How the Chinese Communist Party uses Cold War Espionage Tactics to Steal Intellectual Property and State Secrets

Part 1

During the Cold War, which lasted from the degradation of Nazi Germany and the Soviet occupation of Eastern Europe in 1947 until the fall of the Berlin wall in 1991, intelligence services were the fundamental method of combat for the war-wearied territories. This time period saw the proliferation of the United States’ newly founded intelligence service; the Central Intelligence Agency (CIA), the reassertion of the Secret Intelligence Service (MI6) as the European intelligence power, and the massive extrapolatory growth of the Russian Committee of State Security (KGB), while other smaller countries also bolstered their intelligence services. These intelligence services were in constant battle with each other for dominance in the European political systems, each trying to poach contacts from each other, each trying to decrease their opponent’s capability. This tumultuous time which was inundated with technological advancement such as the precursor to the internet, subversive government activities and a resulting paranoia within all governments was causing intelligence services to become increasingly deceptive, unconventional and pioneering in tactics. The combination of technological advancement and increased paranoia was making infiltration more difficult by the year. However, a clever solution that was both simple and dismissive was used by territories involved in intelligence operations; diplomatic espionage agents known as resident spies. These resident spies could be trained in all thing’s intelligence, such as; human intelligence, recruitment, interrogation, negotiation, reconnaissance and etcetera. However, these resident spies would not be employed by their country’s intelligence service, rather they would be employed by their country’s foreign ministry or related ministerial department. Once their diplomatic employment was confirmed and recognized, they would be sent to work in their country’s embassy, located inside a target countries capital city. In effect, many diplomates during the cold war were actually spies covering as diplomats. This method of espionage is well documented in use and effectivity. A main recorded perpetrator of this method of espionage was the USSR, who called their resident spies rezidents and their base of operations, often the embassy, rezidenturas. While all countries were aware of this method of espionage, it was tolerated because they were involved in the same operation. For example, if Denmark wanted to eliminate Soviet espionage, they would have to cut off diplomatic ties with the USSR and expel all diplomats and rezidents from the country. In retaliation, the USSR would cut off its own diplomatic ties and expel the Danish diplomats and resident spies back to Denmark. In the end, the capability of Soviet espionage in Denmark would have been nearly nullified, but Danish espionage in the USSR would have all but cease to exist. As a result, this method of spying was tolerated by both countries, so that intelligence can still be gathered. Each intelligence service would tail foreign diplomats who were suspected of espionage, and vice versa. When a true matter of national security became apparent, a group of resident spies may be expelled, but you could guarantee an equal reaction of the opposing country, so you had to be sure of your own intelligence to not damage your won intelligence gathering operations. This type of espionage is well documented in the non-fiction novel ‘The Spy and the Traitor’ written by Ben Macintyre, which details the life of a Soviet spy who begins spying for MI6 during the Cold War.

As the Cold War came to a close in 1991, intelligence services were finally allowed to relax, slightly. The intelligence operations that had been mandatory to protect a territory were becoming less and less essential as the USSR became The Russian Federation, and moved towards capitalism freedom, and a free market economy. The western countries realized victory when the Berlin wall was toppled, and their intelligence services regarded it the same way. However, while the Cold War may have come to an end, espionage surely didn’t. The west was still faced with many issues that required clandestine operations such as the rise of Islamic extremism in the Middle East, anti-western actions taken by the new Russian Federation, Japanese domination of the auto market and the rise of China as a new expansionist territory enriched with wealth and power, ready to become earth’s new dominant super power. This rise of China as the new threat to western interests has quietly been breathing life back into intelligence services, as funding for intelligence agencies reach new highs, along with the adaptation and integration of digital spying capabilities. This new technology mandates governmental investment into intelligence services to remain relevant, and it shows the requirement to maintain a competitive intelligence service during these combative and confusing times (BTIC, 2020)

Part 2

China’s Ministry of State Security (MSS) operates in one of Beijing’s largest government buildings with a suspected budget of USD$8B. As one of the most obscure intelligence agencies operating on behalf of one of the most obscure governments, there is little concrete information known to the public. MMS does not even have a publicly listed website, contacts or spokespeople (Gan, 2020). However, the actions of the MSS are felt by its targets, and while its various methods of operations are known by governments, they are not becoming known to the public based on governmental actions, such as the closure of the Chinese Consulate in Houston, Texas and China’s retaliatory action; the closure of the American Consulate in Chengdu, Sichuan (Gramer and Mackinnon, 2020).

