- The Washington Times - Wednesday, January 20, 2010

The White House National Security Council recently directed U.S. spy agencies to lower the priority placed on intelligence collection for China, amid opposition to the policy change from senior intelligence leaders who feared it would hamper efforts to obtain secrets about Beijing’s military and its cyber-attacks.

The downgrading of intelligence gathering on China was challenged by Director of National Intelligence Dennis C. Blair and CIA Director Leon E. Panetta after it was first proposed in interagency memorandums in October, current and former intelligence officials said.

The decision downgrades China from “Priority 1” status, alongside Iran and North Korea, to “Priority 2,” which covers specific events such as the humanitarian crisis after the Haitian earthquake or tensions between India and Pakistan.

The National Security Council staff, in response, pressed ahead with the change and sought to assure Mr. Blair and other intelligence chiefs that the change would not affect the allocation of resources for spying on China or the urgency of focusing on Chinese spying targets, the officials told The Washington Times.

White House National Security Council officials declined to comment on the intelligence issue. Mike Birmingham, a spokesman for Mr. Blair, declined to comment. A CIA spokesman also declined to comment.

But administration officials, speaking on the condition of anonymity, said the new policy is part of the Obama administration’s larger effort to develop a more cooperative relationship with Beijing.

A U.S. official who defended the policy change said “everybody involved understood the absolute importance of China as an intelligence priority.”

“This is a case in which the assignment of a relative number — one or two — wouldn’t mean, or change, a damn thing. And it didn’t.” The official said the U.S. government “has to keep its eyes on a host of threats, challenges and opportunities overseas. That’s how it works.”

Critics within the government, however, said the change will mean that strategic intelligence on China — the gathering of data and analysis of information — will be reduced over time, undermining what officials said are urgently needed efforts to know more about China’s political, economic, military and intelligence activities.

Rep. Peter Hoekstra of Michigan, the ranking Republican on the House Permanent Select Committee on Intelligence, expressed concern about the change.

“For those who say changing from Priority 1 to Priority 2 doesn’t make any difference — well then, why do it?” he asked. “China should be at the top of the priority list, not moving down.”

Officials said the lower intelligence priority for China is a subtle but significant change that will affect an array of intelligence activities.

Although the effect is not expected to be immediate, a change in priority number generally means that projects regarding that country are scrutinized more skeptically on budgetary and other grounds. Agencies likely will reduce spending for intelligence operations on China, whether carried out by spies or by photographic and electronic-intercept satellites.

Critics of the decision also fear that the lower priority will cause CIA and Defense Intelligence Agency operatives to take fewer risks in the field when spying on Chinese targets.

One new area that has been given a higher intelligence priority under the Obama administration is intelligence collection on climate change, a nontraditional mission marginally linked to national security. The CIA recently announced that it had set up a center to study the impact of climate change.

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