Chinese Peril

U.S. charges four Chinese military members in connection with 2017 Equifax hack
By Devlin Barrett and Matt Zapotosky

Attorney General William P. Barr charged four members of the Chinese military with the 2017 hack of credit rating agency Equifax on Feb. 10. 

The Justice Department has charged four members of the Chinese military with a 2017 hack at the credit reporting agency Equifax, a massive data breach that compromised the personal information of nearly half of all Americans.
In a nine-count indictment filed in federal court in Atlanta, federal prosecutors alleged that four members of the People’s Liberation Army hacked into Equifax’s systems, stealing the personal data as well as company trade secrets. 

Attorney General William P. Barr called their efforts “a deliberate and sweeping intrusion into the private information of the American people.”
The 2017 breach gave hackers access to the personal information, including Social Security numbers and birth dates, of about 145 million people. 

Equifax last year agreed to a $700 million settlement with the Federal Trade Commission to compensate victims. 

Those affected can ask for free credit monitoring or, if they already have such a service, a cash payout of up to $125, although the FTC has warned that a large volume of requests could reduce that amount.
Clockwise from top left: Wang Qian, Xu Ke, Wu Zhiyong and Liu Lei, picture unavailable. The four, all members of the Chinese military, were charged with computer fraud, economic espionage and wire fraud. (FBI)

At a news conference announcing the indictment, Barr said China has a “voracious appetite” for Americans’ personal information, and he pointed to other intrusions that he alleged have been carried out by Beijing’s actors in recent years, including hacks disclosed in 2015 of the health insurer Anthem and the federal Office of Personnel Management (OPM), as well as a 2018 hack of the hotel chain Marriott.
“This data has economic value, and these thefts can feed China’s development of artificial intelligence tools,” Barr said. 

The attorney general said the indictment would hold the Chinese military “accountable for their criminal actions.”

William Evanina, director of the National Counterintelligence and Security Center, characterized the breach as “a counterintelligence attack on the nation,” saying China had long been trying to gather massive amounts of Americans’ personal and sensitive data.
The Washington Post reported in 2015 that the Chinese government has been building huge databases of Americans’ personal information through hacks and making use of data-mining tools to sift through the information for compromising details about key government personnel — making them susceptible to blackmail and, thus, potential spy recruits.

The OPM intrusion, for instance, exposed the private data of more than 21 million government employees, contractors and their families, including a complete history of where they lived and all of their foreign contacts.
U.S. officials said the stolen data could be used to help Chinese intelligence agents target American intelligence officials, but they added that they have seen no evidence yet of such activity. 

Evanina said his chief concern was that Chinese intelligence agencies could use the stolen data to target those who work at universities or research firms who have access to useful information.
Barr and other U.S. law enforcement officials in recent weeks have taken a particularly aggressive posture toward China. 

Late last week, Barr warned of that country’s bid to dominate the burgeoning 5G wireless market and said the United States and its allies must “act collectively” or risk putting “their economic fate in China’s hands.”
Those charged with the Equifax hack are Wu Zhiyong, Wang Qian, Xu Ke and Liu Lei. 

Officials said they were members of the PLA’s 54th Research Institute.
According to the indictment, in March 2017, a software firm announced a vulnerability in one of its products, but Equifax did not patch the vulnerability on its online dispute portal, which used that particular software. 

In the months that followed, the Chinese military hackers exploited that unrepaired software flaw to steal vast quantities of Equifax’s files, the indictment charges.
Officials said the hackers also took steps to cover their tracks, routing traffic through 34 servers in 20 countries to hide their location, using encrypted communication channels and wiping logs that might have given away what they were doing.
“American business cannot be complacent about protecting their data,” said FBI Deputy Director David Bowdich.
Barr said that although the Justice Department does not normally charge other countries’ military or intelligence officers outside the United States, there are exceptions, and the indiscriminate theft of civilians’ personal information “cannot be countenanced.”
In the United States, he said, “we collect information only for legitimate, national security purposes.”
None of the four is in custody, and officials acknowledged that there is little prospect they will come to the United States for trial. 

But the indictment does serve as a public shaming, and officials said that if those charged attempt to travel someday, the United States could arrest them.
“We can’t take them into custody, try them in a court of law, and lock them up — not today, anyway,” Bowdich said. 

“But one day, these criminals will slip up, and when they do, we’ll be there.”
The case marks the second time the Justice Department has unsealed a criminal indictment against PLA hackers for targeting U.S. commercial interests. 

In 2014, the Obama administration announced an indictment against five suspected PLA hackers for allegedly breaking into the computer systems of a host of American manufacturers.

U.S.'s 5,025,817 Chinese Spies

FBI points to China as biggest U.S. law-enforcement threat

Top U.S. officials to spotlight Chinese spy operations, pursuit of American secrets

By Mark Hosenball

U.S. Attorney General William Barr arrives for U.S. President Donald Trump's State of the Union address to a joint session of the U.S. Congress in the House Chamber of the U.S. Capitol in Washington, U.S. February 4, 2020. 

WASHINGTON -- An aggressive campaign by American authorities to root out Chinese espionage operations in the United States has snared a growing group of Chinese government officials, business people, and academics pursuing American secrets.
In 2019 alone, public records show U.S. authorities arrested and expelled two Chinese diplomats who drove onto a military base in Virginia. 

They also caught and jailed former CIA and Defense Intelligence Agency officials on espionage charges linked to China.
On Thursday, U.S. Attorney General William Barr, FBI director Christopher Wray and U.S. counterintelligence chief William Evanina will address a Washington conference on U.S. efforts to counter Chinese economic malfeasance involving espionage and the theft of U.S. technological and scientific secrets.
China’s efforts to steal unclassified American technology, ranging from military secrets to medical research, have long been extensive and aggressive, but U.S. officials only launched a broad effort to stop Chinese espionage in the United States in 2018.
“The theft of American trade secrets by China costs our nation anywhere from $300 to $600 billion in a year,” Evanina, director of the National Counterintelligence and Security Center, said in advance of Thursday’s conference.

Of 137 publicly reported instances of Chinese-linked espionage against the United States since 2000, 73% took place in the last decade, according to the Washington-based Center for Strategic and International Studies (CSIS).
The think-tank’s data, which excludes cases of intellectual property litigation and attempts to smuggle munitions or controlled technologies, shows that military and commercial technologies are the most common targets for theft.
In the area of medical research, of 180 investigations into misuse of National Institutes of Health funds, diversion of research intellectual property and inappropriate sharing of confidential information, more than 90% of the cases have links to China, according to an NIH spokeswoman.
One main reason Chinese espionage, including extensive hacking in cyberspace, has expanded is that “China depends on Western technology and as licit avenues are closed, they turn to espionage to get access,” said James Lewis, a CSIS expert.

The Harvard Connection
In late January alone, federal prosecutors in Boston announced three new criminal cases involving industrial spying or stealing, including charges against a Harvard professor.
Prosecutors said Harvard’s Charles Lieber lied to the Pentagon and NIH about his involvement in the Thousand Talents Plan -- a Chinese government scheme that offers mainly Chinese scientists working overseas lavish financial incentives to bring their expertise and knowledge back to China. 

Lieber also lied about his affiliation with China’s Wuhan University of Technology.
During at least part of the time he was signed up with the Chinese university, Lieber was also a “principal investigator” working on at least six research projects funded by U.S. Defense Department agencies, court documents show.
A lawyer for Lieber did not respond to a request for comment.

