America's 350000 Chinese Spies

China is using Chinese students to steal secrets
By Zachary Cohen and Alex Marquardt

Chinese "student" spies

"Student" spy Ji Chaoqun

Washington -- In August 2015, an electrical engineering student in Chicago sent an email to a Chinese national titled "Midterm test questions."
More than two years later, the email would turn up in an FBI probe in the Southern District of Ohio involving a Chinese intelligence officer who was trying to acquire technical information from a defense contractor.
Investigators took note.
They identified the email's writer as Ji Chaoqun, a Chinese student who would go on to enlist in the US Army Reserve. 

His email, they say, had nothing to do with exams.
Instead, at the direction of a high-level Chinese intelligence official, Ji attached background reports on eight US-based individuals who Beijing could target for potential recruitment as spies.
The eight -- naturalized US citizens originally from Taiwan or China -- had worked in science and technology. 

Seven had worked for or recently retired from US defense contractors. 

All of them were perceived as rich targets for a new form of espionage that China has been aggressively pursuing to win a silent war against the US for information and global influence.

Ji was arrested in September last year, accused of acting as an "illegal agent" at the direction of a "high-level intelligence officer" of a provincial department of the Ministry of State Security, China's top espionage agency, the Department of Justice said at the time.
He was formally indicted by a grand jury on January 24. 

Ji appeared in federal court in Chicago and pleaded not guilty, according to Joseph Fitzpatrick, a spokesman for the US attorney's office in Chicago. 

While Ji has not been convicted, the circumstances outlined in his case demonstrate how China is using people from all walks of life with increasing frequency, current and former US intelligence officials tell CNN.
Beijing is leaning on expatriate Chinese scientists, businesspeople and students like Ji -- one of roughly 350,000 from China who study in the US every year -- to gain access to anything and everything at American universities and companies that's of interest to Beijing, according to current and former US intelligence officials, lawmakers and several experts.
The sheer size of the Chinese student population at US universities presents a major challenge for law enforcement and intelligence agencies tasked with striking the necessary balance between protecting America's open academic environment and mitigating the risk to national security.
While it remains unclear just how many of these students are on the radar of law enforcement, current and former intelligence officials told CNN that they all remain tethered to the Chinese espionage machine in some way.
It's part of a persistent, aggressive Chinese effort to undermine American industries, steal American secrets and eventually diminish American influence in the world so that Beijing can advance its own agenda, US officials, analysts and experts told CNN.
CIA Director Gina Haspel warned last year that China intends "to diminish US influence to advance their own goals."
China's approach to espionage is taking on added urgency as ties between Beijing and Washington sour over trade differences, cyberattacks and standoffs over military influence in Asia.

"China's intelligence services exploit the openness of American society, especially academia and the scientific community, using a variety of means," according to the intelligence community's World Wide Threat Assessment.

Lawmakers are also sounding the alarm.
"There is no comparison to the breadth and scope of the Chinese threat facing America today, as they actively seek to supplant the US globally," Republican Sen. Marco Rubio of Florida told CNN, noting that Russia and China have taken similar approaches when it comes to nontraditional espionage.

'Covert influencers'
For more than a decade, US law enforcement and intelligence officials have raised internal concerns about US universities becoming soft targets for Chinese intelligence services that use Chinese students and staff to access emerging technologies, according to multiple former US officials.
But in recent months, senior officials have expressed a renewed sense of urgency in addressing the issue and sought to increase public awareness by highlighting the threat during congressional testimony and while speaking at various security forums.
While US officials stress that they believe some Chinese students are here for legitimate purposes, they have also made it clear that the Trump administration continues to grapple with counterintelligence concerns posed by Chinese agents seeking to exploit vulnerabilities within academic institutions.
Rather than having trained spies attempt to infiltrate US universities and businesses, Chinese intelligence services have strategically utilized members of its student population to act as "access agents" or "covert influencers," according to Joe Augustyn, a former CIA officer with firsthand knowledge of the issue from his time at the agency.
Creating this degree of separation allows the Chinese government to maintain some deniability should an operation become exposed, Augustyn said.
"We allow 350,000 or so Chinese students here every year," William Evanina, director of the National Counterintelligence and Security Center, said last April during an Aspen Institute conference. 

"That's too much. We have a very liberal visa policy for them. It is a tool that is used by the Chinese government to facilitate nefarious activity here in the US."
Chinese students now constitute the largest foreign student body in the US, according to data from the Institute of International Education.
US intelligence officials have taken note of the steady increase in Chinese students entering the country each year and are well aware of the challenges associated with that trend.
Along with cyber-intrusion and strategic investing in American businesses, senior US intelligence officials told CNN on Tuesday that China is tapping into its massive network of Chinese students to compress the time it takes to acquire certain capabilities.

"In a world where technology is available, where we are training their scientists and engineers, and their scientists and engineers were already good on their own, we are just making them able to not have to toil for the same amount of time to get capabilities that will rival or test us," a senior official in the office of Director of National Intelligence Dan Coats said.

Addressing that problem is difficult given the large population of Chinese student spies sent to the US each year.
"We know without a doubt that anytime a graduate student from China comes to the US, they are briefed when they go, and briefed when they come back," according to Augustyn.

"There is no question in my mind, depending on where they are and what they are doing, that they have a role to play for their government."

In Ji's case, he was first approached by a Chinese intelligence officer who, initially at least, used a false identity, according to FBI Special Agent Andrew McKay, who filed a criminal complaint against Ji in the US District Court in Chicago.
The complaint charges Ji with one count of knowingly acting in the US as an agent of Chinese government without prior notification to the attorney general. 

Ji has been detained since his arrest in September, according to his lawyer.
Like thousands of Chinese nationals who come to the US each year, Ji entered the country on an F1 visa -- used for international students in academic programs.
Citing immigration records, the complaint states that Ji's goal, when he landed in Chicago in August 2013, was to study electrical engineering at the Illinois Institute of Technology, where he ultimately earned a master's degree.
By December, Ji had been approached by the high-level Chinese intelligence official, who presented himself as a professor at Nanjing University of Aeronautics and Astronautics.
Ji, now 27, eventually realized who this official and his colleagues really were, according to the criminal complaint.
Still, court documents say he would funnel them background reports on other Chinese civilians living in the US who might be pressured to serve as spies -- in this case, in the strategically critical US industries of aerospace and technology. 

And he would lie to US officials about it, according to the complaint filed by FBI investigators.
In their response, the Chinese government did not comment on the current status of Ji's case.
But in September, Chinese Foreign Ministry spokesman Geng Shuang told CNN he was "unaware of the situation" when asked about Ji's arrest during a press briefing.
According to the complaint, FBI agents discovered about 36 text messages on one iCloud account that Ji and the intelligence officer exchanged between December 2013 and July 2015. 

In 2016, after he graduated, Ji enlisted in the US Army Reserve under a program in which foreign nationals can be recruited if their skills are considered "vital to the national interest."
As part of his Army interview and in his security clearance application, Ji was asked if he'd had contact with foreign security services, the complaint says.
He answered "no."
The Washington Post previously reported that Ji's case has been linked to the indictment of a Chinese intelligence officer named Xu Yanjun.
Xu's indictment was unsealed in October after he was arrested in Belgium for stealing trade secrets from US aerospace companies. 

