Chinese espionage operations in US at their highest level: US Intelligence

At the beginning of November this year, the United States extradited a high level Chinese spy to the US from Europe. The Chinese official in question is
Yanjun Xu, a Deputy Director in China’s Ministry of State Security (MSS),
mainly responsible for external intelligence. It is the first time that an official
at this level has been moved to the US for trial. The conviction of Yanjun Xu
could set the precedence for the extradition of other Chinese intelligence
officials. Just how serious an issue Chinese espionage activity in the US
becomes clear from the fact that the FBI opening a new counterintelligence
case into China every 12 hours.1
The US Federal Court verdict (5 November 2021) states that Xu is a Chinese
national and Deputy Division Director of the Sixth Bureau of the Jiangsu
Province, Ministry of State Security. Laying down the conviction, Assistant
Attorney General Matthew G. Olsen of the Justice Department’s National
Security Division said, “This conviction of a card-carrying intelligence officer
for economic espionage underscores that trade secret theft is integral to the
PRC government’s plans to modernize its industries”.2
The Xu case is pathbreaking because he could provide leads to other Chinese
espionage activity directed against the US. Also, his conviction will set the
template for future trials of Chinese intelligence officers. Whether or not, Xu
will give information to his captors remains to be seen, because he is a
hardened intelligence official. By way of a distant analogy, one may recall that
in 1945 KGB officer Oleg Guzenkohad defected, he provided the CIA with
loads of information on KGB operations in the US. Returning to Xu, it can be
stated with surety that China will almost certainly seek to obtain his
return.One way of getting Xu back would be for China to go after Americans
in China in retribution, irrespective of whether they are spies or not and use
them as eventual bargaining chips to help facilitate Xu’s release.
Just for the record, attention is drawn to the US think tank CSIS survey of
Chinese espionage in the US since 2000. This survey lists 160 publicly
reported instances of Chinese espionage directed at the US since 2000. Of the
total, 42 per cent cases were carried out by Chinese military or government
employees. Of the 160 incidents it was found that 24 per cent occurred
between 2000-2009, while 76 per cent occurred between 2010-2021.3
Christopher Wray, FBI Director had testified earlier this year that the US
government had experienced a 1,300 percent increase in economic espionage
investigations over the last few years.”I don’t think there is any country that
presents a more severe threat to our innovation, our economic security, and
our democratic ideas,” Wray told the Senate Intelligence Committee talking
about the threat from China in this regard.
The story of Yanjun Xu can be partially recreated from US Federal Court
records. Beginning in 2013, he used multiple aliases to go after company
secrets in the aviation field, mainly in the US. Like most Chinese operators,
Xu targeted company employees with enticing offers and payments to travel
to China to make presentations on their latest innovations. However, Xu was
caught when he attempted to steal technology relating to GE Aviation’s
composite aircraft engine fan, which GE has guarded closely from
competitors. In 2017, Xu targeted a GE employee and invited him to give a
presentation at a University in China. He then tried to get the employee to
hand off corporate secrets.
According to the US Federal Court, in January 2018, Xu requested “system
specification, design process” information from the employee and – with the
co-operation of the company, who was working with the FBI – the employee
emailed a two-page document from the company that included a label that
warned about the disclosure of proprietary information.4 After much
discussion, Xu eventually suggested they meet in Europe in 2018. But by this
time, GE and the employee had begun working with the FBI. When Xu tried
his hand at the rendezvous in Belgium, he quickly learned he’d been duped.
Xu was apprehended and extradited to the United States.
Reports indicate that the Biden administration has been working towards the
setting up of a China Mission Centre in the CIA to ramp up intelligence
collection on China. According to a Bloomberg report, US spy agencies have
been struggling to provide the amount of information on China that would be
helpful to policymakers. With the US government attempting to take a harder
line on China, it also finds that China is becoming a harder target, just as
demands for insights into Xi’s decision-making is increasing. Just as this
time, tensions with China are also heating up over issues from Taiwan to high
technology.
Bloomberg also cites a September 2020 House Intelligence
Committee report (partially redacted) which had concluded that US spy
agencies were failing to meet the multifaceted challenges posed by China and
were overly focused on traditional targets such as terrorism or conventional
military threats.
The China Deep Dive: A Report on the Intelligence Community’s Capabilities and Competencies with Respect
to the People’s Republic of China, House Permanent Select Committee on Intelligence
The Communist Party of China pursues a jigsaw puzzle strategy towards its
adversaries, which includes talking to the adversary while taking all steps
simultaneously to weaken them. This is precisely what they have been doing
with the US in recent years. That the conviction of Yanjun Xu occurred a few
weeks prior to the Biden-Xi telephonic conversation, indicates that ties are
still rocky. This also suggests that China will continue to engage Washington
politically, while aiming to penetrate the US, its technology and defence
companies for the purpose of stealing high technology to maintain its efforts
to match the US. That is precisely why the China Intelligence Centre at the
CIA will have to become the new frontline in the battle of wits against China.
Is India watching and listening?