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.

Chinese Espionage

F.B.I. Bars Chinese Scholar-Spies From Visiting U.S.
By Jane Perlez

Christopher Wray, the F.B.I. director, warned at a Senate Intelligence Committee hearing last year that China presented “a whole-of-society threat on their end” that required a “whole-of-society response.”

BEIJING — Just as he had on previous trips, Zhu Feng bolted down his lunch at a Los Angeles airport before sprinting to catch his Air China flight back to Beijing.
Suddenly, two F.B.I. agents blocked the Chinese scholar at the boarding gate and ordered him to hand over his passport.

They flipped to the well-used 10-year visa to the United States and crossed out the page with a black pen.
“‘Go back to China,’” Zhu, a professor of international relations, recalled an agent telling him during that visit in January last year.

“You will receive a notification.”
In the four decades since China and the United States normalized relations, Washington has generally welcomed Chinese scholars and researchers to America, even when Beijing has been less open to reciprocal visits. 

Republican and Democratic administrations have operated on the assumption that the national interest was well served by exposing Chinese academics to American values.
Now, that door appears to be closing, with the two nations ramping up their strategic rivalry and each regarding academic visitors from the other with greater suspicion — of espionage, commercial theft and political meddling.
The F.B.I. has mounted a counterintelligence operation that aims to bar Chinese academics from the United States if they are suspected of having links to Chinese intelligence agencies. 

As many as 30 Chinese professors in the social sciences, heads of academic institutes, and experts who help explain government policies have had their visas to the United States canceled in the past year, or put on administrative review, according to Chinese academics and their American counterparts.
It follows the warning of the F.B.I. director, Christopher A. Wray, at a Senate hearing last year that China presented “a whole-of-society threat on their end” that required a “whole-of-society response.”
In a written response to questions, a State Department official said that Chinese intelligence services were increasingly using visiting Chinese scholars to target American citizens for intelligence gathering purposes. 

The department said it would not discuss the details of specific cases.
The F.B.I. said that it would not confirm or deny any investigations into the scholars’ visits.
The Trump administration has sought to crack down on intellectual property theft by Chinese scientists working at American research institutions. 
Last year, it began restricting visas for Chinese graduate students studying in sensitive research fields and warned biomedical researchers at American universities to beware of Chinese spies trying to steal information from their laboratories.
At the heart of the United States’ concerns is the view that China poses a threat to America’s technological dominance.
Xi Jinping has set a goal for China to become a global scientific power by 2049.

President Trump and Xi Jinping in Beijing in 2017.

American researchers are arguing that academic exchanges between the countries have become a one-way street benefiting China.
They accuse China of denying visas to American scholars seeking to research subjects the Chinese consider too sensitive even as their Chinese compatriots face fewer restrictions in the United States.
China has for several decades denied visas to a number of influential American academics who have been critical of China’s human rights record. 
And as Xi Jinping wages a campaign against so-called Western values in academia, the authorities have only become even more selective.
America’s visa bans are particularly affecting experts at the Chinese Academy of Social Sciences, a sprawling network of state-run institutes.
The director of the academy’s American studies institute, Wu Baiyi, said he was interviewed by F.B.I. agents in Atlanta where he attended an event at the Carter Center in January.
His visa was later canceled.
Lu Xiang, a "scholar" at the same academy who spent six months at the Center for Strategic and International Studies in Washington a few years ago, said his visa was canceled last year.
“They may feel we know too much about the United States,” he said.
Some scholars have been told that they can apply for single-entry visas instead.
But they would have to provide their addresses, phone numbers and travel history over the last 15 years, said Wang Wen, the head of the Chongyang Institute for Financial Studies in Beijing, a think tank that promotes China’s infrastructure program, the Belt and Road initiative.
Wang’s visa was canceled after he attended the conference at the Carter Center.
He decided against applying for a single-entry visa because the questions were too intrusive, he said.
“I don’t want to go to America in the coming years,” he said.

An Air China plane at Los Angeles International Airport. Two F.B.I. agents blocked Chinese scholar Zhu Feng at the boarding gate at the airport last year.

