Clandestine Services, Part 1: Chinese Intelligence

Clandestine Services, Part 1: Chinese Intelligence

[Teaser:] Beijing’s espionage efforts are nothing if not pervasive, patient and persistent. Part 1 of an ongoing series on major state intelligence operations.

Summary

The January hubbub over Google’s operations in China, sparked by what could have been a hacking attempt by the Chinese government, seems to be blowing over. But it did remind the world how foreign businesses in China must be vigilant about the country’s pervasive intelligence apparatus. China’s covert bag of tricks seems enormous, in large part due to the magnitude of the country’s population and the historic Chinese diaspora that has spread worldwide. Traditionally focused inward, China as an emerging power is determined to compete with more established powers by aiming its intelligence operations at a more global audience. China is driven most of all by the fact that it has abundant resources and a lot of catching up to do.

Editor’s Note: This is part one in an ongoing series on major state intelligence operations.

Analysis

China’s clandestine services may not be as famous as the CIA or the KGB, but their operations are widespread and well known to counterintelligence agencies throughout the world. Chinese intelligence operations have been in the news most recently for an alleged <link nid="152217">cyberattack against California-based Google</link>, but two other recent cases shed more light on the ways of Chinese intelligence gathering. One involved a <link nid="110520">Chinese-born naturalized American citizen named Dongfan Chung</link>, who had been working as an engineer at Rockwell International and Boeing. He was [convicted of espionage?] on Jan. 8 and sentenced to 15 years in prison. The other involved a former U.S. Defense Department official, an American named James Fondren, who was convicted of [espionage?] on Jan. 22 after being recruited by a Chinese case officer and was sentenced to three years in prison.

Together, these cases exemplify the three main Chinese intelligence-gathering methods, which often overlap. One is “human-wave” or “mosaic” collection, which involves assigning or dispatching thousands of assets to gather a massive amount of available information. Another is recruiting and periodically debriefing Chinese-born residents of other countries in order to gather a deeper level of intelligence on more specific subjects. The third method is patiently cultivating foreign assets of influence for long-term leverage, insight and espionage.

Chinese intelligence operations stand out in the intelligence world most of all because of their sheer numbers. China has the largest population in the world, at 1.2 billion, which means that it has a vast pool of people from which to recruit for any kind of national endeavor, from domestic road-building projects to international espionage. Emerging from this capability are China’s trademark <link nid="121140">human-wave and mosaic intelligence-gathering</link> techniques, which can overload foreign counterintelligence agencies by the painstaking collection of many small pieces of intelligence that make sense only in the aggregate. This is a slow and tedious process, and it reflects the traditional Chinese hallmarks of patience and persistence as well as the centuries-old Chinese custom of “<link nid="108920">guanxi</link>,” the cultivation and use of personal networks to influence events and engage in various ventures.

And though China has long been obsessed with internal stability, traditionally focusing its intelligence operations inward, it is now taking advantage of the historic migration of Chinese around the world, particularly in the West, to obtain the technological and economic intelligence so crucial to its national development. To Western eyes, China’s whole approach to intelligence gathering may seem unsophisticated and risk-averse, particularly when you consider the bureaucratic inefficiencies inherent in the Communist Party of China’s (CPC) administrative structure. But it is an approach that takes a long and wide view, and it is more effective than it may seem at first glance.

A Brief History

China’s first intelligence advocate was military theorist Sun Zi[Tzu?], who, in his fifth[sixth?] century B.C. classic The Art of War, emphasized the importance of gathering timely and accurate intelligence in order to win battles. Modern Chinese intelligence began during the Chinese Communist[Nationalist?] Revolution, when Chiang Kai-Shek’s Chinese Nationalist Party (the Kuomintang, or KMT) created its Investigation Section. The Chinese communists later followed suit with a series of agencies that eventually became the Social Affairs Department (SAD)[Central Department of Social Affairs (CDSA)?], the party’s intelligence and counterintelligence organ.

The [founding?] head of the CDSA was Kang Sheng, who had become involved in the communist movement while a student at ShanghaiUniversity in the [1920s?]. During the first half of the 20th century, the epicenter for espionage in East Asia was Shanghai, where Chinese agents cut their teeth operating against nationalists, communists, triad gangs, warlord factions and Russian, French, Japanese, British and American intelligence services. Later, Kang traveled to Moscow, where he would spend four years being taught what the Soviets wanted him to know about intelligence operations. Much like “Wild Bill” Donovan of the United States and Russia’s Laventriy Beria, Kang is considered the father of his country’s clandestine services -- the first Chinese official to appreciate the practice of global intelligence.

