US and UK Intelligence Leaders Warn of Increasing Chinese Threat

They're stealing our secrets and working to undermine our elections.

Reuters (“Heads of MI5, FBI give joint warning of growing threat from China“):

The heads of MI5 and FBI warned of the growing long-term threat posed by China to UK and U.S. interests, in their first joint appearance on Wednesday.

MI5 Director General Ken McCallum said the service has already “more than doubled our previously-constrained effort against Chinese activity of concern,” adding it was running seven times as many investigations as in 2018.

FBI Director Christopher Wray said that the Chinese government “poses the biggest long-term threat” to economic and national security, for the UK, the U.S. and allies in Europe and elsewhere.

“The Chinese government is trying to shape the world by interfering in our politics (and those of our allies, I should add),” Wray said, saying Beijing had directly interfered in a Congressional election in New York this year, as it did not want a candidate who was a critic and former protester at Tiananmen Square to be elected.

Wray warned that the Chinese government “poses an even more serious threat to Western businesses than even many sophisticated businesspeople realize,” and is “set on stealing your technology.”

The Chinese government’s hacking program is “bigger than that of every other major country combined,” according to Wray.

Over the past year, the UK has shared intelligence with 37 countries to help them defend against cyber espionage, McCallum said, adding that in May they had disrupted a sophisticated threat targeting critical aerospace companies.

Speaking about Taiwan, which China regards as a province, Wray said that China may try to forcibly take it over and if that were to happen, “it would represent one of the most horrific business disruptions the world has ever seen.”

“The widespread Western assumption that growing prosperity within China and increasing connectivity with the West would automatically lead to greater political freedom has, I’m afraid, been shown to be plain wrong,” McCallum said.

“The allegations against China by U.S. and UK intelligence officials are completely groundless and the so-called cases they listed are pure shadow chasing,” a spokesperson for the Chinese embassy in the UK said, in response to a question about the comments made by McCallum and Wray.

The spokesperson said that China urged both the countries to “have a clear understanding of the trend of the time, abandon the Cold War mentality which has long gone out of date, stop spreading “China threat”, and stop creating confrontation and conflicts.”

I’m generally skeptical of these statements, mostly because I don’t know what purpose going public in this manner is supposed to achieve. But this report from WSJ (“Heads of FBI, MI5 Issue Joint Warning on Chinese Spying“) clarifies that somewhat:

The heads of the FBI and Britain’s domestic security service issued sharply worded warnings to business leaders about the threats posed by Chinese espionage, especially spying aimed at stealing Western technology companies’ intellectual property.

In a rare joint appearance on Wednesday at the headquarters of MI5, Christopher Wray, director of the Federal Bureau of Investigation, and Ken McCallum, director-general of MI5, urged executives not to underestimate the scale and sophistication of Beijing’s campaign.

“The Chinese government is set on stealing your technology—whatever it is that makes your industry tick—and using it to undercut your business and dominate your market,” Mr. Wray told the audience of business people. “They’re set on using every tool at their disposal to do it.”

U.S. counterintelligence officials issued a separate notice on Wednesday warning state and local government leaders and business executives about a different Chinese threat—accelerating efforts to influence policy-making through overt and covert means.

The notice, from the U.S. National Counterintelligence and Security Center, cited tactics ranging from open lobbying, where Beijing’s role is acknowledged, to collecting personal information about state and local leaders, and leveraging trade and investment to reward or punish officials.

This seems like a huge story—we’re seemingly moving from treating China as a mere “strategic competitor” to a full-on adversary—but I’m not seeing coverage of this in the NYT, WaPo, or NPR.

Chinese industrial espionage is, of course, not new. And countries, including the United States, often work to shape foreign elections in ways favorable to their own interests. But the heads of the FBI and MI-5 aren’t calling together business and academic leaders to warn about normal politics and low-level spying.

Stay tuned. This won’t be the last word on the matter.

FILED UNDER: Asia, Intelligence, National Security, World Politics, , , , , , , , , ,
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Tony W says:

    You would think Americans wouldn’t be so stupid as to vote for the person that our enemies/competitors are boosting.

