China is increasingly targeting American state and local officials in influence operations designed to further the objectives of the ruling Communist Party, according to a new report by a U.S. counterintelligence agency.
“In partnering with any foreign entity, U.S. state and local leaders should exercise vigilance, conduct due diligence, and ensure transparency, integrity and accountability are built into the partnership to guard against potential foreign government exploitation,” the National Counterintelligence and Security Center (NCSC) stated in a report made public Wednesday.
China’s government invests heavily in conducting covert and overt influence operations targeting the United States through the Chinese Communist Party’s (CCP) United Front Work Department, the report said. The NCSC report said the efforts are continuing to focus on Washington, including lobbying against a major competitiveness bill targeting China now working its way through Congress.
China “has also stepped up its efforts to cultivate U.S. state and local leaders in a strategy some have described as ‘using the local to surround the central,’” the report said, adding that China‘s targeting of state and local officials can be an effective tool in promoting agenda that are more difficult at the national level.
The CCP also exploits Chinese funding in state and local areas as a way to create dependencies that can produce influence in Washington. Chinese officials exploit American businesses’ investments and desire for access to markets in China as leverage.
The practice involves forcing American business leaders “to lobby Washington for policies Beijing favors.”
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In 2020, then-Secretary of State Mike Pompeo first disclosed aggressive Chinese influence activities targeting regional officials in a speech to the National Governors Association.
“The CCP is inside the gates here at home,” Mr. Pompeo told The Washington Times, noting that not enough is being done to counter the threat.
“As secretary of state, I alerted the world to this danger. While I’m encouraged that on consecutive days directors [FBI Director Christopher A.] Wray and [Director of National Intelligence Avril] Haines have identified this risk, sadly, the Biden team has not taken serious efforts to eliminate this risk to us all.”
Mr. Pompeo said he directed the closing of the Chinese consulate in Houston over spying activities, yet he contended that the Biden administration has done little to follow through on countering the espionage dangers.
“Americans deserve leaders prepared to defend them here at home,” he said.
The report said Chinese influence operations against what it termed “subnational” officials is designed to pressure Washington to adopt policies favorable to Beijing. The Chinese believe U.S. state and local leaders are more independent from Washington and as a result can be used as proxies to promote pro-China policies, including greater bilateral economic cooperation and curbing American criticism of China’s policies toward Taiwan, Tibetans, Uyghurs, pro-democracy activists and others, the report said.
Entities in China for decades have linked to government and business leaders in U.S. states in mutually beneficial exchanges.
“However, as tensions between Beijing and Washington have grown, the government of the People’s Republic of China under President Xi Jinping has increasingly sought to exploit these China-U.S. subnational relationships to influence U.S. policies and advance PRC geopolitical interests,” the report said.
One case disclosed by Mr. Pompeo two years ago involved a Chinese consulate official in Chicago, Wu Ting, who sent an email to Wisconsin state Sen. Roger Roth with a draft resolution that the official wanted Mr. Roth to introduce in the Wisconsin legislature, praising China’s response to the COVID-19 pandemic.
Mr. Roth deleted the email believing it to be a hoax. Ms. Wu sent a second email prompting the state legislator to respond with a single word: “Nuts.”
Mr. Pompeo said the influence effort is part of attempts to “collectively whitewash [China’s] culpability for a global pandemic.”
The Wisconsin influence operation was part of a large-scale operation targeting statehouses around the country by officials at Chinese embassies and consulates.
“We’ve seen them at PTA meetings,” Mr. Pompeo said in the speech. “They have been in full swing for years, and they’re increasing in intensity.”
Another case involved a California state senator who in 2017 proposed a bill voicing support for the Falun Gong Buddhist group that has been targeted by Beijing authorities as a cult. The Chinese officials at the consulate in San Francisco wrote the legislature in Sacramento and as a result the legislation was shelved.
