Chinese Moles Dig Deep Into Europe’s Political Landscape

China has an array of agents of all political persuasions across Europe

By Peter Martin and Alan Crawford

Emmanuel Macron and Xi Jinping during a news conference in Paris, on March 25. 

In November, a British Conservative Member of the European Parliament called Nirj Deva traveled to Beijing for an event on innovation. 

It was a routine trip for Deva, a regular visitor as chairman of the EU-China Friendship Group. 

And as usual, his economy class air fare was upgraded to business by his Chinese government hosts, who also picked up his hotel bills and expenses.
Once there, Deva and his group, who have no formal role representing the European Union, were given better access than the EU’s official delegation for relations with China. 

Among those he met: Li Zhanshu, the head of the National People’s Congress and the No. 3 ranked official in China; Song Tao, head of the Communist Party’s international department; and Cai Qi, the party boss in Beijing who is on the 25-member Politburo.

Chinese mole Nirj Deva in the European Parliament.

“I am quite intimately involved with China,” Deva said in an interview at his parliamentary office in Strasbourg, France. 

He confirmed the arrangements for his visits, which are recorded in the European Parliament’s register of interests and are legitimate under the code of conduct for lawmakers. 

Deva said that growing wariness of China’s motives is misplaced and in his experience is partly due to “ignorance.” 

Over 15 years of closely watching China, “I can’t think of one big mistake they have made,” he said.
At a time when the world is growing more skeptical of China’s economic attentions, Deva is one of an increasing number of European officials courted by Beijing as it seeks to push its political agenda. Bloomberg spoke with more than two dozen diplomats, government officials, lawmakers and business leaders in China and in Europe to shine a light on Beijing’s links with sympathetic politicians and political parties across the European Union.
What emerges is an extensive network of contacts of all political persuasions, all of whom are either predisposed to China or are open to Chinese arguments. 

The result is a band of Chinese agents throughout Europe whose positions range from urging closer economic and governmental cooperation with Beijing to air-brushing over China’s human rights record.
Discussions with officials also showed:

• China’s penetration of Europe’s political landscape knows no geographical boundaries. It includes European heavyweights Germany and France, eastern states Romania and Hungary, as well as smaller strategic countries Belgium, Portugal, Greece and Austria.
• China isn’t fussy about political orientation. Beijing has traditionally had links with mainstream parties and former communists in Europe; now it’s building ties to right-wing populists such as the Alternative for Germany (AfD), anti-immigrant nationalists like Austria’s Freedom Party and Italy’s anti-establishment Five Star Movement.
• China has stepped up its outreach in recent months, coinciding with the campaign for EU-wide elections to the European Parliament in May.

Beijing’s efforts to reach out beyond the European mainstream are paying off as populism gains traction on the continent. 

Italy is the first Group of Seven country to join Xi Jinping’s Belt and Road Initiative, and Hungary under Viktor Orban blocked the EU from signing a letter two years ago condemning the torture of Chinese human rights lawyers.
Yet more broadly, Europe is adopting an increasingly critical stance toward China more in line with the U.S., Australia and Canada. 

Beijing wants to avoid Europe joining with the U.S. and others in an anti-China front, several officials said.

Xi Jinping, left, and Giuseppe Conte, pose for photographs ahead of the signing of the memorandum of understanding on China's Belt and Road Initiative in Rome, on March 23.

Countries including Russia have long tried to influence European politics; so-called friendship groups exist between other countries and members of the European Parliament, and are recognized as lobbying vehicles by the Association of Accredited Public Policy Advocates to the European Union. Indeed, Parliament has recently moved to tighten up their regulation. 

However, China’s efforts are on the radar after Xi’s visit to Italy and France last month failed to alleviate European concerns over undue Chinese influence.
“One country isn’t able to condemn Chinese human rights policy because Chinese investors are involved in one of their ports,” European Commission President Jean-Claude Juncker said on Monday, adding: “It can’t work like this.”
Europe faces a dilemma, with unease spreading as it becomes increasingly reliant on China economically. 