Following the communist victory over KMT forces on Oct. 1, 1949, the domestic and counterintelligence functions of the CDSA became part of the Ministry of Public Security (MPS), and the military kept its own Military Intelligence Department (MID). Given China’s size and its insular geography, its <link nid="118032">first geopolitical imperative</link> was to maintain internal security, especially along its periphery. China’s intelligence services would both police the Han population to guarantee security and monitor foreigners who worked their way in from the coast as the Chinese economy developed. The emphasis on internal security means extensive informant networks, domestic surveillance and political control and censorship by domestic Chinese [intelligence?] services.

By the mid-1950s, Beijing’s Central Investigation Department (CID) had taken on the foreign responsibilities of CDSA. By the mid-1960s, in the midst of the Cultural Revolution, the CID was be disbanded, only to be reinstituted in 1971, when Deng Xiaoping came back into favor.[what do you mean by this, exactly? Wikipedia says he became PRC leader in ’78. shouldn’t we allude to the ‘opening up’ here, since that was such a dramatic turning point for china?]. Deng wanted China’s intelligence services to stop using journalists and businessmen as cover for intelligence operations, and he later borrowed a centuries-old saying for his policy, “Hide brightness; nourish obscurity,” which was meant for the development of China’s military development but could just as well apply to its intelligence agencies.[not sure I get why this saying applies to Deng’s desire not to use journalists and businessmen as cover. Can you clarify/elaborate? wouldn’t this be when intelligence focus turned outward?]

The Ministry of State Security (MSS) was created in 1983 in a merger of the CID and the counterintelligence elements of the MPS. It is currently the main civilian foreign intelligence service and reports to the premier, the State Council, the CPC and its Political and Legislative Affairs Committee. In China, as in most countries, all domestic and foreign intelligence organizations feed into this executive structure, with the exception of military intelligence, which goes directly to the CPC.

The Chin Case

Since the time of Sun Tzu, perhaps the most successful Chinese spy has been the legendary Larry Wu-Tai Chin (Jin Wudai), an American national of Chinese descent who began his career as a U.S. Army translator and was later recruited by the MSS while working in a liaison office in Fuzhou, China, during the Korean War. Following his army service, he joined the CIA and became a translator for the Foreign Broadcast Information Service (FBIS), beginning a 30-year career as a double agent within the world’s most famous intelligence agency. His most valuable intelligence may have been the information he passed about President Richard Nixon’s desire to establish relations with China in 1970, which gave the Chinese leadership a leg up during subsequent negotiations with the United States.

The key to Chin’s success may have been his use of third-country “cutouts” (when a case officer travels from one country and an agent travels from another to meet in a third country) and his careful money laundering. Chin traveled to Canada and Hong Kong to pass along intelligence, in meetings that could last as little as five minutes. He was paid significant amounts of money for his espionage activities, and after he moved to Virginia to work for the CIA he became a slumlord in Baltimore, investing his cash in low-income properties.

The Chin case exemplifies, above all, a careful use of operational security that allowed him to operate undetected until a defector exposed him in 1985. (The use of third-country cutouts and personal meetings with agents, rather than dead drops, may be an MSS specialty.) Chin had the same handler for 30 years, which means both agent and [case officer?] had ahigh level of experience and the ability to keep all knowledge of the operation within the MSS. And the Chinese government never acted on Chin’s intelligence in a way that would reveal his existence. The only way he could have been detected, other than through exposure by a defector, would have been during his foreign travel or by extensive investigation into his property holdings. And that is what happened to Chin: He was exposed by a senior MSS official, Yu Zhensan (Yu Qiangsheng??), who defected to the FBI in the early 1980s.[We’ve already said he was exposed by a defector. Was Chin convicted and sent to prison? When and where? Is he still alive?]

Current Organization

Today, China’s intelligence bureaucracy is just that -- a vast array of intelligence agencies, military departments, police bureaus, party organs, research institutions and media outlets. All of these entities report directly to executive governmental decision makers, but with the CPC structure in place there is <link nid="145454">parallel leadership </link> for intelligence operations, with the CPC institutions holding the ultimate power. Beyond the party itself, the opaque nature of China’s intelligence apparatus makes it difficult to determine exactly where or with whom the authority really lies.