One of many ways China is able to implant spies into target nations is through this well-known method of diplomatic espionage and the use of resident spies. It is impossible to not see similarities between these consulate closures with the diplomatic espionage of the Cold War. If we see these events in symmetry, we can see that the United States (US) closed the Chinese Consulate in Houston for reasons of National Security, and China responded in equal capacity. Denoting the actions of the Chinese Houston Consulate as being clandestine and related to state sponsored espionage, which is asserted by the US government was further reinforced when footage and evidence of document burning by Chinese diplomates transpired. There is clearly something to hide. While the US may have engaged in document destruction in their Chengdu consulate, there was no evidence made public. This event appears entirely related to the diplomatic espionage from the Cold War era or resident spies, rezidents and rezidenturas. This method of diplomatic espionage has evolved over time to also include news agencies. This became evident when the US designated many large Chinese news agencies as ‘state propaganda outlets’, due to there being controlled by the Communist Party of China. These agencies include China Central Television, China News Service, People’s Daily, and the Communist Parties’ official mouthpiece, The Global Times (Delaney, 2020). These organizations are involved in the projection and dissemination of Chinese propaganda, in order to shape public opinion abroad. This is done by taking advantage of the target territories free speech laws. In executing these operations, the state-sponsored news agencies are always collecting information on the citizens of these target territories to determine how to best target coercible individuals. This information is analysed and sent back to the true decision makers in Beijing (Kounalakis, 2020). The ability for these state-funded global news behemoths to collect data on a target population, especially in our digital society, is easy, and is made easier when taking advantage of a target counties legislated freedom of press and freedom of speech laws.

A second way China is able to implant spies into target nations is through the target’s educational system. This is done in a way very similar to the method of diplomatic espionage. An ‘agent’ may be trained in various methods of intelligence gathering techniques and would then be given cover as an exchange student, professor, or something of similarity. These student spies will then be educated at, or work in western universities, operating to either damage research, or steal research. This is the case of Juan Tang, a Chinese national working as a researcher at the University of California. Ms. Tang entered the US with an approved visa; however, this visa was later found to be approved using false information provided by Ms. Tang. It has been uncovered that Ms. Tang is part of China’s People’s Liberation Army. As a fugitive, Ms. Tang sought refuge in China’s San Francisco Consulate, until she was eventually arrested for visa fraud. Ms. Tang is one of four similar visa fraud perpetrators who have been recently arrested in the US and tensions with China increase (Manson and Shubber, 2020)

A third common way for China to implant spies into target nations is through seemingly genuine business operations. A Chinese national may start a seemingly legal business in America. It may have authentic operations, financial statements and may even produce products or services that are enjoyed by its consumers. However, these businesses may also be used to transfer data and information related to its employees, job applicants, competitors and supply chain technologies, amongst other business activities. An example of this kind of activity could be Yoe Jun Wei, a Singaporean national who was recruited by Chinese Intelligence, likely the MMS. Mr. Wei created a consultancy business in Washington D.C. and used it as a front to gather information on Americans with security clearances for Chinese Intelligence. He and his firm would spot and assess Americans with access to valuable non-public information, including US military and government employees with high-level security clearances. If he or his firm obtained the information, it would be sent back to China. However, any individual that became a person of interest to the firm would have their information sent over to Chinese Intelligence, so that they could be added as a person of interest, who could become a possible recruit. Mr. Wei has since admitted his guilt in the US and is to be sentenced in the fall (AFP, 2020).