Europe’s relative openness makes it a more attractive target than the U.S. for Chinese investment, with some 45 percent more deals over the decade to end-2017. 

China is already the most important trading partner for Germany, the region’s biggest economy, with a 6.1 percent growth in total trade volume in 2018, the BGA exporters group said in its annual outlook last week.
For China, its European push is also something of an insurance policy. 

China was blindsided by President Donald Trump’s election victory in 2016, and his administration’s assault on strategies such as the Made in China 2025 plan to become the foremost world power in 10 key industries. 

It wants to make sure the same doesn’t happen in Europe.
China has taken an unusual degree of interest in the EU elections, and especially what populist candidates might mean for the bloc’s China policies. 

The Ministry of Foreign Affairs in Beijing didn’t respond to a fax requesting comment.
“We cannot let mutual suspicion get the better of us,” Xi said in Paris after visiting Rome, where Italy’s government signed the Belt and Road memorandum.
That could be read as a dig at Europe’s emerging China strategy, which will feature at an EU-China summit in Brussels on April 9. 

Europe’s toolkit includes anti-dumping instruments, tighter investment screening, and efforts to bolster cybersecurity defenses and protect 5G networks from security risks such as those attached to Huawei Technologies Co.
Deva dismissed security concerns over Huawei as “such nonsense” and praised Italy’s embrace of Belt and Road, expressing hope the EU will do likewise. 

For him, China isn’t trying to influence European politicians, but rather to learn why it is the subject of criticism.
“I think they are first trying to understand why they get attacked,” he said. 

“So they need a group of interlocutors who they can trust to give them an answer and say why is this happening.”

The EU Parliament’s official delegation for relations with China is more skeptical of Beijing’s motives. 

China under Xi shows a “total control phobia” that’s forcing the EU to “wake up” and protect itself, said Jo Leinen, a German Social Democrat lawmaker who chairs the delegation.
“From a friendly partner, in a few years it changed to an unfriendly competitor,” Leinen said of China. 

He cited industrial policy as well as human rights violations including the detention of Muslim minority Uighurs for the “rougher tone” from the EU. 

“China has lost the battle in the U.S. and is on the way to losing the battle in Europe,” he said.
Against that backdrop, China is stepping up its political engagement with a different set of tools. Invitations to politicians to visit China are issued by government-run “friendship organizations” like the Chinese People’s Association for Friendship with Foreign Countries, as well as Communist Party bodies such as the International Liaison Department and the United Front Work Department. 

The invites form part of a “united front” strategy to win support for China’s agenda through alternatives to official diplomatic channels. 

Xi described united front work as a “magic weapon” in a 2014 speech.
China doesn’t care about the ideological hue of its interlocutors. 

Robby Schlund, an AfD lawmaker who is deputy chair of the German-Chinese group in the Bundestag, met with Chinese People’s Association Vice President Xie Yuan in July. 

According to the Chinese group’s website, Schlund -- a former East German army officer who praised Vladimir Putin in an interview with Kremlin-backed Sputnik news last year -- pledged to deepen “exchanges and cooperation in the fields of parliaments, local governments and friendship cities.”
Austrian Transport Minister Norbert Hofer, who unsuccessfully contested the presidency for the Freedom Party, is leading his coalition government’s push for closer ties with China, saying “it’s not a question of whether China becomes the world’s biggest economic power, but when.” 

Brecht Vermeulen, a lawmaker with the Flemish nationalist NVA party who chairs Belgium’s home affairs committee, was pictured at a Chinese embassy reception in July 2017 marking the anniversary of the Chinese People’s Army. 

Vermeulen told Belga news agency he was invited “as a member of the Belgium-China inter-parliamentary friendship group.”
For China, “it’s about gaining influence,” with the Communist Party doing what it can to get close to politicians “from the far left to the far right,” said Reinhard Buetikofer, a senior Green party member of the European Parliament who also sits on the delegation for relations with China. 