He is the first Chinese intelligence officer to be extradited for prosecution in the US. 

He has pleaded not guilty.

Complex counter intelligence challenge
FBI Director Christopher Wray, in the past year, has sought to focus repeatedly on the threat from Chinese students in US universities trying to get access to sensitive military and civilian research.
"They're exploiting the very open research and development environment that we have," Wray told a Senate Intelligence Committee hearing last year, expressing concern that academic officials aren't taking the threat from China seriously enough.
But Wray told Senate lawmakers he has seen reasons for optimism.
"One of the things that I've been most encouraged about in an otherwise bleak landscape is the degree to which -- as Director Coats was alluding to -- American companies are waking up, American universities are waking up, our foreign partners are waking up," Wray said.

Still, the issue continues to pose a complex counterintelligence challenge for the US.

The Chinese are notorious for appealing to the nationalism and loyalty of their citizens to coerce them into carrying out acts of espionage, lawmakers and intelligence officials say.
Sen. Mark Warner of Virginia, the leading Democrat on the Senate's Select Committee on Intelligence, stressed that it is important to recognize "that the Chinese government has enormous power over its citizens."
"In China, only the government can grant someone permission to leave the country to study or work in the United States and we have seen the Chinese government use their power over their citizens to encourage those citizens to commit acts of scientific or industrial espionage to the benefit of the Chinese government," he told CNN.
The ruling Communist Party in China has tightened its grip over all aspects of Chinese society, including academia, under Xi Jinping, who has routinely said that "the Party exercises overall leadership over all areas of endeavor in every part of the country."

The State Department has considered implementing stricter vetting measures for F1 Visa applicants like Ji in an effort to address the problem, administration officials have told CNN, though the details of that plan remain unclear.
The Trump administration has also insisted that any trade deal with China must address concerns about Beijing's use of covert operations to steal US government secrets and intellectual property belonging to American private-sector businesses.
Ahead of President Donald Trump's December dinner meeting with Xi in Buenos Aires, the top US trade negotiator released a 50-page report showing Beijing had done little to fix unfair policies and that it continued to conduct and support cyber-enabled economic espionage that has stolen trillions of dollars in intellectual property.
The Trump administration has said the huge waves of tariffs it has slapped on Chinese goods are part of an effort to stop Beijing from unfairly getting its hands on American technology.

Prior to releasing the National Intelligence Strategy, The Office of the Director of National Intelligence issued new warnings and information to technology and aviation companies believed to be targets to help the private sector guard against growing threats from Chinese intelligence entities.
A US intelligence official told CNN that American companies need to be alert to the growing threat. "Whether it is a Chinese national, student, businessman or through cyber means, companies need to know they are up against China who wants their information," the official said.
US authorities are also taking action beyond just issuing warnings.
Since August 2017, the Justice Department has indicted several individuals and corporations on charges related to economic espionage and intellectual property theft, predominantly in the aerospace and high-technology sectors.
One October 2018 indictment accused two Chinese intelligence officers of attempting to hack and infiltrate private companies over the course of five years in an attempt to steal technology.
The indictment also targeted six of what it said were the officers' paid hackers and two Chinese nationals, employed by a French aerospace company, who were told by the officers to obtain information about a turbofan engine developed in partnership with a US-based plane maker.

And prior to that, in September, US authorities arrested Ji for allegedly spying on behalf of Beijing.
McKay and the FBI used search warrants to scour emails and texts that were used to piece together what they claim is the story of how Ji was lured in and exploited by his Chinese spymasters.
They sent an undercover agent who pretended he'd been directed by Chinese intelligence to meet Ji after one of the student's alleged handlers had been arrested.
Video and audio recordings captured Ji telling the undercover FBI officer he knew he'd been helping a "confidential unit" of the government -- exactly the actions he'd denied in his interviews for both a student visa and his entry to the US Army Reserve program, according to the complaint.
"Ji specifically denied having had contact with Chinese government within the past seven years," the Department of Justice said in a press release, citing the complaint.

Still, US officials say addressing the issue requires striking a delicate balance and more than just outreach.
"Despite active engagement with academia, industry, and the greater public on this issue, however, Chinese efforts to exploit America's accessible academic environment continue to grow," E.W. Priestap, assistant director of the FBI's counterintelligence division, told lawmakers last year. 

"In particular, as internet access, cyber exploitation, transnational travel, and payment technologies proliferate, so, too, do Chinese options for exploiting America's schools for domestic gain."

Chinese Fifth Column

China is infiltrating US colleges to recruit spies, indoctrinate students

By Eric Shawn 

Born to spy: Chinese students in America

U.S. Intelligence agencies continue to warn of Beijing’s spying activities in the U.S. – including commercial espionage and the stealing of intellectual property.
“The Chinese counter-intelligence threat is more deep, more diverse, more vexing, more challenging, more comprehensive and more concerning than any counterintelligence threat that I can think of," FBI Director Christopher Wray testified at a Senate Intelligence Committee hearing last week.
And now, lawmakers are also focused on new allegations of China's attempts to influence American academia and public opinion.
A report from the director of National Intelligence is blunt: "China's intelligence services exploit the openness of American society, especially academia and the scientific community..."
"It is widespread and it is dangerous and this is legislation designed to stop that," Texas Republican Sen. Ted Cruz told Fox News about a bill he has re-introduced, The Stop Higher Education Espionage and Theft Act.
Its goal is to deter the infiltration by China of our country's universities, colleges and research institutions.
"Too many universities, I think, are gullible, are not realizing the magnitude of this threat," Cruz warned. 

"This is a concerted, organized, systematic threat to undermine our universities and undermine our economy and we need to be serious to combat it."
Several current and former Chinese students have been convicted in U.S. courts for espionage.

Chinese spy Ji Chaoqun -- who came to the U.S. on a student visa, attended Illinois Institute of Technology and enlisted in the U.S. Army Reserve -- was assigned to provide Chinese intelligence officials with information from background checks on eight American citizens -- some of whom were U.S. defense contractors

Just recently, Ji Chaoqun, who had studied electrical engineering at the Illinois Institute of Technology, was arrested and accused of working for Chinese intelligence to recruit spies here in the U.S. 

He is now awaiting trial. 

But it is not just spying that Sen. Cruz is concerned about. 

He is also raising the alarm about a Chinese-backed academic program, The Confucius Institute, that currently operates on about 100 U.S. campuses.
The Institute, financed by Beijing and designed to provide education about the country's culture, is actually indoctrinating American students with regime propaganda. 

The National Association of Scholars published a 184-page study called "Outsourced To China, Confucius Institutes and Soft Power in American Higher Education." 

 It says the Institute suppresses academic freedom, lacks transparency, and is part of China's use of soft power intended to present China in a 'positive' light in order to develop a generation of American students with selective knowledge of a major country.
"I passed into law legislation targeting, in particular, the Confucius Institutes, institutes being funded by the communist government of China," Cruz said. 

"The FBI has raised concerns very specifically about the Confucius Institutes."

At a Senate hearing last year, FBI Director Wray acknowledged that worry.
"We do share concerns about the Confucius Institutes. We have been watching that development for a while. It is just one of the tools that they take advantage of," he said.
The National Association of Scholars is calling on Congress and state legislatures to open investigations to determine "whether Confucius Institutes increase the risks of a foreign government spying or collecting sensitive information."
"The key risk is that the American public and the students hear a one-sided view of what's going on in China," said Rachelle Peterson, policy director of the National Association of Scholars, who authored the study. 

