Comment: Is China the New Spy Superpower?

US and China

By JOSEPH FITSANAKIS* | intelNews.org |
In fifteen years of monitoring intelligence-related developments, I have rarely seen so many news items about China appear simultaneously in the Western press, as I did during the past fortnight. On December 5, financial news network Bloomberg reported that the United States government invoked “Cold War-era national security powers” to compel telecommunications companies operating on American soil to disclose confidential data about their networks. The plan, spearheaded by the US Department of Commerce, but undoubtedly prompted and monitored by the National Security Agency, features a detailed survey distributed to dozens of telecommunications service providers, as well as hardware and software developers. The latter are reportedly required to supply “a detailed accounting” of every piece of “foreign-made hardware and software” installed on their networks, in a move that Bloomberg interprets as “a hunt for Chinese cyber-spying”. A few days later, intelligence researcher and author David Wise opined in The New York Times that the West had better recognize that China “has developed a world-class espionage service —one that rivals the CIA”. He qualified his statement by providing several examples of major espionage triumphs achieved by the Chinese intelligence services in the last decade, such as the acquisition of design blueprints for the US-built B-1 bomber and Northrop Grumman’s B-2 stealth bomber. Other examples given by Wise include China’s attainment of the design specifications for the US Navy’s Quiet Electric Drive system, aimed at enhancing the stealth abilities of submarines, as well as the remains of the modified Black Hawk helicopter that crashed in Abbottabad, Pakistan, during the CIA-led operation to assassinate al-Qaeda founder Osama bin Laden last May. Most of all, Wise laments the acquisition by the Chinese of the design specifications for the W-88 warhead, the symbol of America’s next-generation of mini-nuke weapons.

How is all this alleged espionage perpetrated? Undoubtedly, much of China’s purported intelligence collection comes from assets, actual human spies who are able to acquire the desired information directly from targeted organizations. But most media reports focus on China’s seemingly rising cyberespionage skills. A December 13 article in The Wall Street Journal quotes “senior US intelligence officials” who claim that US counterintelligence has detected “many of the Chinese groups responsible for cyberspying on the US”. Most of them, according to the paper’s sources, are directly linked to or sponsored by Chinese military agencies, most notably the People’s Liberation Army. The Journal adds that, at the end of last November, American officials actually met with Chinese government representatives and bluntly warned them “about the diplomatic consequences of economic spying”.

But do US officials have direct evidence of Chinese cyberespionage? A far more detailed analysis of the subject appeared on December 14 in The Sydney Morning Herald, Australia’s largest newspaper. According to the exposé, the US intelligence community has identified “at least 17 China-based spying operations”, including an “elite group” of alleged cyber spies, which American investigators have codenamed “Byzantine Foothold”. The report states that Byzantine Foothold displays remarkable originality in its choice of targets; the latter include iBahn, a company that provides Internet-based broadband services to hotel chain guests all over the world. The logic behind targeting a company such as iBahn may seem perplexing, until one realizes the enormous volume of economic-interest messages exchanged every day by travelers staying at hotels around the world. The paper quotes one “senior US intelligence official”, who claims that the iBahn hack allowed Byzantine Foothold to read “millions of confidential emails, even encrypted ones”, and that the group might have used iBahn’s network to launch attacks on countless corporate networks connected to it. The article concludes that “China has made industrial espionage an integral part of its economic policy”.

Commenting on The Sydney Morning Herald report, Dr Paul Monk, former China analyst with Australia’s Defence Intelligence Organisation, quotes US Representative Mike Rogers, Chairman of the House’s Permanent Select Committee on Intelligence. Rogers accuses the Chinese of “stealing everything that isn’t bolted down and it’s getting exponentially worse”. Writing for Australian daily The Age, Monk argues that Beijing’s rising intelligence prowess is not so much reflected in its ability to score successive intelligence victories against the West, but that it does so while managing to protect its spies in the process. The latter, says Monk, “remain mostly undetected”. What is more, because of its position as a major trading partner of most advanced nations, the China of today is far better positioned than the old Soviet Union to plant agents and moles abroad.

What is one to make of all this? Is China the undisputed new espionage superpower? To some extent, the intelligence prowess of nations advances or retreats in accordance with their political and economic standing. In this sense, China’s intelligence sector should be expected to mirror —and sometimes even lead— the country’s economic and political expansion. Moreover, as the Chinese state enriches its coffers by taxing the country’s rapidly developing economy, security and intelligence funding should be expected to increase accordingly. If nothing else, the very size of China’s intelligence apparatus, which is classified, but which should be expected to broadly correspond to a country of 1.3 billion people, makes it a formidable force on the world stage. Not only are there more Chinese spies, but, as Paul Monk mentioned in his editorial earlier this week, the extent of China’s access to the infrastructure of global capitalism —as typified by its colossal export sector— makes it easy for its spies to acquire premium intelligence on economic, sociopolitical, technical, academic, or defense matters. In comparison, the Soviet Union, which served as the West’s ideological nemesis for much of the 20^th century, was economically isolated and marginalized, which in turn severely limited its international intelligence reach.

It may be argued that, ultimately, the question of whether China is the new spy superpower is irrelevant. What is of more significance is how China is perceived by its adversaries, because in the craft of intelligence perception tends to be far more actionable than reality itself. The frequency of media reports on —either real or imagined— Chinese spying operations could be taken to imply that Western intelligence services perceive China as the new giant of international espionage. If this is so, then China can indeed be said to be dominating the spy wars of the 21^st century.

* Dr Joseph Fitsanakis coordinates the Security and Intelligence Studies program at King College, USA. He is Senior Editor of intelNews.