While the West was distracted, the Chinese government began an intelligence assault that never stopped. We are now witnessing some of the effects of a decision made years ago by China to use every means and medium of intelligence-gathering at its disposal against the West. Its strategy can be summarized in three words: collect, collect, collect.
BY CALDER WALTON FOR FOREIGN POLICY
Most Westerners do not yet appreciate just how sweeping China’s intelligence onslaught directed at their countries is; for decades, their own governments likewise didn’t understand because their attention was largely directed elsewhere.
After 9/11, the U.S. intelligence community was overwhelmingly geared toward counterterrorism. U.S. spy chiefs followed priorities for this agenda set by decision-makers in Washington. The U.S. government’s strategic focus on combating terrorism took place at the expense of focusing on resurgent states such as China and Russia. As we pass the 20th anniversary of the U.S.-led invasion of Iraq, it is useful to understand how China’s intelligence and national security establishment reacted at the time.
The strategy that China’s Ministry of State Security (MSS), its principal civilian intelligence service, took toward the United States after 9/11 followed a Chinese saying, ge an guan huo, which roughly translates as “watch the fires burn from the safety of the opposite river bank, which allows you to avoid entering the battle until your enemy is exhausted.” The MSS followed this saying to a T. Its long-term aim was to contain the United States, and then supplant it, in Southeast Asia. As the United States was mired in the Middle East, the gains being made by the MSS went by largely undetected or appreciated by U.S. intelligence.
Beginning in 2005, the MSS declared war on the U.S. intelligence community. From that point on, all of the service’s best resources and personnel were marshaled against U.S. intelligence—while the United States was pivoting to the global war on terrorism. According to one CIA official with deep expertise on China, with whom I had an exclusive interview on condition of anonymity, internal MSS deliberations from that time were marked with glee as the U.S. government was consumed, if not distracted, by the global war on terrorism.
Chinese intelligence was soon winning its war on U.S. spies. As previously reported in these pages, in 2010 the MSS dismantled a major CIA network being run from its station in Beijing. It reportedly led to the killing or imprisonment of more than a dozen CIA sources in China over more than two years. Details about how Chinese intelligence compromised the U.S. network remain murky. It seems, however, that the MSS hacked into the CIA’s supposedly secure communication channels. There are also whispers that the network may have been compromised by a human agent—a mole, to use John le Carré’s phrase—in the CIA. That person may have been Jerry Lee, a former CIA case officer working on Chinese affairs. After leaving the CIA, Lee sold U.S. secrets to Chinese intelligence. He was later caught—a U.S. counterintelligence success—and in 2019 was sentenced to 19 years in prison. There is little information in the public domain about what secrets Lee delivered to his Chinese handlers.
Unlike those in Western democracies, China’s intelligence services are not held to account by independent political bodies or the public, nor are they subject to the rule of law. Instead, the Chinese government fuses together a “whole of society” approach for collecting intelligence. This sets it apart from anything undertaken by Western governments. Chinese intelligence and commerce are integrated in ways without comparison in the West. Contrary to what may be thought, the U.S. government does not conduct industrial espionage to advantage U.S. businesses. In China, by contrast, thanks to successive national security legislation passed under President Xi Jinping, Chinese businesses are required to work with its intelligence services whenever requested to do so. They are effectively silent partners in Chinese commerce with the outside world. Another difference between Chinese intelligence and Western powers concerns what those in the spy world call ubiquitous technical surveillance. Facial recognition, phone apps, and CCTV all make China an infinitely harder target for Western agencies to collect intelligence on than Chinese services’ targets in open Western democracies. A fundamental asymmetry thus exists in the shadowy intelligence battles between China and the West.
China’s foreign intelligence offensive has reached new levels since Xi took power in 2012. Its purpose involves what all intelligence agencies do: to understand the intentions and capabilities of foreign adversaries. But China’s offensive goes much further: to steal as many scientific and technical secrets from Western powers, principally the United States, as possible to advance China’s position as a superpower—challenging and overtaking the United States on the world stage.
