Chinese espionage, cyber programs pose major counterintelligence threat, Senate report warns

According to a Senate report on the growing problem of enemy espionage, China’s human espionage, cyberespionage and, more recently, covert disinformation operations are a “600-pound gorilla in the room” of foreign counterintelligence threats.

The heavily redacted Senate Select Committee on Intelligence report warns that the US government’s central counterintelligence and other components are ill-equipped and poorly structured to counter the growing threats of foreign espionage.

Foreign intelligence agents and hackers from China, Russia, Iran, North Korea and others are busy acquiring secrets and technology from both US government agencies and the private sector, with little counterintelligence resistance, the report said, but one Threat is above all others.

“However, China is the ‘600-pound gorilla in the room,'” the report said.

The report, released late last month, focuses primarily on the National Counterintelligence and Security Center (NCSC), a relatively new agency established as the central policy-making center for counterintelligence units. The center is part of the Office of the Director of National Intelligence.

“NCSC, like the US [government] lead for [counterintelligence], lacks a clear mission, as well as sufficient and well-defined authorities and resources to effectively confront this landscape,” the report states. “Furthermore, the NCSC’s placement in the Office of the Director of National Intelligence may impact its ability to flexibly scale and respond to threats. Despite these challenges, there is no consensus between them [counterintelligence] Officials moving forward for NCSC.”

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A spokesman for the NCSC said the center appreciates the panel’s report on ways to improve the center’s operations and will continue to work with the committee on the matter.

The report is part of an ongoing investigation by the committee into US counterintelligence capabilities. The last law on the subject was enacted in 2002 and falls short in combating cyber and technology collection by foreign intelligence agencies, senators and experts said during a hearing on the report.

One suggestion to improve the counter-espionage effort would be to make NCSC a separate agency, similar to the British counter-intelligence MI-5. Currently, the FBI is tasked with conducting counterintelligence operations in the United States, and the CIA takes the lead on foreign threats.

The gap in responsibilities between agencies has been exploited for decades by foreign espionage services, which have recruited spies and stolen highly damaging secrets from almost every national security agency and military. The 152-page report identifies shortcomings in US counterintelligence but offers no clear solutions.

“I would like to say that this report contains a number of specific recommendations. That wasn’t the case,” said committee chairman Mark Warner, a Democrat of Virginia.

Mr Warner said he had doubts about creating a separate counterintelligence agency, but added that the committee was thoroughly investigating the possibility.

threat from China

The report outlines several ways China in particular is gathering secrets and information in the United States. Operations range from traditional approaches, such as planting spies in intelligence and defense agencies, to newer methods of cyber-espionage from computer networks. China’s spies also target agencies not involved in national security, as well as private sector companies and academia.

Chinese intelligence is also involved in covert influence operations that support its other espionage operations.

Alignment of university researchers with technology and other know-how is also a key tool.

A list of targets of Chinese intelligence operations was mostly blacked out in the report, with the exception of Beijing’s efforts to infiltrate critical US infrastructure such as the power grid and financial sector.

Beijing’s spies, hackers and agents of influence “launched an all-out campaign to develop or acquire technology [China] considers it vital to its national interests,” the report added.

China is approaching parity with the United States in terms of gross domestic product and certain elements of its military power.

The United States has also become “interdependent” on China over the past 40 years, unlike previous adversaries like the Soviet Union.

“China seeks to first oust the United States as a regional power in East Asia, and then eventually oust the United States as a global hegemon,” the report said.

The confrontation with China is different from the Cold War confrontation with the Soviet Union, which was both military and ideological. The current rivalry with China operates on the economic, technological, military, diplomatic and ideological spectrum.

The acquisition of technology is key to Chinese strategies and plans and is considered the most important prerequisite for both economic growth and national power.

The targets of the Chinese intelligence collection include artificial intelligence, quantum computing, integrated circuits, genetics and biotechnology, high-value new materials, new energy and smart vehicles, smart manufacturing, aerospace engines and gas turbines, outer space, deep earth, deep sea and polar exploration, among other things, the report said.

“It is important to emphasize that China is an authoritarian nation with little distinction between its public and private sectors,” the report said.

The Chinese system does not distinguish between the civilian and military sectors and calls for the “merging” of technology and resources for both.

China’s no-holds-barred approach to espionage uses every available means of human espionage, technical collection and cyberespionage to infiltrate the government, private sector and academia, the report said.

The FBI is currently investigating over 2,000 cases of Chinese technology and information theft.

Chinese intelligence agencies are also using “grey-zone” warfare — below the level of armed conflict — against the United States, the report said.

Non-Intelligence Assets

A unique feature of Chinese operations is the use of non-intelligence assets, including businessmen, students and researchers in US laboratories.

The FBI reported that Beijing’s “massive, sophisticated computer hacking programs” are the largest in the world. Chinese cyber forces operate out of every major city in China, with robust funding and sophisticated hacking tools, the report said.

The NCSC considers countering Chinese influence operations as part of its counterintelligence mission. According to the report, China’s network of Confucius Institutes — Beijing-funded language and cultural centers — is being used as a tool by government intelligence.

China has also tried to exploit Americans’ doubts about US leaders, undermine democracy and try to promote a positive image of China, the report said. China has spread COVID-19 disinformation, claiming that the United States caused the virus, and stepped up activities aimed at shaping public discourse and silencing criticism of China’s repressive policies toward the Uyghur minority.

Senator Marco Rubio, a Florida Republican and the committee’s vice chairman, said the Chinese are conducting long-term intelligence recruitment of younger Americans in their 20s who could be used in the future to promote policies and narratives pro-China, such as regarding Taiwan or China Tibet.

“Twenty years from now, these people will run companies or key agencies in government and maybe even be elected,” Mr Rubio said. “This is a multi-faceted, new-era challenge that our agencies simply weren’t built to function.”

Michelle Van Cleave, former head of national counterintelligence, told the committee the current counterintelligence structure is not designed to effectively stop foreign spies, noting that “the best defense is a good offense.”

“But unfortunately, our counterintelligence company was never configured to be able to prevent,” she said. “Prevention requires strategic national planning and coordinated operations against foreign intelligence threats. In contrast, ours [counterintelligence] Agencies have very different and separate missions, and they operate in their own ways.”