Zhu Feng, 55, the international relations "expert" whose visa was canceled at a Los Angeles airport, was among the first generation of America "experts" in post-Mao China.
He had become enamored with American studies at Peking University in the 1980s and 1990s, studying with one of the giants of the field, Robert A. Scalapino.
His first visit to the United States was to the Monterey Institute of International Studies in 1999.
The F.B.I. first questioned him when he landed in Los Angeles to make a connection to a conference in San Diego.
They asked if he had worked with the People’s Liberation Army and the Ministry of Foreign Affairs. They also asked him, he said, who among his colleagues had close relations with Chinese intelligence.
They told him, he said, that if he did not cooperate, he would be considered unfriendly toward the United States.
Zhu said he denied working with the military and that he told the agents he had nothing to say in response to the question about the foreign ministry.
As for the question about his colleagues, he said: “I don’t know.”
He declined the offer to cooperate.
In an interview, Zhu said he worked with a group overseen by the China Association for International Friendly Contact, an arm of the ruling Communist Party that seeks to promote Chinese interests abroad. 
That group helped him organize a conference in China on Northeast Asian security that was attended by Dennis Blair, a retired admiral, and retired Chinese generals.
Zhu, who heads a South China Sea institute at Nanjing University, said he also cooperated with the foreign ministry’s policy planning department.
He said he has not acted in a way that would harm relations with the United States.
He acknowledged that the unquestionable authority of the security apparatus puts Chinese academics in an awkward position.
“China is, by its nature, a police state. When a national security official comes to my office, I have no way to kick them out,” he said.
The visa ban meant he could not travel to his son’s college graduation. 

Rogue Nation, Rogue Company

Huawei and Meng Wanzhou Face Criminal Charges
By David E. Sanger, Katie Benner and Matthew Goldstein

The Justice Department unveiled charges against Meng Wanzhou, the chief financial officer of Huawei, for helping evade American sanctions on Iran.

