PERRY "PEACE ENVOY" IN NORTH KOREA
Pjongyang, North Korea.
Former Defense Secretary William Perry - the feature of the
Softwar report of the week - is currently taking a whirlwind
tour of the orient as a "peace envoy" on behalf of Bill Clinton.
Perry is currently in North Korea trying to work out a deal to
inspect the atomic weapon site at Kumchang-ni.  Perry is
expected to offer the Pjongyang "incentives" on behalf of
President Clinton to stop its nuclear weapons development.

Perry is also expected to stop in Beijing to visit with his
"comrades" in red China.  Perry is slated to meet with top
officers of the Peoples Liberation Army (PLA) including
commanders from COSTIND (the Chinese Commission On Science
Technology and Industry for National Defense).

It is not known if Perry will appeal for the release his good
friend and so-called "defector", Hua Di.  Hua Di, a former PRC
missile scientist, re-defected back to China in late 1997 after
being accused of spying for Beijing.  Hua is also one of the
major players featured in the Softwar report.

DING RETIRES
Beijing, China
General Ding Henggao has retired.  The COSTIND commander made
famous by his successful penetration of the Clinton White House
has decided to hang up his spurs.  He and the wife, General Nie
Li, made a tidy profit working the "Hua Mei" espionage campaign
against William Perry and the Clinton administration.  No word
on which General, Ding or Nie, will command the finances in
their joint retirement.

The PLA appointed Lt. General Cao Gangchuan as Director of
COSTIND to replace General Ding.  General Cao does not have much
experience but he has plenty of old-hands underneath him.  Four
of the current COSTIND Deputy Directors served with General
Ding, and two worked successful espionage operations against the
Clinton administration.  The four sub-Directors of COSTIND are
Lt. General Shen Rougjun, Lt. General Xie Guang, Lt. General
Huai Guomo and Lt. General Shen Chunnian.

It is expected that Cao will rely on Generals Shen and Huai to
run the huge PLA defense organization.  A Rand study concluded
that COSTIND is the PLA's fourth most influential player in
devising and supervising Chinese defense policy.  According to
Rand, the most important in order are:  The General Staff,
Peoples Liberation Navy (PLN), Peoples Liberation Army Air Force
(PLAAF) and COSTIND.

COSTIND Lt. General Shen met with Ron Brown and CEO of Loral
Bernard Schwartz in 1994.  General Shen's son, Shen Jun, was
also the lead engineer for satellite software at Hughes.
COSTIND Lt.  General Huai Guomo worked with William Perry and
"defector" Hua Di to export the advanced "Hua Mei" AT&T fiber
optic communication system to China.  AT&T sold the fiber optic
system directly to the Chinese Army General Logistics Division
(GLD) better known as the PLA Quartermaster Corps.

1000 MORE PLA MISSILES!
Taipei, Taiwan
The Chinese Army is building 1,000 air breathing cruise missiles
with help from Russia.  The 1,000 airborne missiles are in
addition to the expected deployment of 1,000 ballistic missiles
by the PLA over the next 4 years.

According to Taiwan Defense officials, several hundred Russian
cruise missile engineers are working in China on the new
project.  The new cruise missile is reported to have been
successfully test fired by the PLA and manufacturing has begun.
Active deployment of the Chinese cruise missile, reported to be
similar to the U.S. Tomahawk, is expected by the end of the
year.

Taiwan Defense officials confirmed that Russian engineers are
assisting Beijing in the cruise missile project, including
scientists from the Zvezda Russian design bureau.  Zvezda has
experience copying U.S. cruise missile designs.  The Zvezda
Kh-35 (NATO codename "Switchblade") missile is also known as the
"Harpoonsky" in the west because it is almost identical in
appearance and performance to the U.S. Navy Harpoon anti-ship
missile.  Zvezda announced last year that Algeria had purchased
a large quantity of Kh-35 missiles for anti-ship missions.

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1 if by land, 2 if by sea.  Paul Revere - encryption 1775
Charles R. Smith
SOFTWAR         http://www.softwar.net      [EMAIL PROTECTED]
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CFA9DBE887690404D478AF8EAA2F5A531393ED2CDC6BCDA4CB1ADD03C8D1B8D9
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SOFTWAR EMAIL NEWSLETTER                            03/10/99
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