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Understanding China’s Intelligence and Cyber Threat

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Joshua A. Wong

Mar. 16, 2021

Understanding China’s Intelligence and Cyber Threat – Introduction


As the United States (U.S.) Government starts to look away from counterterrorism efforts in the Middle East officials are starting to realize China took advantage of the opportunity to build infrastructure and advance its capabilities to counter its rivals. China presents a critical and highly advanced intelligence and cyber threat to U.S. national security. They are equipped to damage and sustain intelligence operations against the U.S. government, military personnel, and critical infrastructure. China plans to be the strategic overall global power by 2049 most likely encouraging Chinese officials to utilize all of its capabilities to target the U.S. government. ii China will continue its already persistent influence operations, cyber-attacks, U.S. investments, and intelligence collection to further its political and military agenda. This report will serve as a foundational analysis for the National Security and Policy Analysis Organization.

China’s Intelligence Services


Like the U.S. China has its intelligence agencies who are assigned to specific
roles and functions that support the goals of the Chinese Government which consists of
both civilian and military personnel. The Chinese Communist Party (CCP) is the sole
ruling political party of China, also referred to as the People's Republic of China the
CCP has been around since 1949 and has been the main benefactor in moving China
towards global power. In 2012, President Xi Jinping came into control and prioritized the
party’s goals and political ventures which made the CCP stronger to what we know
today as one of the leading global powers. The CCP focuses on the control of
personnel, propaganda, and the People’s Liberation Army. The CCP has nearly 90
million members. iii The Ministry of State Security (MSS) a civilian-led intelligence agency
is a similar mixture to that of the U.S. Central Intelligence Agency and the U.S. Federal
Bureau of Investigations. The MSS's priority is to oversee and conduct intelligence
collection operations through human intelligence and cyber operations. iv The MSS
specifically the second bureau is responsible for foreign operations. Their job is to task,
monitor, and report to higher regarding intelligence collection operations abroad.
Intelligence Officers insert themselves in U.S. embassies and conduct clandestine
operations outside of the embassy acting as a political party member or part of a
Chinese bank, an insurance company, or shipping company. v The MSS is a critical piece
in China's intelligence operations and specifically focuses on gaining information
regarding U.S. military weapon systems, science and technology, and research and
development. Understanding this information China is capable of creating similar
equipment for resale to the U.S. military or build counterattack measures for use during
a time of war. China’s military intelligence is operated by the People’s Liberation Army
(PLA). The PLA is broken down into many facets, the PLA Army, PLA Navy, PLA Air
Force, PLA Rocket Force, PLA Strategic Support Force, and the PLA joint logistics
support force. PLA strategic support force carry’s China’s military cyber and space
capabilities conducting cyber-attacks and cyber collection operations as well as
electronic and psychological warfare. vi The PLA intelligence component is responsible
for intelligence collection with a focus on foreign military, economic, and political
intelligence to support its military operations. The PLA consists of multiple intelligencecomponents targeting different priority intelligence requirements. PLA intelligence organizations conduct human intelligence collection and cyber operations. vii The PLA over the years has built a strong and powerful military capable of withstanding an attack if targeted by a foreign power. Its power is not to be seen as a show of force but an
understanding that although their military and countermeasures are likely the best next
to Russia's their effective intelligence collection and cyber capabilities continue to make
their military forces stronger. With the stand-up of the U.S. Space Force, China's PLA
Strategic Support Force in combination with MSS will likely create missions for
operatives, agents, and cyber actors to gain valuable sensitive information that can put
China ahead in space over the U.S.

Influence Operations


China proudly controls the influence of its citizens and looks to expand its reach to
many countries that have little to no political or economic stability. For instance, China is
currently working on developing and controlling The Bahamas. When Hurricane Dorian
hit The Bahamas, China took steps to help provide relief and rebuild The Bahamian
infrastructure. viii China’s influence in countries like The Bahamas will continue to grow
over the years as China pushes to build a strong bond with political leaders to increase
its influence and collection reach. China's presence in The Bahamas is a concern to the
U.S. government because of its proximity to the U.S. Becoming a political ally with The
Bahamian government will bolster collection capabilities against American citizens,
especially U.S. government personnel due to it being a tourist destination. China also
stayed busy in 2020 conducting influence operations in the U.S. as the U.S. battled with
the global pandemic, the U.S. Presidential election, and topics regarding racism in
America. China took advantage by utilizing its cyber capabilities to influence the
American population through social media platforms like TikTok and Instagram. Chinese
influence operations can disrupt U.S. politics and persuade U.S. government and
military personnel to vote for a certain political party especially on controversial topics.
China utilized multiple social media platforms to push viewpoints and encourage action
that would benefit the CCP.

Cyber Threat


China consistently targets the U.S. government, U.S. businesses, and U.S.
universities focusing on science and technology, and research and development. China
has invested time and money in targeting U.S. businesses that have relationships and
contracts with the U.S. government. x Chinese cyber actors are under fire after
allegations from U.S. lawmakers stating China exploited a flawed software made by
U.S. company SolarWinds Corp to break into U.S. government computers to access
sensitive information. There were two different cyber break-ins into SolarWinds, and
Federal Bureau of Investigations (FBI) agents accessed that both break-ins were
separate, and according to tactics, techniques, and procedures they access the two
groups were from a Russian cyber group and a Chinese cyber group. According to the
FBI, China has the infrastructure and capabilities to conduct this type of complex attack
to target U.S. government information. xi China's capabilities and manpower allow for
consistent cyber-attacks on Department of Defense network systems as well as U.S.
critical infrastructure, gaining access to sensitive information.