WASHINGTON — The Justice Department unveiled sweeping charges on Monday against the Chinese telecom firm Huawei and its chief financial officer, Meng Wanzhou, outlining a decade-long attempt by the company to steal trade secrets, obstruct a criminal investigation and evade economic sanctions on Iran.
The pair of indictments, which were partly unsealed on Monday, come amid a broad campaign by the United States to thwart China’s biggest telecom equipment maker.
Officials have long suspected Huawei of working to advance Beijing’s global ambitions and undermine America’s interests and have begun taking steps to curb its international presence.
The charges underscore Washington’s determination to prove that Huawei poses a national security threat and to convince other nations that it cannot be trusted to build their next generation of wireless networks, known as 5G. 
The indictments, based in part on the company’s internal emails, describe a plot to steal testing equipment from T-Mobile laboratories in Bellevue, Wash.
They also cite internal memos, obtained from Meng, that link her to an elaborate bank fraud that helped Huawei profit by evading Iran sanctions.
The acting attorney general, Matthew G. Whitaker, flanked by the heads of several other cabinet agencies, said the United States would seek to have Meng extradited from Canada, where she was detained last year at the request of the United States.
The charges outlined Monday come at a sensitive diplomatic moment, as top officials from China are expected to arrive in Washington this week for two days of talks aimed at resolving a months long trade war between the world’s two largest economies.
Trump administration officials have insisted that Meng’s detention will not affect the trade talks, but the timing of the indictment coming so close to in-person discussions is likely to further strain relations between the two countries.
Meng is the daughter of Huawei’s founder and one of the most powerful industrialists in the country. Her arrest has outraged the Chinese government, which has since arrested two Canadians in retaliation.
The indictment now presents Canada with a politically charged decision: whether to extradite Meng to face the fraud charges, or make a political determination to send her back to Beijing.
A spokesman for Huawei, Joe Kelly, said it “is not aware of any wrongdoing by Meng, and believes the U.S. courts will ultimately reach the same conclusion.”
The indictment unsealed against Meng is similar to the charges leveled against the Huawei executive in filings made by federal prosecutors in connection with the bail hearing in Canada.
It claimed that Huawei defrauded four large banks into clearing transactions with Iran in violation of international sanctions through a subsidiary called Skycom.
Federal authorities did not identify the banks, but in an earlier court proceeding in Canada after Meng’s arrest, prosecutors had identified one of the banks as HSBC.
The most serious new allegation in the indictment, which could have bearing on the extradition proceeding in Canada, is the contention by federal prosecutors that Huawei sought to impede the investigation into the telecom company’s attempt to evade economic sanctions on Iran by destroying or concealing evidence.
Huawei moved employees out of the United States so they could not be called as witnesses before a grand jury in Brooklyn. 
The company destroyed evidence in order to hinder the inquiry.
Richard P. Donoghue, the United States attorney for the Eastern District of New York, said that the telecom firm’s actions began in 2007 and “allowed Iran to evade sanctions imposed by the United States and to allow Huawei to profit.”
The arrest of a top executive for sanctions evasion is unusual.
In 2015, Deutsche Bank was fined $258 million for violating American sanctions on Iran and Syria. No executives involved in the scheme were indicted, though six employees were fired.
Meng is under house arrest at one of two residences that she owns in Vancouver.
American officials said Monday that they will request her extradition before a deadline on Wednesday. 
The next stage of her case will be decided at the Supreme Court of British Columbia.
“Companies like Huawei pose a dual threat to both our economic and national security,” said Christopher A. Wray, the F.B.I. director, who joined Mr. Whitaker and two other cabinet members, Wilbur Ross, the commerce secretary, and Kirstjen Nielsen, the homeland security secretary.
Mr. Wray argued that “the magnitude of these charges make clear just how seriously the F.B.I. takes this threat.”
“Today should serve as a warning that we will not tolerate businesses that violate our laws, obstruct justice or jeopardize national and economic well-being,” he added.
Parts of the indictment were redacted and left open the question of whether the United States had secretly indicted Meng’s father, Ren Zhengfei, a former People’s Liberation Army officer and member of the Communist Party.
A United States government interview with Ren from 2007 is cited in one of the indictments, to make the case that he misled investigators, and the name of at least one of those indicted is blacked out from the publicly filed version of the indictment.
Mr. Whitaker fueled the speculation about an indictment of Ren when he told reporters on Monday that the criminal activity “goes all the way to the top of the company.”
The Justice Department also accused Huawei of conspiring to steal trade secrets from a competitor, T-Mobile.
The charges relate to a criminal investigation that stemmed from a 2014 civil suit between the two companies.
In that case, T-Mobile accused Huawei of stealing proprietary robotics technology that the telecom company used to diagnose quality-control issues in cellphones.
Huawei was found guilty in May 2017.
The indictment cited internal emails from Huawei and its American subsidiary that set up a bonus system for employees who could illicitly obtain the T-Mobile testing system.
“These are very serious actions by a company that appears to be using corporate espionage not only to enhance their bottom line but to compete in the world economy,” Mr. Whitaker said.
The legal drama now shifts to Canada, where the government has warned that it will not extradite Meng if it appears that the request is being made for political reasons.
Trump said after her arrest that he would consider using her case for leverage in the upcoming trade negotiations, which fueled speculation that the United States may be more interested in Meng’s value in winning trade concessions than in obtaining a conviction.
Canada’s ambassador to Beijing was fired over the weekend by Prime Minister Justin Trudeau for suggesting that the case against Meng was political and that Canada might accede to Chinese demands and return her home.
Mr. Whitaker declined to say Monday whether the White House would interfere in the criminal case against Meng.
But the array of officials present at the announcement was clearly intended to demonstrate a coordinated government effort to go after Huawei.
“Given the seriousness of these charges, and the direct involvement of cabinet officials in their rollout, today’s announcements underscore that there is a unified full-court press by the administration to hold China accountable for the theft of proprietary U.S. technology and violations of U.S. export control and sanctions laws,” said David Laufman, the former chief of the Justice Department’s counterintelligence and export control section.
The indictments could further complicate the trade talks that the administration is holding this week with Beijing.
The Trump administration is seeking significant changes to China’s trade practices, including what it says is a pattern of Beijing pressuring American companies to hand over valuable technology and outright theft of intellectual property.
“The Americans are not going to surrender global technological supremacy without a fight, and the indictment of Huawei is the opening shot in that struggle,” said Michael Pillsbury, a China scholar at the Hudson Institute who advises the Trump administration.
Lawmakers like Senator Mark Warner, Democrat of Virginia, who have long argued for action to be taken against Chinese technology providers including Huawei and ZTE, a smaller firm that has faced similar accusations, called the indictment “a reminder that we need to take seriously the risks of doing business with companies like Huawei and allowing them access to our markets.”
Mr. Warner said that he would continue to press Canada to reconsider using any Huawei technology as it upgrades its telecommunications network.
On Tuesday, American intelligence officials are expected to cite 5G investments by Chinese telecom companies, including Huawei, as a worldwide threat. 
And the United States has been drafting an executive order, expected in the coming weeks, that would effectively ban American companies from using Chinese-origin equipment in critical telecommunications networks.

