18/09/2023, 19:12 In risky hunt for secrets, U.S.

In risky hunt for secrets, U.S. and China expand global spy operations - The Japan Times

ASIA PACIFIC / POLITICS

In risky hunt for secrets, U.S. and China

expand global spy operations

Models of military equipment and a giant screen displaying Chinese leader Xi Jinping are seen at an exhibition at the Military Museum of
the Chinese People's Revolution in Beijing last October. | REUTERS

BY JULIAN E. BARNES AND EDWARD Sep 17, 2023

WONG
THE NEW YORK TIMES SUSTAINABLE JAPAN

WASHINGTON – As China’s spy balloon drifted across the continental

6 Six: Popular French restaurant on small
United States in February, U.S. intelligence agencies learned that Okinawa isle

Chinese President Xi Jinping had become enraged with senior Chinese

military generals.

The spy agencies had been trying to understand what Xi knew and
what actions he would take as the balloon, originally aimed at U.S.
military bases in Guam and Hawaii, was blown off course.

Xi was not opposed to risky spying operations against the United

States, but U.S. intelligence agencies concluded that the People’s
Liberation Army had kept Xi in the dark until the balloon was over the
United States.

U.S. officials would not discuss how spy agencies gleaned this
information. But in details reported here for the first time, they
discovered that when Xi learned of the balloon’s trajectory and
realized it was derailing planned talks with Secretary of State Antony
Blinken, he berated senior generals for failing to tell him that the
balloon had gone astray, according to U.S. officials briefed on the
intelligence.

The episode threw a spotlight on the expanding and highly secretive

spy-versus-spy contest between the United States and China. The
balloon crisis, a small part of a much larger Chinese espionage effort,
reflects a brazen new aggressiveness by Beijing in gathering
intelligence on the United States as well as Washington’s growing
capabilities to collect its own information on China.

For Washington, the espionage efforts are a critical part of President

Joe Biden’s strategy to constrain the military and technological rise of
China, in line with his thinking that the country poses the greatest
long-term challenge to American power.

For Beijing, the new tolerance for bold action among Chinese spy
agencies is driven by Xi, who has led his military to engage in
aggressive moves along the nation’s borders and pushed his foreign
intelligence agency to become more active in farther-flung locales.

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18/09/2023, 19:12 In risky hunt for secrets, U.S. and China expand global spy operations - The Japan Times

A U.S. Air Force U-2 pilot looks down at a suspected Chinese surveillance balloon as it
hovers over the central continental United States in February before later being shot down.
| U.S. AIR FORCE / U.S. DEPARTMENT OF DEFENSE / VIA REUTERS

The main efforts on both sides are aimed at answering the two most
difficult questions: What are the intentions of leaders in the rival
nation? And what military and technological capabilities do they
command?

U.S. officials, most of whom spoke on condition of anonymity to

discuss espionage, have stressed in interviews throughout the year the
magnitude of the challenge. The CIA is focusing on Xi and, in
particular, his intentions regarding Taiwan. The FBI’s
counterintelligence task forces across the nation have intensified their
hunt for Chinese efforts to recruit spies inside the United States. U.S.
agents have identified a dozen penetrations by Chinese citizens of
military bases on American soil in the past 12 months.

Both countries are racing to develop their artificial intelligence

technology, which they believe is critical to maintaining a military and
economic edge and will give their spy agencies new capabilities.

Taken together, U.S. officials say, China’s efforts reach across every
facet of national security, diplomacy and advanced commercial
technology in the United States and partner nations.

The CIA and the Pentagon’s Defense Intelligence Agency have set up
new centers focused on spying on China. U.S. officials have honed
their capabilities to intercept electronic communications, including
using spy planes off China’s coast.

The spy conflict with China is even more expansive than the one that
played out between the Americans and the Soviets during the Cold
War, said FBI Director Christopher Wray. China’s large population and
economy enable it to build intelligence services that are bigger than
those of the United States.

"The fact is that compared to the PRC, we’re vastly outnumbered on

the ground, but it’s on us to defend the American people here at
home,” Wray said in an interview, using the initials for the People’s
Republic of China. "I view this as the challenge of our generation.”

China sees it differently. Wang Wenbin, a Chinese Foreign Ministry

spokesperson, has said that "it is the U.S. that is the No. 1 surveillance
country and has the largest spy network in the world.”

‘Going after everything’

Espionage can halt a slide into war or smooth the path of delicate
negotiations, but it can also speed nations toward armed conflict or
cause diplomatic rifts.

In late February, weeks after he canceled an important trip to Beijing

over the balloon episode, Blinken confronted China’s top diplomat
with a U.S. intelligence assessment that Beijing was considering giving
weapons to Russia. That disclosure raised tensions, but it also might be
keeping China from sending the arms, U.S. officials say. And when
Blinken finally went to Beijing in June, he raised the issue of Chinese
intelligence activities in Cuba.

