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China’s Growing Spy Threat

September 27, 2011

Source: http://the-diplomat.com/2011/09/19/chinas-growing-spy-threat/

The Chinese government’s ‘vacuum cleaner’ approach to espionage is
worrying foreign governments, companies and overseas dissidents.
They’re right to be concerned.

Beijing fiercely denies it. Much of the world ignores it. But
according to analysts and officials, the communist-controlled People’s
Republic of China operates the single largest intelligence-gathering
apparatus in the world—and its growing appetite for secrets has
apparently become insatiable.

From economic and military espionage to keeping tabs on exiled
dissidents, the China’s global spying operations are rapidly
expanding. And, therefore, so is the threat. Some analysts even argue
the regime—which is also gobbling up such key natural resources as
farmland, energy, and minerals—has an eye on dominating the world.

Estimates on the number of spies and agents employed by the communist
state vary widely. According to public statements by French author and
investigative journalist Roger Faligot, who has written several books
about the regime’s security services, there are around two million
Chinese working directly or indirectly for the China’s intelligence
apparatus.

Other analysts say it would be impossible to count the exact number.
‘I doubt they know themselves,’ says Richard Fisher, a senior fellow
on Asian military affairs at the Washington-based International
Assessment and Strategy Center. Regardless, the number is undoubtedly
extraordinary. ‘China can rightly claim to have the world’s largest,
most amorphous, but also most active intelligence sector,’ he says.

That’s partly because it operates very differently from most. ‘When
you consider that China’s intelligence community views any
foreign-deployed Chinese citizen, any Chinese delegation, all Chinese
criminal networks, and all overseas Chinese with any tangible affinity
or connection to the Motherland as a target for recruitment, then you
have to find a different way to measure,’ Fisher explains. ‘This has
to start with the consideration that any Chinese, especially those
from China, from student to CEO, are potential active intelligence
assets.’

Other analysts echo his concerns, and a simple fact: the regime’s
spies are increasingly active across the globe. Since 2008, more and
more intelligence-training colleges—‘spy schools’—have been popping up
at universities across the country. Meanwhile, Chinese
satellite-reconnaissance and cyber espionage capabilities are
expanding at an unprecedented speed.

Officials are, probably for good reason, skittish when discussing
China and its intelligence collection operations. But there’s near
unanimous agreement—and court convictions in countries around the
globe support the premise—that, in terms of sophistication, scope, and
international capabilities, the perils of Chinese espionage are on the
rise.

‘The danger is pronounced,’ warns Charles Viar, chairman of the
Washington, D.C.-based Center for Intelligence Studies. ‘In my view,
no one is really doing enough to deal with the Chinese threat. It is
too large, and by Western standards, too unconventional.’

Among the array of growing dangers associated with Chinese spying: the
regime’s increasingly advanced cyber capabilities. While the
techniques are used to steal ever more information of all sorts, the
potential for devastating offensive operations exists as well. Leaked
US diplomatic cables and cyber-security analysts suggest that Chinese
military intelligence has been involved in countless network
penetrations in recent years. In some instances, evidence suggests
that the regime is even able to remotely control sensitive systems.

Consider one example: In 2009, senior US officials reported that cyber
spies—at least some of whom were Chinese—infiltrated the US electrical
grid. And after breaking in, they left software behind that could be
used to cause disruptions or possibly even shut the system down.

The Evolution of the Menace

Though the evolving threats are more advanced and dangerous today than
ever before, Chinese espionage is nothing new. In fact, it began
centuries ago—well before the communist regime rose to power.

‘China has a history of organized intelligence-gathering operations
that goes back to the 15th century—perhaps even earlier,’ says Joseph
Fitsanakis, a senior editor with Intel News who teaches classes on
espionage, intelligence, and covert action at King College’s
Department of History and Political Science. The Chinese, however,
took it to a new level.

Up until two to three decades ago, the regime’s spying was largely
domestic in nature, Fitsanakis explains—primarily targeting perceived
enemies and dissidents within China. But in the post-1980s era, with
economic reforms and growing affluence pacifying much of the internal
unrest, Chinese intelligence collection efforts began to focus more on
the outside world.

