- The Washington Times - Tuesday, December 3, 2019

China’s military is engaged in an elaborate covert smuggling operation in Hong Kong to steal U.S. and other western arms and military technology, according to a Chinese intelligence official who has defected to Australia.

Wang Liqiang described the operation in an official statement to Australian authorities that also revealed details of a major Chinese influence campaign aimed at swaying the upcoming presidential election in Taiwan, and aggressive efforts to undermine democracy advocates in Hong Kong.

Mr. Wang worked until the past spring as a mid-level official in a Chinese military front organization controlled by the General Staff Department of the Chinese military, the department in charge of intelligence operations, according to his sworn statement to the Australian Security and Intelligence Organization (ASIO).

“I have been personally involved in a series of espionage activities that were in breach of the principles of democracy and morality, as well as activities intending to control media and public opinion,” Mr. Wang said, according to an English language translation of the statement.

Mr. Wang broke with the Communist Party of China after he was ordered to travel to Taiwan in May to take part in multi-million dollar covert operations aimed at manipulating the Taiwan elections. He defected rather than carry out the mission and is currently seeking political asylum for himself, his wife and an infant child.

A copy of his 17-page statement was obtained by The Washington Times. The statement was first reported by Australian news outlets 60 Minutes Australia, The Age, and the Sydney Morning Herald.

A U.S. official said Mr. Wang’s information is very detailed and appears credible, although his legitimacy as a defector has not been determined independently of the ASIO, a U.S. intelligence ally.

Former Defense Intelligence Agency counterintelligence official Nick Eftimiades, a China specialist, said that based on public statements he believes Mr. Wang is a legitimate defector. “They will determine more during the debriefing process,” he said. “They certainly have already done that otherwise this would not have gone public. He is young and came out after the Hong Kong protests started so he has motivation.”

China, through state media, has denounced Mr. Wang as a financial criminal and sought to discredit his reported disclosure secrets.

A spokesman for the Australian Embassy did not return emails seeking comment. A Chinese Embassy spokesman also did not return an email seeking comment.

In his statement, Mr. Wang warned repeatedly that he fears for his life and worries Chinese intelligence agents operating in Australia will kidnap and kill him to prevent the disclosure of secrets on a range of subjects.

Mr. Wang claimed to have worked for several years for a military front company that gathered intelligence and stole advanced technology, using Hong Kong’s open trading system. The targets included U.S. military satellite and aerospace technology and research on guided missiles.

Through the front company, China Innovation Investment Ltd., a publicly-listed Hong Kong firm, China’s military successfully used Hong Kong to covertly buy weapons banned for export directly to China, according to the defector’s statement.

The process involved purchasing arms and missiles, shipping them Hong Kong and then dismantling them and secretly sending them to China, Mr. Wang said in the statement without elaborating precisely.

“In fact, the so-called advanced weapons in China have been predominantly acquired through such channels,” he said.

Web of operations

Regarding influence operations in Taiwan, Mr. Wang said the goal was for Taiwan to “lose its sovereignty” while China seeks “to replace the Republic of China with rule of the Communist Party of China.”

Republic of China is Taiwan’s official name.

Mr. Wang also said the front company he worked for had operations aimed at infiltrating Hong Kong universities and media outlets.

A second Chinese military intelligence front, the Hong Kong-listed company, China Trends Holding Ltd., was also identified in Mr. Wang’s statement.

Both companies’ executive director, Xiang Xin and alternate director, Kung Ching, were detained by Taiwanese authorities on Nov. 25, after reports about Mr. Wang’s activities first emerged in Australia.

Based on the statement given to Australian authorities, Mr. Xiang appears to have been Mr. Wang’s intelligence handler. Mr. Wang said that Mr. Xiang served for many years in large military intelligence organization in China and was dispatched to Hong Kong to create the two front companies to support the intelligence operations.

Mr. Xiang’s wife, Qing Gong, is also working as a Communist Party of China agent, the defector claimed.

Mr. Wang also said that in addition to arms procurement and influence operations, the military intelligence fronts were used to spy on Chinese officials who fled to Hong Kong after losing out in factional Chinese Communist Party (CCP) disputes.

For example, Mr. Wang revealed that a senior Chinese Communist Party official Li Yuanchao, who was vice president of China from 2013 to 2018, made a “forced retreat” to Hong Kong. Intelligence agents, including Mr. Wang, sought to pressure him into returning to the mainland as part of an investigation.