Part 3

Canada has been targeted by Chinese clandestine operations for two main reasons; our high-quality relationship with the US, and because of our access to the Arctic which is second only to Russia. There are of course many other reasons, such as our involvement in NATO and NORAD, our relationship with the people of Hong Kong and our overall capacity as a western power. As global warming affects the arctic causing ice to become thinner and in some cases, non-existent, the previously frozen and unusable ground becomes usable. Areas where mining developments would have been extremely expensive, are becoming affordable. The northwest passage, an arctic shipping rout that has been mostly unusable until now, is becoming usable. The Arctic was once a barren wasteland, comprised of useless land that was nearly uninhabitable, and mostly undevelopable. However, as temperate rise, ice melts, and attraction to the Arctic gains steam. Currently, eight developed countries have clear claims in the arctic; Russia, Canada, the United States, Denmark, Norway, Sweden and Finland. These countries all have land borders within the Arctic circle, and therefore have clear claims to arctic territory, and the natural resources and shipping capability it holds. However, China has aspirations for the Arctic as well, despite not sharing a land border anywhere near the Arctic, and is actually 3,000km away from the Arctic circle (Lino, 2020). This does not deter China from having Arctic aspirations, going as far as to call itself a ‘near-Arctic state’. The emergence of the Arctic as shipping rout and natural resource goldmine is causing the export fueled economy of China to flex its muscles and try to secure what it thinks it can. One clear example of Chinese espionage in Canada related to Arctic aspirations is Qing Quentin Huang. Mr. Huang was employed by Lloyd’s Register, a subcontractor of Irving Shipbuilding, which is the company responsible for much of Canada’s military shipbuilding. During the inception of Canadas National Shipbuilding Strategy, which was designed to bolster Canada’s naval capability, especially in the Arctic, Mr. Huang was caught by the Canadian Security Intelligence Service (CSIS) when trying to pass on confidential information to the Chinese. This information was specific to Canada’s Arctic endeavours, as it contained privy detail’s about patrol ships, auxiliary vessels, science research vessels and ice breakers. The CSIS-RCMP operation, codenamed ‘Project Seascape’ was able to apprehend Mr. Huang before any confidential information was communicated to Beijing. If there was in fact no information shared, this was a very close call (CBC, 2019). This is just one example of Chinese espionage on Canadian soil, that was luckily foiled in time. If it wasn’t foiled, the damage caused in technological delay, and strategic knowledge gained by China would have been great. Just this year the self-denoted ‘near-arctic-nation’ of China launched their second icebreaker into Arctic waters. It is clear that China still has Arctic aspirations (Staalesen, 2020).

While it is clear that China is heavily involved in intelligence operations in foreign countries, its methods are slowly becoming more known, as the tensions rise, and threats gain more and more credibility. Canadian and western countries should begin to understand for themselves the methods of Chinese espionage and inform their citizens on how to maintain safe conditions. If the goal for Chinese espionage is to steal technology, then sensitive areas of technological development must be reinforced.

Nearly 15 years ago, in 2005 two Chinese defectors said publicly that China had a network of more than 1,000 spies and informants in Canada. In 2005 China had Gross Domestic Product (GDP) of roughly USD$2.3T, their current GDP is closer to USD$20T. With this historic increase in economic power and with-it political power, one can assume that the espionage tactics that helped them achieve this economic success would have been reinforced, grown and made more advanced.

The director of the Federal Bureau of Investigation (FBI), Mr. Christopher Wray, recently stated that China (The Communist Party of China) is the greatest threat to the US, and in that, to the western way of line. Mr. Wray said things like: “China is engaged in a whole-of-state effort to become the world's only superpower by any means necessary”, “We've now reached a point where the FBI is now opening a new China-related counterintelligence case every 10 hours.", and, “Of the nearly 5,000 active counterintelligence cases currently underway across the country, almost half are related to China” (BBC, 2020). These statistics demonstrate just how prevalent these deceptive tactics of intelligence gathering are, and that they should be taken seriously. Like the Cold War, espionage may once again he the primary battlefield for dominance.