U.S.'s 5,025,817 Chinese Spies

Sino-American engineer arrested for taking US missile defense secrets to China

By Justin Rohrlich & Tim Fernholz

When Wei Sun, a 48-year-old engineer at Raytheon Missile Systems, left for an overseas trip last year, he told the company he planned to bring his company-issued HP EliteBook 840 laptop along.
Sun, a Chinese-born American citizen, had been working at Raytheon, the fourth-largest US defense contractor, for a decade. 

He held a secret-level security clearance and worked on highly sensitive missile programs used by the US military.Since Sun’s computer contained large amounts of restricted data, Raytheon officials told him that taking it abroad would not only be a violation of company policy, but a serious violation of federal law, as well.

Sun had access to sensitive missile defense technology.
Sun didn’t listen, according to US prosecutors. 

While he was out of the country, Sun connected to Raytheon’s internal network on the laptop. 

He sent an email suddenly announcing he was quitting his job after 10 years in order to study and work overseas.
When Sun returned to the United States a week later, he told Raytheon security officials that he had only visited Singapore and the Philippines during his travels. 

But inconsistent stories about his itinerary led Sun to confess that he traveled to China with the laptop.
A Raytheon lawyer examined the machine, and confirmed it contained technical specifications prohibited from export by the International Traffic in Arms Regulations (ITAR), in addition to security software that is itself export-controlled and requires a special license to take outside the United States.
Sun was arrested by FBI agents the next day. 

His attorney, Cameron Morgan, did not respond to a request for comment. 

Raytheon said only that the company “cooperated with this investigation,” declining to elaborate further.
Court documents refer to Sun possessing classified files related to several different air defense systems designed by Raytheon for the US military and sold to American allies and proxies around the world.
The case, which has not been reported until now, is yet another example of China’s increasing efforts to acquire American military technology. 

The country’s security services have already compromised dozens of crucial US weapons systems, such as the Army’s Terminal High Altitude Area Defense (THAAD) ballistic missile defense system, and the Aegis ballistic missile defense system used by the Navy. 

In 2018, Chinese hackers stole top-secret plans for a supersonic anti-ship missile being developed by the Navy known as Sea Dragon. 

The Chinese managed to get massive amounts of sensitive signals and sensor data, in addition to the Navy’s entire electronic warfare library.
The weapons with which Sun worked are “pretty much top-of-the-line American systems,” according to Dean Cheng, a fellow at the Heritage Foundation who studies China’s military capabilities.
The AMRAAM, or Advanced Medium Range Air to Air Missile, is used on US fighter jets like the F-16 and F-22 to destroy other aircraft before they can be seen by anything but radar. 

It has also been converted into a ground-based air defense system, which is Sun’s focus, since prosecutors describe his work as centered on ballistic missile defense.
The documents also say Raytheon employees will provide testimony about the Stinger missile, a “man-portable” air-defense missile that can be fired by troops on the ground, made most famous when the US supplied it to Afghan warlords fighting against occupying Soviet troops.
Perhaps most significant is Sun’s involvement with the Redesigned Kill Vehicle (RKV) program, an effort to replace the interceptor used by US air defense systems to shoot down incoming ballistic missiles.
The Pentagon cancelled the program last year because of technical problems, but information about the project would still be useful to China to understand what the US might do to defend from conventional or nuclear missiles. 

Missile technology has become central to Beijing’s strategy to deter US power in the Pacific, making up for deficiencies and a lack of experience with weapons systems like jet fighters.
China would be eager to learn how to defeat the missiles by understanding the technical details of how they find their targets with radar and other sensors, and how they respond to attempts to jam or distract them, Cheng told Quartz.
China already has its own equivalents of these weapons, so it’s not necessarily seeking to copy US technology. 

However, as one example, China’s advanced air-to-air missile has never been used in combat, while the AMRAAM has, so its design may offer lessons that China’s defense industrial base has yet to learn.
Cheng said this is “one piece of the larger Chinese espionage picture… we tend to focus on Chinese cyber [but] they have human intelligence, they have people trying to steal examples of it in other countries as well.”
“Chinese government agencies are keeping their eye on former citizens who are working in big US companies [like Raytheon],” said Janosh Neumann, a former counterintelligence officer with Russia’s Federal Security Service who now lives in the United States.

The files Sun took out of the country could have just as easily been purloined by Chinese spy service without the engineer’s knowledge.

“If your computer gets left in a hotel room, somebody could image the whole thing and you’d never know it.” 

“There’s always the risk of something like that—no different than if somebody took pictures or copies of blueprints or a paper file.”
A grand jury in Arizona last week returned a superseding indictment charging Sun with additional counts of violating ITAR. 

Legal filings suggest that Sun, who initially pleaded not guilty, is preparing to change his plea to guilty as part of an agreement with the Department of Justice. 

He is scheduled to appear in court on Feb. 14.

Germany Investigates 3 Suspected of Spying for China

Raids were carried out on the homes and offices of the three people
By Melissa Eddy

The Chinese Embassy in Berlin. A spokesman for Germany’s federal prosecutor said the Chinese intelligence service was involved in the inquiry.

BERLIN — German authorities raided the homes and offices of three people suspected of spying for the Chinese government, officials said on Thursday, giving no details about their identities or the nature of the alleged espionage.

“This is a preliminary investigation against three known persons,” said Markus Schmitt, a spokesman for the German federal prosecutor, Peter Frank. 

None of the three have been arrested, he said.
The raid comes amid an intensifying debate in Berlin over the country’s relationship with Huawei, the Chinese technology giant used for espionage by Beijing.
On Thursday, Angela Merkel met with senior lawmakers in her party as part of continuing efforts to resolve a dispute over whether to allow Huawei to help build the country’s 5G next-generation mobile network.
Germany has been concerned about the threat posed by Chinese hackers seeking to steal information from the country’s companies, research facilities and ministries. 

But if sufficient evidence is found in the current case, it would be one of the first in years involving old-fashioned human espionage.
German officials were sifting through evidence gathered in the raids, which were carried out early Wednesday on nine homes and offices in Brussels and Berlin, as well as in the German states of Baden-Württemberg and Bavaria, Mr. Schmitt said.
The Chinese intelligence service is also involved in the inquiry, Mr. Schmitt said.
The German newsmagazine Der Spiegel, which first reported the raids, said that the three people targeted were suspected of passing private and social information to China’s ministry of state security.
Der Spiegel said that one of the three was a German national who had worked as a diplomat for the European Union until 2017, when he switched to a well-known consulting company. 

The other two work for a different consulting company, the report said.
Although some of the searched properties are in Brussels, a spokeswoman for the Brussels-based European Commission said on Thursday that none of its premises had been searched. 

She also said it had not received any requests to work with the German authorities or to hand over any evidence.
“No searches were conducted in the premises of our buildings, we haven’t been contacted by the German authorities,” said the spokeswoman, Virginie Battu-Henriksson.
European Union diplomats are normally senior envoys from their own member states who join the bloc’s diplomatic ranks. 

Many go on to join lobby firms or think tanks after retirement. 

If proven that the suspect was indeed spying for China, it would be a first for the bloc’s foreign policy branch.
China is one of Germany’s most important trading partners, and the two countries collaborate on international issues like climate change and hold regular government-level discussions.
But the relationship has come under scrutiny since the Chinese acquired several German technology companies in 2016. 