Huawei, a Chinese-owned telecommunications giant was banned in the U.S. and
was one of the most significant national security concerns in the past four years. If
Huawei had created a stronghold in the U.S. it would have amplified China's cyber
collection capabilities drastically. In 2019, the Trump Administration added Chinese
telecommunications giant, Huawei to a list that restricted U.S. companies the ability to
work with them. The U.S. intelligence community stated that Huawei presented a
national security concern to the U.S. military and intelligence agencies. xii Although
Huawei may not be in the U.S. China can create large telecommunications companies
that can penetrate the U.S. government. Huawei is touching bases with many other
countries even though it was banned in the U.S. New Zealand is the only country
among the Five Eyes intelligence alliance that has yet to denounce Huawei according to
the most recent report from December 2020. Huawei celebrated its partnership with
New Zealand in December. Canada is not using Huawei 5G networks but hasn't
confirmed its official ban leaving the door open for further communication. Australia and
the United Kingdom followed suit after the U.S. quickly banned the Chinese
government-backed company. xiii Germany on the other hand has yet to participate in the
ban on Huawei forcing the U.S. to hold conversations such as threatening to withhold
from sharing intelligence with Berlin.

Economics and Business


China continues to benefit from U.S. businesses that outsource their products to
China. China uses this economic gain to fund its political and military operations to
target the U.S. government. China also continues to invest millions of dollars into U.S.
corporations that develop science and technology and/or research and development for
the U.S. government. They believe that by investing in the corporations that have
contracts with the U.S. government they will be able to enter the U.S. supply chain and
gain valuable intelligence to further their agenda. China will continue to leverage its
wealth to build Chinese-owned businesses in the U.S. to further intelligence collection
capabilities and rebuild infrastructure in underdeveloped countries to fund their political
and military operations.

Intelligence Collection


China conducts intelligence collection in the U.S. by leveraging U.S.-based
Chinese citizens, insertion of its businesses, and through Chinese government officials.
Chinese students studying in the U.S. had to go to battle with Former President Donald
Trump due to information supporting that Chinese students are a national security
concern. The Trump administration called for the idea of banning Chinese students due
to their connection with the CCP. The CCP plays a large role in selecting who will attend
universities in the U.S., specifically those who have ties to the PLA and those wanting to
study science. When the CCP makes decisions, it most likely aligns with their agenda.
When selected these students must relay information back to the Chinese Government
which makes it not a hard choice knowing that the Chinese Government cover this
college tuition.

According to the U.S. Department of Justice (DOJ) court documents, a Harvard
professor and two Chinese Nationals were charged in three separate related issues that
involved supporting and aiding PRC and its goals. Dr. Charles Lieber served as thePrincipal Investigator of the Lieber Research Group at Harvard University which
received more than $15 million in grant funding from the National Institutes of Health
and the DoD. Dr. Lieber was a part of China's Thousand Talents Program which spots,
accesses, and recruits professionals that align with the CCPs agenda to further
development, economic prosperity, and national security. Apart from his program
agreement Lieber had to establish a research lab at the Wuhan University of
Technology to build a program that involved cooperation with the U.S. including
recruiting young teachers and students.

More recently on July 23, 2020, the Chinese Houston Consulate closed down.
The Trump administration ordered Chinese Officials to vacate the Houston Consulate
because of observed intelligence collection. According to former U.S. Secretary of State
Michael R. Pompeo, the Chinese Houston consulate was a hub for Chinese intelligence
officers to spy and steal intellectual property. Officials from the consulate were directly
involved in stealing U.S. intellectual property from research institutions and
companies.

Conclusion


China is often referred to as the sleeping giant or to Retired U.S. Air Force
Brigadier General (BG) Robert Spalding and former White House Director for Strategic
Planning at the National Security Council as the country the U.S. has been at war with
for years. The word "war" is normally associated with Afghanistan, Iraq, firefights, and
improvised explosive devices or IEDs however Retired BG Spalding described the word
“war” as “stealth”, a stealth war. A war where the CCP planned, trained and executed
various operations ranging from influence operations, cyber operations, human
intelligence collection, competitive business analysis, and intelligence collection under
the nose of the U.S. government. xix The MSS operated out of Chinese embassies for
years and used Chinese Nationals attending DoD-funded universities to conduct
collection on science and technology. Chinese government officials turned money made
by U.S. corporations outsourcing material to further their agenda and offer The
Bahamian government money to further its reach in the Caribbean. China has
presented a national security risk since the U.S. Government turned its head to focus on
counterterrorism efforts on September 11, 2001. Since then, the CCP has made it a
priority to advance its technology, cyber capabilities, and bolster its economy and
influence in the U.S. and other countries. With China’s persistent influence, cyber-
attacks, money growth, and intelligence collection by the year 2049 China expects to be
the world power controlling the majority of the world's infrastructure,
telecommunications, and money. The DoD and the USG need to control space and
expand the National Security Agency and U.S. Cyber Command to bolster its efforts to
defeat cyber intrusions and influence.

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xix Spalding, R. (2019). Steal War. Penguin.