Nation of Thieves

U. S. charges Chinese hackers in theft of vast trove of confidential data in 12 countries

By Ellen Nakashima and David J. Lynch

Prosecutors unsealed an indictment charging two Chinese with computer hacking attacks on a wide range of U.S. government agencies and corporations. 

The United States and four of its closest allies on Thursday blamed China for a 12-year campaign of cyberattacks that vacuumed up technology and trade secrets from corporate computers in 12 countries, affecting almost every major global industry.
The coordinated announcements in five capitals marked the Trump administration’s broadest anti-China initiative to date, yet it fell short of even stronger measures that officials had planned.
During debate, Treasury Secretary Steven Mnuchin blocked a proposal to impose financial sanctions on those implicated in the hacking, according to five sources familiar with the matter. 

Two administration officials said Mnuchin acted out of fear that sanctions would interfere with U.S.-China trade talks.
The centerpiece of Thursday’s synchronized accusations came in Washington, where the Justice Department unveiled indictments against two Chinese hackers, who it said acted “in association with” the Chinese Ministry of State Security (MSS).
Zhu Hua and Zhang Shilong, members of a hacking squad known as “Advanced Persistent Threat 10” or “Stone Panda,” were accused of conspiracy to commit computer intrusions, wire fraud and aggravated identity theft while pilfering “hundreds of gigabytes” of confidential business data, the indictment said.
“China’s goal, simply put, is to replace the U.S. as the world’s leading superpower, and they’re using illegal methods to get there,” said FBI Director Christopher A. Wray.
U.S. allies echoed the Justice Department action, signaling a growing consensus that Beijing is flouting international norms in its bid to become the world’s predominant economic and technological power.

Xi Jinping's empty promises

In the capitals of the United Kingdom, Australia, Canada and New Zealand, ministers knocked China for violating a 2015 pledge — offered by Chinese dictator Xi Jinping in the White House’s Rose Garden and repeated at international gatherings such as the Group of 20 summit — to refrain from hacking for commercial gain.
“This campaign is one of the most significant and widespread cyber intrusions against the U.K. and allies uncovered to date, targeting trade secrets and economies around the world,” British Foreign Secretary Jeremy Hunt said in a statement.
Still, some administration allies were skeptical that Thursday’s announcement would alter China’s behavior.

Deputy Attorney General Rod J. Rosenstein announces on Thursday the indictments of two Chinese for hacking attacks. 

“Just as when the Obama administration did it, indicting a handful of Chinese agents out of the tens of thousands involved in economic espionage is necessary but not important,” said Derek Scissors, a China analyst at the American Enterprise Institute. 

“International denouncements may irritate Xi, but they place no real pressure on him.”
Scissors said it would be more effective for the United States to hit high-profile Chinese companies with financial sanctions, including potential bans on their ability to do business with American companies.
The five governments that joined in the statements about China are partners in the “Five Eyes” intelligence alliance, sharing some of their most closely guarded technical and human reporting.
The foreign ministries of Denmark, Sweden and Finland tweeted statements saying they shared the concerns over rampant cyberespionage against corporations.
The united front against Chinese hacking and economic espionage stands in contrast to the “America First” president’s preference for taking a unilateral course to many of his trade goals.
“This demonstrates there’s a strong well of international support the United States can tap... Countries are fed up,” said Ely Ratner, executive vice president of the Center for a New American Security.
The hackers named in the indictment presided over a state-backed campaign of cybertheft that targeted advanced technologies with commercial and military applications. 