Today, according to experts and former counterintelligence officials,
Chinese spying represents one of the largest threats to US security.
And the sheer size of the regime’s espionage apparatus ‘is proving a
good match for the more advanced automated systems used by its less
populous regional rivals, including Taiwan, South Korea, and Japan,’
adds Fitsanakis.

Public awareness of the hidden menace is indeed on the rise. But
available evidence indicates that the danger is still
underestimated—and growing quickly.

‘The Chinese are the biggest problem we have with respect to the level
of effort that they’re devoting against us versus the level of
attention we are giving to them,’ former US counterintelligence chief
Michelle Van Cleave told CBS during an interview. Officials with the
US Immigration and Customs Enforcement (ICE), meanwhile, labelled
China’s ‘aggressive and wide-ranging espionage’ the ‘leading threat to
US technology.’

According to former Chinese intelligence officials who defected to the
West, the United States is indeed China’s main target for espionage.
But as China steps up its spying around the world, it’s becoming clear
that no nation, company, military, or exiled dissident is immune.

Espionage & Influence

Like the intelligence services of most large and powerful countries, a
significant segment of China’s spying apparatus is devoted to
collecting information on foreign governments—particularly in terms of
their military and political systems. Vast numbers of Chinese spies
have been caught stealing such secrets.

In fact, it’s known that the regime has already acquired some of the
United States’ most sensitive secrets. A US Congressional Committee
and then-Director of National Intelligence George Tenet found as early
as the late-1990s that China had even obtained information on the
United States’ most advanced nuclear weapons.

That’s not all. ‘China has managed to gather a great deal of
information on US stealth technology, naval propulsion systems,
electronic warfare systems, and nuclear weapons through espionage,’
says Larry Wortzel, a commissioner and former chairman on the US-China
Economic and Security Review Commission, and the ex-director of the US
Army War College’s Strategic Studies Institute. ‘That is documented in
convictions in US courts.’

The regime, however, wants more. A few Chinese espionage cases have
made headlines recently, such as the scandal involving former weapons
analyst Gregg Bergersen with the US Defense Security Cooperation
Agency. A leaked video of him selling sensitive information about US
military collaboration with Taiwan—a nation which the communist regime
considers a breakaway territory—sparked a new level of public interest
in Chinese espionage just last year.

But most cases barely cause a stir. According to an analysis of US
Justice Department records by the Associated Press, there have been at
least 58 defendants charged in federal court for China-related
espionage since 2008. Most have been convicted, while the rest are
awaiting trial or on the run. Hundreds of investigations are ongoing.

A leaked diplomatic cable from the US embassy in Santiago, Chile, also
revealed that US officials were worried about Chinese espionage
against the US military even in Latin America. ‘There’s concern that
the Chinese could be using Chilean officers and access to the Army
training school to learn more about joint programs, priorities, and
techniques that the Chileans have developed with their US
counterparts,’ noted the 2005 cable signed by then-Ambassador Craig
Kelly, adding that even Chinese journalists were ‘assumed’ to be
involved in some kind of collection activity.

‘(A)s the (US government) augments its support to the Chilean Armed
Forces, Chinese interest in USG activities in the Southern Cone will
most assuredly increase,’ according to the document released earlier
this year by WikiLeaks. ‘The Chinese will likely attempt to learn more
about US military strategies and techniques via Chilean participation
in bilateral training programs and joint exercises.’

And while experts agree that the United States is the single most
important target, Chinese agents involved in military and political
espionage have been convicted all over the world. In late July, for
example, Taiwanese General Lo Hsien-che was sentenced to life in
prison for handing over military secrets to Beijing. The case shocked
the nation. But it wasn’t necessarily surprising to some observers.

‘Anyone who has followed developments in Taiwan over the years knows
how deeply Chinese forces have infiltrated Taiwan’s military,
especially its senior officers,’ noted Taiwan-based journalist and
security analyst J. Michael Cole in a recent opinion piece for the
Wall Street Journal. He noted that, because Taiwan is so infested with
Chinese spies, any US weapons sales to the nation could result in
sensitive military secrets ending up in Beijing.

