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Spy games: why the US-China cold war is heating up in public

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“Governments of all persuasions use them to pursue foreign policy in non-avowed ways. So what you can’t do openly, you use an intelligence agency to do covertly.”

This comes as both sides raise public consciousness with ever more warnings of spies, industrial espionage, cybertheft and related dark arts.

Among recent disclosures, US officials arrested two Navy sailors for allegedly passing classified information to China; reported dozens of Chinese gatecrashers entering US military bases; and sentenced a Chinese former graduate student to eight years in prison for spying on US-based engineers and scientists.
These followed a 2021 FBI announcement that the bureau was opening a new Chinese espionage case every 12 hours as Washington strengthens export laws and tightens rules on foreign influence peddling.
Ji Chaoqun, a former graduate student, was convicted of spying for China and sentenced to eight years in prison. Photo: Ji Chaoqun/Facebook

Local governments, meanwhile, routinely deny permits for Chinese factories once considered valuable job generators, while Chinese-Americans suffer discrimination as suspected agents for Beijing.

On the other side, China’s Ministry of State Security (MSS) is stepping up its handiwork, reporting in August the capture of two CIA agents – a government worker surnamed Hao recruited in Japan and another Chinese national surnamed Zeng recruited in Italy – without much further detail.
This follows China’s sentencing in May of US citizen John Shing-Wan Leung, 78, to life imprisonment on spying charges.

As part of Chinese President Xi Jinping’s heightened security focus, the MSS also called in August for an “all members of society” effort to catch US spies and safeguard against CIA recruitment.

China spy agency widens remit as well as reach with WeChat account

This included a hotline and unprecedented WeChat presence, as China further strengthens national security laws, disaffecting many foreign companies.

“It’s really hooked to bilateral relations,” said Matthew Brazil, senior analyst with Bluepath Labs, a research consultancy.

“When you have a deterioration of relations, there’s naturally going be a political response, and that can include inadvisable paranoia, which is always harmful. And it’s not surprising we would see that kind of thing.”

When bilateral relations were better, espionage indiscretions were often played down to safeguard economic and diplomatic ties, experts said. In 2017, MSS officials were exposed in New York pressuring exiled billionaire Guo Wengui to return and face Chinese justice.

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Snowden spy leaks shook the world, a decade later, what’s changed?

Snowden spy leaks shook the world, a decade later, what’s changed?

After the US State Department argued for a non-confrontational approach, they were quietly returned to China, The Wall Street Journal reported.

In the past, the CIA, MSS and People’s Liberation Army even shared signal intelligence – about Moscow after the Sino-Soviet split, and about potential terrorists after September 11. “There have been many times of close collaboration,” a former intelligence agent said. “And vice versa.”

Such exchanges led to greater mutual insight, security experts added.

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While both intelligence communities are good at hacking and online surveillance, China focuses on gathering massive amounts of information – a “thousand grains of sand” approach, often using students, businessmen and tourists – while the US prefers fewer, bigger targets involving professional spies.

And while Beijing has more grass roots heft, US experts contend, the sheer volume of material can produce less focused intelligence, weaker analysis and more newly recruited agents making rookie mistakes.

Furthermore, because the massive MSS monitors both foreign and domestic threats – unlike the CIA and FBI, which generally divide responsibilities – this can undercut coordination, they add.

China’s Ministry of State Security monitors both foreign and domestic threats. Undated. Photo: Handout
Thus many of the estimated 100 so-called Chinese police stations operating abroad appear directed by provincial MSS offices, combining routine driver license renewals with espionage. One set up in New York by the Fuzhou Public Security Bureau made headlines in April.

These days, the two giants are clearly each other’s principal intelligence target. The CIA recently announced a new China “mission centre” and a hiring push for Mandarin speakers.

“When times are good, they work together a lot. When times are bad, like now, the level of cooperation recedes,” the former intelligence agent said.

“Espionage can be a gentleman’s game or a bloody game.”

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Previously, he added, MSS agents might return a US agent caught recruiting in a Beijing restaurant, for instance, and say “kindly take him out of the country. You just lost one. Better luck next time.”

In the current climate, people can get beaten up, apartments turned over, computers disassembled: “The game changes, it’s a bit rougher, much less gentlemanly.”

But the US is also working to “quietly strengthen intelligence channels” with Beijing to avoid a crisis, CIA Director William Burns said following an unpublicised May trip to Beijing.

CIA Director William Burns made an unpublicised trip to China in May. Photo: AP

While spying isn’t easily quantified, Western security agencies cite a huge increase in Chinese espionage – especially targeting trade secrets – in recent years.

Nicholas Eftimiades, an Atlantic Council senior fellow, said that headline-making espionage incidents worldwide involving China totalled 772 during the past 10 years, up 75 per cent over the prior decade. This vastly underestimates actual activity, he added.

Beijing is similarly concerned – “not without merit”, said Brazil, a former Army officer and co-author of Chinese Communist Espionage: An Intelligence Primer – that the US is expanding its networks.