They also hacked into companies called “managed service providers,” which act as gatekeepers to computer networks serving scores of corporate clients.
The Chinese targeted companies in the finance, telecommunications, consumer electronics and medical industries, along with U.S. government laboratories operated by the National Aeronautics and Space Administration and the military.
Along with the United States and the United Kingdom, countries targeted by China include Canada, France, Germany, Japan, Sweden and Switzerland.
“The list of victim companies reads like a who’s who of the global economy,” said Wray.
The Stone Panda team made off with personal information, including Social Security numbers belonging to more than 100,000 U.S. Navy personnel.
The hackers employed a technique known as “spear-phishing,” tricking computer users at the business and government offices into opening malware-infected emails giving them access to log-in and password details.
They worked out of an office in Tianjin, China, and engaged in hacking operations during working hours in China.
Geoffrey Berman, the U.S. attorney for the Southern District of New York, called the Chinese ­cyber-campaign “shocking and outrageous.”
Over the past seven years, more than 90 percent of cases alleging economic espionage involved China as did more than two-thirds of trade-secret theft prosecutions, according to Deputy Attorney General Rod J. Rosenstein.
The industries targeted in the Stone Panda hacks are featured in the Chinese government’s Made in China 2025 program, which aims to supplant the United States as the global leader in 10 advanced technologies including artificial intelligence, robotics and quantum computing, Rosenstein added.

In November, in one of his last official actions, then-Attorney General Jeff Sessions announced a major initiative to combat Chinese commercial spying, building on four years of prosecutorial effort. The department vowed to aggressively pursue trade-secret theft cases and identify researchers and defense industry employees who have been “co-opted” by Chinese agents seeking to transfer technology to China.
While the show of anti-China unity was notable, the administration pulled back from plans for tougher action after warnings from the treasury secretary.
Mnuchin’s 11th-hour intervention left administration officials fearing Beijing would view the limited actions as a sign that Trump lacks the stomach for an all-out confrontation.
“We don’t comment on sanctions actions or deliberations, but it’s important to note that these issues are completely separate from trade,” said a Treasury Department spokesman asked to comment on the reports.
The administration’s action entailed statements from four Cabinet agencies — Justice, State, Energy and Homeland Security — while Treasury remained on the sidelines.
The condemnations also pose a complication as Trump and Xi seek to negotiate a trade deal. 

Over dinner in Buenos Aires earlier this month, the two leaders agreed to a truce in their months-long tariff war.
Talks between U.S. and Chinese diplomats are expected to begin early next month.
The Trump administration is seeking a deal that would involve structural changes to China’s state-led economic model, greater Chinese purchases of American farm and industrial products and a halt to what the United States says are coercive joint-venture licensing terms.
The indictments were followed by a joint statement from Secretary of State Mike Pompeo and Homeland Security Secretary Kirstjen Nielsen that assailed China for violating Xi’s landmark 2015 pledge to refrain from hacking U.S. trade secrets and intellectual property to benefit Chinese companies.
“These actions by Chinese actors to target intellectual property and sensitive business information present a very real threat to the economic competitiveness of companies in the United States and around the globe,” they said.
Thursday’s push to confront China over its cyber-aggression comes at a fraught time, as Canada has arrested a Chinese telecommunications executive at the United States’ request on a charge related to violating sanctions against Iran.

China's theft of US intellectual property

Lawmakers press for answers about China's supply chain hack
By Derek Hawkins

Sen. Marco Rubio (R-Fla.) on Capitol Hill in Washington on Aug. 2. 

Lawmakers are prying into a controversial report that Chinese spies installed surveillance microchips in servers used by Apple, Amazon and other American companies.
On Wednesday, Sens. Marco Rubio (R-Fla.) and Richard Blumenthal (D-Conn.) wrote to Supermicro, the firm that manufactured the compromised hardware, asking whether it had detected any such tampering in its products. 