Europe isn’t immune either. In Belgium, headquarters of NATO and the
European Union, the Minister of Justice and the Minister of Foreign
Affairs separately accused China of cyber spying and attempting to
compromise critical government networks in 2008. The next year,
reports of Chinese intelligence efforts directed at top Australian
officials, including the prime minister, made headlines worldwide.

Even in Russia, widely considered at least a tenuous ally of the
Chinese regime, Chinese spies have been convicted in recent years. One
man, Igor Reshetin, was found guilty of providing information useful
in designing nuclear missiles to a Chinese state-owned firm. In early
September, Russian prosecutors charged two more academics with selling
military secrets to China.

Aside from stealing political and military information, another
important goal of Chinese intelligence agents is to gain influence
among members of a target country’s political elite. According to
experts, China uses bribes, blackmail, women, lavish vacations in
China, and other means to compromise officials worldwide.

Even former US President Bill Clinton was widely accused of being too
close to Beijing for comfort. ‘President Clinton promised to restrain
those who ordered the Tiananmen Square massacre, but he has now
allowed these men whose hands are stained with the blood of martyrs of
freedom into the highest reaches of our military defences, and made
available to them significant portions of our advanced military
technology,’ charged former US Joint Chiefs of Staff Chairman Admiral
Thomas Moorer in a letter to congressional leaders.

Indeed, one of the prime targets of Chinese intelligence, according to
analysts, is information to create comprehensive databases on current
and future leaders of free countries. ‘They want to arm their
diplomats and businessmen with the inside scoop to be able to expand
their political and economic allies to help foster ruling elites that
will never challenge the legitimacy of the Chinese Communist regime,’
says Fisher.

In Canada, the issue was raised just last year. During a TV interview,
Canadian Security Intelligence Service (CSIS) Director Richard Fadden
suggested that some politicians in Canada were connected to certain
foreign governments—almost universally assumed to mean China.

After causing an uproar among some sectors, however, the Canadian spy
chief tried to downplay the remarks. ‘He was very rapidly shut down by
some irresponsible—almost suspicious’—officials, who denied that there
was any problem, says Michel Juneau-Katsuya, the former Asia-Pacific
head of CSIS.

‘Actually, Mr. Fadden was talking about something that has been
happening for decades,’ Juneau-Katsuya says. The strategy of gaining
influence among foreign power brokers is an important tool in China’s
espionage arsenal, he says. It’s also one that is rarely discussed.

Theft of Trade Secrets

The theft of trade secrets, technology, and corporate information is
another one of China’s specialties. ‘When it comes to economic
espionage, China is universally recognized as at the top,’ says
Juneau-Katsuya, who now serves as the CEO of security consulting firm
The Northgate Group. ‘What we know is that, by far, they are at the
top when it comes to stealing information.’

Oftentimes the line between military and economic espionage is blurry.
The case of engineer Dongfan ‘Greg’ Chung, sentenced last year, is
just one example among many. Chung was caught passing sensitive US
aerospace and rocket secrets to China that he stole while working for
defence contractors Boeing and Rockwell International.

In other cases, the foreign technology stolen by Chinese spies is used
to further oppress the population. A revealing lawsuit filed by US
software maker Cybersitter, seeking more than $2 billion in damages,
accused China and other conspirators of stealing its proprietary
filtering code. The software was then apparently used to help censor
the web in China.

‘They have a multitude of goals all at once: To catch up on the
difference in technology, to gain influence around the world, to know
more about where the competition is, and definitely to not have to pay
for research and development,’ says Juneau-Katsuya. The R&D element is
key.

Often, the motivation for stealing trade secrets is purely economic.
In addition to saving unfathomable amounts of time and capital, using
stolen information crucial to a company’s survival can actually lead
to shutting down China’s foreign competition.

So, partly because the return on investment from spying is so much
greater than from R&D, experts say the budgets of Chinese intelligence
agencies have soared in recent years. That trend is expected to
continue indefinitely.

But while it may be cost effective for China, the price tag paid by
others is massive. Precise figures are, of course, impossible to
calculate. But in 1995, when Juneau-Katsuya was at CSIS, he tried to
get an estimate: It was somewhere in the neighbourhood of $10 billion
to $12 billion per year. Since then the problem has only grown.