In July, Burns said the US “had made progress on rebuilding a strong human intelligence capability”. That follows the reported arrest or execution of some dozen Chinese CIA agents, including an aide to then-MSS vice-minister Lu Zhongwei, a decade ago.

“China will take all necessary measures to firmly safeguard our national security,” Foreign Ministry spokeswoman Mao Ning said after Burns’s comments.

An undated photograph pix of US citizen John Shing-wan Leung, who was sentenced by a Chinese court in May to life imprisonment on spying charges. Photo: Alliance for China’s Peaceful Reunification

But paranoia may also leave agencies revealing imagined spies in addition to real ones, experts said, given the incentives to tout their counter-espionage wins and intimidate rival agencies.

“The consistent unveiling of espionage cases serves to emphasise China’s capabilities and determination in defending itself against foreign infiltration and manipulation,” the state mouthpiece Global Times wrote last week.

As China has elevated security concerns, promoting key security officials to top Communist Party positions, the MSS has targeted foreign corporate due-diligence firms, some staffed by former MSS and PLA officials.

The crackdown includes Bain & Company, Forrester Research, Capvision and the Mintz Group, whose Asia operation was formerly run by CIA veteran Randal Phillips.

Be alert: China enlists the public in push back at US spying efforts

Security experts said one objective seems to be signalling to Chinese nationals working for Western companies that collecting economic intelligence is strictly forbidden.

Others include: showing that Chinese agencies are punching back after the embarrassment of a surveillance balloon found transiting across the US; and deterring CIA and FBI recruiting and intelligence gathering to “make us more cautious”, said Dennis Wilder, director of a Georgetown University initiative for US-China dialogue and a former National Security Council official.
Critics note that recent overzealous FBI programmes like the officially discontinued China Initiative have damaged Asian-American careers, chilled academia and made the US less attractive for Chinese student and tourists.
China’s security obsession, meanwhile, has alienated foreign investors deemed important for its economic recovery; recent surveys of foreign multinationals in China register two-decade lows for optimism.
Tougher security regulations released in April are, by some counts, the 20th such legal overhaul since 2014.

China’s all-of-society campaign also risks producing bad intelligence.

“If you tell people they’re getting a reward, they err on the side of reporting, even if it’s score-settling,” said Sheena Chestnut Greitens, an associate professor at the University of Texas, Austin, who is writing a book on Chinese internal security.

“There is a risk to MSS of being too aggressive in getting people to report things. Actually, there is a risk that it could make their job harder.”

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The new WeChat site unveiled by MSS – the super secretive agency lacks a listed telephone number – came partly in response to CIA claims of a rebuilt US spy network, according to a Chinese analyst who declined to be named.

“It’s also called on people to report on cases to create an atmosphere for national security mobilisation,” the Beijing-based analyst added.

Convincing people of the existential US threat has also meant acknowledging vulnerabilities long kept secret, as seen in a recent Xinhua report disclosing that Washington had hacked into Huawei Technologies headquarters since 2009.

“You can’t have a public campaign on espionage without being a little more open,” said Eftimiades, a retired intelligence officer specialising in China.

MSS, the PLA, FBI and CIA have at least one thing in common: it’s not easy for spy agencies to adapt to rapid shifts in social media, big data and open source intelligence.

Ken McCallum (left), head of the British intelligence agency MI5, and Christopher Wray, director of the US Federal Bureau of Investigation holding a news conference at MI5 headquarters on July 6, 2022. Photo: PA Wire/dpa

Recently, Britain’s long-secretive MI5 and MI6 – which didn’t officially exist for their first 80 years – launched Instagram accounts.

Last year, the FBI and MI5 held their first ever joint press conference – on the China threat – while the CIA has even set up a “Spy Kids” site, promoting the lure of “travelling the world and building relationships”.

“The idea that you can operate clandestine services in the shadows and nobody talks about it, that’s over,” said Walton of the Kennedy Centre, author of Spies: the Epic Intelligence War Between East and West.

“It’s unsurprising that we find spy agencies are grappling with this more public-facing role.”

Intelligence communities also have shifted to fundamentally different targets. Where once the adversary’s intent, capability and verification regarding nuclear weapons were paramount, it’s now all about artificial intelligence, quantum computing and biotechnology.

As the gloves come off, China is also less coy about identifying the United States by name.

Calder Walton, author of “Spies: the Epic Intelligence War Between East and West”. Photo: Harvard Kennedy Centre

In 2005, China’s state-sponsored State Secrets TV drama – rolled out ahead of the 2008 Beijing Olympics and its influx of foreigners – depicted Chinese citizens convinced to spy by “unnamed” foreign powers.

With the Silent Section, a follow-up series currently streaming, clearly depicts the foreign spies as Americans – including “Charlie” who ultimately gets caught and takes a poison pill.

For the foreseeable future, there’s little sign of any letup in the trans-Pacific machinations, experts said.

“The PRC has a massive force focused on cyber operations and so that creates a unique challenge,” said David E. Frederick, the National Security Agency’s assistant deputy director for China.

“We cannot be complacent or underestimate China’s capabilities.”

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