She said the Institutes should all be shut down.
"At these Confucius Institutes, the teachers are hand selected and paid by the Chinese government, the textbooks are being sent over and paid for by the Chinese government, and funding is being provided by the Chinese government," she notes.
"The only way to protect from these type of incursions from the Chinese government is to close down the Institute. There really is no safe way to operate a Confucius Institute that protects academic freedom."
Cruz said its past time to send Beijing an even stronger message than just closing the Institute's doors.
"The Chinese communist government is a dictatorship, it is cruel and repressive. It tortures and murders its citizens, and dictatorships hate sunlight, they hate truth. We are sitting here in my Senate office, over my shoulder here," he said, pointing a large painting of President Ronald Reagan addressing the crowd in Berlin during his famous "Tear down this wall" speech in 1987. 

"This a painting of Ronald Reagan standing before the Brandenburg gate, and up above written in German are the words 'tear down this wall' in the style and graffiti on the Berlin wall. I think those are the most important words said by any leader in modern times."
The senator likens that call for freedom for the millions of people living behind the Iron Curtain, to one that he says is needed to tell Beijing today.
"That's what the Chinese government fears. They fear sunlight, so they spend money trying to stifle academic freedom in our universities and universities shouldn't be willing to sell their academic freedom, they shouldn't be willing to allow the communist government to have control over discussion."
Neither the Chinese Embassy in Washington, D.C. nor Hanban, a public Chinese institution affiliated with the Chinese Ministry of Education, responded to requests from Fox News to comment about the allegations. 

But the Confucius Institute U.S. Center defended itself, by issuing a statement that said, in part:

"They are programs... dedicated to the teaching of Mandarin, cultivating Chinese cultural awareness, and facilitating global education... The programs do not teach history, politics, or current affairs... The courses are managed and supervised by U.S. universities which also decide the content, instructors, and textbooks."

But despite that defense, Rachelle Peterson has reservations.

"The American people need to know that what they are hearing about China may not be true. It may be influenced by the Chinese government's P.R. campaign, and even from the halls of academia, which are supposed to be trustworthy and respected, it may even be happening there."
She said at least 15 universities have shut down or are in the process of kicking the Confucius Institutes off their campuses, and more are expected to follow.
Senator Cruz says the University of Texas at Austin turned down Chinese funding.
“Thankfully U.T. made the right decision and said, ‘you know what, we are not going to take the Chinese money,’” he says.
“There is no doubt, in the long term, China is the single greatest geo-political competitor and threat to the United States,” Cruz warns. 

“The tools they are using are espionage and theft, and too many of our university officials are naïve to that threat, and just see free money, without the perils that are attached.”

Born to Spy

China is using student spies to steal secrets

By Zachary Cohen and Alex Marquardt

Born to spy: Chinese students in the USA

Washington -- In August 2015, an electrical engineering student in Chicago sent an email to a Chinese national titled "Midterm test questions."
More than two years later, the email would turn up in an FBI probe in the Southern District of Ohio involving a Chinese intelligence officer who authorities believed was trying to acquire technical information from a defense contractor.
Investigators took note.
They identified the email's writer as Ji Chaoqun, a Chinese student who would go on to enlist in the US Army Reserve. 

His email, they say, had nothing to do with exams.

Ji Chaoqun arrested in US on spying charges

Instead, at the direction of a high-level Chinese intelligence official, Ji attached background reports on eight US-based individuals who Beijing could target for recruitment as spies, according to a federal criminal complaint.
The eight -- naturalized US citizens originally from Taiwan or China -- had worked in science and technology. 

Seven had worked for or recently retired from US defense contractors. 

The complaint says all of them were perceived as rich targets for a new form of espionage that China has been aggressively pursuing to win a silent war against the US for information and global influence.

Ji was arrested in September last year, accused of acting as an "illegal agent" at the direction of a "high-level intelligence officer" of a provincial department of the Ministry of State Security, China's top espionage agency, the Department of Justice said at the time.
He was formally indicted by a grand jury on January 24. 

Ji appeared in federal court in Chicago on Friday and pleaded not guilty, according to Joseph Fitzpatrick, a spokesman for the US attorney's office in Chicago. 

He is due to appear in court next on February 26 and will remain in detention until then, Fitzpatrick said.
While Ji has not been convicted, the circumstances outlined in his case demonstrate how China is using people from all walks of life with increasing frequency, current and former US intelligence officials tell CNN.
Beijing is leaning on expatriate Chinese scientists, businesspeople and students like Ji -- one of roughly 350,000 from China who study in the US every year -- to gain access to anything and everything at American universities and companies that's of interest to Beijing.
The sheer size of the Chinese student population at US universities presents a major challenge for law enforcement and intelligence agencies tasked with striking the necessary balance between protecting America's open academic environment and mitigating the risk to national security.
While it remains unclear just how many of these students are on the radar of law enforcement, current and former intelligence officials told CNN that they all remain tethered to the Chinese government in some way.
It's part of a persistent, aggressive Chinese effort to undermine American industries, steal American secrets and diminish American influence in the world so that Beijing can advance its own agenda.
CIA Director Gina Haspel warned last year that China intends to diminish US influence to advance their own goals.
China's approach to espionage is taking on added urgency as ties between Beijing and Washington sour over trade differences, cyberattacks and standoffs over military influence in Asia.

"China's intelligence services exploit the openness of American society, especially academia and the scientific community, using a variety of means," according to the intelligence community's World Wide Threat Assessment released Tuesday.
The problem is with the Chinese government, a US official told CNN, adding that the counterintelligence issue is making sure those individuals are coming to the US for legitimate purposes.
Lawmakers are also sounding the alarm.
"There is no comparison to the breadth and scope of the Chinese threat facing America today, as they actively seek to supplant the US globally," Republican Sen. Marco Rubio of Florida told CNN, noting that Russia and China have taken similar approaches when it comes to nontraditional espionage.

'Covert influencers'
For more than a decade, US law enforcement and intelligence officials have raised internal concerns about US universities becoming soft targets for Chinese intelligence services that use students and staff to access emerging technologies, according to multiple former US officials.
But in recent months, senior officials have expressed a renewed sense of urgency in addressing the issue and sought to increase public awareness by highlighting the threat during congressional testimony and while speaking at various security forums.
US officials made it clear that the Trump administration continues to grapple with counterintelligence concerns posed by Chinese agents seeking to exploit vulnerabilities within academic institutions.
Rather than having trained spies attempt to infiltrate US universities and businesses, Chinese intelligence services have strategically utilized members of its student population to act as "access agents" or "covert influencers," according to Joe Augustyn, a former CIA officer with firsthand knowledge of the issue from his time at the agency.
Creating this degree of separation allows the Chinese government to maintain some deniability should an operation become exposed, Augustyn said.
"We allow 350,000 or so Chinese students here every year," William Evanina, director of the National Counterintelligence and Security Center, said last April during an Aspen Institute conference. 