In Germany, the cost is high, too, Berthold Stoppelkamp of the German
Association for Security in Industry and Commerce (ASW) told the press
in 2009. He estimated the damages from economic espionage—primarily
Russian and Chinese—at around €20 billion every year. But it could be
closer to €50 billion, he noted.

An estimate on the cost of economic espionage to the US economy was
offered by FBI Director Robert Mueller in 2003: over $250 billion per
year. And counterintelligence officials with the Bureau and other
experts agree that China is by far the most serious threat.

‘This espionage saps US companies of their industrial lead in the new
technologies and materials,’ notes Wortzel. ‘And often the Chinese
incorporate what they have learned into new weapon systems that can be
used against the US, its allies, and friends.’

And because the threat is continually evolving and comes from multiple
directions, it’s difficult to deal with, experts say. China uses all
known means of stealing information even as it develops ever more
ingenious schemes.

Traditional methods, such as infiltrating companies and compromising
existing employees, are still widely used. Academic and educational
institutions play a crucial role as well—as do the regime’s ‘front
companies’ set up in the United States, estimated to number in the
thousands by the FBI. Foreign companies with operations in China are
said to be particularly vulnerable to losing their secrets.

Meanwhile, more advanced tools like computer hacking are becoming an
increasingly important weapon in the regime’s economic-spying arsenal.
‘Their cyber activities have increased in the last ten years quite
significantly,’ says Juneau-Katsuya. ‘They are devoting university
departments and entire sections of the (People’s Liberation Army) just
to that.’

Another key but underestimated strategy employed in China’s quest for
trade secrets—corporate acquisitions and joint ventures—makes use of
the regime’s vast empire of well-funded, state-owned companies. By
purchasing even a significant percentage of a firm, China often
obtains important technological know-how. It also buys political
influence.

‘China continues to leverage foreign investments, commercial joint
ventures, academic exchanges, the experience of repatriated Chinese
students and researchers, and state-sponsored industrial/technical
espionage to increase the level of technologies and expertise
available to support military research, development, and acquisition,’
notes a 2011 US Defense Department report to Congress on Chinese
military and security developments.

Especially following the recent recession, the Chinese regime has been
on a global shopping spree using its vast cash reserves—buying up all
sorts of companies, from car manufacturers to technology enterprises.
But countless examples of the use of this tactic have been documented
for well over a decade.

Even more alarming for some: A secret 1997 investigation by CSIS and
the Royal Canadian Mounted Police entitled ‘Sidewinder’ found that
criminal networks affiliated with Chinese intelligence were also
intimately involved. The Canadian government essentially dismissed the
report, but many analysts believe the collaboration has only grown
since then.

In general, firms and universities are simply not doing enough to
protect their secrets and technology from China, says Center for
Intelligence Studies Chairman Charles Viar. ‘That said, the larger
problem involves contractual agreements in which Western companies
voluntarily transfer sensitive technologies—often illegally—in order
to win contracts with China,’ he points out.

Fisher has similar concerns. He says firms and educational
institutions around the world are not simply targets—in many cases
they have become ‘compliant victims’ of Chinese intelligence agencies’
designs.

‘Companies and universities must first reach an understanding of how
they are aiding and abetting the Chinese Communist dictatorship,’ says
Fisher, noting that as long as they crave Chinese money, they will
continue bending over backwards to satisfy the regime. ‘This scandal
is compounded by the fact that Chinese allies in the capitals of most
democracies are succeeding in avoiding or averting the level of
critical review that would also lead to defensive action.’

Persecuting Dissidents, Even Abroad

One of the top priorities of Chinese espionage efforts—foreign and
domestic—is monitoring and disrupting dissidents, according to
defectors, experts, and official documents. In the crosshairs overseas
are Chinese democracy activists, Tibetans, the exiled Uighur
community, Falun Gong practitioners, supporters of Taiwanese
independence, and countless others—essentially anybody who disagrees
with the regime or paints a negative image of it abroad.

In 2009, for example, a massive and sophisticated cyber espionage
network was discovered by Canadian researchers. The system, known as
‘GhostNet,’ had reportedly penetrated computers belonging to multiple
governments, the exiled Dalai Lama, and a number of other dissidents
and critics. Investigators traced the operation to China.