China’s unprecedented economic boom this century has been fueled by an equally unprecedented theft of Western science and technology. Back in 2012, the director of the U.S. National Security Agency warned that cyber-espionage constituted the greatest transfer of wealth in history. China was—and remains—the greatest perpetrator. Beginning around 2013 or 2014, Chinese operatives carried out a massive hack of the U.S. Office of Personnel Management (OPM), which holds some of the most sensitive information in the U.S. federal government: information obtained during security clearances. This information is that which people often hide from their nearest and dearest—extramarital affairs and such. Chinese intelligence thus has millions of datapoints for potential blackmail, what the Russians call kompromat, to recruit agents with access to U.S. secrets. The OPM haul was followed, in 2017, by China’s hack of the credit rating bureau Equifax, which gave China sensitive data on approximately 150 million Americans. If you are an American, it is more likely than not that China has sensitive data about you.
Then there are Chinese businesspeople who in reality are undercover MSS operatives. Take the example of Yanjun Xu, an MSS officer (not just an agent) who posed as a businessman to steal U.S. aviation trade secrets. He was caught and is now in prison. Xu is hardly alone. A common tactic on the part of the MSS is to dangle a lucrative deal to U.S. businesses, obtain a target’s underlying intellectual property, scuttle the deal, but keep the IP and manufacture the product. In some cases, the Chinese intelligence front companies sell the product back to the original target market.
According to the FBI, in 2021 it was opening a China-related investigation every 12 hours. Even Britain’s traditionally secretive services—MI5, MI6, and GCHQ—have now come out of the shadows and publicly warned about the threat posed by Chinese espionage.
The above, then, is the real context for China’s spy balloon this year. Certainly, balloons seem so last century—or even the century before. But that should not fool us about their capabilities. According to Western signals intelligence officials with whom I have spoken, China’s balloon was equipped with state-of-the-art sensors capable of eavesdropping on electronic signals from near space that satellites could not.
Aerial reconnaissance has a proven track record. After World War II, as the Cold War set in, the newly founded CIA suffered a succession of human intelligence failures in heavily guarded police states behind the Iron Curtain. It was largely due to those failures that the CIA pioneered the use of overhead reconnaissance. In 1954, President Dwight D. Eisenhower authorized the CIA to develop a top-secret spy plane, the U-2. Subsequent U-2 flights allowed U.S. intelligence to peer inside the otherwise dark interior of the Soviet Union.
Papers held at the Eisenhower Presidential Library show the value of U-2 intelligence given to the small circle of those in Washington indoctrinated into its secrets. U-2 overflights of the Soviet bloc revealed that the “missile gap”—the claim that the United States trailed the Soviet Union in missile development—was erroneous. In May 1960, one of the CIA’s U-2s, flown by Francis Gary Powers, was shot down over the Soviet Union. Believing the pilot had been killed, Eisenhower authorized a cover story, similar to China’s recent claims about its balloon: that the U-2 plane was a U.S. weather-monitoring aircraft that had strayed off course. When Soviet leader Nikita Khrushchev announced to the world that Powers was in fact alive, and in Soviet custody, Eisenhower was left scrambling. The CIA gave a closed briefing to Congress about the U-2 program. The CIA’s head, Allen Dulles, was surprised to receive a standing applause from the senators briefed. Eisenhower, however, chose not to reveal to Americans at large the nature of the U-2 program, not wanting to reveal U.S. intelligence sources and methods. That was understandable, but it was also a missed opportunity. It is likely that, if they had known about it, Americans would have rallied behind the U-2 program as Congress did.
The U-2 program continued after the shootdown, playing a major role during the Cuban missile crisis in October 1962. Thereafter, both sides of the Cold War, East and West, threw increasing resources to collect intelligence from even higher overhead—space. Both sides of the Cold War relied on technical intelligence collection, from satellites and overflights, about each other’s arsenals. This made it possible for each side to verify the other’s compliance with arms reduction treaties in the later years of the Cold War. Without what was euphemistically called “national technical means”—a combination of signals intelligence, imagery intelligence, and that gleaned from electronic emissions—such arms reduction treaties would have been impossible. Those treaties, backed by mutual Eastern and Western intelligence collection, helped to stabilize the Cold War.