"That's a lot. We have a very liberal visa policy for them. And it is a tool that is used by the Chinese government to facilitate nefarious activity here in the US."
Chinese students now constitute the largest foreign student body in the US, according to data from the Institute of International Education.
US intelligence officials have taken note of the steady increase in Chinese students entering the country each year and are well aware of the challenges associated with that trend.
Along with cyber-intrusion and strategic investing in American businesses, senior US intelligence officials told CNN on Tuesday that China is tapping into its network of students to compress the time it takes to acquire certain capabilities.

"In a world where technology is available, where we are training their scientists and engineers, and their scientists and engineers were already good on their own, we are just making them able to not have to toil for the same amount of time to get capabilities that will rival or test us," a senior official in the office of Director of National Intelligence Dan Coats said.
But addressing that problem is difficult given the large population of Chinese students sent to the US each year.
"We know without a doubt that anytime a graduate student from China comes to the US, they are briefed when they go, and briefed when they come back," according to Augustyn.
"There is no question in my mind, depending on where they are and what they are doing, that they have a role to play for their government."
In Ji's case, he was first approached by a Chinese intelligence officer who, initially at least, used a false identity, according to FBI Special Agent Andrew McKay, who filed a criminal complaint against Ji in the US District Court in Chicago.
The complaint charges Ji with one count of knowingly acting in the US as an agent of a foreign government without prior notification to the attorney general. 

Ji has been detained since his arrest in September, according to his lawyer.
Like thousands of Chinese nationals who come to the US each year, Ji entered the country on an F1 visa -- used for international students in academic programs.
Citing immigration records, the complaint states that Ji's goal, when he landed in Chicago in August 2013, was to study electrical engineering at the Illinois Institute of Technology, where he ultimately earned a master's degree.
By December, Ji had been approached by the high-level Chinese intelligence official, who presented himself as a professor at Nanjing University of Aeronautics and Astronautics.
Ji, now 27, eventually realized who this official and his colleagues really were, according to the criminal complaint.
Still, court documents say he would funnel them background reports on other Chinese civilians living in the US who might be pressured to serve as spies -- in this case, in the strategically critical US industries of aerospace and technology. 

And he would lie to US officials about it, according to the complaint filed by FBI investigators.
In their response, the Chinese government did not comment on the current status of Ji's case.
But in September, Chinese Foreign Ministry spokesman Geng Shuang told CNN he was "unaware of the situation" when asked about Ji's arrest during a press briefing.
According to the complaint, FBI agents discovered about 36 text messages on one iCloud account that Ji and the intelligence officer exchanged between December 2013 and July 2015. 

In 2016, after he graduated, Ji enlisted in the US Army Reserve under a program in which foreign nationals can be recruited if their skills are considered "vital to the national interest."
As part of his Army interview and in his security clearance application, Ji was asked if he'd had contact with foreign security services, the complaint says.
He answered "no."
The Washington Post previously reported that Ji's case has been linked to the indictment of a Chinese intelligence officer named Xu Yanjun.

Xu Yanjun is accused of seeking to steal trade secrets from a US company that leads the way in aerospace

Xu's indictment was unsealed in October after he was arrested in Belgium for stealing trade secrets from US aerospace companies. 

He is the first Chinese intelligence officer to be extradited for prosecution in the US. 

He has pleaded not guilty.

Complex counter intelligence challenge
FBI Director Christopher Wray, in the past year, has sought to focus repeatedly on the threat from China and its use of Chinese students in US universities to try to get access to sensitive military and civilian research.
"They're exploiting the very open research and development environment that we have," Wray told a Senate Intelligence Committee hearing last year, expressing concern that academic officials aren't taking the threat from China seriously enough.
But on Tuesday, Wray told Senate lawmakers he has seen reasons for optimism.
"One of the things that I've been most encouraged about in an otherwise bleak landscape is the degree to which -- as Director Coats was alluding to -- American companies are waking up, American universities are waking up, our foreign partners are waking up," Wray said.
Still, the issue continues to pose a complex counterintelligence challenge for the US.
The Chinese are notorious for appealing to the nationalism and loyalty of their citizens to coerce them into carrying out acts of espionage.
Sen. Mark Warner of Virginia, the leading Democrat on the Senate's Select Committee on Intelligence, stressed that it is important to recognize "that the Chinese government has enormous power over its citizens."
"In China, only the government can grant someone permission to leave the country to study or work in the United States and the Chinese government use their power over their citizens to encourage those citizens to commit acts of scientific or industrial espionage to the benefit of the Chinese government," he told CNN.
The ruling Communist Party in China has tightened its grip over all aspects of Chinese society, including academia, under Xi Jinping, who has routinely said that "the Party exercises overall leadership over all areas of endeavor in every part of the country."

The State Department has considered implementing stricter vetting measures for F1 Visa applicants like Ji in an effort to address the problem, administration officials have told CNN, though the details of that plan remain unclear.
The Trump administration has also insisted that any trade deal with China must address concerns about Beijing's use of covert operations to steal US government secrets and intellectual property belonging to American private-sector businesses.
Ahead of President Donald Trump's December dinner meeting with Xi in Buenos Aires, the top US trade negotiator released a 50-page report showing Beijing had done little to fix unfair policies and that it continued to conduct and support cyber-enabled economic espionage that has stolen trillions of dollars in intellectual property.
The Trump administration has said the huge waves of tariffs it has slapped on Chinese goods are part of an effort to stop Beijing from unfairly getting its hands on American technology.

Prior to releasing the National Intelligence Strategy, The Office of the Director of National Intelligence issued new warnings and information to technology and aviation companies believed to be targets to help the private sector guard against growing threats from Chinese intelligence entities.
A US intelligence official told CNN that American companies need to be alert to the growing threat. "Whether it is a foreign national, student, businessman or through cyber means, companies need to know they are up against nations who want their information," the official said.
US authorities are also taking action beyond just issuing warnings.
Since August 2017, the Justice Department has indicted several individuals and corporations on charges related to economic espionage and intellectual property theft, predominantly in the aerospace and high-technology sectors.
One October 2018 indictment accused two Chinese intelligence officers of attempting to hack and infiltrate private companies over the course of five years in an attempt to steal technology.
The indictment also targeted six of what it said were the officers' paid hackers and two Chinese nationals, employed by a French aerospace company, who were told by the officers to obtain information about a turbofan engine developed in partnership with a US-based plane maker.

The Chinese government did not respond to CNN's request for comment on the case.
In September, US authorities arrested Ji for spying on behalf of Beijing.
McKay and the FBI used search warrants to scour emails and texts that were used to piece together what they claim is the story of how Ji was lured in and exploited by his Chinese spymasters.
They sent an undercover agent who pretended he'd been directed by Chinese intelligence to meet Ji after one of the student's handlers had been arrested.
Video and audio recordings captured Ji telling the undercover FBI officer he knew he'd been helping a "confidential unit" of the government -- exactly the actions he'd denied in his interviews for both a student visa and his entry to the US Army Reserve program, according to the complaint.
"Ji specifically denied having had contact with a foreign government within the past seven years," the Department of Justice said in a press release, citing the complaint.
Still, US officials say addressing the issue requires striking a delicate balance and more than just outreach.
"Despite active engagement with academia, industry, and the greater public on this issue, however, Chinese efforts to exploit America's accessible academic environment continue to grow," E.W. Priestap, assistant director of the FBI's counterintelligence division, told lawmakers in June last year. "In particular, as internet access, cyber exploitation, transnational travel, and payment technologies proliferate, so, too, do Chinese options for exploiting America's schools for domestic gain."