Last year, after a ‘highly sophisticated and targeted attack’
originating in China, Google announced that a primary goal of the
operation was to gain access to Chinese human rights activists’ e-mail
accounts. ‘Dozens’ of such accounts had already been compromised
through other means before the attack in question, the company also
said in a statement.

It’s not just human rights campaigners and pro-Tibetan activists who
are under constant attack, however. Among the most viciously
persecuted are individuals associated with Falun Gong, also known as
Falun Dafa. The spiritual and philosophical movement was banned by the
Communist regime in 1999 after officialdom decided it might represent
a threat to the Communist Party.

Labelling it an ‘evil cult,’ China then created an extra-legal
apparatus known as the 6-10 Office to quash the discipline
domestically—and around the world. An unprecedented campaign of terror
and brainwashing has since been unleashed, including a vast network of
‘re-education’ camps, disappearances, torture, harvesting organs from
practitioners, and more.

And the regime’s tentacles have truly spread worldwide in pursuit of
its goal. ‘The war against Falun Gong is one of the main tasks of the
Chinese mission overseas,’ Chen Yonglin, a senior official at the
Chinese Consulate in Sydney told a US Congressional committee in 2005
after his defection.

A vast body of evidence, and even recent court cases, support the
claim. In June, for example, a Chinese man in Germany was convicted of
spying on members of the Falun Gong community for China. A few years
earlier, a senior Chinese embassy official in Ottawa was expelled
after being caught spying on practitioners there.

In the United States, officials also regularly highlight the problem.
The House of Representatives has blasted the regime for similar
illegal activities inside the United States on at least four
occasions. A House resolution passed last year and a separate measure
adopted in 2004, for instance, recognized the seriousness of the
problem, called for the regime to stop, and urged US authorities to
take action.

According to the resolutions, China’s diplomatic corps is actively
‘harassing and persecuting’ Chinese dissidents in the United States,
breaking into the homes of prominent activists, pressuring US
officials with threats, spreading lies, and more. In addition to the
well-known persecution going on within China, ‘the Chinese Government
has also attempted to silence the Falun Gong movement and Chinese
pro-democracy groups inside the United States,’ the measures state.

More than a few US Representatives have been even more direct. Foreign
Affairs Committee Chair Ileana Ros-Lehtinen (R-FL), speaking in
support of the resolution, said last year that ‘clear evidence’ shows
Chinese diplomats were colluding with secret agents and ‘thugs’ to
suppress the constitutionally protected rights of Americans. She
called on the State Department to ‘get tough’ on the regime’s
functionaries within US borders.

‘First is the issue of the penetration of agents of an alien Communist
regime right here inside the United States to wage a campaign of
repression against US citizens,’ Ros-Lehtinen said before the House,
citing examples and noting that Chinese agents were ‘persecuting
American Falun Gong practitioners in our own country.’ And the
well-documented ‘bloody harvest’ and ‘coercive organ transplants’ from
Falun Gong practitioners within China, she added, ‘is almost too
ghoulish to imagine.’

One prominent analyst on the issue of Falun Gong persecution, David
Kilgour, is a former Canadian member of parliament and served as
Canada’s secretary of state for Asia-Pacific in 2002 and 2003. He
recently co-authored a book entitled ‘Bloody Harvest—The killing of
Falun Gong for their organs,’ which closely examines the brutality and
takes a look at the regime’s illegal persecution of exiled
practitioners.

‘The espionage and intimidation the party-state deploys against Falun
Gong abroad is outrageous,’ Kilgour says, calling it an extension of
the ‘very severe persecution’ in China. ‘It’s unconscionable for a
repressive government to use the freedom of a democracy to project
abroad its persecution of its chosen victims.’

Among the examples he cites is a 2003 case in which two Chinese
diplomatic officials in Edmonton were caught handing out pamphlets
inciting hatred against the Falun Gong—a crime in Canada. But there’s
much more, he says.

Chinese defectors have told Kilgour that the effort spent monitoring
and repressing dissidents overseas actually outweighs all other
functions of Chinese diplomatic missions combined, he says. Apparently
the regime doesn’t want the international community to realize what
has been perpetrated in China.