Mr. Wang said he and several other agents met with a relative of Mr. Li’s at the Shangri-La Hotel in Hong Kong. They threatened Mr. Li’s wife as part of the pressure campaign and then began targeting the company he owned, identified as Leshi Internet Information and Technology Corp.

The company is among the largest online video outfits in China and is based in the Chinese city of Shenzhen, near China’s border with Hong Kong.

Known as Le.com, the company was placed under investigation in April and is struggling financially.

“The crisis of Le.com has never been a financial crisis as it has been known,” Mr. Wang said. “It is in fact a political crisis. It was the faction strive [sic] inside the Communist Party of China that caused the collapse of this company.”

Another internal CCP factional dispute involves current Chinese Premier Li Keqing who has sought to deregulate financial markets and provide more incentives for business in China by promoting peer-to-peer lending.

To gain greater control over the financial sector, Chinese leader Xi Jinping has cracked down on the so-called “p2p” lending, according to Mr. Wang.

“The Communist Party of China suppressed these [p2p] organizations under the pretext that it is for the benefits of the people,” he said. “In fact, the real purpose behind [this] is to prevent the Chinese financial market from getting too active.”

Mr. Wang stated that his boss, Mr. Xiang, told him he could have been a provincial governor but chose to remain undercover in Hong Kong to avoid factional fighting in Beijing.

With regard to Taiwan election manipulation operations, meanwhile, Mr. Wang said the Chinese military-run influence campaign in Taiwan was a prime reason he broke with the CCP.

China’s influence operations in Taiwan, he said, included providing Chinese currency worth roughly $1.42 million to presidential candidates of Taiwan’s main opposition party, the pro-Beijing Kuomintang or KMT.

The Chinese influence operations also spread fake news attacking the ruling, pro-independence Democratic Progressive Party of Taiwan, Mr. Wang stated.

Fifty Internet companies controlled by the Chinese military are working in Taiwan, and restaurants and hotels on the island are being used for intelligence collection, he said.

Cultural exchange programs from the mainland also are being used funnel money to pro-China groups and media as part of the campaigns. “We believe that if we help KMT win the election, then China wins the US,” Mr. Wang said of the operations.

Subterfuge in Hong Kong

Mr. Wang separately claimed to have taken part directly in the kidnapping and rendition to China in October 2015 of Lee Bo, a Hong Kong bookshop owner wanted by Beijing for selling dissident material.

The current Hong Kong protests were set off six months ago by plans to introduce a law that would make such renditions legal.

Mr. Bo was kidnapped for his role in publishing the book “Xi Jinping and His Six Women,” about the Chinese leader’s mistresses.

Mr. Wang claimed the kidnapping operation was part of Chinese military intelligence efforts targeting democracy advocates in Hong Kong and, ultimately, to “conduct sabotage and suppression of democracy.”

Several Chinese media outlets operating in the former British colony were identified in the defector’s statement as being controlled by China, including Hong Kong Satellite TV, whose chairman Hao Wang is accused of holding a military post equivalent to a division commander within the General Staff Department.

The front organization also gathered intelligence on pro-democracy advocates and others that were then placed under surveillance, Mr. Wang said.

Regarding work on Hong Kong universities, the defector claimed that Qing Gong, the wife of Mr. Xiang, led efforts to recruit agents among student populations to support Beijing’s policies. The agents would be called on to confront and politically attack pro-democracy students, Mr. Wang said.

Many of the pro-China students, he said, were dispatched from Nanjing University of Science and Technology, a school linked to the Chinese military, and trained in intelligence skills.

China’s government has shot back at the allegations, describing Mr. Wang as a “fraud” linked to past financial crime.

Beijing is known to use allegations of crime or corruption to discredit dissidents and opponents of the Chinese government.

Shanghai police issued a statement on Nov. 24 claiming Mr. Wang is a “fugitive suspect,” who was found guilty of financial fraud three years ago as part of an investment scheme, the Financial Times reported.

Chinese state-run news reports also maintain that a fraudulent passport, which Mr. Wang claims was provided to him for his mission to Taiwan, contained obvious errors and therefore, he could not be a legitimate intelligence defector.

Mr. Wang, however, noted that he had recognized the flaws in the passport.

In an interview with Australia’s “60 Minutes” on Nov. 24, the defector said that “Taiwan was the most important work of ours.” He added that Chinese agents infiltrated media, temples, and grass roots groups there.

The director general of ASIO, Mike Burgess, said last week that the Australian intelligence services are taking Mr. Wang’s allegations seriously and are “actively investigating” his claims.

• Bill Gertz can be reached at bgertz@washingtontimes.com.

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