Steal or Die

China Accelerates Cyberspying Efforts to Obtain U.S. Technology
By David E. Sanger and Steven Lee Myers

General Electric Aviation’s factory in Cincinnati. A Chinese intelligence official is accused of trying to obtain trade secrets from the company.

WASHINGTON — Three years ago, Barack Obama struck a stupid deal with China: Xi Jinping agreed to end his nation’s yearslong practice of breaking into the computer systems of American companies, military contractors and government agencies to obtain designs, technology and corporate secrets, usually on behalf of China’s state-owned firms.
The pact was celebrated by the Obama administration as one of the first arms-control agreements for cyberspace — and for some few months, the number of Chinese attacks plummeted.
But the "victory" was fleeting.
Soon after President Trump took office, China’s cyberespionage picked up again and, according to intelligence officials and analysts, accelerated in the last year as trade conflicts and other tensions began to poison relations between the world’s two largest economies.
The nature of China’s espionage has also changed.
The hackers of the People’s Liberation Army — whose famed Unit 61398 tore through American companies until its operations from a base in Shanghai were exposed in 2013 — were forced to stand down, some of them indicted by the United States.
But now, they have begun to be replaced by stealthier operatives in the country’s intelligence agencies.
The new operatives have intensified their focus on America’s commercial and industrial prowess, and on technologies that the Chinese believe can give them a military advantage.
That, in turn, has prompted a flurry of criminal cases, including the extraordinary arrest and extradition from Belgium of a Chinese intelligence official in October. 
Trump administration officials said the arrest reflected a more determined counterattack against a threat that has infuriated some of the country’s most powerful corporations.
“We have certainly seen the behavior change over the past year,” said Rob Joyce, President Trump’s former White House cybercoordinator, speaking at the Aspen Cyber Summit in San Francisco this month.
President Trump and administration officials often suggest that all technology-acquisition efforts by China amount to theft.
In doing so, they are blurring the line between stealing technology and negotiated deals in which corporations agree to transfer technology to Chinese manufacturing or marketing partners in return for access to China’s market — a practice American companies often view as a form of corporate blackmail but one distinct from outright theft.
The stealing of industrial designs and intellectual property — from blueprints for power plants or high-efficiency solar panels, or the F-35 fighter — is a long-running problem.
The United States Trade Representative published a report earlier this month detailing old and new examples.
But the administration has never said whether cracking down on theft and cyberattacks is part of the negotiations or simply a demand that China cease activity that Beijing has already acknowledged was illegitimate.
But as President Trump and Xi prepare to meet at the Group of 20 gathering in Argentina this weekend, China’s corporate espionage has once again emerged as a core American grievance.
Whatever the reason for the renewed hacking, it is a cautionary tale as President Trump tries to use tariffs and threats of more restrictions to strike a new trade deal with Xi, one that presumably would address, once again, the Chinese practices that Obama naively thought Xi had halted.
American trade and intelligence officials, as well as experts from private cybersecurity firms, all acknowledged that the previous agreement had completely fallen apart.
And that, they agreed, has made it still more difficult to imagine how any new agreement struck between President Trump and Xi would become a permanent solution to a problem that reaches back years, and seems rooted in completely different views of what constitutes reasonable competition.
“Our two systems are so dissimilar that I think there was never real hope that crafting an agreement like this would last that long anyway,” said Matthew Brazil, a former government official who now runs Madeira Security Consulting, a firm in San Jose, Calif.
Why the espionage has spiked again is a matter of debate.
Some officials and analysts call it a cause of the worsening trade relationships, others a symptom. Still others argued that the tightening of American export controls in critical industries like aerospace and rules on Chinese investment in Silicon Valley has led the Chinese once again to try to steal what they cannot buy.
The impetus for the 2015 accord was one of the most blatant espionage operations ever conducted by the Chinese government: the removal, over a period of more than a year, of 22 million security-clearance files on American officials, military personnel, contractors and American intelligence officers.
The Obama administration, out of embarrassment, said little about the breach, never naming the Chinese publicly — except by mistake when the director of national intelligence blurted out the truth.
American intelligence officials concluded that the Chinese were assembling a giant database of who worked with whom, and on what, in the American national security sphere, and were applying “big data” techniques to analyze the information. 
The C.I.A. could not move some officers to China, for fear their cover had been blown. 
Publicly, Obama administration officials offered millions of Americans credit protection for a few years in the wake of the data breach — as if Xi’s agents were looking for credit card numbers.
Michael Kovrig, a former Canadian diplomat who is now a China analyst for the International Crisis Group, said that China had a fundamentally different understanding of what was acceptable in espionage.
While the Central Intelligence Agency, say, would not act to help a private company gain a competitive advantage over a foreign competitor, he said, China’s Communist Party, which has control over practically all aspects of policy there, would make no such distinction.
“If you view economic growth as an existential pillar of your party’s political legitimacy and in fact your national security, it follows that you would do anything possible to maintain that competitive edge,” he said.
Indeed, the latest spike in corporate espionage cases — including some not yet made public — has focused on industries critical to Xi’s Made in China 2025 program.
That is a plan to jump ahead of the United States and others in cutting-edge industries like aerospace, automation, artificial intelligence and quantum computing.
“We are seeing it in high tech, in law firms, in insurance companies,” said Dmitri Alperovitch, one of the founders of CrowdStrike, who early in his career was one of the first to identify the teams of state-run Chinese hackers aiming at the United States.
With the arrest of the intelligence officer in Belgium in October, the Trump administration claimed it had exposed what the assistant F.B.I. director, Bill Priestap, called “the Chinese government’s direct oversight of economic espionage against the United States.”
That case involves Xu Yanjun, a deputy division director in the Jiangsu branch of the Ministry of State Security, China’s main intelligence agency.
According to a secret criminal complaint filed in Ohio in March but not unsealed until October, Xu tried to recruit an employee of General Electric Aviation and entice him to provide proprietary information about jet fan blade designs.
Instead the employee alerted the company, which went to the F.B.I. and organized a sting.
Xu flew from China to Belgium in April on the hope he would be able to copy the employee’s computer hard drive.
He was arrested on April 1 when he arrived in Brussels and was extradited to the United States on Oct. 9, the day before the Justice Department made the case public.
China’s Foreign Ministry denounced the criminal case as “pure fabrication,” but it has neither confirmed nor denied that Xu was an intelligence officer.
China’s relatively muted reaction could be an effort to minimize attention on an embarrassing intelligence failure and leave room for quiet negotiations for an exchange.
Xu’s was the most high profile of several recent cases, including two others that had links to the Ministry of State Security’s branch in Jiangsu Province, which extends north from Shanghai.
In September, the Justice Department announced the arrest of Ji Chaoqun, a 27-year-old graduate student who had joined the Army Reserves under a special waiver for foreigners.
The F.B.I. affidavit in the case said that Ji’s handler — presumably Xu — had been arrested, allowing the bureau to send an undercover officer to meet the student in April.
Ji, the affidavit said, had been recruited to gather background information about eight potential recruits for the Jiangsu branch.
Xu, who went by at least two aliases, often claimed to represent the Jiangsu Association for International Science and Technology Cooperation and Nanjing University of Aeronautics and Astronautics, both based in the provincial capital, Nanjing.
The reasons Jiangsu has become a hotbed of China’s cyberespionage are not entirely clear, though it is an important manufacturing center, with many foreign investments, and is thus one of China’s richest provinces.
In 2016, the director of the Jiangsu intelligence branch, Liu Yang, declared that “the national security departments should actively cooperate and promote enterprises” in their efforts to expand and compete globally, according to a report from the Suzhou General Chamber of Commerce.
In January, Liu was promoted and is now the vice governor of the province.
Another American criminal case of espionage in the same region of China was announced Oct. 30. The Justice Department accused two other intelligence officers from that branch, as well as five hackers and two employees of a French aerospace company in Suzhou.
The target was Safran, which operates a joint venture, CFM International, that builds jet engines with General Electric.
The hackers were accused of using a variety of sophisticated techniques and tools against the Suzhou plant, and against other companies.
But the suspects are believed to still be in China and thus beyond the reach of American law enforcement.