The next year, Germany’s domestic intelligence agency accused China of using LinkedIn and other social media sites to infiltrate the government in Berlin.
A year ago, Poland arrested two people, including a Chinese employee of Huawei, and charged them with spying for Beijing.

U.S.'s 3.17 million Chinese Spies

A Chinese “tourist” accused of espionage is the latest example of a growing threat to US security
By Justin Rohrlich
Chinese tourist-spies

On June 28, 2019, Qingshan Li landed in Southern California on a flight from China.
Li, a Chinese national visiting the US on a tourist visa, was scheduled to return home 10 days later.
The day after he arrived, Li drove his rental car to a storage facility in the San Diego area.
There, he met up with an unidentified person named in court filings only as “AB,” from whom Li had arranged to purchase several pieces of sensitive military gear.
Li’s case, which has not been previously reported and is described in a federal charging document obtained by Quartz, is among the most recent incidents of Chinese civilians accused of spying on behalf of Beijing.
While Li was apprehended by authorities, he represents the immediate—and increasing—threat China poses to US national security, say experts.
One of the items Li was allegedly after, a Harris Falcon III AN/PRC 152A radio, is designated as a defense article on the United States Munitions List, and subject to international arms trafficking regulations.
This means the Falcon III, which provides US troops in the field with National Security Agency-certified encrypted communications, cannot leave the country without a special license issued by the State Department.
Li had agreed to pay AB a total of 50,000 renminbi, or roughly $7,200, for the radio.
He knew AB was already under investigation for export-related crimes and believed AB “was attempting to get rid of the radio in light of AB’s entanglement with law enforcement,” according to court filings.
Li told AB he planned to drive with the Falcon III to Tijuana, Mexico—about 30 minutes by car from San Diego—and ship it to China from there.
This, Li reportedly thought, would help him skirt American trafficking laws.
He gave AB a $600 down payment for the radio, and left the storage facility carrying it in a shoulder bag.
It is unclear from the court record whether AB was cooperating with authorities, or if they had become aware of Li’s activities during their ongoing monitoring of AB’s conversations, but the FBI was waiting for Li outside the building.
Agents intercepted him immediately after the transaction with AB was completed.
Li, they soon discovered, had a second Harris Falcon III in his possession, several antennas, a digital memory card, and a map of the North Island Naval Air Station, a nearby military base home to two US aircraft carriers.


According to an FBI affidavit filed in the case, Li came clean during questioning, confessing he had been tasked with obtaining the Falcon III radio by a contact Li claimed was an officer in the Chinese People’s Liberation Army (PLA).
He told the agents the PLA officer had given him a list of US military items to procure on his trip to the US, including the Falcon III.
Li was indicted by a federal grand jury less than two weeks after his arrest, and in September pleaded guilty to attempting to export defense articles without a license.
The charge carries a possible $1 million fine and 20 years in prison.
Last month, the Naval Criminal Investigative Service seized everything Li had on him at the time he was caught, including an iPhone 10 XS Max, which Li said he used to set up the radio purchase, as well as $2,844 Li said was intended for further illegal buys.
He remains in custody, pending a pre-sentencing hearing set for Feb. 7.
Jonathan Rapel, Li’s attorney, and assistant US attorney Alexandra Foster, the lead federal prosecutor on the case, both declined to comment on Li’s case.

Not the first attempt
Almost exactly a year ago, America’s top counterintelligence official sounded the alarm about Chinese espionage.
China’s spy services are more persistent than even Russia’s or Iran’s, with broader reach and a wider variety of operational techniques than any other US adversary, warned William Evanina, who has led the National Counterintelligence and Security Center, a government agency under the aegis of the Office of the Director of National Intelligence, since 2014.
“China is number one,” Evanina said in a 2018 podcast interview with former deputy CIA director Michael Morell. 
“Existentially, long term, they’re the largest threat to our national security, bar none—it’s not even close.”
There has been a marked increase in non-traditional intelligence collection efforts, Evanina said. “Those out-of-embassy jobs where they send over engineers, businessmen, students to do the same type of collection, recruitment, co-opting of information… at mass scale,” he said.
The Chinese intelligence services possess practically unlimited financial resources, and use this wealth freely, said Janosh Neumann, a former counterintelligence officer with Russia’s Federal Security Service (FSB), which replaced the KGB at the end of the Cold War.
The US, as the undisputed leader in innovation and advanced technology, is the world’s top target for scientific and technical espionage of Chinese intelligence services.
Neumann, who defected to the US in 2008, describes the Li case as a “classic example” of the way China operates, using voluminous numbers of agreeable civilians as freelance agents, as well as private companies, to further its geopolitical aims. (In the espionage world, “officer” denotes a professional intelligence operative, while “agents” are roughly akin to confidential informants.)
“The standard scheme is when special services use agents—sources—for smuggling technical devices or technologies prohibited from export from the United States,” Neumann told Quartz.
“Most likely, Li was one of several agents whom the Chinese side sent with a similar task. To perform such operations, several agents are used simultaneously, thereby increasing the chances of success.”
Documents filed in the Li case do not provide any details about his background.
However, the circumstances do suggest he was a citizen agent.
The intelligence arm of the PLA, for whom Li said he was working, is tasked with obtaining military secrets and related foreign technology, mostly the illegal export of restricted military and dual-use technology, according to Nicholas Eftimiades, who spent 34 years as a senior official with, variously, the CIA, the Defense Intelligence Agency, and the State Department’s Bureau of Diplomatic Security.
Eftimiades, who is considered one of the country’s foremost experts on Chinese espionage, told Quartz that Li’s tasking from the PLA was a “very focused collection operation,” and said the objective for someone like Li is to get in and get out before US authorities can figure out what’s happening.
In this instance, however, Li’s contact, AB, was already in the FBI’s sights.
When Li suddenly appeared on their radar, Eftimiades said, he “walked right into a trap.”
The Li case does not mark the first time China has tried stealing the Harris Falcon III radio, Eftimiades said, pointing to a trio of Chinese agents prosecuted in 2009 for selling an earlier model of the Falcon III.
There is a civilian version of the Falcon III, Eftimiades noted, but that has already been knocked off by the Chinese and is not of particular interest to its spy services.

A threat to US troops
Although China is known for knocking off pilfered technology through reverse engineering, that may not have been the primary goal here.
If China were to successfully acquire a military-grade Falcon III, it could directly endanger US troops on the battlefield.
“What you’d want to do is take it apart and understand the guts of it,” Eftimiades said.
“It also has uploadable software. Were I a bad guy, I would want to know exactly how and where the software is uploaded, because it’s probably done from some central point. If I can get into that supply chain, I could theoretically upload software that may allow me access to [encrypted top secret] communications.”
Dan Grazier, a former US Marine tank commander, relied on the Falcon III regularly during tours of duty in Iraq and Afghanistan.
“This is the handheld unit used by our forward air controllers on the ground,” Grazier told Quartz.
“I would have a forward air controller with my tank company, and he would use this kind of radio to talk to aircraft, to guide close air support missions. So, this is an important system. It’s certainly something that we would not want to fall in the hands of a potential adversary.”
Now a fellow at the nonprofit Project on Government Oversight, Grazier said he assumes the Falcon III Li attempted to buy from AB was smuggled off of a US base, where it was almost certainly kept under lock and key within a secure area.
“The military works hard to control these sensitive items,” Grazier continued.
“When I was the officer of the day for the tank battalion, I had to check to make sure that the vaults were locked, I had to sign the sheet to show that I checked it. If it gets out and if it gets off base, then it becomes really difficult to keep track of these things.”
Li’s sloppy spycraft is another indication he was an asset recruited from outside of the official intelligence community.
If Li were a full-time spy, speculated Eftimiades, everyone involved would have first, at minimum, been vetted thoroughly by the PLA, including his source for the illicit military equipment, and would have established a secure means of communication before anyone was dispatched abroad.
The Li operation was “state-sponsored, clearly,” Eftimiades said, pointing out that Li told the FBI he was taking orders from the PLA, but fits into what Eftimiades described as China’s “whole-of-society approach” towards conducting espionage.