The aim is to get international access “and not just rely exclusively on their foreign ministry,” he said. “That’s why they’re trying to strike up these relationships.”
Beijing’s influence tool kit also includes propaganda and flexing its cultural muscles, from an array of Confucius Institutes whose teaching materials are supplied by Beijing to paid-for inserts in European newspapers.
The risk of cyber attacks and espionage is becoming more apparent too. 

Germany’s domestic intelligence agency has warned of Chinese attempts to infiltrate political and business circles through LinkedIn. 

One of the European diplomats interviewed for this piece insisted on meeting in a park for fear that coffee shops near their place of work were bugged.
The paradox is that China’s approach is contributing to the distrust. 

The idea that the EU and China might get closer as a result of Trump was always exaggerated, yet there was a real window of opportunity which China has failed to grasp, one official said. 

Several said Europe’s traditional focus has been on Russian infiltration; now it’s shifting to include China.
A line has been crossed that is unlikely to lead to the EU softening its stance on China, according to Leinen. 

“If they don’t change in Beijing, it could even get tougher,” he said.

Australia's Chinese Moles: The Manchurian Labor

Labor MP Pierre Yang "forgets" to disclose China memberships

• Yang says he knows nothing about the affiliation between the groups he joined and the Chinese Communist Party
• He says he only gave legal advice to group members, not the organisations

By Eliza Borrello and Eliza Laschon

Yang and his protector, WA Labor Premier Mark McGowan

WA Labor MP Pierre Yang has given a lengthy radio interview defending his character and apologising for not disclosing his memberships of two Chinese organisations.
Yang, a Chinese-born member of the Upper House, has been at the centre of intense media scrutiny after News Corp reported on Tuesday that he had not disclosed memberships of two groups affiliated with the Chinese Communist Party.
The 35-year-old lawyer cancelled his memberships of both the Northeast China Federation Inc and the Association of Great China after the story was posted.
Curtin University's former head of Chinese Studies Catherine Yeung told the ABC the Northeast China Federation Inc was affiliated with the United Front Work Department — a Communist Party agency promoting China's political interests overseas.
She also said the Association of Great China signed a letter supporting China's claim of sovereignty in the South China Sea.
Yang spoke at length to ABC Perth on Wednesday afternoon and said he was "not aware" of either groups' affiliations with the Communist Party.
"I'll admit I overlooked my disclosure. I rectified that and I admit that it was my mistake," he said.
He also conceded not knowing about the organisations' affiliations was naive.
"And that's why I have taken action to rectify my oversight and I apologise for that," he said.

Yang yesterday confirmed he was a voluntary legal adviser to both groups for several months after he commenced his parliamentary term, but said he had not done work for them.
Today he said he had done legal work, but for "individual" members of the organisations, not the entities themselves.
Yang remains adamant he is not yet a member of the Australian Council for the Promotion of the Peaceful Reunification of China, despite his name appearing online as an executive of the group.
"I don't know why my name is there and I had instructed my lawyer to write to the organisation to remove my name," he said today.
The Australian Council for the Promotion of the Peaceful Reunification of China's former head was Huang Xiangmo, a prominent political donor embroiled in the scandal that forced the resignation of ex Labor Senator Sam Dastyari.

From China with love: Yang, pictured with his protector, says he "loves" Australia.

The interview ended with Yang declaring his "love" for Australia and saying he hoped to be a good example for other foreign-born Australians aspiring to enter Parliament.
"I'm an Australian, I have been an Australian citizen for 13 years ... this is my country, Australia has given me so much.
"My wife, my children were born here and you know I "love" this country."
WA Premier Mark McGowan is continuing to stand by Yang.
"It's discretionary on your parliamentary disclosures as to what memberships you put on there and you'll find very few members of parliament put any disclosures of organisations we're members of because generally we're members of scores," he said.
McGowan also said it did not concern him that the two organisations in question were affiliated with the Chinese Communist Party.
"No, it doesn't, look, China is our biggest trading partner, they're the country that we rely on most for jobs and opportunities in Australia."
Pierre Yang's parliamentary interests register did not include the memberships of two organisations  affiliated with the Chinese Communist Party. 