Chinese Theft of Trade Secrets

America’s overt payback for China’s covert espionage
By David Ignatius

Chinese dictator Xi Jinping in Beijing on Nov. 2. 

While the U.S.-China trade war has been getting the headlines, U.S. intelligence and law enforcement agencies have been waging a quieter battle to combat Chinese theft of trade secrets from American companies — a practice so widespread that even boosters of trade with China regard it as egregious.
The Trump administration’s campaign of tariffs will eventually produce some version of a truce.
But the battle against Beijing’s economic espionage is still accelerating, and it may prove more important over time in leveling the playing field between the two countries.
To combat Chinese spying and hacking, U.S. intelligence agencies are increasingly sharing with the Justice Department revelatory information about Chinese operations.
That has led to a string of recent indictments and, in one case, the arrest abroad of a Chinese spy and his extradition to the United States to face trial.
The indictments don’t just charge violations of law; they also expose details of Chinese spycraft.
And there’s a hidden threat: The Chinese must consider whether the United States has blown the covers of not just the people and organizations named in the criminal charges but also others with whom they came in contact.
This law enforcement approach to counterespionage requires public disclosure of sensitive information, something that intelligence agencies often resist.
But it seems to be an emerging U.S. strategy.
The Justice Department has pursued a similar open assault on Russian cyberespionage, with three recent indictments naming a score of Russian operatives and disclosing their hacking techniques, malware tools and planned targets.
China, like Russia, is displaying an increasingly freewheeling and entrepreneurial approach to espionage. 
Several indictments unsealed since September reveal how the Ministry of State Security, the Chinese spy service, has operated through its regional bureaus — in this case the Jiangsu provincial office of the MSS — to obtain precious U.S. technology.
The indictments allege that from 2010 to 2015, the Jiangsu branch ran a team of nine hackers who tried to steal U.S. techniques for making jet engines. 
This is a subtle and highly valuable aspect of aerospace technology, one of the few that China hasn’t yet mastered or stolen, and the Chinese evidently wanted to obtain by stealth what they couldn’t produce on their own.
“The concerted effort to steal, rather than simply purchase, commercially available products should offend every company that invests talent, energy and shareholder money into the development of products,” said Adam Braverman, the U.S. attorney in San Diego who helped prosecute the cases.
The San Diego indictment lists the hacker names used by the conspirators, handles such as “Cobain,” “sxpdlcl” and “mer4en7y.”

Yanjun Xu, who also uses the names Qu Hui and Zhang Hui, was extradited to the US with help from Belgian authorities for seeking to steal trade secrets and other sensitive information from GE Aviation, an American company that leads the way in aerospace.

A separate indictment charged an MSS officer named Yanjun Xu, a deputy division director in the Jiangsu bureau, with trying to steal jet engine secrets from GE Aviation; Xu was arrested in April in Belgium after he began trying to penetrate the company’s operations, and he was extradited to the United States last month.

Ji Chaoqun: US army reservist accused of trying to recruit Chinese spies

The United States in September arrested a U.S. Army reservist named Ji Chaoqun and charged that he had helped the Chinese gain information about aerospace industry targets.
This month, the Justice Department also unsealed a September indictment that accused a Chinese company and its Taiwanese partner, both funded by the Chinese government, of trying to steal eight trade secrets for a memory-chip technology known as DRAM from Micron Technology Inc., based in Silicon Valley.
The indictment notes that the Chinese government had identified DRAM as “a national economic priority” that Beijing was determined to obtain.
The indictment, brought by the U.S. attorney in San Jose, uses blunt language to describe the plot: “In order to develop DRAM technology and production capabilities without investing years of research and development and the expenditure of many millions of dollars,” the defendants “conspired to circumvent Micron’s restrictions on its proprietary technology.”
What gives these indictments extra bite is that Xi Jinping had promised back in 2015 that China wouldn’t conduct economic cyberespionage anymore.
That pledge followed an indictment the previous year that revealed an elaborate plot by Chinese military hackers to steal U.S. commercial secrets.
But in the espionage world, promises not to spy are dubious at best. 

Jerry Chun Shing Lee: ex-CIA officer at the centre of one of the largest US intelligence breaches in decades.

Over the past three years, the Justice Department has charged former CIA officer Jerry Chun Shing Lee and five other Americans with stealing secrets on behalf of Beijing.
As a rising power, China is also a rising threat in the intelligence sphere.
The U.S. counterattack, in part, seems to be a public revelation of just how and why Beijing is stealing America’s secrets — overt payback for covert espionage.

CHINA'S 5 STEPS FOR RECRUITING SPIES

US Stupidity Enabling Chinese Spies to Steal Tons of US Defense and Trade Secrets
By Garrett M. Graff
BEWARE OF CHINESE spies offering laptops, women, or educational stipends—and especially watch out for odd LinkedIn requests.
On Tuesday, the Justice Department unsealed new charges against 10 Chinese intelligence officers and hackers who perpetrated a years-long scheme to steal trade secrets from aerospace companies.

The case continues an impressive tempo from the Justice Department, as it continues to try curb China's massive, wide-ranging, and long-running espionage campaign. 

In fact, it's the third time since September alone that the US government has charged Chinese intelligence officers and spies, including one of its biggest coups in years: The extradition earlier this month of a Chinese intelligence officer, caught in Europe, who will face a US courtroom.
That arrest marks the first time the US has prosecuted an officer of China's Ministry of State Security. The feds believe that the suspect, Yanjun Xu, spent years cultivating a person he thought was a potential asset inside GE Aviation, which makes closely held jet engine technology.
While historic, the GE Aviation case hardly stands as an outlier. 

Chinese espionage against the US has emerged over the past two decades as the most widespread, damaging, and pernicious national security threat facing the country—compromising trade secrets, American jobs, and human lives.
Even as popular culture and public attention has focused in the past decade on a few high-profile cases against Russian intelligence operations, China’s spying efforts have yielded a more steady stream of incidents. 

Over the last 15 years, dozens of people have been arrested, charged, or convicted of economic or military espionage for China. 

