- The Washington Times - Thursday, March 9, 2000

China's spy services are stepping up military spying against the United States while using Chinese students as intelligence agents and "political influence" programs to manipulate U.S. policy, a joint CIA and FBI report says.

"Chinese attempts to obtain U.S. military and military-related technology … have increased since the early 1990s," the counterintelligence report stated.

"Beijing continues to view the United States as one of its major targets for political collection," according to the report sent to Congress in January but released yesterday. A copy of the five-page unclassified report was obtained by The Washington Times.

Chinese spying "focuses on the foreign policies and intentions of the United States as well as information on U.S. leaders and sensitive bi- or multilateral negotiations," the report said.

Regarding political influence activities, the report said China is continuing to work on "building political influence in the United States."

Stepped-up influence operations date to 1995, when Beijing began directing resources toward influencing Congress and building greater overall political influence in the United States. The operations followed the June 1995 visit to the United States by Taiwanese President Lee Tenghui.

That year, Beijing set up its Central Leading Group for U.S. Congressional Affairs that sought to increase support for Chinese goals.

China's government is trying to influence Congress through visits to China by members, lobbying of ethnic Chinese voters and prominent U.S. citizens, and "engaging U.S. business interests to weigh in on issues of mutual concern," the report said.

As for military espionage, the United States continues to be the "main target" of spying by the intelligence arm of the People's Liberation Army, known as the Military Intelligence Department (MID).

China focused on gathering military-related technology after seeing the impressive U.S. high-technology warfare actions in the 1991 Persian Gulf War and last year's Kosovo operations, the report said.

Most military spying is done overtly by Chinese attaches posted to embassies and consulates. However, the report states that since 1987 the FBI and Customs service have stopped "at least two MID/ PLA clandestine collection operations in the United States."

The attaches collect intelligence from "contacts" with U.S. officials and from publications as well.

Chinese spies are continuing to obtain valuable intelligence from U.S. nuclear weapons laboratories, the report states.

"PRC scientists, through mutually beneficial scientific exchange programs, gather [science and technology] information through U.S. national laboratories," the report said.

Cooperative exchange programs by the laboratories have created "new vulnerabilities" for U.S. high-technology information, the report states.

"These vulnerabilities emphasize the significant difficulty the United States encounters in detecting PRC espionage activity," the report said.

No mention was made in the report of the ongoing spy probe of Los Alamos National Laboratory scientist Wen Ho Lee. Mr. Lee is suspected of passing nuclear warhead secrets to China and has been charged with mishandling extremely sensitive data on U.S. nuclear weapons.

The secret and public versions of the report were sent last week to the House Intelligence Committee by CIA Director George Tenet and FBI Director Louis Freeh. The report was required under legislation passed by Congress.

The report mentions the FBI case involving Lawrence Livermore National Laboratory scientist Peter H. Lee, who gave China secret information about the neutron bomb which kills with radiation instead of a large blast in 1985 and 1997. Lee pleaded guilty to espionage in 1997.

Sen. Arlen Specter, Pennsylvania Republican, said during a Senate hearing Tuesday that Lee was sentenced only to community service and served no jail time despite his involvement in "a very egregious case involving the disclosure of nuclear secrets in 1985 and the disclosure of certain materials about detecting submarines in 1997."

Mr. Freeh said during the hearing that the FBI and other security agencies view Chinese spying "with the utmost seriousness."

Asked if the threat from Chinese spies is serious, Mr. Freeh said, "Yes, sir, absolutely."

China also is engaged in economic espionage against U.S. companies, the report said. Chinese spies have targeted private company information and trade secrets, "particularly advanced civilian, military and dual-use and bio-technology," as a top priority, the report said.

China's civilian MSS spy agency is particularly active against U.S. businessmen and Westerners in China "where MSS officers can be aggressive," the report said.

Chinese spies often exploit the "shared ancestry" of so-called overseas Chinese with access to commercial or government secrets, the report said.

According to the FBI and CIA, professional military and civilian intelligence officers play a small part in the China's spying efforts.

"Some of the thousands of Chinese students, scientists, researchers and other visitors to the United States also gather information, working mostly for government-controlled end-user organizations and other scientific bureaus, research institutes and enterprises," the report said.

The Ministry of State Security, however, assists these institutions by "matching their information needs with assets the service has developed in the United States and elsewhere," the report said.

Most intelligence collected by Chinese nationals abroad is gathered legally through "open sources," such as U.S. university libraries, research institutions, the Internet and other databases.

The report described the information as "highly valued yet unclassified" data.

The report said some Chinese businesses in the United States "are a platform for intelligence collection activities." Chinese firms provide "cover" for spies, it said.

"These collectors enter the United States to gather sensitive and/or restricted proprietary [and] trade secret information or to act as a liaison to consumers of intelligence back in China," the report said.

The activities of Chinese spies were described as "low-key and singular in nature," frustrating FBI counterspy efforts.

China also is engaged in "propaganda and perception management" against the United States, using government-owned or -controlled press. The report identified the newspaper supplement Wen Wei Po as "a favored outlet for reaching ethnic Chinese audiences, whose perspectives in turn can influence the broader public's views of China," the report said.

The main spy agencies for Beijing were identified as the Ministry of State Security, which conducts collection and counterespionage in China and abroad, the MID, which gathers military and technical secrets, and the PLA's Liaison Department, charged with spying on Taiwan.

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