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18/09/2023, 19:12 In risky hunt for secrets, U.S. and China expand global spy operations - The Japan Times
China’s vastly improved satellite reconnaissance and its
cyberintrusions are its most important means of collecting
intelligence, U.S. officials say. The fleet of spy balloons, though far less
sophisticated, has allowed China to exploit the unregulated zone of
"near space.” And the U.S. government is warning allies that China’s
electronic surveillance capabilities could expand if the world’s nations
use technology from Chinese communications companies.

U.S. President Joe Biden meets with Chinese leader Xi Jinping on the sidelines of the
Group of 20 leaders' summit in Bali, Indonesia, last November. | REUTERS

Artificial intelligence is another battleground. The U.S. government

sees its lead in AI as a way to help offset China’s strength in numbers.
Chinese officials hope the technology will help them counter
American military power, including by pinpointing U.S. submarines
and establishing domination of space, U.S. officials say.

U.S. officials are also more concerned than ever at Chinese agencies’
efforts to gather intelligence through personal contacts. They say
China’s main intelligence agency, the Ministry of State Security, aims
to place agents or recruit assets across the U.S. government, as well as
in technology companies and the defense industry.

Chinese agents use social media sites — LinkedIn, in particular — to

lure potential recruits. Any time an American takes a publicly
disclosed intelligence job, they can expect a barrage of outreach from
Chinese citizens on social media, according to current and former
officials.

Responding to that threat, federal agencies have quietly opened or

expanded their in-house spy catching operations. And Wray said the
FBI has thousands of open Chinese intelligence investigations, and
every one of its 56 field offices has active cases. All of those field offices
have counterintelligence and cyber task forces largely focused on the
threat from Chinese intelligence.

Those investigations involve attempts by Chinese spies to recruit

informants, steal information, hack into systems, and monitor and
harass Chinese dissidents in the United States, including using so-
called police outposts.

"They’re going after everything,” Wray said. "What makes the PRC
intelligence apparatus so pernicious is the way it uses every means at
its disposal against us all at once, blending cyber, human intelligence,
corporate transactions and investments to achieve its strategic goals.”

But critics say some of the U.S. government’s counterintelligence

efforts are racially biased and paranoid, amounting to a new Red Scare
— a charge at least partly supported by the cases the Justice
Department has had to drop and by its shutdown of the Trump-era
China Initiative program.

China has undertaken its own expansive counterintelligence crusade,

one that echoes Mao-era political campaigns. On July 1, China enacted
a sweeping expansion of a counterespionage law. And in August, the
Ministry of State Security announced that "all members of society”
should help fight foreign spying, and offered rewards for anyone
providing information.

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The rival governments have also established new listening posts and
secret intelligence-sharing agreements with other governments. U.S.
and Chinese agents have intensified their operations against each
other in pivotal cities, from Brussels to Abu Dhabi, United Arab
Emirates, to Singapore, with each side looking to influence foreign
officials and recruit well-placed assets.

The art of mind-reading

For U.S. spy agencies, Xi’s decisions and intentions are arguably the
most valuable intelligence they seek, but he is also the most elusive of
targets.

U.S. agencies are probing exactly why China’s defense minister, Gen. Li
Shangfu, appears to have been placed under investigation for
corruption, and why Xi ousted Qin Gang, his foreign minister. U.S.
diplomacy and policy depend on knowing the motivations behind
these moves.

A decade ago, the United States’ network of informants in China was

eliminated by Chinese counterintelligence officials after the
informants’ identities were uncovered. Since then, the CIA has faced a
major challenge to rebuild its network. That is partly because China’s
expanding webs of electronic surveillance have made it difficult for
American case officers to move freely in China to meet contacts.

U.S. Navy sailors recover a suspected Chinese high-altitude surveillance balloon that was
downed by the United States over U.S. territorial waters off the coast of Myrtle Beach,
South Carolina, in February. | U.S. FLEET FORCES / U.S. NAVY / VIA REUTERS

China even has artificial intelligence software that can recognize faces
and detect the gait of an American spy, meaning traditional disguises
are not enough to avoid detection, according to a former intelligence
official. American operatives now must spend days rather than hours
taking routes to spot any tailing Chinese agents before meeting a
source or exchanging messages, former intelligence officials say.

And Xi, like other authoritarian leaders, limits his use of phones and
electronic communications, for the very purpose of making it difficult
for foreign intelligence agencies to intercept his orders.

But officials in the vast bureaucracy under Xi do use electronic

devices, giving U.S. agencies a chance to intercept information — what
spies call signals intelligence — to give them some insight into the
internal discussions of their Chinese counterparts.

In the balloon incident, the CIA began tracking the balloon in mid-
January, when the Chinese army launched it from Hainan Island,
officials said.