Sino-American Loyalty

Hunting a C.I.A. Mole, Agents Gambled and Let a Suspect Return to China

By MATT APUZZO and ADAM GOLDMAN

Fears of a mole grew when the C.I.A. noticed in late 2010 that its spies were disappearing.
WASHINGTON — Face to face with a former C.I.A. officer in 2013, federal agents took a calculated risk.
They did not confront him about the classified information they had found in his luggage.
And they did not ask what they most wanted to know: whether he was a spy for China.
It was a life-or-death call.
The Chinese government had been systematically picking off American spies in China, dismantling a network that had taken the C.I.A. years to build.
A mole hunt was underway, and the former officer, Jerry Chun Shing Lee, was the prime suspect.
The F.B.I. could have arrested him on the spot for possessing classified information. 

But inside a secretive government task force, investigators argued against it, former American officials recalled. 

If Lee were a turncoat, arresting him on an unrelated charge would tip off the Chinese and allow them to cover their tracks. 

If he was not the mole — and some argued strenuously that he was not — an arrest might allow the real traitor to escape.
So the F.B.I. allowed Lee to return to Hong Kong, court papers show, where he hastily resettled with his family. 

The agents, working out of an office in Northern Virginia, gambled that by watching patiently, they might piece together how China had decimated the United States’ spy network, and determine whether Lee had helped.
Nearly five years later, when Lee made a surprise return to the United States this week, the F.B.I. made its move. 

He stepped off a Cathay Pacific flight at Kennedy International Airport on Monday and was waved through customs. 

A waiting F.B.I. agent, Kellie O’Brien, called out his name, according to court records. 

Lee answered, and was arrested.
His apprehension, on the same single charge that could have been brought years ago, is the latest development in one of the most damaging affairs in modern C.I.A. history. 

But it does nothing to settle the question of how or whether Lee was involved. 

For years, he was the prime suspect in a mole hunt, but officials disagreed over whether he was actually to blame.
One government official said there was no plan at the moment to charge Lee with espionage, handing over American secrets to the Chinese or anything beyond the one felony count of illegally possessing classified information. 

That would leave open the mystery of how China managed to unravel the C.I.A.’s web of informants.
Neither the F.B.I. nor the Justice Department would discuss this high-stakes back story on Wednesday. 

“This is an example of the system working,” said Ian Prior, a Justice Department spokesman. 

“The defendant arrived in this country, we apprehended him and he has been charged with an extremely serious offense.”
In an email, Lee’s college-age daughter declined to discuss the case and said that no lawyer or family member was available to speak on his behalf.
The New York Times revealed the decimation of the C.I.A.’s network last year, citing 10 current and former government officials, who were not authorized to speak publicly about the investigation. Several of them identified Lee as the key suspect at the time.

Lee, 53, took an unremarkable path through the C.I.A. 

He became a United States citizen and, after four years in the Army, studied international business management at Hawaii Pacific University. 

He graduated in 1992 and received a master’s degree in human resource management the next year.
From there, he joined the C.I.A., posing as an American diplomat while serving as a clandestine case officer. 

From old address records, he appears to have served in Tokyo from about 1999 to 2002. 

Officials say he also worked at the East Asia Division at C.I.A. Headquarters and the agency’s Beijing station before he left in 2007 and took a job in Hong Kong.
When the C.I.A. noticed in late 2010 that its spies were disappearing, suspicion did not immediately turn to Lee.

But as fears of a mole grew, the government set up a secret task force of C.I.A. officers and F.B.I. agents. 

A veteran F.B.I. counterintelligence agent, Charles McGonigal, was assigned to run it, former American law enforcement officials said.
As the disappearances continued, analysts concluded that Lee, even though he had been out of the C.I.A. for years, had known the identities of many of the those who had been killed or imprisoned. 

He showed all the indicators on a government matrix used to identify potential espionage threats.
But warning signs can be wrong. 

At the C.I.A., top officials ruefully remembered the treatment of Brian J. Kelly, an agency officer who in the 1990s was wrongly suspected by the F.B.I. of being a Russian spy. 

