FBI San Francisco Special Agent in Charge John F Bennett on September 30, 2019, announces a criminal complaint against Xuehua Peng for acting as an illegal foreign agent that allegedly delivered classified security information to China's Ministry of State Security. Photo: AFP/Justin Sullivan/Getty Images

After decades of all but ignoring large-scale Chinese intelligence operations targeting the United States, the US government is engaged in a major crackdown on Beijing spying and technology theft.

Almost on a monthly basis, the US Department of Justice announces the arrest of people facing various charges related to the theft of American secrets or similar intelligence activities.

Last month, the FBI arrested Chinese government official Zhongsan Liu on visa fraud charges that masked his role in directing a major Chinese government operation to obtain American technology by recruiting experts at high-technology universities.

Liu headed a Beijing front group in New Jersey called the China Association for International Exchange of Personnel (CAIEP).

According to court papers in the case, Lui since 2017 worked to fraudulently obtain US visas for Chinese officials with the help of at least six universities in Massachusetts, Georgia, New Jersey and elsewhere that were not identified by name.

The Thousand Talents Program

The real purpose of the front was to recruit Americans engaged in high-tech research to support the Chinese government’s program to develop high-technology.

The scheme was part of China’s Thousand Talents Program to recruit Chinese-Americans and others to support research in China. It has been linked to the China Ministry of Science and Technology.

The Pentagon’s latest annual report on the Chinese military stated the Thousand Talents Program is not limited to commercial efforts, but supports the large-scale military buildup by the People’s Liberation Army.

Thousand Talents is used for strategic programs and to fill technical knowledge gaps, the report said. The program “prioritizes recruiting people of Chinese descent or recent Chinese emigrants whose recruitment the Chinese government views as necessary to Chinese scientific and technical modernization, especially with regard to defense technology,” the report said.

Assistant Attorney General John C Demers, head of the National Security Section, said of Liu’s arrest:  “We will continue to confront Chinese government attempts to subvert American law to advance its own interests in diverting US research and know-how to China.”

The same day Liu’s arrest was announced, American former Defense Intelligence Agency officer Ron R Hansen was sentenced to 10 years in prison for spying for China.

Hansen was one of three former US intelligence officials who were caught spying for China’s Ministry of State Security (MSS) intelligence service in the past three years and the first major espionage prosecution in more than a decade.

The others included former CIA officer Kevin Mallory, who was given 20 years in prison for passing secrets to China, and Jerry Chung Shin Lee, who was paid thousands of dollars by the MSS for divulging the identities of recruited CIA informants.

Agents imprisoned or killed

As many as 30 of the CIA’s recruited agents in China were imprisoned or executed beginning in 2010 in one of the most significant intelligence disasters for the agency since the loss of all its agents in Russia during the 1980s and 1990s.

Former CIA counterspy Mark Kelton called the recent uncovering of Americans who spied for China unprecedented. “Sun Tzu’s age-old wisdom that ‘knowledge of the enemy’s dispositions can only be obtained from other men’ needs a cyber caveat,” he said.

“The PRC has launched a covert assault on the US across the full spectrum of intelligence activities.”

The damage includes stealing sensitive government, trade and industrial secrets through myriad Chinese cyberattacks mainly carried out by People’s Liberation Army Third Department (3PLA) against both government and private sector targets.

Meanwhile, traditional intelligence collection continued apace to include professional Chinese intelligence officers and unformal spies such as Chinese travelers and visitors. They also continue to seek to recruit Americans with access to secrets of all kinds.

“This Chinese intelligence threat is only now beginning to garner the attention it deserves,” Kelton said.

China avoided greater American counter-intelligence scrutiny by using methods that appeared less threatening and avoided triggering alarms, specifically utilizing non-professional spies, Kelton says.

Low-profile operations

Also, China in the immediate post-Cold War period sought to conduct cautious and low-profile operations that were largely directed against opponents of the Communist regime in Beijing. They reflected limited Chinese intelligence capabilities in mounting overseas operations.

“In contrast, Beijing’s intelligence services today have global reach to match China’s global aspirations,” Kelton said.

Another reason for the lack of attention in the past to Chinese intelligence operations was the focus of US counter-intelligence agencies on Russian operations.

By contrast, China was considered a less dangerous adversary than Moscow.

Other signs of China’s increasing operations abroad include China’s unusual use of a Ministry of Public Security official who in February 2019 was caught spying on a US Navy base in Key West, Florida.

Zhao Qianli was arrested photographing antennas at the base and the FBI later determined he was part of MPS, which until recently had been considered China’s national police force not known for conducting overseas operations.

Late last month, police in California launched an investigation after an Asian man was arrested for impersonating a Chinese police officer. The man was caught driving an Audi with markings in Chinese of the People’s Armed Police.

A second PAP impersonator also was being sought. Counter-intelligence experts say the police may be part of China’s overseas operations to intimidate or coerce overseas Chinese opponents of the Communist regime.

The crackdown on Chinese spying shows no signs of slowing down and is expected to continue under US President Donald Trump’s tougher policies toward China.

The Trump White House last year published a report on “Chinese economic aggression” that stated that Chinese technology theft in the United States involved the loss of as much as US$600 billion annually in intellectual property theft.

Trump appears to be following the strategy used during the Cold War of blocking US and western technology to the Soviet Union, a policy that contributed to the 1991 collapse.

The president is testing China to see if the Chinese economic miracle of the last 30 plus years can continue without infusions of American know-how.

Bill Gertz is a national security journalist based in Washington, DC.

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