partner in satellite communications with PetroChina, the Beijing-backed energy company with ties to the Chinese military. Satellite systems also designed by iDirect are equipped by China for maritime law enforcement. In 2018, ST Engineering also worked with the Chinese car company BYD Auto to develop AI forklifts, and again in 2019 for autonomous buses, technologies that could have defense applications. 

The company's direct cooperation with Chinese firms has raised concerns on Capitol Hill about ST Engineering's successful Pentagon contract bid. Rep. Jim Banks (R., Ind.), the chairman of the Republican Study Committee, said the federal government is "lagging behind geopolitical reality" of China's threat to American interests. The Defense Department should be wary of getting involved with firms that also profit from their relationship with the Chinese regime. 

"Since 2015, the Pentagon has officially recognized China as a serious threat to our national security. The federal government needs to quit lagging behind geopolitical reality and ignoring its own national security strategy," Banks said. "We need to start treating China like the existential threat it plainly is. The United States shouldn't be funding Chinese military companies in any way."

Pentagon spokesman John Supple told the Washington Free Beacon that ST Engineering's contract is now under review.

"We are aware of the claims, and the [Department of Defense] is reviewing the matter," Supple said. ST Engineering did not respond to a request for comment.

ST Engineering's operations and Chinese ties have also been linked to pervasive human rights abuses. The company has a partnership with Jiangsu Huatong Power Heavy Industry Co., a construction company with an office in Urumqi, Xinjiang's capital. Jiangsu is primarily focused on infrastructure construction, a common task for companies involved in the Uyghur genocide in western China. In July 2020, the Trump administration sanctioned fellow construction group Xinjiang Production and Construction Corps, a paramilitary organization responsible for serious human rights abuses in the region.

Army officials picked the firm to develop crucial military equipment as competition with China and Russia in the Arctic heats up. China hopes to ascend to "polar great power" status by 2030. A strategy document declassified by the Army in March highlighted China's incursion into the Arctic as a "central problem" for U.S. national security. The Department of the Army did not respond to a request for comment.