More recently, the Justice Department’s efforts to unearth Chinese spies have suffered embarrassing setbacks, including dropped charges against prominent Chinese-Americans.
In Lee’s case, other possible explanations existed. 

Some investigators believed that China had cracked the C.I.A.’s system for communicating with its informants. 

The spy agency had encountered similar problems in other countries, and some investigators believed the technology was too clunky to stand up to China’s sophisticated computer specialists.
Another group accused C.I.A. officials in Beijing of being sloppy and allowing themselves to be identified when meeting with their informants. 

It was an acrimonious dispute, and some officials conceded that a combination of factors could account for the damage.
Some former officials who reviewed the evidence described the case against Lee as strong but circumstantial, not bulletproof. 

Some at the C.I.A. argued that officials were too quick to suspect a mole when there were other explanations.
The F.B.I. was watching in August 2012 when Lee returned to the United States with his family. Agents secretly entered his hotel rooms in Hawaii and Virginia and discovered two small books with handwritten notes that contained classified information, including the identities of undercover C.I.A. officials, court papers show.
The information the books contained, including details about meetings between C.I.A. informants and undercover agents, as well as their real names and phone numbers, matched documents that Lee had written while at the C.I.A., according to court documents. 

It was not clear whether any of the people identified in his documents were part of the Chinese roundup of C.I.A. sources.
Agents spoke with him repeatedly in the following months. 

Both the attorney general at the time, Eric H. Holder Jr., and Robert S. Mueller III, then the F.B.I. director, were personally briefed on the investigation and pledged whatever resources were necessary. But senior government officials said they cannot recall any serious push to arrest Lee at the time or to try to charge him with espionage in connection with the lost Chinese informants.
So in June 2013, the agents let Lee leave. 

Current and former officials have said that the C.I.A.’s losses had ended by late 2012, so there is no evidence that the decision allowed more informants to be captured or killed.
At least once in recent years, according to a government official, Lee returned to the United States without attracting the F.B.I.’s attention. 

It was not clear how or why he did so.
At some point the Justice Department decided that if it had the chance, it would charge Lee. 

Officials suspected that opportunity might come later this year when Lee’s daughter graduated from college, an occasion that might draw him back to the United States.
When Lee surprised the government recently by booking a trip to New York, prosecutors hurried to file the charge that they had kept waiting for years.

Chinese Fifth Column

A Sino-Kiwi Lawmaker’s Spy-Linked Past Raises Alarms on China’s Reach
By CHARLOTTE GRAHAM

Chinese mole: Jian Yang, a New Zealand lawmaker born in China, at a news conference in Auckland, New Zealand, last month. A recent investigation revealed that he had taught spies in China in the 1980s and ’90s.

WELLINGTON, New Zealand — Revelations that a New Zealand lawmaker had been a member of the Communist Party in China and taught English to spies there have raised alarms about Beijing’s influence in New Zealand — and how well the political parties there vet their candidates.
Jian Yang, a lawmaker with the center-right National Party, did not declare his past Communist Party affiliation or his work teaching spies in China on his New Zealand citizenship application. 

He was returned to Parliament for a third term in the country’s Sept. 23 elections.
Days before the election, as some New Zealanders were casting advance ballots, Mr. Yang’s background was exposed in a joint investigation by The Financial Times and the New Zealand online media outlet Newsroom.
While New Zealand is a small country, it is a member of the “Five Eyes” intelligence sharing partnership along with the United States, Britain, Canada and Australia. 

And so vulnerabilities in New Zealand’s government could have wider import.
Yang admitted that in the 1980s and early ’90s, before emigrating to Australia and then moving to New Zealand to teach at a university, he studied and taught at two Chinese educational institutions run by the People’s Liberation Army, China’s armed forces.