U.S. officials also determined that commanders on the Central Military

Commission that Xi chairs were unaware of this particular flight until
it was tipping into crisis, and they vented their frustration at the
generals overseeing the surveillance program.

Since that crisis, China has paused the operations of its fleet of
balloons, but U.S. officials said they believe Beijing will probably
restart the program later.

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Under William Burns, director of the CIA since 2021, the agency has
hired more China experts, increased spending on China-related efforts
and created a new mission center on China. And although U.S. officials
refuse to discuss details of the agency’s network of informants, Burns
said publicly in July that it had made progress on rebuilding a "strong
human intelligence capability.”

Although it is unclear how robust the new network is, some U.S.
officials think Xi’s extremely authoritarian governance style gives
intelligence agencies an opening to recruit disaffected Chinese
citizens, including from among the political and business elite who
had benefited in previous decades from less party control and a less
ideological leadership.

Chinese leader Xi Jinping attends the plenary session of the 2023 BRICS Summit in
Johannesburg on Aug. 23. | POOL / VIA REUTERS

Some prominent Chinese figures, including "princelings” of

Communist Party elite families, say in private conversations that they
disagree with the turn China has taken.

China has also poured resources into determining the thinking of top
American officials. A Justice Department indictment unsealed in July
suggests Chinese businesspeople tied to the government were trying
to recruit James Woolsey, a former CIA director who was in the
running to be a Trump administration national security Cabinet
official right after the 2016 election.

More recently, a sophisticated, highly targeted penetration of

Microsoft’s cloud computing platform gave China access to the emails
of senior State Department diplomats, including the U.S. ambassador
in Beijing and Commerce Secretary Gina Raimondo.

U.S. officials traveling to China take elaborate countermeasures to

avoid having government secrets pilfered. They are issued burner
cellphones and laptops and told to leave their regular devices at home.

Dennis Wilder, a former U.S. intelligence analyst on China and a senior

fellow at Georgetown University, said that discerning the intentions of
U.S. leaders is one of the very top priorities for Chinese intelligence
agencies.

"They look for senior planning and intentions,” he said. "What is the
secretary of state really thinking? What is he really doing? What are the
operations the CIA is really running against you?”

Measuring military muscle

No issue in U.S.-China relations has loomed larger than Taiwan. It is

the flash point likeliest to lead to war, analysts say. Xi has said China
must take control of Taiwan, a de facto independent island, and has
ordered his military to be capable of doing so by 2027. But so far, the
United States and its allies do not appear to have concrete intelligence
on whether Xi would be willing to order an invasion.

And China obsesses over the flip side of the question. Biden has
declared four times that the U.S. military will defend Taiwan should
China try to seize the island. But whether Biden really means that —
and whether U.S. leaders plan to permanently keep Taiwan out of

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18/09/2023, 19:12 In risky hunt for secrets, U.S. and China expand global spy operations - The Japan Times
China’s reach — are believed to be focal points of some of China’s
intelligence efforts.

In the absence of real intelligence on intentions, U.S. and Chinese

officials are focused on gathering information on each other’s military
capabilities. The United States, for instance, has stepped up its aerial
surveillance of Chinese military bases.

U.S. President Joe Biden walks to deliver remarks and sign the CHIPS and Science Act of
2022, on the South Lawn of the White House in Washington in August last year. |
REUTERS

Meanwhile, Chinese intelligence agents have penetrated many parts of

the Taiwanese government over the decades, former U.S. intelligence
officials say. Chinese agents are now trying to learn more about the
Biden administration’s efforts to outfit Taiwan with certain weapons
systems and provide secret training for Taiwanese troops. Chinese
agents also seek more details on the growing military cooperation
between the United States and Asian allies.

"What is it all for?” asked Rep. Mike Gallagher, chair of the House’s
new China committee, referring to Beijing’s espionage efforts. "My
speculation, based on what we see around our military bases, based
on their cyberhacks, is that it is all geared toward Taiwan.”

Other U.S. officials also say China’s desire to learn more about U.S.
armed readiness explains its attempts to surveil military bases around
the United States. In the past 12 months, according to U.S. officials,
they have tracked about a dozen attempts by Chinese citizens to sneak
onto military bases to take photos or measure electromagnetic activity.
Some of the recent efforts appear focused on bases that would play an
important role in a Taiwan conflict, they say.

In August, the Justice Department charged two U.S. sailors with

providing military secrets to Chinese intelligence agents. The sailors
pleaded not guilty.

But intelligence collection is not in itself a prelude to war. The

espionage struggle actually could be a substitute for armed clashes, as
it often was during the Cold War.

U.S. intelligence officials believe that China does not want to go to war
now over Taiwan, Avril Haines, director of national intelligence, told
Congress in March.

"We assess that Beijing still believes it benefits most,” she said, "by
preventing a spiraling of tensions and by preserving stability in its
relationship with the United States.”

This article originally appeared in The New York Times © 2023

The New York Times Company

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