    That’s not a hard strategy to see right through. yet……

    3
  2. Joe says:

    I live in a town with a major research university, which thrives on the tuition and the significant related dollars of hundreds of college-aged Chinese nationals. I support educating anyone and everyone, but I also have no doubt that some percentage of these students are here to glean every technical advantage they can get to take home with them and compete.

    2
  3. Just nutha ignint cracker says:

    @Tony W:

    You would think Americans wouldn’t be so stupid as to vote for the person that our enemies/competitors are boosting.

    Sure, but wouldn’t it also depend on who “our” is?

    It reminds me of an old Lone Ranger joke where the punch line is “What do you mean ‘we,’ paleface?”

    2
  4. Just nutha ignint cracker says:

    @Joe: “but I also have no doubt that some percentage of these students are here to glean every technical advantage they can get to take home with them and compete.”

    Again sure, but isn’t that partially what the “free” in “free enterprise” is about? But I do get that the US is as mercantilist as the rest of the world. Back in the days when cameras had film, the Yashica-flex camera (I own one, very good camera) was developed because a Yashica bought a Rolleiflex to dismantle. We’re supposed to believe that the “cross-pollenation,” if you will, is making us and our products better, too.

  5. Gustopher says:

    @Joe: I don’t think anyone is seriously worried about them getting educated over here and returning home.

    There’s more of a concern about things like this:

    https://en.m.wikipedia.org/wiki/Operation_Aurora

    On January 13, 2010, the news agency All Headline News reported that the United States Congress plans to investigate Google’s allegations that the Chinese government used the company’s service to spy on human rights activists.

    […]

    Elderwood specializes in attacking and infiltrating second-tier defense industry suppliers that make electronic or mechanical components for top defense companies. Those firms then become a cyber “stepping stone” to gain access to top-tier defense contractors.

    I have to be careful with what I write about it, as I was at Google at the time, and the information being circulated in the company at the time does not entirely match Wikipedia’s summary, and I’m not sure what was made public. I also wasn’t part of the security team, so my memory may be fuzzy — did we do X to lock down an attack vector that had happened, or that might have happened?

    The company’s security posture changed give or take overnight, and it was honestly really impressive.

    Anyway, I’m very curious as to what is going on now that prompted this statement.

  6. Kathy says:

    @Just nutha ignint cracker:

    Well, let’s not overlook all the technology transfers to China in the form of manufacturing facilities set up there by foreign companies.

  7. gVOR08 says:

    Some years ago a friend of mine worked for a company that made specialized optics. They set up a plant in China. I told him his company would be out of business in a few years. They were.

    Recent discussion here of the Battle off Samar got me to rereading the end of Twilight of the Gods, the last volume of Ian Toll’s trilogy on WWII in the Pacific. He notes that Japan managed to industrialize the country with amazing speed while buying the resources they needed in Manchuria, the rest of Asia, and the West. They got most of their oil from Texas. But in the 30s the militarists got control and decided it wasn’t enough to be able to buy what they needed, they had to control the source. Hence WWII, the death of millions of Japanese, and the widespread destruction of Japan. Since then they’ve re-industrialized amazingly fast while buying resources overseas.

    Russia and China don’t seem to have learned from Japan’s example. OK, they want to steal technology to grow their economy. That’s the American way. We did it wholesale to the Brits. Why risk war to take over Taiwan when they can buy whatever they want? And what the hell does Ukraine have that a friendly Russia couldn’t buy? Including port access.

  8. Kathy says:

    @gVOR08:

    And what the hell does Ukraine have that a friendly Russia couldn’t buy? Including port access.

    It’s what Ukraine doesn’t have: millions of Slavic people not beholden to Putin.

  9. Mu Yixiao says:

    “The Chinese government is set on stealing your technology—whatever it is that makes your industry tick—and using it to undercut your business and dominate your market,” Mr. Wray told the audience of business people. “They’re set on using every tool at their disposal to do it.”