He said he had not named the Chinese military institutions on his application for New Zealand citizenship, and had instead listed “partner institutions” as his employers, because that was what the Chinese “system” had told him to do.
Yang conceded that he had taught English to spies, but said he had never been a spy himself, was no longer a member of the Communist Party, and had been contracted and paid only as a so-called civilian officer.
Yang has not been officially investigated in New Zealand or charged with espionage.
But Nicholas Eftimiades, a former officer with the Central Intelligence Agency with extensive experience on China matters, said the title of civilian officer was a fluid one in China.
Mr. Eftimiades, now a lecturer at Penn State Harrisburg in Pennsylvania, said officers moved seamlessly between military and civilian assignments to include Chinese army units and work in the defense industry, think tanks and universities.

New Zealand’s prime minister, Bill English, and his wife, Mary, during an election-night event in Auckland last month. English said the National Party had been aware of Yang’s background, and Yang had made no attempt to hide it. 

“Whether in uniform or not, these personnel are still actively engaged in espionage,” said Mr. Eftimiades, who also worked with the Defense Intelligence Agency in the United States.
Several China experts said in interviews that it was not possible for people to willingly “leave” China’s Communist Party, as Yang said he did, unless they had been expelled from it. 

Yang has not denounced the party.
Rodney Jones, a New Zealand economist who lives in Beijing and who has worked in Asia for 30 years, said that an “unrepentant” former member of the Communist Party should not be eligible to be a New Zealand lawmaker. 

He said that Yang should resign from Parliament.
Mr. Jones said that New Zealand needed better representation of its Chinese population in Parliament, but that Yang’s ascension showed that New Zealand had become a “tributary state” of China.
The leadership of both major political parties in New Zealand said they were not concerned by the revelations. 

Bill English, the incumbent prime minister whose party Yang belongs to, said through a spokesman that he did not “see any obvious signs of anything inappropriate” and would not be interviewed on the matter.
English said the National Party had been aware of Yang’s background, and Yang had made no attempt to hide it.
Mr. Jones criticized the prime minister’s lack of alarm, saying the disclosure warranted an investigation.
The revelation comes as both the National and Labour parties have come under scrutiny in a report on China’s influence on the New Zealand government by Anne-Marie Brady, a political-science professor at New Zealand’s University of Canterbury.
Ms. Brady said that since the ascension of Xi Jinping, China’s government has mounted an aggressive campaign of using soft power to influence New Zealand’s politics, economy and society, including through campaign donations.
In her report, Ms. Brady said that this year “a Chinese diplomat favorably compared New Zealand-China relations to the level of closeness China had with Albania in the early 1960s.”

Parliament House in Wellington, New Zealand. The country’s main political parties have come under scrutiny recently in a report on China’s influence on the New Zealand government. 

She said the Chinese-language media in New Zealand was subject to extreme censorship, and accused both Yang and Raymond Huo, an ethnic Chinese lawmaker from the center-left Labour Party, of being subject to influence by the Chinese Embassy and community organizations it used as front groups to push the country’s agenda.
Huo strongly denied any “insinuations against his character,” saying his connections with Chinese groups and appearances at their events were just part of being an effective lawmaker.
Chinese-language news media outlets in New Zealand reported that Yang had presented awards in April to members of the New Zealand Veterans General Federation, a group made up of former Chinese military or police officers now living in New Zealand. 

The awards were for members’ activities during a visit to New Zealand by Premier Li Keqiang of China, when they blocked the banners of anti-Chinese government protesters and sang military songs.
Yang would not comment on the report, other than to say in a statement that “allegations about my loyalty to New Zealand” were “a racially and politically timed smear.”
Chen Weijian, a member of the pro-democracy group New Zealand Values Alliance and the editor of a Chinese-language magazine, Beijing Spring, said Yang was “very, very active” in New Zealand’s Chinese community.
“When he speaks, he speaks more as a Chinese government representative, instead of a New Zealand lawmaker,” Mr. Chen said.
New Zealand has become increasingly dependent on China as a market for farm products, especially dairy goods, and the two countries have been in talks to expand a free-trade agreement signed in 2008.
Despite the criticism, Yang has continued to appear alongside Wang Lutong, China’s ambassador to New Zealand, at public events, including for China’s National Day celebrations this week, when he posed for photos with the ambassador and a Chinese military attaché.
Mr. Jones, the Beijing-based economist, said China’s level of involvement in New Zealand could threaten the country’s democratic institutions. 