One victim of that persecution, author and human rights activist
Jennifer Zeng, fled China in 2001 after being tortured at one of the
regime’s ‘Re-Education-Through-Labour’ camps. ‘The PRC espionage and
intimidation against FG practitioners overseas is so common that many
of us have become accustomed to it,’ she says.

But while Falun Gong practitioners may be at the top of the regime’s
list of perceived enemies, they are far from the only victims of
anti-dissident Chinese operations abroad. Another extensively targeted
group is the exiled Uighur community, an ethnic minority—primarily
Muslim—that has been systematically oppressed within China for
decades. China has also been very active in tracking and disrupting
the activities of those who managed to flee.

Last year, for example, a man was convicted of ‘aggravated illegal
espionage’ against the Uighur refugee community in Sweden. ‘He
reported all he could about them,’ says Sweden’s chief national
security prosecutor Tomas Lindstram, who prosecuted the case. The
information included everything from the targets’ political views and
activities to details about their health and travel habits.

Using a ‘rather tricky’ method to communicate with his handlers—a
Chinese ‘journalist’ and a diplomatic official—the convicted spy
‘fooled most of his fellow countrymen,’ says Lindstram. The court and
the prosecutor recognized the seriousness of the crime—especially
because it was to benefit a ‘totalitarian’ government that does not
respect human rights. Incredibly, however, the spy was sentenced to
less than two years.

Lindstram admits he thought the short sentence was ‘odd’ and didn’t
correctly account for the severity of the crime. The government is now
apparently looking into the sentencing length question. But for many
Uighur activists, the penalty was almost an outrage.

‘There should be a tougher punishment for a crime like this in order
to send a strong signal to other possible spies around the world,’
says Mehmet Tohti, the Special Representative of the World Uighur
Congress to the European Union. And it isn’t just Sweden that could
use improvement.

Tohti says the West in general isn’t doing enough to protect and
support exiled Chinese dissidents—even though it is in the free
world’s own interest to do so. In Germany, for example, there have
also been several incidents of Chinese espionage against Uighurs in
recent years. Little has been done.

‘Chinese spying is a big problem for the Uighur community—especially
for Uighur organizational leaders,’ says Tohti. But they are hardly
alone.

Other victims of Chinese intimidation, wiretapping, and e-mail
theft—Tibetan activists and pro-democracy advocates, for example—are
fiercely persecuted by the regime outside of China, too. According to
Tohti, one of the goals is to minimize the impact of anti-China
protests because they are ‘exposing China’s gross and systematic
violation of human rights’ to the world.

Beyond Intelligence: Offensive Capabilities

Chinese intelligence agencies are clearly involved in collecting
information on a massive scale. Some analysts even refer to the
regime’s strategy as the ‘Vacuum Cleaner’ approach. But intelligence
gathering is only one piece of the puzzle.

Perhaps even more alarming than monitoring dissidents and stealing
trade secrets, analysts say, is mounting evidence of the regime’s
increasing ability and willingness to employ its spy services
offensively. The number of examples is growing rapidly.

In the cyber realm, China’s use of offensive tactics was highlighted
again just last month. As The Diplomat reported on August 25, a video
on cyber warfare broadcast over China’s military state TV channel
included a brief segment that raised eyebrows worldwide.

The footage apparently showed an old computer programme from the
People’s Liberation Army Electronic Engineering Institute being used
to ‘attack’ a US-based website tied to the Falun Gong via a US
university’s network. And, while the short clip featured outdated and
unsophisticated methodology, analysts say it was important for several
reasons—providing more evidence of China’s offensive cyber activities
being chief among them.

A 2009 report prepared for the US-China Economic and Security Review
Commission on China’s cyber capabilities also suggests that the
regime’s information-warfare strategy features offensive operations
prominently. According to the authors’ analysis of the regime’s
strategy, the tools ‘will be widely employed in the earliest phases of
a conflict, and possibly pre-emptively.’

The study also notes that faculty members at China’s National
University of Defense Technology ‘are actively engaged in research on
offensive network operations techniques or exploits.’ Research and
development on ‘a variety of offensive information warfare
technologies’ is also being conducted by institutes overseen by the
PLA’s General Staff Department Fourth Department.

