ne spy is worth 10,000 soldiers.107

—Sun Tzu, The Art of War

The primary objective of Chinese intelligence operations108 targeting the U.S. government and its industries is to collect technical and economic information, with the dual purpose of making the Chinese military-industrial base more sophisticated and the economy more competitive.

—Intelligence Threat Handbook

Every day, a loose network of thousands of professional and amateur Chinese spies gather intelligence in the offices, factories, and schools of America, Europe, and nations ranging from Brazil and India to Japan and South Korea. And every minute of every day, hundreds of Chinese hackers use thousands of hijacked computers to batter down the firewalls of industrial, financial, academic, political, and military information systems around the world looking for valuable data and quietly documenting vulnerabilities that can be exploited to devastating effect in the future.

Why do we in America put up with what the U.S.–China Commission has called “the most aggressive country conducting espionage against the United States”?109 That’s a good question that we must ask ourselves—whether we go to work every day at the White House or on Capitol Hill or whether we shop every week for cheap Chinese products at our local Walmart.

In this chapter, we look carefully at the dark and shadowy world of Chinese espionage on American soil—and elsewhere around the world. In the next chapter, we turn to a review of China’s arguably even more dangerous and provocative cyberespionage—a form of so-called “asymmetric” warfare that has the capability to reach into every computer, household, business, and bureaucracy on the planet.

By the end of these two chapters, we hope that everyone in America—from Main Street and Wall Street to the halls of the CIA, FBI, and Pentagon—has an epiphany about the naiveté of engaging in unconditional commerce and trade with a country that is using spycraft, both old and new, to systematically strip us of our technologies and probe our defenses for a possible eventual kill.

While We Hunt Bin Laden, the Dragon Runs Wild and Free

Beijing does not favor the classical methods110 used by other big intelligence services, featuring tight control over a few, deeply buried and valuable agents. Instead, it employs a vast, decentralized network that employs Chinese students, businesspeople, and delegations in the United States, and targets Americans of Chinese ancestry as possible espionage recruits.

—The Christian Science Monitor

As part of its boots on the ground, traditional spycraft, China’s government, and many of its state-run industries, actively runs a highly sophisticated three-pronged espionage campaign against many nations around the world—with major rivals like America, Europe, and Japan drawing much of the attention. This three-pronged strategy involves penetrating academia, industry, and government institutions to steal valuable financial, industrial, political, and technological information and prepare for possible disruptive and destructive attacks in the event of a hot war.

In fact, while the United States intelligence infrastructure has been consumed by the War on Terror, Chinese operatives have been allowed to run wild and free in America. Their vehicle is an elaborate “hybrid” espionage network, very different from that of the traditional spycraft of the old Soviet Union.

At the height of the Cold War, the Soviet Union’s KGB relied on a relatively small number of professional “secret agents” stationed overseas and a seemingly constant supply of new American traitors they “turned” through bribery or blackmail. While China has its own share of secret agents and turned Americans, it relies far more heavily upon a highly decentralized network of low-level spies, the vast majority of which are ethnic Chinese.

China’s cadres of semi-pro spies and amateur informants are typically recruited by agencies such as the Ministry of State Security—China’s KGB—as well as by specific industry groups. Some of these spies may be drawn from the Chinese–American community. As noted by the Intelligence Threat Handbook, they are typically brought into the network in one of two ways: either by appeals to Chinese nationalism111 and ethnicity or by coercive threats to family members living in China.

Far more of China’s spies are embedded among the roughly 750,000 Chinese nationals who are issued U.S. visas in any given year. They may be reporters for news agencies like Xinhua,112 students at American universities, touring business executives, guest workers at American corporations or national labs, or simply tourists. In fact, the vast quantities of legitimate Chinese visitors to America every year coupled with the large Chinese–American community make it easy for recruited spies to fly well below FBI radar and do as Mao Zedong once advised: “Swim with the fish.”113

Free Visas to the U.S. Candy Store

Spying is war without the fire.114

—Li Fengzhi

The case of Li Fengzhi is instructive because it illustrates both how easy it is for a Chinese agent to infiltrate the United States and how deep the Chinese espionage network runs. Li was working as an analyst for the Ministry of State Security when he slipped quietly into the United States as a graduate student at the University of Denver in 2003.