Both he and Ms. Brady, the author of the report on China’s growing influence, have called for New Zealand to ban foreign political donations, as Australia is moving to do.
“New Zealand has become so fearful of the Chinese economic power we’re prepared to throw our values and standards overboard,” Mr. Jones said, adding, “There’s no reason for the fear, except for elites in New Zealand who may lose money personally.”

New Zealand's Top Chinese Mole

China-born New Zealand MP probed by spy agency
By Jamil Anderlini in Hong Kong
Chinese mole Jian Yang spent decade at elite Chinese military academies. The Beehive, part of New Zealand's parliament buildings, where Jian Yang has served as an MP since 2011.

Jian Yang, left, with Senior Colonel Wang Liwei, defence attaché, at an event held at the Chinese embassy in Wellington to mark the 88th anniversary of the founding of the People's Liberation Army in 2015.

The mole and New Zealand Prime Minister Bill English give the thumbs up at a campaign event.

New Zealand’s national intelligence agency has investigated a China-born sitting member of parliament in connection with the decade he spent at leading Chinese military colleges.
Jian Yang, an MP for New Zealand’s ruling National Party, spent more than 10 years training and teaching at elite facilities including China’s top linguistics academy for military intelligence officers, the Financial Times has learnt.
Since being elected in 2011, Yang has been a big fundraiser for the National Party.
He has consistently pushed for closer ties with Beijing and for international policies and positions echoing those of China’s Communist party.
The fact he has served for six years in the governing party of a member country of the “five eyes” intelligence alliance raises questions about western preparedness to deal with China’s increasingly aggressive efforts to influence foreign governments and spy on them.
 “China has been very active in recent years placing and cultivating people at the grassroots political levels of western democracies and helping them to reach positions of influence,” said Christopher Johnson, a former senior China analyst at the US Central Intelligence Agency now at the Center for Strategic and International Studies in Washington.
Mr Johnson warned that while Beijing appeared to see New Zealand as a softer target than countries such as the US and UK, “it is using it as a testing ground for future operations in other countries”.
Yang, 55, lived in China until he was 32.
No information about his Chinese education or military background is included in his official biographies in New Zealand or those published when he was an academic at Auckland university.
He served on New Zealand’s parliamentary select committee for foreign affairs, defence and trade from October 2014 until he was replaced in March 2016.
As number 33 on the National Party list for the September 23 general election he is very likely to be returned to parliament for a third term under the country’s mixed member proportional electoral system.
Yang on Wednesday insisted he was "loyal" to New Zealand, said the reports about his background were a “smear campaign” and suggested that anti-Chinese racism was the motive.
After the FT published its investigation, at a press conference in Auckland he said he had never been a spy but acknowledged training people who went on to be intelligence officers.
“If you define those cadets or students as spies, yes, then I was teaching spies,” he told reporters.
“I don’t think so. I just think they are collecting information through communication in China.”