    The businesses know grok this. MI5 and the FBI are telling business leaders that “water is wet”. “sex is fun”. and “gravity makes things fall”.

    I spent six years working with “foreign” (non-Chinese) companies in China. They (and I) understand that the Chinese metaphor for business is “be the best thief”.* If I understand it**, you can be dead certain that anyone involved in serious international business understands this.

    ======
    * And if you’re a bad thief–or can’t catch the thief–then you deserve to lose whatever you have.

    ** It took me a while (and experiencing backstabbing that could have landed me in a Chinese prison), but I learned. I grok.

  10. MarkedMan says:

    This seems like a huge story—we’re seemingly moving from treating China as a mere “strategic competitor” to a full-on adversary

    A little more context: for a couple of decades it was believed that as China matured and gained more of a stake in the international community they would start to see the value of playing by the rules that the West had developed over the centuries in order to promote maximum innovation. The main effort to move this along was endless and repeated negotiations with the Chinese, and an encouragement for them to file their own patents (in order to give them a stake).

    What I suspect has happened, is that we have just given up and accepted that China has shown no tendency to develop in this way. Rather, they have simply amped up their efforts to violate IP law and steal whatever they can. I suspect this is probably a well known games theory scenario. In a system which has developed to insure cooperation, how do you handle the freeloader, the one who takes the benefits of everyone else’s negotiated truce but refuses to abide by it themselves.

    When I lived in Shanghai in 2011-2015, every day on my way to work I passed a rather sizable high-rise building. The people in that building worked for the Chinese government. Some people in there had jobs intercepting emails, breaking into encrypted USB sticks, and lord knows what else, all to identify foreign technology. Others, specialists, figured out what it all meant and how it was used, and how valuable it was. CAD files, machine tool specifications, chemical formulas, all was grist for their mill. Other people organized and collected these files into coherent packages according to their type and intent. Still others processed requests from Chinese corporations for specific types of data. There were even those who searched out Chinese corporations that might be interested in the data and made them aware of what they had. This place was “secret” in only the most general sense. When someone interviewed there for a job they were told what they would be doing. I don’t think anyone who didn’t work for a Western company thought there was anything wrong with what went on in there. They would have assumed that this is just something all countries do, like have armies or collect taxes.

  11. MarkedMan says:

    @Joe:

    but I also have no doubt that some percentage of these students are here to glean every technical advantage they can get to take home with them and compete.

    That’s actually one of the purposes of universities: provide a general or specific education so that everyone who is competing has access to the same base of knowledge. It’s, say, MITs highest goal that their students graduate and go out to build a better mouse trap.

    @Just nutha ignint cracker:

    was developed because a Yashica bought a Rolleiflex to dismantle

    Nothing wrong here, either. Athletes learn from each others techniques. Actors watch recordings of how other people played Hamlet. And companies buy their competitors’ products and take them apart to see how they work. In fact, if you want to get protection in the form of a patent, one of the conditions is that you describe how it works, and if you get the patent the whole thing is made available to anyone who visits the patent database.

  12. Michael Cain says:

    Lots of people write about what lessons China should be learning from Russia’s Ukraine “adventure”. My opinion on that one is “Be absolutely, completely, self-sufficient from beginning to end on 28nm integrated circuits. 16nm would be better.” When they begin firing on Taiwan across the strait, they want to be able to send a clear message that they’re building smart munitions faster than they’re using them, even if that’s several hundred per day.

  13. Joe Wilson says:

    @Just nutha ignint cracker: When I worked for NEC, (Lexington MA) I found a US company that made keyboard-add-on barcode reader I/O PCBs. I instantly realized that NEC could use these cheap boards to increase the sales of NEC PCs to shipping companies. FEDEX, UPS etc & many of their customers. They sent a three man team to buy a a board from that US vendor and then copied it, right down to the EPROM firmware. NECIS USA locked in some very large customers with that system. We made a ton of money for NEC Tokyo. To me, that seemed illegal.. I was told, “Business is War”..