According to interviews we conducted with Li, his life started out innocently enough as a son born in 1968 to an educated family in Liaoning Province. Upon graduating from college in 1990, Li joined a provincial intelligence service; and, within a few years, he moved up to the Ministry of State Security where he worked for Beijing as an agent in his home province. According to Li, as a naïve young man, he saw this as a “very good job and a special career working for the government.”

As an analyst for China’s version of the KGB, Li spent time gathering intelligence on Eastern Europe and Russia while pursuing a PhD in international politics. In 2003, he was chosen to travel to the United States. Instead of spying against the United States, however, Li had an epiphany.

As Li saw more and more of the outside world and what freedom looked like, he, in his own words, “began to see that the Chinese Communist Party was evil and that it had been harming the Chinese people.” It was on the strength of this epiphany that Li sought to defect to the United States.

According to Li, when he “left the Ministry of State Security, they had about 100,000 documented agents or informants, not counting the very amateur ones, and a large number of individuals who worked as spies within other Chinese governmental departments.” By comparison, the U.S. FBI has only about 13,000 sworn officers.

Likewise according to Li—and this is his perhaps most damning revelation—the majority of official Chinese agents are Chinese reporters, photographers, NGO members, influential Chinese-American leaders and business people, engineers, and scholars. In Li’s words, while these professional spies “might not have conditions to get the important information, they will focus on recruiting informants to get that intelligence.”

What is remarkable about the Li Fengzhi story besides how easily he was able to slip into the United States despite his background in intelligence is how much more of a realistic view he has of China than most citizens of the United States.

A Veritable Beehive of Vacuuming Activity

So just what exactly does China’s spy network do, and how does it do it? In the industrial espionage arena, this network is constantly seeking to acquire new technologies, trade secrets, and processes. On the military front, espionage goals range from the acquisition of new weapons systems to more detailed information about America’s military bases and operations.

In both its industrial and military espionage, the hallmark of Chinese spying is its relentless beehive patience. Decade by decade, thousands of its “worker bee” spies and information gatherers painstakingly vacuum up small bits of information from America’s university research facilities, sensitive national laboratories, Silicon Valley start-ups, and defense-related companies.

In fact, this glacially moving, time-consuming process is totally in character with China’s long-run view of history—and fully consistent with Sun Tzu’s famous dictum that “one spy is worth 10,000 soldiers.” For once enough small bits of information are vacuumed up and fed back to mainland China and compiled, they offer Chinese intelligence agencies and state-owned enterprises a clear composite view of entire technologies, processes, or systems.

As Scott Henderson has stated in The Dark Visitor: “Rather than set a targeted goal for collection,115 they instead rely on the sheer weight of information to form clear situational understanding.” That this kind of vacuumed information can be quite valuable is reflected in these famous words of none other than George Washington, the father of America. On the benefits of grassroots intelligence gathering, he astutely observed:

Even minutiae should have a place in our collection, for things of a seemingly trifling nature, when enjoined with others of a more serious cast, may lead to a valuable conclusion.

To date, China’s spy network has stolen technologies and processes ranging from subsystems of the Aegis guided missile destroyer, the inner workings of neutron bombs, and naval reactor designs to plans for the space shuttle, Delta IV rocket specs, and ICBM-capable guidance systems. This Communist beehive has been equally effective116 in vacuuming up details on weapons systems ranging from the B1-B bomber, unmanned aerial vehicles, and submarine propulsion systems to jet engines, aircraft carrier launch systems, and even highly specific U.S. Navy warship operations procedures.

Throughout all these acts of war without fire by China against America, both law enforcement and counterespionage efforts have been extremely lax, our politicians have taken no retaliatory actions, and the American public has been grossly underinformed.

On top of all this, many of America’s most elite academic and research institutions have become naïve cheerleaders for the so-called Chinese economic miracle. Part of the problem is a lucrative flood of grant money now flowing in to support various Chinese research efforts. This makes American universities reluctant to “bite the Chinese hand that feeds them.” An even bigger part of the problem is the billions of dollars in tuition money that floods in from China’s 125,000-plus visiting students to America’s universities. While the majority of Chinese students in the United States are among the brightest and hardest working and hopefully will make contributions to America and the world, enough of them are under some level of Communist Party influence to warrant a more serious upfront vetting process.