The National Fifth Column
Peter Goodfellow, president of the National Party and the person who recruited Yang, said his background was “public knowledge” in New Zealand and he had “no idea” about an investigation by the country’s Security Intelligence Service (SIS).
“He certainly gave us his full résumé with the two universities — an air force academy and the other one,” Mr Goodfellow said.
He also said Yang’s background was “covered in a review of candidates” by a government relations consultancy, Saunders Unsworth.
Prime Minister Bill English told New Zealand media on Wednesday that he had been aware “from early on” of Yang’s “military training, including military intelligence”.
Someone with Yang’s background would not normally gain security clearance to work on foreign affairs in New Zealand but elected MPs are exempt from such requirements.
Yang has represented New Zealand on numerous official trips to China and been present at many high-level meetings between the two countries’ leaders.
Several New Zealand politicians have been briefed by the SIS on its interest in Yang, a naturalised New Zealand citizen.
SIS agents also conducted interviews with people familiar with Yang’s background as recently as last year, according to people with direct knowledge of the matter.
The SIS told the Financial Times it did not comment on operational matters, especially investigations involving individuals.
A spokesperson for China’s foreign ministry said on Wednesday it did not comment on the internal affairs of other countries but nevertheless rejected what it said were “groundless, false accusations”. In 2010 the director of Canada’s Security Intelligence Service warned that several Canadian provincial cabinet ministers and government employees were “agents of influence” under the control of China. 
In recent months Australia has also indicated it is concerned about Chinese intelligence operations and covert campaigns influencing the country’s politics.
But no other western country is known to have a sitting member of parliament with such extensive training in China’s military intelligence apparatus. 
“In the last five to 10 years, Chinese intelligence agencies have moved heaven and earth to recruit anyone in public life anywhere in the world who they think might work for them,” said one person familiar with Yang who is an expert in China’s global intelligence efforts.
“With his education background [Yang] would be a prime target if he was not already an active agent.”
Yang entered the People’s Liberation Army Air Force Engineering Academy as an undergraduate majoring in English language in 1978 and later taught at the academy after graduation.
“Someone who taught at that institute would have to be an officer in the PLA as well as a member of the Communist party,” said Peter Mattis, an expert on China’s military and intelligence at the Jamestown Foundation in Washington.
After teaching at the air force academy, Mr Yang went on to the Luoyang Foreign Languages Institute, an elite facility for China’s military intelligence officers. 
It is attached to the third department of the PLA general staff headquarters — equivalent to the US National Security Agency or the UK’s Government Communications Headquarters — and specialises in training both openly acknowledged military intelligence officers and “secret line” deep cover agents. 
“Everyone I know who’s attended the Luoyang Foreign Language Institute has been in Chinese military intelligence or at least linked to that system,” Mr Mattis said.
In a Chinese-language interview with the FT, Yang acknowledged he had attended the PLA Air Force Engineering Academy and the Luoyang Foreign Languages Institute but repeatedly requested that this information not be included in any article about him, saying “there’s no need to write too much about my personal situation”. 
He declined numerous subsequent interview requests over several days.
Interviewed on Wednesday by Newsroom, a New Zealand-based independent media group, Yang refused to comment, saying repeatedly on camera: “Ask my boss” and “I have nothing to hide”.
He then drove away, but after publication of the story on Wednesday he issued a statement calling the news a “smear campaign” and suggesting racism as the motive.
He said: “I refute any allegations that question my loyalty to New Zealand.
“I have been nothing but upfront and transparent about my education and employment. Although I was not born here, I am proud to call myself a New Zealander, obey our laws, and contribute to this country.”
He added: “This is a smear campaign by nameless people who are out to damage me and the National party 10 days from an election, just because I am Chinese.”
A former senior British intelligence official said someone with Yang’s educational background would usually go on to a career in military intelligence.
After graduating from Luoyang, Yang studied between 1988 and 1989 at the Hopkins-Nanjing Center for Chinese and American Studies.
At that time the majority of Chinese students attending were either military intelligence officers or Chinese state security agents, according to three former senior western intelligence officials.
One of Yang’s classmates was Xu Meihong, a famous Chinese military intelligence officer who was assigned in 1988 to spy on a visiting US history professor but was subsequently arrested on suspicion of betraying her country. 
Ms Xu later married the professor, Larry Engelmann, became a venture capitalist in Silicon Valley and wrote a book about her experience entitled Daughter of China: A True Story of Love and Betrayal. 
It is unclear what Yang did between 1989 and 1994, the year he was granted an “AusAID” scholarship to study at the Australian National University in Canberra.
Given his background, Yang would have needed permission from the Chinese government and military to leave China.
At ANU he completed a masters degree and PhD focused on US Congressional policy towards China and in 1999 he moved to New Zealand to teach international relations at Auckland university.
Yang has been a big National party fundraiser among New Zealand’s large Chinese community, including from big-spending anonymous donors, according to local media reports.