We should not, therefore, be surprised in principle that China would be using overhead platforms to collect intelligence. The United States has done it in the past—and it proved useful. What is surprising is how relatively easy the U.S. government has made it for the Chinese government to steal secrets in key U.S. sectors.
You can’t blame a wolf for going after chickens in a coop—especially if the door is left open. A recent report by Strider Technologies, an open-source strategic intelligence start-up, has revealed how Chinese scientists were able to obtain valuable research and development (R&D) from Los Alamos, home to the U.S. government’s cutting-edge laboratories. The report—which also demonstrates the power of open-source intelligence in today’s digital world—reveals that Chinese scientists at Los Alamos brought R&D from there back to China, which the Chinese government then used in defense technologies such as hypersonics. In some instances, the Chinese scientists at Los Alamos had been funded by U.S. research grants. The United States was thus effectively funding its own competitive disadvantage with China in these sectors.
Cold wars tend to start before Western countries are prepared. Intelligence records reveal that in 1945 the Soviet government was effectively already engaged in a cold war with its Western counterparts. This was based on its long-term ideological opposition to capitalist powers and Soviet leader Joseph Stalin’s belief that he had to contain them. Before and during World War II, Soviet intelligence undertook an unprecedented espionage offensive against Western powers—including the Soviet Union’s wartime allies Britain and the United States—to collect political intelligence and steal as many scientific and technical secrets as possible. Soviet spy chiefs were pushing at an open door as their Western allies were distracted, if not consumed, by fighting the Axis powers. By the end of World War II, Soviet spies had acquired secrets of the nuclear bomb, whose later development would shape postwar international security. Soviet agents had also penetrated the most sensitive parts of Western governments. This allowed Stalin to calibrate his strategies toward his former wartime Western allies—who were never his allies in the sense they thought—based on secrets from the inside. Western powers were ill-equipped for a struggle they were already in by 1945.
History may not repeat itself, but it does rhyme. There are rhymes with the Cold War and U.S.-China relations today. As in the Cold War, from the view of intelligence and national security, the United States is already in a cold war with China. Like the last century’s superpower conflict, Western intelligence agencies are again racing to recalibrate and catch up.
The Cold War offers two warnings. First, Chinese spies are real in the same way Soviet agents were real. An uncomfortable public policy conversation is urgently needed about the nature of Chinese students, academics, and businesspeople—some of whom may have malign intentions—as well as talent programs and cultural outreach programs in the United States. But that does not mean that Americans who happen to be of Chinese heritage are spies, any more so than left-leaning Americans were Soviet agents.
Second, sunlight is the best disinfectant. The U.S. government must be transparent about its knowledge of Chinese intelligence. If such information is not forthcoming—and scrutinized, debated, and challenged—there is a real prospect of another McCarthyite witch hunt. Today, Chinese Americans are often the victims of the Chinese government and its intelligence services. Finding the balance between security and civil liberties is our challenge ahead. China will continue to spy, using all means available—balloons, businesses, and bytes. We need to determine what trade-offs we are willing to put up with between security and civil liberties.
Now is a moment for nuance, not grandstanding. TikTok provides the Chinese government with a potential platform to collect intelligence on Americans, behind the endless videos posted on it. It also offers the Chinese government the opportunity to shape public opinion. So far, however, it has not been demonstrated in Congress that TikTok actually does either. TikTok should certainly be banned from phones carrying Western state secrets because of the potential for Chinese espionage, but its wholesale ban in the United States is so far not justified on national security grounds. Unless or until evidence emerges that TikTok constitutes more than a potential security threat at large, it is surely the right of Americans to post as many videos as they want online and potentially have their data mined in China if they wish.
Calder Walton is a historian at the Harvard Kennedy School. He is the author of the forthcoming Spies: The Epic Intelligence War Between East and West.