In just the 28-month period that a notorious Russian spy ring unraveled around 2010, US officials charged and prosecuted more than 40 Chinese espionage cases, according to a Justice Department compilation.
The majority of Chinese espionage cases over the years have involved ethnic Chinese, including Chinese students who came to the US for college or advanced degrees, got hired at tech companies, and then absconded back to China with stolen trade secrets. 

Historically, very few Chinese spying cases have featured the targeting or recruitment of Westerners. But this year has seen a rash of cases of Sino-Americans recruited to spy on China’s behalf, encouraged to turn over sensitive military, intelligence, or economic information—at least one of which started with a simple LinkedIn message.
Sifting through more than a dozen of the major cases that have targeted Westerners, though, provides an illuminating window into how China recruits its spies. 

The recruitment follows a well-known five-step espionage road map: Spotting, assessing, developing, recruiting, and, finally, what professionals call “handling.”

Stage 1: Spotting
The first step in any espionage recruitment is simply knowing the right people to target. 

That job often falls to what intelligence professionals call a “spotter,” a person who identifies potential targets, then hands them off to another intelligence officer for further assessment. 

These spotters, sometimes friendly officials at think tanks, universities, or corporations, are often separate from the intelligence officers who ultimately approach potential spies, allowing a level or two of remove. 

They sometimes have such “deep cover” that they are considered too valuable to make a recruitment approach directly, leaving that work to a cut-out who could more easily disappear if the recruitment pitch is rejected.
In that vein, last week’s Yanjun Xu indictment ties in to another little-noticed September arrest, where the FBI charged a 27-year-old Chinese citizen and Chicago resident with acting as an unregistered foreign agent for China—the federal criminal charge that prosecutors often use as code for spying. That man, Ji Chaoqun, had arrived in the United States in 2013 to study electrical engineering at the Illinois Institute of Technology, and had subsequently enlisted in the Army Reserves.
Yet according to the government’s criminal complaint, Ji Chaoqun had less pure motives at heart than service: He had been recruited at a Chinese job fair while in college to join a “confidential unit” and work as a “spotter” for Yanjun Xu, helping the MSS officer identify potential recruits and providing background reports on at least eight potential spies. 

In a 2015 email, Ji Chaoqun wrote that he was enclosing “eight sets of the midterm test questions for the last three years,” according to court documents. 

He attached eight PDFs of background reports downloaded from sites like Intelius, Instant Checkmate, and Spokeo, which compile public records on individuals for purchase online. (The sites limit purchases to US-based consumers, so they were inaccessible to Yanjun Xu himself.)
All eight of the targeted individuals were ethnic Chinese who worked in science or technology. 

Seven of them were either currently employed or had recently retired from US defense contractors, according to the US government.
“Spotting” doesn’t necessarily have to involve human targets; an article in the November issue of WIRED, excerpted from the new book Dawn of the Code War, outlines the US pursuit of the Chinese spy Su Bin, who was captured in Canada in 2014 after working for years as a technical “spotter” for Chinese military intelligence officers.                         

Su, an aviation expert, would examine stolen file directories hacked by Chinese intelligence to point them to the most valuable and relevant documents, helping them navigate massive troves of files on secret projects like the US development of the C-17 military transport plane.

Chinese intelligence officer of China's Ministry of State Security Xu Yanjun was extradited to the US with help from Belgian authorities for seeking to steal trade secrets and other sensitive information from an American company that leads the way in aerospace.

Stage 2: Assessing
Once intelligence officers identify potential recruits, they then examine how they might encourage those targets to spy. 

Professionals often summarize the motives for espionage with the acronym MICE: money, ideology, coercion, and ego. 

Spies want to be paid for their work, or believe in the cause, or can be blackmailed, or want the ego boost that comes with leading a double life.
While it often relies on ideology or coercion in pressuring ethnic Chinese to spy on its behalf abroad, China has proved particularly successful in luring Westerners with cash. 

In June of this year, FBI agents arrested a Utah man as he prepared to fly to China and charged him with attempting to pass national defense information to China. 

The felony complaint says that Ron Rockwell Hansen, a former Defense Intelligence Agency officer, had been struggling financially, living primarily off his $1,900-a-month DIA pension and facing debts of more than $150,000. 

In 2014, Rockwell allegedly began meeting with two MSS officers—who introduced themselves to him as “David” and “Martin." 

During one 2015 business trip to China, they offered him up to $300,000 a year for “consulting services.” 

Hansen was, according to the government, to “attend conferences or exhibitions on forensics, information security, and military communications and to conduct product research.” 

The money, in turn, would be funneled to him by David and Martin by “overpaying him for purchases of computer forensic products.”
Hansen attended defense and intelligence conferences, on China’s behalf, for nearly four years, from 2013 through 2017. 

He took photos, made notes, and tried to strike up contact with former DIA and intelligence colleagues. 

He also purchased restricted forensics software to transport to China.
All told, according to the complaint, Hansen made 40 trips to China between 2013 and 2018, often returning with tens of thousands of dollars in cash—four trips cited by the government netted him $19,000, $30,000, $20,000, and, in 2015, $53,000. 

Ultimately, court documents show that Hansen received upwards of $800,000 from Chinese sources. 

Hansen pleaded not guilty to 15 counts in July.
In another major corporate espionage case that dates back to 2011, a grand jury indicted the Sinoval Wind Group, a Chinese company, for trade secret theft and wire fraud related to its partnership with American Superconductor. 

The indictment specifically alleged that Sinoval stole American Superconductor's source code for its wind turbine, recruiting an employee to betray the Massachusetts-based company with promises of wealth and women. 

The two firms had been working together on massive wind farms in China; American Superconductor provided the software for the turbines, while Sinovel manufactured the turbines and did the construction work.
American Superconductor managers had heard horror stories of American companies having their intellectual property stolen by Chinese business partners, so the company went to great lengths to lock down its software and allow access only by its own employees. 

Chinese spy Dejan Karabasevic

Sinovel, instead, recruited Dejan Karabasevic, a Serbian employee based in Austria, to out-and-out steal the source code. 

Karabasevic pleaded guilty in an Austrian court in 2011.

“They offered him women. They offered him an apartment. They offered him money. They offered him a new life,” the head of American Superconductor, Daniel McGahn, later told 60 Minutes.
Karabasevic was quite clear about his motives: As detailed in court documents, he wrote in one email to his new Chinese business partners, “All girls need money. I need girls. Sinovel needs me.” 

The Chinese firm ultimately offered Karabasevic $1.7 million to steal the turbine source code. 

He wrote to Sinovel in one text message: “I will send the full code of course.”
American Superconductor only became aware of the theft when its engineers noticed that some of the turbines being installed in Sinovel’s large wind farms in China were running a version of the operation software that hadn’t yet been released; by then, it was too late. 

The collapse of the partnership forced the company to lay off 600 of its 900 employees; a federal jury found Sinovel guilty on counts of theft of trade secrets and wire fraud in January of this year.

Spies for China. The Indian-American Noshir Gowadia; the Chinese-American Wenxia Man and the Chinese-Canadian Su Bin. 

Stage 3: Developing
Intelligence officers generally don’t lead off by asking potential sources to betray their country or their employer. 

The third stage of espionage recruitment, instead, is known as “developing,” when recruiters begin to ask for trivial requests or favors to establish rapport. 