The senators said “the nature of the claims raised alarms that must be comprehensively addressed.”
“We are alarmed by the dangers posed by back doors, and take any claimed threat to the nation’s networks and supply chain seriously,” they said. 

“These new allegations require thorough and urgent investigation for customers, law enforcement and Congress.”
Other lawmakers on the Hill have fired off similar missives. 

Sen. John Thune (R-S.D.) wrote to Apple, Amazon and Supermicro requesting staff briefings about the Bloomberg article by Friday. 

And House Oversight Committee Chairman Trey Gowdy (R-S.C.) and Intelligence Committee Chairman Devin Nunes (R-Calif.) called on the heads of the FBI, Department of Homeland Security and the Office of the Director of National Intelligence to provide a classified briefing on the matter by Oct. 22. (Amazon.com founder and chief executive Jeffrey P. Bezos owns The Washington Post.)
The flurry of requests underscores long-standing concerns in Congress about the potential for China to conduct cyber espionage by infiltrating the supply chain. 

So lawmakers aren’t taking any chances with the allegations raised in it.
“If this news report is accurate, the potential infiltration of Chinese back doors could provide a foothold for adversaries and competitors to engage in commercial espionage and launch destructive cyber attacks,” Rubio and Blumenthal wrote.

The explosive Bloomberg report said that operatives from a unit of the People’s Liberation Army secretly installed the surveillance chips in Supermicro motherboards during the assembly process in China, creating a “stealth doorway” into networks that used the machines. 

Citing unnamed government and corporate officials, the report described it as the “most significant supply chain attack known to have been carried out against American companies.”

Sen. Ron Johnson (R-Wis.), chairman of the Homeland Security Committee, said in a hearing Wednesday morning that he found the story credible. 

He asked FBI Director Christopher A. Wray and Homeland Security Secretary Kirstjen Nielsen, who testified in the hearing, whether they were aware of “implantation of chips in the supply chain.”
Wray deflected. 

“Be careful what you read in this context,” he said, adding that he was barred from commenting on whether the FBI was investigating the matter. 

Nielsen said that supply chain hacks are "a very real and emerging threat that we are very concerned about." 

Indeed, the article seemed to channel some of Washington’s worst anxieties about supply chain security.
Lawmakers and federal officials have long fretted over whether a foreign adversary could carry out such an infiltration, and over the past year they’ve taken steps to try to prevent it. 

Last fall, DHS directed federal agencies to stop using software made by the Russian cybersecurity contractor Kaspersky over concerns that Moscow’s intelligence services could use the company to conduct cyber espionage. 

Shortly after, Congress banned federal agencies from using Kaspersky’s products as part of the defense spending bill. 

Lawmakers and military officials have raised similar fears that Chinese telecom giants ZTE and Huawei could be used as conduits for Beijing to spy on U.S. citizens, companies and government offices. 

This year, lawmakers abandoned an effort to prohibit federal agencies and contractors from doing business with ZTE at the request of the White House.

China a bigger security threat than Russia, says FBI Director Wray

Nielsen also warned senators that China “absolutely” is “exerting unprecedented effort to influence American opinion" in her appearance before the Senate Homeland Security and Governmental Affairs Committee on Wednesday. 

Nielsen testified alongside Wray and Russell Travers, the acting director of the National Counterterrorism Center at the Office of the Director of National Intelligence.
Asked by Sen. Jon Kyl (R-Ariz.) to assess the risk that Beijing's cyber activities and disinformation efforts represent in comparison to Russia, Wray replied that he was “reluctant to try to rank threats” but added that “China in many ways represents the broadest, most complicated, most long-term counterintelligence threat we face.” 

Wray told Kyl that China will remain a threat to the United States in the long run. 

“Russia is in many ways fighting to stay relevant after the fall of the Soviet Union. They're fighting today's fight,” Wray said. 

“China is fighting tomorrow's fight, and the day after tomorrow, and the day after that. And it affects every sector of our economy, every state in the country and just about every aspect of what we hold dear.”