The “million grains of sand” method
In a 2018 op-ed for The New York Times, Paul Moore, a former China analyst for the FBI, explained the technique, which is also known as a “mosaic” or “million grains of sand” method:
“If a beach were a target, the Russians would send in a sub, frogmen would steal ashore in the dark of night and collect several buckets of sand and take them back to Moscow,” Moore wrote.
“The US would send over satellites and produce reams of data. The Chinese would send in a million tourists, each assigned to collect a single grain of sand. When they returned, they would be asked to shake out their towels. And they would end up knowing more about the sand than anyone else.”
Chinese citizens benefit in two ways from this arrangement.
Beijing’s spymasters pay well for valuable information, and a large number of individuals and companies are willing to work with the government. 
This has to do not only with any immediate financial rewards, but also the promise of increased future earnings in one’s regular life, as well.
“If you’re an individual or a company, you stand in very good stead with the Chinese government for doing these sorts of things, which of course raises your own guanxi, your own reputation, inside those circles, and your ability to do more business,” said Eftimiades.
Knowing your adversary is a concept “as old as time,” said Grazier.
By the same token, it’s also incumbent upon US counterintelligence to protect the nation’s sensitive information and materiel as much as possible.
“We don’t want to make it easy for them, that’s the big thing,” Grazier said.
“We know that they’re doing this, but the counterintelligence aspect of the military is to thwart their efforts as much as we possibly can, and not do their jobs for them.”
To that end, the American counterintelligence apparatus is overdue for an update, Eftimiades said. For starters, he believes the federal government must start partnering with industry much more closely than it does now.
The FBI, as well as the Department of Homeland Security and the Department of Commerce are making attempts to strengthen ties with the commercial sector, but this sort of outreach is expensive and time-consuming, said Eftimiades.
Agents get taken off the street to conduct industry briefings, which Eftimiades says doesn’t typically impart much usable information, anyway.
Equally important, Eftimiades said, the US needs to strengthen laws on intellectual property and the Foreign Agents Registration Act (FARA), which requires anyone acting on behalf of a foreign government to register with the Department of Justice and disclose their affiliation.
FARA became law in 1938 to counter Nazi propaganda, and experts say it hasn’t evolved with the times—the 82-year-old regulations obviously don’t cover things like social media, and didn’t anticipate how blurred the lines between private industry and government would eventually become in countries like China and Russia.
“I testified before Congress a couple of times in the 90s, and I told them, ‘Do something about this problem now, because if not, in 20 years, you’re going to be calling me back crying: How did it get this bad?’” Eftimiades said. “And you know what happened? They didn’t do anything about it.”

Chinese Integrity: Scientist Accused of Smuggling Lab Samples

Zaosong Zheng, a cancer researcher, confessed that he had planned to take the stolen samples to China's Sun Yat-sen Memorial Hospital
By Ellen Barry
An entrance to Beth Israel Deaconess Medical Center, in Boston, in 2014. Zaosong Zheng was a cancer researcher there recently.

BOSTON — Zaosong Zheng was preparing to board Hainan Airlines Flight 482, nonstop from Boston to Beijing, when customs officers pulled him aside.
Inside his checked luggage, wrapped in a plastic bag and then inserted into a sock, the officers found what they were looking for: 21 vials of brown liquid — cancer cells — that the authorities say Zheng, 29, a cancer researcher, took from a laboratory at Beth Israel Deaconess Medical Center.
Under questioning, Zheng acknowledged that he had stolen eight of the samples and had replicated 11 more based on a colleague’s research. 

When he returned to China, he said, he would take the samples to Sun Yat-sen Memorial Hospital and turbocharge his career by publishing the results in China, under his own name.
Zheng’s arrest on Dec. 10 signified an escalation in the F.B.I.’s efforts to root out Chinese scientists who are stealing research from American laboratories. 

Federal prosecutors warn that he may be charged with transporting stolen goods or with the theft of trade secrets, a felony that brings a prison term of up to 10 years.
At a hearing on Monday, Magistrate Judge David Hennessy granted prosecutors’ wish to hold Zheng without bail, noting that the theft had the support of the Chinese government. 

Two other Chinese scientists who worked in the same lab as Zheng had successfully smuggled stolen biological material out of the country, prosecutors say.Zheng’s case is the first to unfold in the laboratories clustered around Harvard University, but it is not likely to be the last. 

Federal officials are investigating hundreds of cases involving the potential theft of intellectual property by visiting scientists, all of them Chinese nationals.Christopher Wray, director of the F.B.I., described the researchers as “nontraditional collectors” of intelligence acting at the behest of the Chinese government, part of a collective effort to “steal their way up the economic ladder at our expense.”Dr. Ross McKinney Jr., chief scientific officer of the Association of American Medical Colleges, said the actions Zheng was accused of were especially bold.
“This is one of the cases where there’s been stealing of physical material as well as the stealing of ideas,” he said. 

“It’s an escalation over most of what we’ve been seeing.”Chinese researchers make up nearly half of the work force in American research laboratories, in part because American-born scientists are drawn to the private sector and less interested in academic careers, Dr. McKinney said. 

Among the 6,000 Chinese scientists who have received grants from the National Institutes of Health, around 180 are under investigation for violation of intellectual property law, he said.

Importing Chinese spies

Harvard University had sponsored Zheng’s visa starting on Sept. 4, 2018, according to Jason A. Newton, a spokesman for the university. 

The visa support ended when Zheng lost his job at Beth Israel Deaconess Medical Center, he said.
The hospital said in a statement that it was cooperating with the investigation. 

“Any efforts to compromise research undermine the hard work of our faculty and staff to advance patient care,” said Jennifer Kritz, the hospital’s director of communication.
A message left for Brendan O. Kelley, Zheng’s lawyer, was not returned.
Court records sketch out a cat-and-mouse game between Zheng and Kara Spice, the F.B.I. special agent assigned to the case. 

Customs and Border Protection agents had been warned that he was “a high risk for exporting biological undeclared biological material,” and inspected his luggage in the airline’s bag room.
At first, Zheng deflected their interest in the 21 vials, telling the agents that they “were not important and had nothing to do with his research.” 

