Beijing espionage poses ‘No. 1’ threat

China’s aggressive spying, technology theft and computer attacks pose the most significant threats to U.S. national security, officials and analysts told a congressional hearing yesterday.

“China has now become the No. 1 espionage threat to the United States,” Rep. J. Randy Forbes, Virginia Republican, said after a closed-door briefing with U.S. counterintelligence and security officials.

“It is a real problem that is costing us a lot of dollars and potentially puts our soldiers at risk down the road,” he said in an interview.

J. Patrick Rowan, deputy assistant attorney general in the Justice Department“s national security division, said after the House Judiciary subcommittee briefing that both China and Iran are stepping up military technology spying.

“Of great concern recently is the substantial and growing national security threat posed by illegal foreign acquisition of restricted U.S. military technology,” he said. “China and Iran pose particular U.S. export-control concerns, and recent prosecutions have highlighted illegal exports of stealth missile technology, military aircraft components, naval warship data, night-vision equipment and other restricted technology destined for those countries.”

Larry Wortzel, a former military counterintelligence officer and current chairman of the congressional U.S.-China Economic and Security Review Commission, said he told the panel that China is using stolen technology to rapidly produce new and lethal high-technology weapons.

After a year of hearings, research and classified briefings, the commission concluded that “China’s espionage activities are the single greatest threat to U.S. technology and strain the U.S. counterintelligence establishment,” Mr. Wortzel said afterward.

“This illicit activity significantly contributes to China’s military modernization and acquisition of new capabilities,” he said.

Mr. Wortzel said China’s cyber-spying and computer attacks are major worries. He noted that U.S. government and private-sector networks are targets and that counterespionage services are “overwhelmed” in trying to counter the threat.

Spying today includes traditional Cold-War-style espionage as well as sophisticated operations to gather trade secrets and export-controlled military technology, Mr. Rowan said. Two recent China cases included the spying by Chinese-born defense contractor Chi Mak, who supplied embargoed defense technology to China, and Noshir Gowadia, a former Northrop Corp. engineer who sold classified stealth missile technology to China.

A presidential directive on export controls announced last week includes the creation of an interagency working group that will bolster the Justice Department export enforcement investigations, he said. The hearing was called to examine whether current laws are sufficient to prosecute foreign spies. Several recent spy cases, including the Mak case, were hampered by outdated spy laws that led prosecutors to use export-control laws.

“Like fighting today’s wars with yesterday’s weapons, if you conduct counterintelligence based on the way it was done yesterday, you lose,” Mr. Forbes said.

Mr. Wortzel said U.S. counterintelligence agencies, mainly the FBI and domestic security agencies, must contend with Chinese spies dispatched by myriad Chinese spy services.

They include the Ministry of State Security; the Public Security Bureau; the PLA Third, the military intelligence unit of the People”s Liberation Army (PLA); the PLA Fourth Department, which conducts information warfare; industrial spies from the PLA”s General Armaments Department and the General Logistics Department; the technical intelligence collectors of the military industrial sector and the Commission of Science Technology and Industry for National Defense; the Communist Party Liaison Department; and the PLA General Political Department.