The Ministry of State Security

The Guojia Anquan Bu, or Ministry of State Security, is China’s primary foreign intelligence organization, but it also handles counterintelligence in cooperation with the Ministry of Public Security (MPS). MSS involvement in domestic operations is widespread through its First and Fifth Bureaus, activities that are coordinated with the MPS. (Due to this overlap, we will discuss domestic operations in the MPS section below.) One target set that clearly falls under MSS jurisdiction are foreign diplomats. Bugging embassies and surveilling embassy employees or those traveling on diplomatic passports is common practice for the MSS. According to one MSS publication, “foreign diplomats are open spies.” This is not a false statement, but it does reflect a certain paranoia on the part of the agency and an intention to target such officials. It also underscores the fact that Beijing views all foreigners with suspicion.

As did its predecessor organizations, the MSS follows the bureaucratic structure of the Soviet Union’s KGB (the result of founder Sheng’s formative tour in Moscow), but it operates like no other intelligence agency in the world. We call it espionage with Chinese characteristics. The MSS network is so diffuse and decentralized that each individual asset may be doing nothing particularly illegal -- often merely collecting open-source information or asking innocuous questions. But when all the information these assets have collected is analyzed at the Institutes of Contemporary International Relations[is this officially an MSS entity? is it in Beijing?], it can produce valuable intelligence products. Still, it remains to be seen from the outside whether such a process is effective in producing actionable intelligence in a timely manner. For example, in the case of technology theft -- a growing focus of the MSS -- by the time the intelligence is processed and exploited the technology may already be outdated.

While it is difficult to assess MSS analytical capabilities, much is known about its recruitment and operations. Training for most MSS intelligence officers begins at the Beijing University of International Relations[is this the same entity mentioned above?]. This is a key difference in the Chinese approach to recruiting intelligence agents. The MSS approaches university-bound students prior to their university entrance exams, choosing qualified students with a lack of foreign contacts or travel[you mean, they pick students who lack foreign contacts or travel? Why?]. The MSS also places a heavy emphasis on the mastery of foreign languages and operates an intensive language school for recruits. To root out possible defectors and moles embedded in the MSS network, the agency runs an internal security department known as the Ninth Bureau for Anti-Defection and Counter-Surveillance.

The <link nid="27648">decentralized operations of the MSS</link> are really what set it apart from the intelligence services of other countries. Instead of intelligence officers[then who are the students it’s recruiting in China? do the students then become case officers who manage the ordinary students and business people living overseas? very unclear. please clarify], the MSS employs Chinese nationals living abroad, some of whom function as temporary agents and the rest of whom [function as what? full-time agents?]. For budgetary and security reasons, the MSS prefers to recruit its assets in China, before they venture overseas. It prefers ethnic Chinese because they are believed to be more trustworthy and easier to control. The MSS relies first on pride in national heritage for asset recruitment (known as the “help China” approach), but it can always revert to pressure tactics -- threatening to revoke their visas[how so? the destination country issues the visa, correct?] or passports, promising a dismal future upon their return, making life difficult for their families still living in China -- if more coercion is needed.

According to STRATFOR sources, [full-time? trained?] MSS intelligence officers are rarely used to collect intelligence. FBI statistics show that of hundreds of thousands of individuals and 3,000 front companies in the United States alone are involved in Chinese espionage. One should not assume, of course, that every Chinese national living overseas is a spy. Many may simply be Chinese students or professionals trying to collect information for their own legitimate academic or business purposes. The problem with China’s human-wave approach to intelligence gathering, from the targeted country’s perspective, is that it is difficult to tell if the activities constitute espionage or not.

The MSS divides its operatives into short-term and long-term agents. Short-term agents are recruited only a few days before leaving and tend to be Chinese dissidents. They may be promised financial stipends and good jobs upon their return, or they may be encouraged by the threat of having their passports revoked. Often dissidents are arrested and forced to spy as short-term agents, either overseas or domestically, in order to stay out of jail. Long-term agents are known as chen di yu, or “fish at the bottom of the ocean,” what Westerners would call “sleeper agents.” Though they constitute the minority of Chinese agents, they likely provide most of the intelligence. Before going overseas, long-term agents with foreign visas are often recruited through their danwei, or traditional Chinese work units, by local MSS intelligence officers. These “fish” are identified, recruited and trained months before departure, and they are deployed mainly to gather intelligence, develop networks and, in some cases, influence foreign policy and spread disinformation in the host country.

The MSS encourages agents abroad to achieve their academic or business goals as well as their intelligence goals, since China benefits either way, and legitimate pursuits provide effective cover for illicit ones. Agents are asked to write letters to their families at home about their arrival in country, studies or work and financial situation, letters that the MSS will intercept and monitor. Long-term agents are generally told to return to the mainland every two years for debriefing, though this can be done in Hong Kong or in third countries. Agents are expressly prohibited from contacting Chinese embassies and consulates, [which are known to be bugged and monitored by host country counterintelligence?].