Then he offered another explanation, saying that they had been given to him by a friend and that he had no plans to do anything with them.
“Zheng could not explain why he was attempting to leave the United States with the vials concealed in a sock in his checked bag,” Ms. Spice’s statement says.
Shortly thereafter, he confessed to stealing the material.
Zheng booked another flight to China the following day, but was detained by F.B.I. agents before he could board it, court documents say.
Through a Mandarin interpreter, he waived his Miranda rights and told the agents he intended to use the samples for cancer research.
At that point, he was arrested.
Agents learned more when they visited Zheng’s apartment, according to court documents.
His former roommate, a fellow medical researcher named Jialin Li, told them that Zheng had packed all his possessions in preparation for his Dec. 9 flight, suggesting that he did not intend to return to the United States.
Li also told them that two other Chinese researchers, Lei Liu and Leina Mo, who had worked in the same laboratory at Beth Israel Deaconess Medical Center, had managed to smuggle biological material into China without getting caught, according to court documents.
Zheng’s theft “was not an isolated incident,” prosecutors stated in the motion to hold him without bail.
“Rather, it appears to have been a coordinated crime, with involvement by the Chinese government, as two other Chinese working in the same lab have also stolen biological materials and smuggled them out of the United States.”

U.S.'s 5,025,817 Chinese Spies

Chinese arrested for taking photos at Naval Air Station in Key West
By Jay Weaver
The future USS Billings is docked at the Naval Air Station Key West’s Truman Waterfront base on Aug. 1, 2019.

The day after Christmas, a Chinese man rose early because, he said, he wanted to take photographs of the sunrise on the grounds of the Naval Air Station in Key West.
It was only a matter of time before witnesses spotted Lyuyou Liao at 6:50 a.m. Thursday walking around a perimeter fence and entering the military facility from the rocks along the water.
They warned Liao that he was trespassing in a restricted area, known as the Truman Annex, as he took photographs of government buildings near “sensitive military facilities,” according to a federal criminal complaint filed Thursday.
Then, U.S. Military Police saw him snapping photos with the camera on his cellphone, approached him and took a look at the pictures.
The police officers immediately called a federal agent, who arrested Liao on a charge of entering Naval property for the purpose of photographing defense installations.
Liao agreed to waive his Miranda rights and told the agent with the Naval Criminal Investigative Service in broken English that “he was trying to take photographs of the sunrise,” according to the complaint affidavit.
But when Liao provided the pass code to his cellphone and allowed the agent to look at the images, he “observed photographs of Truman Annex on the camera.”
Liao, 27, had his first federal court appearance Friday afternoon in Key West via a video hookup with Magistrate Judge Patrick Hunt in Fort Lauderdale and Assistant U.S. Attorney Karen Gilbert in Miami.
Hunt appointed the federal public defender’s office to represent Liao and scheduled his pretrial detention hearing for Jan. 6.
His arraignment will be a week later.
Liao’s arrest marks the second time since last year that a Chinese national has been charged with taking photos of defense installations at the Naval Air Station in Key West
In September of last year, Zhao Qianli, who claimed to be a music "student" from China, got caught by the Key West police for trespassing onto the high-security Naval Air Station.
He later told federal authorities that he lost his way on the tourist trail and did not realize it was a military base.
Investigators found photos and videos on Qianli’s cellphone as well as on his digital camera that he had taken of government buildings and a Defense Department antenna field on the military base.
Qianli, 20, pleaded guilty in February to one count of photographing defense installations at the Key West military facility and was sentenced to one year in prison by U.S. District Judge K. Michael Moore. 
The judge gave him the maximum sentence, which was higher than the sentencing guidelines between zero and six months.
The U.S. attorney’s office sought nine months in prison.
The following March, a Chinese woman was arrested at President Donald Trump’s private club in Palm Beach after she bluffed her way into Mar-a-Lago to attend a purported “United Nations friendship” event that she knew had been canceled before she left China.
Yujin Zhang, 33, was charged with trespassing in a restricted area and lying to a federal agent.
In September, Zhang was convicted at trial and sentenced in November to eights months in prison — or the time she had been in custody since her arrest — by U.S. District Judge Roy Altman.
Another Chinese woman, Lu Jing, 56, was arrested December 18 after she had been reported trespassing and taking pictures at Mar-a-Lago.

Chinese Peril

The Chinese threat to U.S. research institutions is real
By Josh Rogin
Sen. Rick Scott questions Department of Justice Inspector General Michael Horowitz during a Senate Committee On Homeland Security And Governmental Affairs.

The Chinese communists are pursuing a comprehensive, well-organized and well-funded strategy to abuse the open and collaborative research environment in the United States to advance their economic and military expansion at our expense.
But now U.S. research institutions are finally waking up to Beijing’s efforts to recruit American scientists for China’s benefit.
On Wednesday, H. Lee Moffitt Cancer Center & Research Institute announced the forced resignations of its chief executive and president, Alan List, Vice President Thomas Sellers and four researchers.
In a news release, the center said the employees committed compliance and conflict-of-interest violations. 
Specifically, the researchers didn’t reveal they had been recruited and paid by the Chinese government under its “Thousand Talents” program, a massive effort controlled by the Chinese Communist Party to recruit foreign scientists for its own purposes.
The Moffitt Center, located in Tampa, essentially fired its leaders after an investigation prompted by the National Institutes of Health, which had warned them “of foreign efforts to influence or compromise U.S. researchers,” the center said. 
The NIH, which is funded by U.S. taxpayers, is the source of more than half of the center’s $71 million in annual grant funding.
Although the center claims it found no evidence its research was compromised, the details of the relationships between its employees and the Chinese government are unknown.
The center is now working with federal officials on the case.
The FBI has been warning research institutions across the country that Chinese talent-recruitment programs are not only a threat to the integrity of the U.S. research environment but also a real national security concern.
In July, FBI Director Christopher A. Wray testified that the Chinese government and the Chinese Communist Party have many “so-called talent plans” that are not illegal but are routinely abused to steal intellectual property and take it back to China to advance Beijing’s various strategic and economic plans. 
The irony is that the U.S. taxpayer is essentially funding China’s economic resurgence, Wray said.
“The Chinese government knows that economic strength and scientific innovation are the keys to global influence and military power, so Beijing aims to acquire our technology — often in the early stages of development — as well as our expertise, to erode our competitive advantage and supplant the United States as a global superpower,” John Brown, the FBI’s assistant director for counterintelligence, testified in November.
FBI investigations have found that the Chinese recruitment programs — and there are more than 200 of them — have been connected to violations of U.S. laws, including economic espionage, theft of trade secrets, circumvention of export controls and grant fraud, according to Brown.
A 2019 report by the Senate Homeland Security and Governmental Affairs Committee outlined several examples of related abuses by Chinese employees at national labs, the Energy Department and graduate schools across the country.
Beijing, in response to new U.S. government and congressional scrutiny, decided to take the Thousand Talents program underground by deleting news articles and other online references to the program and its members, according to the committee’s report. 
Thousand Talents contracts even require the participants to keep their involvement secret.
Congress is pressing for more investigation, more transparency and more compliance in universities and research institutions across the country. 
Sen. Rick Scott (R-Fla.) sent a letter this month to all Florida universities calling on them to investigate and then reveal their researchers’ relationships with Chinese government programs.
“Everyone needs to be incredibly vigilant about Communist China’s growing influence,” Scott told me. “The situation at Moffitt just shows how far China will go to infiltrate American industries and institutions. I think every elected official needs to be sounding this alarm in their states.”
The Moffitt Center case is important also because it dispels the notion that any scrutiny of these programs represents anti-Chinese bias.
After the MD Anderson Cancer Center in Houston ousted three scientists in April over similar failures to disclose relationships with Chinese institutions, some speculated they were targeted due to their Chinese ethnicity.
U.S. research institutions have been asleep to Beijing’s efforts for a long time because they think of themselves as practicing “open science” — rather than “strategic science,” as the Chinese government does. 
Some believe that because the research will eventually be published, the China threat is overblown. But that ignores the huge body of evidence that the Chinese government is using talent programs not for mutually beneficial collaboration but as vehicles to steal non-public research to feed their own national ambitions.
The U.S. government and the U.S. research community must speed up efforts to work together to determine the extent of Chinese government infiltration into the U.S. research environment and neutralize the threat.
Then we need a national strategy for managing international scientific collaboration in a way that preserves the openness that characterizes our system while also protecting our national security.