Subversion: China is infiltrating U.S. colleges

Penn State is among those that have closed their Confucius Institutes
By JOSH ROGIN

China’s massive foreign influence campaign in the United States takes a long view, sowing seeds in American institutions meant to blossom over years or even decades. 

That’s why the problem of Chinese financial infusions into U.S. higher education is so difficult to grasp and so crucial to combat.
But at last, the community of U.S. officials, lawmakers and academics focused on resisting Chinese efforts to subvert free societies is beginning to respond to Beijing’s presence on America’s campuses. 

One part of that is compelling public and private universities to reconsider hosting Confucius Institutes, the Chinese government-sponsored outposts of culture and language training.
With more than 100 universities in the United States now in direct partnership with the Chinese government through Confucius Institutes, the U.S. intelligence community is warning about their potential as spying outposts. 

But the more important challenge is the threat the institutes pose to the ability of the next generation of American leaders to learn, think and speak about realities in China and the true nature of the Communist Party regime.
“Their goal is to exploit America’s academic freedom to instill in the minds of future leaders a pro-China viewpoint,” said Sen. Marco Rubio, R-Fla., co-chair of the Congressional-Executive Commission on China. 

“It’s smart. It’s a long-term, patient approach.”
This month, Mr. Rubio asked all Florida educational institutions that host Confucius Institutes to reconsider doing so in light of a growing body of evidence that China seeks to constrain criticism on American campuses, exert influence over curriculum related to China and monitor Chinese students in the United States.
One of the schools Mr. Rubio contacted, the University of West Florida, had already decided not to renew its contract with Hanban, the Chinese government entity that manages the institutes. 

Western Florida joins a growing list of universities that are rejecting the Faustian bargain that comes with accepting Chinese government funding and management for programs meant to expose students to China, including the University of Chicago, Penn State University and Ontario’s McMaster University. 

West Florida President Martha Saunders told me the decision was primarily due to a lack of student interest, but the rising concerns also contributed.
FBI Director Christopher A. Wray articulated those concerns in testimony last week before the Senate Intelligence Committee. 

He said the FBI is “watching warily” and investigating Confucius Institutes. 

He said academic sector naivete was exacerbating the problem and called out the Chinese government for planting spies in U.S. schools.
“They’re exploiting the very open research and development environment that we have, which we all revere. But they’re taking advantage of it,” Mr. Wray said.
For Rep. Christopher H. Smith, R-N.J., that’s a long-awaited acknowledgment. 

The majority of the institutes’ activity may be benign, and it’s difficult to determine how much self-censorship participating institutions engage in, Mr. Smith said. 

He has commissioned a study of the institutes by the Government Accountability Office to collect data to support his call for their closure.
“They are nests of influence, reconnaissance,” he said. 

“They keep tabs on Chinese students, and those who attend their classes are getting a Pollyannaish take on what China is about today.”
To understand what Confucius Institutes are really about, it’s necessary to understand their connections to the Communist Party and its history. 

Peter Mattis, a former U.S. intelligence analyst now with the Jamestown Foundation, said Confucius Institutes can be directly linked to the Communist Party’s “united front” efforts, still described in Maoist terms: to mobilize the party’s friends to strike at the party’s enemies.
For example, Liu Yandong, the Communist Party official who launched the Confucius Institutes, was head of the United Front Work Department when the program began. 

“They are an instrument of the party’s power, not a support for independent scholarship,” Mr. Mattis said. 

“They can be used to groom academics and administrators to provide a voice for the party in university decision-making.”
At a minimum, Confucius Institutes must be required to provide more transparency, yield full control over curriculum to their American hosts and pledge not to involve themselves in issues of academic freedom for American or Chinese students. 

If they don’t do this voluntarily, Congress will likely act to compel them. 

Mr. Rubio and Mr. Smith are working on new legislation to do just that.
More broadly, if we as a country don’t want Confucius Institutes to control discussion of China on campus, we must provide better funding for the study of China and Chinese languages. 

If we are headed into a long-term strategic competition with China, there is no excuse for not investing in educating our young people about it — or for letting the Chinese government do it for us.