From a public policy point of view, however, throwing open the doors of American education to any and all Chinese comers is a dangerous game. For as China well knows, much of the technological innovation that has made America great begins in the research facilities of places like CalTech, Harvard, and the Massachusetts Institute of Technology and national laboratories like Argonne, Lawrence Berkeley, Los Alamos, and Sandia. Indeed, it is not for nothing that our nation’s universities and national labs—as well as corporate R&D centers such as Silicon Valley and defense companies like Hughes and Loral—have become veritable “candy stores” for Chinese industrial and military espionage.

One Good Turned Agent Deserves Another—and Life Imprisonment

“Mr. Shriver sold out his country117 and repeatedly sought a position in our intelligence community so that he could provide classified information to the People’s Republic of China,” U.S. Attorney Neil MacBride said.

—Reuters

While ethnic Chinese make up the bulk of the Dragon’s spy network, China’s spymasters have at times also been highly successful in “turning” non-Chinese into agents in the old Soviet style.

Consider, for example, Ko-Suen Moo, a South-Korean born sales consultant for Lockheed Martin and other defense firms. This turned agent wound up in a Florida airplane hangar trying to buy an entire GE-manufactured turbofan jet engine specifically designed for the dogfighter par excellence F-16. Luckily, in this case, U.S. customs agents shot the plot down; but sometimes America is not so lucky.

Such was the bad luck with another South Korean turned by the Chinese, Kwon Hwan Park. He succeeded in exporting two Blackhawk helicopter engines to China via a Malaysian front. Lightning didn’t strike twice,118 however, as Park was later arrested at Dulles Airport heading to China with a suitcase full of military night vision equipment.

While many of China’s spies are quasi-amateurs like Moo and Park, some agents—so-called “sleeper agents”—have been intentionally planted into the United States. That’s how Boeing engineer Dongfan Chung collected Space Shuttle and Delta IV rocket designs destined for Beijing. By the time he was caught, Chung had squirreled away a cool $3 million and was found with over 300,000 pages of technical documents in his home, along with notes about how he hoped to help what he referred to as “his motherland.”

The case of Chi Mak is equally disturbing. He was caught shipping plans for U.S. nuclear submarine propulsion and naval command and control systems to China. Mak’s case is particularly instructive because it illustrates how Chinese handlers routinely provide shopping lists of specific technologies they are looking for. Shredded documents recovered by the FBI urged Mak to “attend more seminars on special subject matters”119 and micromanaged his spying efforts by listing technologies of special interest that included “torpedoes, aircraft-carrier electronics, and a ‘space-launched magnetic levitational platform.’”

And here’s the scariest sleeper agent part: Both Mak and Chung were quietly living in the United States for decades as naturalized citizens. And little did any of us know, they were on a mission to betray their adopted country and deliver some of America’s most technologically advanced weapons systems to the enemy.

In fact, this kind of spycraft is the very definition of high treason and should have made Mak and Chung eligible for the death penalty. However, that charge was never made, and, in a troubling pattern of light sentencing for Chinese spycraft by the U.S. justice system, they were given sentences of 24 and 15 years, respectively.

This is what really puzzles us the most about Chinese spying in America: U.S. judges and juries don’t seem to take it seriously—much less recognize we are in an undeclared state of war. Indeed, time after time, the result has been prison sentences for Chinese espionage that offer little or no deterrent to selling out the United States—for example, the aforementioned Kwon Hwan Park landed a laughable 32-month prison sentence for multiple technology thefts that put the lives of American soldiers and the citizens of our allies in Japan, Taiwan, and Korea at extreme risk.

And please take note: It’s not just Asians with names like Moo and Park and Chinese-Americans like Mak and Chung that are selling out America to the Chinese. How about Glenn Shriver?

The case of this not-so-favorite son of Grand Rapids, Michigan, illustrates just how aggressive China can be in recruiting foreign agents. Shriver was a U.S. student abroad plucked right off a campus in Shanghai; and he eventually tried to penetrate the CIA while under the direction and pay of his Chinese spymasters. Demonstrating just how cheap treason can be these days, Shriver was given a mere slap on the wrist: a 4-year sentence.