Belgian university closes its Chinese state-funded Confucius Institute after spying claims

• Song Xinning, former head of the Confucius institute at Vrije Universiteit Brussel, is a recruiter for Chinese intelligence and conducts espionage for China.
• The Belgian university says cooperating with the Chinese espionage is no longer consistent with its policies

By Stuart Lau

Confucius Institutes, the long arm of Chinese, espionage, have been established in almost 500 higher education institutions globally. 

One of Belgium’s leading universities has decided to close the Chinese state-funded
Confucius Institute on its campus, following accusations that the former head professor conducted
espionage for China.
Vrije Universiteit Brussel (VUB) confirmed that it would not extend its contract with the institute when the agreement expires next June, although it did not refer to the espionage claims.
The university said cooperation with Confucius Institute – whose stated aims include promoting Chinese language and culture and facilitating cultural exchanges – was “not in line with [our] principles of free research”, based on the information it had obtained.
“The university is of the opinion that cooperating with the institution is no longer consistent with its policies and objectives,” it said in a statement on its website.

Leading Chinese spy Song Xinning, pictured in 2016 at the University of Helsinki’s Confucius Institute, has been barred from entering a bloc of European countries. 

In October, Belgian security services accused Song Xinning, former head of the Confucius Institute at VUB, of working as a recruiter for Chinese intelligence.
The Belgian newspaper De Morgen reported that pro-China VUB had ignored a warning from the state security service about the institute’s activities.

Song was subsequently barred from entering the Schengen Area – comprising 26 European countries – for eight years.
In an earlier interview with the South China Morning Post, Song said Belgian immigration authorities had informed him on July 30 that his visa would not be renewed, because he “supported Chinese intelligence activities”.

Jonathan Holslag, an international relations professor at VUB and one of the most vocal critics of VUB’s Confucius Institute, called the university’s decision “brave”.
“This should stand as an example for many European universities,” he said. 

“It is also in the interest of Chinese students, because they are the main victims of the politicisation of academic exchanges and the suspicion that elicits.”
Confucius Institutes, which are overseen by China’s Ministry of Education, have been set up in more than 480 higher education institutions around the world. 

Over the past decade, they have come under increased scrutiny from Western governments over their links to Chinese espionage activities.Several of the institutes in the United States and Australia have been forced to close because of their undue influence on campus, while several Chinese "academics" and "researchers" have been investigated, dismissed and arrested in the US on charges of stealing intellectual property or failing to disclose funding ties with Chinese universities.
In Europe, the Confucius Institutes at the University of Leiden in the Netherlands, Stockholm University in Sweden and University Lyon in France have all been closed.

TikTok Spying for China

TikTok sent US user data to China, lawsuit claims
BBC News

Video-sharing app TikTok has been hit with a class action lawsuit in the US that claims it transferred "vast quantities" of user data to China.
The lawsuit accuses the company of "surreptitiously" taking content without user consent.
Owned by Beijing-based ByteDance, TikTok has built up a keen US fan base.
TikTok, which is thought to have about half a billion active users worldwide, has previously said it does not store US data on Chinese servers.
However, the platform is facing mounting pressure in North America over data collection and censorship concerns.
The lawsuit filed in a Californian court last week claims TikTok "clandestinely... vacuumed up and transferred to servers in China vast quantities of private and personally-identifiable user data".
The data could be used to identify, profile and track users in the US "nw and in the future".

Ima

TikTok lets users make short videos and set them to music, before sharing with followers

The plaintiff is named as Misty Hong, a Californian-based university student. 

Ms Hong claims she downloaded the app this year but did not create an account.
Months later the firm had created an account for her, and surreptitiously took draft videos she had created but never intended to publish.
The data was sent to two servers in China, backed by Tencent and Alibaba.
The lawsuit also argues TikTok unfairly profits from "secret harvesting" of private data by using that data to derive "vast targeted-advertising revenues and profits".
TikTok did not immediately respond to requests for comment.

What is TikTok?
The platform has exploded in popularity in recent years, mostly with people under 20.
They use the app to share 15-second videos that typically involve lip-synching to songs, comedy routines and unusual editing tricks.
Alongside its rapid expansion, concerns have grown -- chiefly in the US -- over the potential to compromise users' privacy.
US lawmakers have put pressure on the company to clear up allegations that it is beholden to the Chinese state.
TikTok operates a similar but separate version of the app in China, known as Douyin. 

It says all US user data is stored in the United States, with a backup in Singapore.
Still, the company found itself in hot water last week, apologising to a US teenager who was blocked from the service after she posted a viral clip criticising China's treatment of the Uighur Muslims.
The company later lifted the ban.

Sinicization and Satellization : Suddenly, the Chinese Threat to Australia Is Very Real

After a businessman said Chinese agents sought to implant him in Parliament, that revelation and other espionage cases have finally signaled the end of a “let’s get rich together” era.
By Damien Cave and Jamie Tarabay

Chinese tourists taking photographs outside Parliament House in Canberra, Australia, in January.

CANBERRA, Australia — A Chinese defector to Australia who detailed political interference by Beijing. 

A businessman found dead after telling the authorities about a Chinese plot to install him in Parliament. 

Suspicious men following critics of Beijing in major Australian cities.
For a country that just wants calm commerce with China — the propellant behind 28 years of steady growth — the revelations of the past week have delivered a jolt.
Fears of Chinese interference once seemed to hover indistinctly over Australia. 

Now, Beijing’s political ambitions, and the espionage operations that further them, suddenly feel local, concrete and ever-present.“It’s become the inescapable issue,” said Hugh White, a former intelligence official who teaches strategic studies at the Australian National University. 

“We’ve underestimated how quickly China’s power has grown along with its ambition to use that power.”
American officials often describe Australia as a test case, the ally close enough to Beijing to see what could be coming for others.
In public and in private, they’ve pushed Australia’s leaders to confront China more directly — pressure that may only grow after President Trump signed legislation to impose sanctions on Chinese and Hong Kong officials over human rights abuses in Hong Kong.

A rally last month in Hong Kong in support of a bill in the American Congress.

Even as it confronts the specter of brazen espionage, Australia’s government has yet to draw clear boundaries for an autocratic giant that is both an economic partner and a threat to freedom — a conundrum faced by many countries, but more acutely by Australia.
Prime Minister Scott Morrison continues to insist that Australia need not choose between China and the United States. 

A new foreign interference law has barely been enforced, and secrecy is so ingrained that even lawmakers and experts lack the in-depth information they need.
As a result, the country’s intelligence agencies have raised alarms about China in ways that most Australian politicians avoid. 