As former CIA director John Brennan said last year, “Frequently, people who go along a treasonous path do not know they are on a treasonous path until it is too late.”
In one of its more daring efforts in recent years, Chinese intelligence tried to place an ambitious China-loving American student inside the CIA, hoping that the would-be mole could rise through the undercover ranks of the agency.

A shot of Glenn Duffie Shriver from the FBI's video.

Glenn Duffie Shriver, a student from outside Richmond, Virginia, had become intrigued with China during a 45-day summer study abroad program in 2001. 

He later returned for his junior year abroad, becoming fluent in Chinese, and moved to Shanghai, where he acted in Chinese films and commercials. 

Around 2004, he responded to a newspaper ad asking for someone to write a white paper about trade relations between the US, North Korea, and Taiwan; the woman who hired him, calling herself “Amanda,” paid him $120 for the essay. 

She told him she liked the work and asked if he’d be interested in more—and then introduced him to two men, “Mr. Wu” and “Mr. Tang.”
Over time, those two encouraged Shriver to return to the US to join either the State Department or the CIA. 

“We can be close friends,” they told him. 

Shriver flunked the foreign service exam twice, but the MSS paid him a combined $30,000 for the effort. 

In 2007, Shriver applied to the CIA’s National Clandestine Service, the unit that runs its undercover foreign operatives, and received a $40,000 payment from the Chinese MSS.
The US government ultimately arrested Shriver, and the FBI even turned the incident into a low-budget movie to warn other students studying abroad about Chinese friends bearing gifts. 

Shriver pleaded guilty to one count of conspiracy to communicate national defense information in 2010.
“It started out fairly innocuous: ‘Oh, you know, we really want to help young people here in China. You know, we realize sometimes you’re far from home and the costs can be quite a bit, so here is just a little bit to help you out,’” Shriver said at his sentencing. 

“And then it kind of spiraled out of control. I think I was motivated by greed. I mean, you know, large stacks of money in front of me.”
That subtle evolution and push over the line from personal or professional favor to outright espionage was also clearly evident in last week’s case against MSS official Yanjun Xu, who had targeted GE Aviation. 

The GE case, which reads almost like a slow-motion David Ignatius espionage novel, was somewhat unique: No documents or trade secrets were compromised—the sting appeared to unfold with the cooperation of the company—but the recruiter apparently followed a clear path of asking for small things before pushing the employee over the line to outright theft.
Yanjun Xu began his recruitment efforts, officials said, by contacting American aerospace experts under the guise of an educational exchange; he worked with the Nanjing University of Aeronautics and Astronomics, one of China’s top engineering schools, to invite the targeted aerospace engineers to give lectures on their work. 

The targeted GE employee, identified only as “Employee #1” in court documents, was both reimbursed for travel expenses and paid a $3,500 “stipend” for the lecture at NUAA. 

The ploy was one Xu appeared to use routinely; court documents cite other examples of “seminars” and “educational exchanges” with aerospace engineers that served as recruiting efforts for espionage.
During the unnamed GE employee’s visit to NUAA in June 2017, according to court records, Xu introduced himself, using the cover identity of “Qu Hui,” and explained that he worked for the Jiangsu Science and Technology Promotion Association. 

The American engineer and Xu had multiple meals together and Xu invited the engineer to return for another lecture. 

By January 2018, Xu was regularly asking the GE engineer to pass along small details about system specifications and the company’s design process, authorities say. 

He then provided what amounted to a shopping list of aviation design secrets, asking, “Can you take a look and see if you are familiar with those?”
In February, Xu allegedly asked for a copy of the employee’s file directory for his company-issued computer, explaining how to appropriately sort and save the directory for Xu’s review. 

The two then began to make plans for Xu to access the company computer during a business trip to Europe; as Xu explained, according to court documents, “We really don’t need to rush to do everything in one time because if we’re going to do business together, this won’t be the last time, right?” 

It was on what Xu thought was that European business trip in April that the Chinese intelligence officer was arrested in Belgium.

Stage 4: Recruiting
The direct request to spy is often the most fraught moment of an espionage operation—but sometimes it starts off easily enough. 

One-time CIA officer Kevin Mallory was recruited to spy for the Chinese right off LinkedIn in February 2017. 

Mallory, who was working as a consultant at the time, was contacted over the social network by someone from a Chinese think tank known as the Shanghai Academy of Social Sciences. 

The FBI said in court documents that the organization—China’s oldest social science think tank—is regularly relied upon by MSS, who “[use] SASS employees as spotters and assessors,” and that MSS officers “have also used SASS affiliation as cover identities.”
Mallory spoke by phone with the purported SASS employee, and subsequently traveled to China twice, in March and April 2017, for in-person meetings. 

There, he received a special phone and instructions on how to use its secure messaging capabilities to contact his Chinese “clients.” 

According to the criminal complaint, Mallory also wrote two short white papers on US policy matters for his Chinese intelligence handlers.
Mallory was caught, in part, because he didn’t realize that the device didn’t wipe sent secure messages, and FBI agents were able to peruse his communications with the Chinese intelligence officers. 

The deal was quite explicit: In one message, Mallory wrote, “your object is to gain information, and my object is to be paid for.” 

Ultimately, the FBI believed that Mallory passed at least three classified documents to the Chinese and was paid about $25,000.
Mallory was found guilty of conspiracy to commit espionage during a June trial, though the judge threw out two convictions related to sharing or trying to share national defense information.


Sino-American double loyalty: China gave ex-CIA agent Jerry Chun Shing Lee US$100,000 and promised to take care of him ‘for life’

Stage 5: Handling

The most delicate part of an espionage operation is always maintaining the regular, day-to-day communication between a spy and his or her assigned “handler.”
Whereas previous generations often relied on the Cold War tradecraft of physical “dead drops” or in-person “brush passes” for covert information exchanges, today’s espionage often relies on encrypted communication tools, surreptitious cell phones, and emails left in draft folders.
Some of that modern tradecraft was on display in the charges against another former CIA case officer, naturalized US citizen Jerry Chun Shing Lee, who is the most devastating Chinese spy ever. 

According to court documents released following his arrest in January, Lee met with two Chinese intelligence officers in April 2010, who promised him “a gift of $100,000 cash in exchange for his cooperation and that they would take care of him for life.” 

Beginning the very next month, the Chinese intelligence officers began passing “taskings” to Lee in envelopes, delivered by one of his business associates, that asked him to reveal sensitive information about the CIA.
Lee ultimately received requests for at least 21 different pieces of information, according to court documents. 

In response to one such request, Lee “created on his laptop computer a document that included entries pertaining to certain locations to which the CIA would assign officers and a particular location of a sensitive operation to which the CIA would assign officers with certain identified experience.” 

Communications flowed, in part, through an email address created using his daughter’s name.
It appears that Lee’s work has helped devastate America’s own spy networks inside China. 

While the government’s reliance on an insecure encrypted communications system exposed several of its own human assets, according to a recent report in Foreign Policy, its problems may not have only been high tech. 

When FBI agents covertly searched Lee’s luggage at one point, the Justice Department indictment says, they discovered a “Day Planner containing handwritten, classified information up to the Top Secret level pertaining to, but not limited to, operational notes from asset meetings, operational meeting locations, operational phone numbers, the true names of assets, and covert CIA facilities.”

President Trump noted that “almost every Chinese student that comes over to this country is a spy.”