Another area of concern is covert Chinese activism overseas. ‘Their
objectives know no limit,’ says Fisher. ‘If China has targeted a
country for its resources and has decided to sustain a noisome regime
to defend those interests, it will give that regime the means to, as
it will also collect a comprehensive data base to help that regime to
avoid threats.’

This strategy—secretly propping up friendly dictators—was illustrated
recently when China was apparently caught quietly arming Gaddafi after
the civil war in Libya began. In violation of international sanctions,
China was reportedly offering weapons to the Libyan dictator even in
the final weeks of battle, documents leaked in early September
indicate.

The move—a carefully calculated risk, to be sure—clearly required
intimate knowledge of potential US and NATO reactions. ‘This kind of
very targeted power projection will become the order of the day when
China builds its power projection Navy and Air Force, due to come
online by the early 2020s,’ Fisher warns.

And even though Gaddafi’s regime may have crumbled, he notes, China
has a growing international network of support, including the regimes
ruling North Korea, Pakistan, Iran, Cuba, Venezuela, and Zimbabwe.
Other key players in the Chinese intelligence community’s expanding
network of friends are global criminal organizations and freelance
cyber warriors—or ‘sub-contractors’ and ‘pirates,’ as Fisher refers to
them.

Links with organized crime and so-called ‘Patriotic hackers’ allow the
regime some degree of plausible deniability in covert operations and
cyber attacks. But between backing socialist strongmen, penetrating
critical infrastructure, and sabotaging computer systems, China’s
aggressive foreign intelligence operations are increasingly arousing
suspicion worldwide.

According to Juneau-Katsuya, the overall designs aren’t all that
complex. ‘If you want to understand the strategy that Chinese
intelligence and the Chinese government are using, you’ve got to refer
yourself to the game of Go,’ he says, noting that it is popular among
China’s military top brass.

The ancient game is fairly simple: The object is to encircle one’s
opponent and take control of the most territory. ‘That’s exactly the
strategy they’re using,’ Juneau-Katsuya says, citing the regime’s
increasingly active presence around the world—particularly in
Africa—as an example of the plan in action.

Guarding against the Threat

There’s some disagreement among experts about whether governments are
doing enough to protect themselves and their people from the threat of
Chinese espionage. But overwhelmingly, insiders say nations from
Canada and Australia to European states and India need to do more—much
more. Small countries in the vicinity of China are probably among the
most vulnerable.

Regardless, what is certain, according to analysts, is that most
companies and institutions aren’t keeping up with the Chinese regime’s
rapidly evolving espionage capabilities. And the PRC is taking full
advantage of the opportunities.

‘They understand very well that the Western world is sleeping at the
switch when it comes to all this, and the majority of people are not
paying attention to the security of their systems,’ says
Juneau-Katsuya. ‘That is the weakest link.’

FBI spokesman Bill Carter says that after terrorism,
counterintelligence ‘is the number two priority in the FBI, and
significant resources are devoted to our counterespionage activities.’
The exact figures are classified, he adds. ‘You don’t like to tell the
opposition what your capabilities are.’

The US Department of Justice didn’t respond to requests for comment.
Neither did Japan’s Public Security Intelligence Agency. But reports
do suggest that at least some governments are getting serious about
counterintelligence and the threat of Chinese espionage.

Many more governments, for example, have recently started to take
action against state-owned Chinese firms attempting to buy up
sensitive or strategic companies. And growing concerns about using
Chinese technology—especially in the realm of telecommunications—have
been expressed by officials around the world.

By raising public awareness of their plight, the fears of exiled
dissidents are being taken more seriously, too. The victims of the
Communist regime’s foreign persecution, however, still say much more
needs to be done.

Strategies to deal with the threat proposed by analysts interviewed by
The Diplomat varied widely, from restricting the number of Chinese
nationals allowed into other countries to developing new multilateral
institutions to address the problem. More resources dedicated to
counterintelligence, tougher punishments for convicted spies, better
encryption systems, and more private sector involvement were also all
mentioned.

But one point in particular was repeated over and over again. By far
the most crucial element in the battle, analysts say, is greater
awareness.

Alex Newman is a freelance writer and correspondent for The New
American magazine

http://the-diplomat.com/2011/09/19/chinas-growing-spy-threat/

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