The agencies have never been flush with expertise on China, including Chinese speakers, yet they are now in charge of disentangling complex claims of Chinese nefarious deeds.
In the most troubling recent case, first reported by The Sydney Morning Herald and The Age, the Australian authorities have confirmed that they are investigating accusations made by Nick Zhao, an Australian businessman who told intelligence officials that he had been the target of a plot to install him in Parliament as a Chinese agent.

Mr. Zhao, a 32-year-old luxury car dealer, was a member of his local Liberal Party branch. 

He was a “perfect target for cultivation,” according to Andrew Hastie, a federal lawmaker and tough critic of Beijing who was briefed on the case. 

He told The Age that Mr. Zhao was “a bit of a high-roller in Melbourne, living beyond his means.”
Another businessman with ties to the Chinese government, Mr. Zhao said, offered to provide a million Australian dollars ($677,000) to finance his election campaign for Parliament. 

But a few months later, in March, Mr. Zhao was found dead in a hotel room. 

The state’s coroner is investigating the cause of death.
In a rare statement, Mike Burgess, the head of Australia’s domestic spy agency, said on Monday that his organization was aware of Mr. Zhao’s case and was taking it very seriously.

Last week, a young asylum seeker named Wang Liqiang presented himself to the Australian authorities as an important intelligence asset — an assistant to a Hong Kong businessman who is responsible for spying, propaganda and disinformation campaigns aimed at quashing dissent in Hong Kong and undermining democracy in Taiwan.

Xiang Xin, the man Mr. Wang identified as his former boss, has denied having anything to do with him, or even knowing him.
The challenge of the case is just beginning. 

The detailed 17-page account that Mr. Wang gave to the authorities as part of an asylum application is being taken seriously by law enforcement agencies worldwide.

Taiwan’s Ministry of Justice detained Xiang and another executive with the company Mr. Wang said he worked for, China Innovation Investment Limited. 

Investigators in Taiwan are looking into assertions that their business acted on behalf of Chinese intelligence agencies.
Other details in Mr. Wang’s account — about the kidnapping of booksellers in Hong Kong, spying on Hong Kong university students, and the theft of military technology from the United States — are still being examined by Australian officials.
“Australia’s peak intelligence agencies are being put to the test,” said John Fitzgerald, a China specialist at Swinburne University of Technology in Melbourne. 

“It’s a tough call, and they cannot afford to get it wrong.”

Chinese mole: Questions of loyalty continue to swirl around a Liberal Party member of Parliament, Gladys Liu.

What’s clear, though, is that they are helping to push the public away from supporting cozy relations. Polls showed a hardening of Australian attitudes about China even before the past week.
Now Mr. Hastie, the Liberal Party lawmaker who chairs Parliament’s joint intelligence committee, says his office has been overwhelmed by people across the country who have emailed, called and even sent handwritten letters expressing outrage and anxiety about China’s actions in Australia.
Questions of loyalty continue to swirl around another Liberal Party member of Parliament, Gladys Liu, who fumbled responses to questions in September about her membership in various groups linked to the Chinese Communist Party.

Massive Chinese fifth column: Chinese student-spies shouting at pro-Hong Kong protesters outside the University of South Australia in Adelaide in August.

The espionage cases also follow several months of rising tensions at Australian universities, where protests by students from Hong Kong have been disrupted with violence by opponents from the Chinese mainland.
Several student activists have told the authorities that they have been followed or photographed by people associated with the Chinese Consulate.
It’s even happened to at least one high-profile former official, John Garnaut. 

A longtime journalist who produced a classified report on Chinese interference for former Prime Minister Malcolm Turnbull in 2017, he recently acknowledged publicly that he had been stalked by people who appeared to be Chinese agents — in some cases when he was with his family.
These actions of apparent aggression point to a version of China that Australians hardly know. 

For decades, Australia has based its relations with Beijing on a simple idea: Let’s get rich together. 

And the mining companies that are especially close to Mr. Morrison’s conservative government have been the biggest winners.
But now more than ever, the country is seeing that for the Communist Party under Xi Jinping, it’s no longer just about wealth and trade.
“The transactions aren’t satisfying them enough; they want more,” said John Blaxland, a professor of international security and intelligence studies at the Australian National University. 

“They want to gain influence over decisions about the further involvement of the United States, about further protestations to Chinese actions in the South China Sea, in the South Pacific, in Taiwan.”
Mr. Blaxland, along with American officials, often points out that Australia’s biggest export to China, iron ore, is hard to obtain elsewhere reliably and at the prices Australia’s companies charge. 

That suggests that the country has more leverage than its leaders might think.Mr. Hastie, who was recently denied a visa to travel to China as part of a study group that included other members of Parliament, agreed. 

In an interview, he said the recent revelations were “the first time the Australian public has a concrete example of what we are facing.”
Now, he added, it’s time to adapt.

California tour guide Xuehua Peng, accused by US of spying for China, pleads guilty in hotel room ‘dead drop’ sting

• Xuehua ‘Ed’ Peng was accused of using coded messages and secret ‘drop box’ deliveries to help pass on classified material
• He was charged in September with acting as unregistered agent of a foreign government

Bloomberg

A screen grab from footage provided by the US Justice Department in its case against Xuehua Peng. 

A California man accused of spying for China’s security service pleaded guilty to a US criminal charge in a case touted by prosecutors as a “rare glimpse” into how Beijing gathers intelligence in America.
Xuehua “Ed” Peng, who became a naturalised US citizen in 2012, was charged in September with acting as unregistered agent of a foreign government.
As part of his plea agreement, the US will recommend a four-year prison sentence and a US$30,000 fine, instead of the maximum penalty of 10 years’ incarceration and a US$250,000 fine, a prosecutor told a judge Monday in Oakland federal court.
A US crackdown on national security espionage by the Chinese government and theft of intellectual property that began under former president Barack Obama has escalated during the Trump administration’s trade war with China.
At three former US intelligence officers have been convicted in recent years of spying for China.

Last year, the Justice Department launched a China Initiative targeting trade-secret theft, hacking and economic espionage.
Peng, 56, worked as a guide for Chinese tourists in the San Francisco area, according to prosecutors. He was snared in a sting operation in which he hid envelopes with US$10,000 to US$20,000 in cash in hotel rooms and returned later to pick up memory cards containing classified security information that had been planted by US agents.

US Attorney David Anderson holds a memory card as he announces charges against Xuehua Peng in September. 

After staging each of the so-called dead drops at hotels in Oakland and Newark, California, as well as Columbus, Georgia – at least one of which the FBI recorded with a hidden video camera – Peng would later fly to China with the cards to deliver them to his handlers at the Ministry of State Security, prosecutors alleged.
The US said it uncovered Peng’s identity as a spy through a double-agent operation in China started in March 2015.
John Demers, the Assistant US Attorney General for national security, said when Peng was arrested that his case exposes how Chinese intelligence officers collect information “without having to step foot in this country”.
Peng’s lawyer declined to comment after Monday’s hearing.

Defecting Chinese Spy Reveals Regime’s Extensive Influence Operations

BY FRANK FANG

Wang Liqiang, a former Chinese spy, has defected to Australia and offered to provide information about his espionage work to the Australian government. 