China also carried out an influence operation targeting Rep. Eric Swalwell, California Democrat, who had an affair with a Chinese national named Fang Fang who helped with fundraising and placing an employee in the congressman’s office, Axios reported in 2020.
Release of the NCSC report follows a rare joint appearance in London this week by Mr. Wray and British MI5 Director General Ken McCallum warning of Chinese intelligence operations in the West.
A Chinese Embassy spokesman did not immediately respond to a request for comment on the speeches or report.
On the two intelligence leaders’ remarks, the spokesman referred to comments by Chinese Foreign Ministry Spokesman Zhao Lijian, who said in Beijing that the United States is “the biggest threat to world peace and development.” Mr. Zhao said Mr. Wray should “stop spreading lies, and stop making irresponsible remarks.”
Regarding Mr. McCallum’s comments, Mr. Zhao said both MI5 and the foreign intelligence service MI6 are “both experts on planting spies.” The MI5 chief’s remarks were “false, sensational reports” to stoke confrontation, he said.
Both officials said the threat posed by Chinese intelligence is increasing and includes theft of technology and business secrets.
Mr. Wray said the Chinese government is using intimidation and repression to shape the world to be more accommodating to China’s campaign of theft.
“We consistently see that it’s the Chinese government that poses the biggest long-term threat to our economic and national security, and by ‘our,’ I mean both of our nations, along with our allies in Europe and elsewhere,” Mr. Wray said.
The FBI chief warned that Chinese government operations pose “an even more serious threat to Western businesses than even many sophisticated business people realize.”
“The Chinese government is set on stealing your technology — whatever it is that makes your industry tick — and using it to undercut your business and dominate your market. And they’re set on using every tool at their disposal to do it,” he said.
Chinese intelligence agents are gathering private-sector information, using scores of agents who are not officially part of the Chinese government. The agents spot and assess sources of information to recruit and provide cover and communications in “helping steal secrets in other ways,” Mr. Wray said.
Chinese hackers also are using cyberattacks to steal information.
Chinese companies also are used to steal information from American companies.
“So, when you deal with a Chinese company, know you’re also dealing with the Chinese government — that is, the MSS and the PLA — too, almost like silent partners,” Mr. Wray said, using the acronym for the spy service Ministry of States Security and the Chinese military, the People’s Liberation Army.
China in 2020 targeted U.S. companies in China through government-mandated tax software that injected spy malware in American business networks, Mr. Wray said. Joint human spying and cyberattacks by the Chinese also targeted the theft of COVID research from U.S. universities, he said.
“The danger China poses to companies isn’t just complex. It’s also getting worse,” Mr. Wray said.
Mr. McCallum, the MI5 chief, said Chinese operations posed a “massive shared challenge.”
The CCP is engaged in “aggression,” stealing and legally acquiring technology, research and commercial secrets from businesses, he said.
“It means that if you are involved in cutting-edge tech, AI, advanced research or product development, the chances are your know-how is of material interest to the CCP,” Mr. McCallum said.
One case involved a British precision engineering firm Smith Harlow that concluded a deal with China’s Future’s Aerospace. The Chinese company paid $3.6 million for the firm’s technology and then canceled the deal.
The MI5 director said Western assumptions that economic engagement with China would lead to greater political freedom there “have, I’m afraid, been shown to be plain wrong.”
“But the Chinese Communist Party is interested in our democratic, media and legal systems. Not to emulate them, sadly, but to use them for its gain,” he said.
The MI5, Britain’s domestic intelligence service, issued an alert earlier this year to Parliament warning that a person linked to the United Front Work Department had penetrated the legislature, Mr. McCallum said.
“Through networks of this sort, the UFWD — described by Mao as one of the CCP’s ‘magic weapons’ — aims to amplify pro-CCP voices — and silence those that question the CCP’s legitimacy or authority,” he said.
“This has very real consequences in communities here in the U.K. It needs to be challenged.”