Recent revelations by a man claiming to be a Chinese spy have made international headlines, blowing the lid off the regime’s espionage operations in Australia, Hong Kong, and Taiwan.
Wang “William” Liqiang sought asylum in Australia and offered the country’s top intelligence agency a trove of information on how the communist Chinese regime funds and directs operations to sabotage the democratic movement in Hong Kong, meddle in Taiwanese elections, and infiltrate Australian political circles, according to a series of reports from Nov. 22 by Nine Network, an Australian media group.
His claims support longstanding concerns about Beijing’s attempts to subvert and undermine its opponents abroad.
In an earlier interview with the The Epoch Times, the 27-year-old said he decided to defect after becoming disillusioned with the Chinese Communist Party’s (CCP) malign ambitions.
“As I grew older and my worldview changed, I gradually realized the damage that the CCP’s authoritarianism was doing to democracy and human rights around the around,” Wang said.
“My opposition to the Party and communism became ever-clearer, so I made plans to leave this organization.”
Wang’s going public marks the first time a Chinese spy has blown his or her cover.

Recruitment
In a detailed statement provided to The Epoch Times, Wang describes how he came to work as a spy for the Chinese regime.
Wang hails from Fujian, the southeast Chinese province across the strait from democratic Taiwan. The son of a local Communist Party official, Wang had a middle-class upbringing and majored in oil painting at the Anhui University of Finance and Economics. 

Photos from Wang’s time in school show awards he won for his artwork.
At the end of his education, a senior university official suggested that Wang should work at China Innovation Investment Limited (CIIL), a Hong Kong-based company specializing in technology, finance, and media. 

In 2014, Wang began working with the firm.
While CIIL presents itself as an investment firm focusing on listed and unlisted Chinese defense assets, Wang soon discovered that it was a major front for the Party’s overseas espionage, serving multiple Chinese security organs and CCP officials.
According to Nine Network, Wang was in the good graces of CIIL CEO Xiang Xin and entered the “inner sanctum” of the company by giving Xiang’s wife painting lessons. 

That gave him wide access to information about both ongoing and past cases of Chinese intelligence operations, much of it connected to the Party’s acquisition of military technology.
Wang said Xiang and his wife, Kung Ching, were both Chinese agents. 

He said Xiang had changed his name from Xiang Nianxin to Xiang Xin before being sent by Chinese military officials to Hong Kong to acquire CIIL and investment company China Trends Holdings Limited.
On Nov. 24, Xiang and Kung were stopped by Taiwanese authorities at Taipei’s main airport and asked to cooperate in an investigation of suspected violations of the country’s National Security Act.
They both deny knowing Wang.

Hong Kong 
Both CIIL and China Trends Holdings were controlled by the Chinese military, specifically the People’s Liberation Army (PLA) General Staff Department.
Both CIIL and China Trends Holdings have issued statements rejecting Wang’s claims, denying any involvement in espionage activities.
Xiang would provide intelligence reports to the PLA General Staff Department about individuals in Hong Kong who may have made comments critical of the Chinese regime or on other topics deemed sensitive by the Party.
Xiang’s PLA handler also directed him to collect information on activists and Falun Gong adherents in the city.
Adherents of the Falun Gong spiritual practice have been persecuted by the regime since 1999, and have been subject to arbitrary detention, forced labor, brainwashing, and torture.
The two companies targeted students in the city. 

They set up an education foundation in Hong Kong to develop agents and promote Beijing’s policies to students in Hong Kong. 

The foundation received 500 million yuan (about $71 million) annually from the Chinese regime to carry out its operations.
Wang said he recruited mainland Chinese students to gather information about individuals and groups deemed a threat to the regime.
“I promoted the Chinese regime’s policies … to these students and had them collect intelligence on the Hong Kong independence [movement] and views opposing the regime.”
Most of the recruited Chinese students came from two Chinese universities: Nanjing University of Science and Technology in the eastern Chinese province of Jiangsu, and Shantou University in southern China’s Guangdong Province.
The Nanjing University of Science and Technology and other Chinese universities have alumni associations in Hong Kong, many of which have members who are Chinese agents.
Wang was involved in an operation that led to the abduction of five Hong Kong booksellers in 2015. 

The booksellers later reappeared in detention in mainland China and participated in forced televised confessions.
Wang said the operation was organized by people inside CIIL in coordination with the PLA.
He said he was shocked that the regime was able to pull off the kidnappings.
“I didn’t think it was possible for the Chinese regime to arrest someone in Hong Kong because of ‘one country, two systems,’” Wang said, referring to the framework under which the regime pledged to afford the city a high level of autonomy and freedoms.

Taiwan
Speaking to Vision Times, Wang said that the majority of infiltration activities in Taiwan were carried out by Xiang’s wife, Kung Ching.
The regime sees the self-ruled island as a renegade province and has never ruled out using military force to reunite it with the mainland. 

In recent years, it has stepped up efforts to infiltrate the media and influence elections in Taiwan.
Wang said he took part in the online campaign to attack Taiwan’s ruling party, the Democratic Progressive Party (DPP) prior to the general elections in November 2018, in an effort to support the opposition party, the Kuomingtang (KMT), which has a Beijing-friendly stance.
He said that their group had more than 200,000 social media accounts, and many other fan pages to support their effort.
CIIL spent 1.5 billion yuan (about $213 million) on Taiwan’s media outlets alone to help in their efforts to influence the 2018 elections, he said.
Wang said they organized Chinese and Hong Kong students studying in Taiwan and Chinese tourists to aid in promoting pro-Beijing candidates running for the 2018 elections.
Overseas Chinese donations also went to pro-Beijing candidates, said Wang. 

More than 20 million yuan (about $2.8 million) went to Han Kuo-yu, who won a local election to become the mayor of the southern Taiwanese city of Kaohsiung.
Han is now running for president as the KMT candidate.
For the 2018 elections, the DPP suffered a major defeat, losing seven of its regional seats to the KMT. 

The KMT now controls 15 cities and counties, compared to six held by the DPP.
Wang described the 2018 elections as a victory for the Chinese regime.
Wang said many of Taiwan’s elite were in their pocket, including the head of a local daily newspaper, the head of a university, the general manager of a cultural center, several politicians, and gang leaders. 

These people were each paid 2 million to 5 million yuan ($284,155 to $710,388) annually to assist Wang and his group in their infiltration efforts.
In the upcoming 2020 presidential election, Wang said Beijing’s goal is to unseat president Tsai Ing-wen’s reelection bid.
He said that Kung wanted him to go to Taiwan on May 28 to assist her in influence operations targeting Taiwan’s media and the internet. 

But he had a change of heart.
“I saw what’s happening in Hong Kong. And I didn’t want to personally turn Taiwan into Hong Kong. So I decided to quit,” Wang told Vision Times, referring to the ongoing protests in Hong Kong against Beijing’s encroachment in the city.
So on April 23, Wang left his post in Hong Kong to visit his wife and baby son in Sydney, having been granted approval by Kung.
He is now staying at a secret location as he cooperates with the Australian Security and Intelligence Organisation, the country’s top intelligence agency.
Being in Australia, however, doesn’t guarantee safety, because Beijing has spy cells in the country who could abduct him and his family and send them back to China, Wang said.
Despite the risks, Wang stands by his decision to defect.
“I thought and rethought it time and time again.”
“I wondered if this decision would be a good thing or a bad thing for my life. I couldn’t tell you definitively, but I firmly believe that if I had stayed with [the CCP], I would come to no good end.”