[ISN] Defection Spotlights Chinese Way of Spying

[InfoSec News]

http://www.latimes.com/news/nationworld/world/la-fg-espionage15jul15,1,4871850.story??coll=la-headlines-world

By Mark Magnier
Times Staff Writer
July 15, 2005 

BEIJING - The defection of a senior Chinese diplomat in Australia who 
claims he helped oversee a vast spy network has cast a spotlight on 
China's espionage activities at a time of increased global trade 
tensions and concern over Beijing's military spending. 

Chen Yonglin, the first secretary of the Chinese Consulate General in 
Sydney, chose a particularly embarrassing moment to go public against 
his employer - a rally last month in Australia marking the 16th 
anniversary of the Tiananmen Square crackdown on pro-democracy 
demonstrators.

At an impromptu news conference shortly after Australia turned down 
his request for political asylum, the bookish Chen announced that he'd 
spent the last four years managing a network of 1,000 informants and 
spies in Australia on behalf of the Chinese government.

Their primary target, he added, were members of Falun Gong, a 
quasi-religious group banned in China as an "evil cult," and those 
advocating independence for Tibet, Taiwan and East Turkmenistan. 

Beijing immediately disputed his claims and similar charges by Hao 
Fengjun, a second Chinese official applying for an Australian visa. 
The allegations are "fabrication and lies," Foreign Ministry spokesman 
Liu Jianchao said in Beijing. "Sino-Australia relations should not pay 
a price for two such people and two such incidents."

"We have some Chinese who don't like China that much and want to 
profit for their own personal agenda," Fu Ying, China's ambassador to 
Australia, said last week. Chen "now appears to be hating China so 
much, but China offered him the best a young man can have."

The incident could reverberate beyond Australian shores, analysts 
said, emboldening China's critics at a time when Defense Secretary 
Donald H. Rumsfeld and other Washington conservatives are expressing 
concern about Beijing's intentions and questioning its growing 
military spending. 

The case has also embarrassed the government of Prime Minister John 
Howard, which critics accuse of putting trade ahead of human rights to 
avoid angering Beijing, a charge the administration denies. China is 
Australia's third-largest trading partner, with annual bilateral 
commerce worth $22.7 billion, and a voracious consumer of its natural 
resources. The two nations are also discussing a free-trade agreement 
to strengthen ties further.

Opposition lawmakers accused the Howard administration of immediately 
informing the Chinese government when Chen submitted his application 
and rejecting his request for a safe meeting place. Last Friday, 
Australia granted Chen a permanent visa. Hao has petitioned for a 
protection visa, and his case is now awaiting a decision.

Part of the equation, analysts said, is that neither Chen nor Hao — 
who claims to have worked in the Chinese city of Tianjin at a security 
office charged with stamping out Falun Gong before fleeing to 
Australia - appears to be a huge intelligence catch.

"For Western intelligence agencies, knowing how China monitors Falun 
Gong is not so important," said Steve Tsang, a China scholar at Oxford 
University. "I suspect that's why they didn't grant Chen's first 
application. If he was involved in a missile program or 
counterespionage, that would probably be a different thing."

Like those of most countries, China's intelligence efforts employ a 
system of concentric circles, analysts said. Unlike U.S. intelligence 
agencies, with their reliance on satellite data and high technology, 
China is known for its "humint," or human intelligence.

"They can and do send out thousands of people with limited tasking, 
flooding the target country," said Larry M. Wortzel, a former U.S. 
Army attache in Beijing now at the Heritage Foundation, a conservative 
think tank in Washington. 

China has three kinds of spies, asylum-seeker Hao told Australian 
reporters: "professional spies" paid to collect information, "working 
relationship" spies operating in business circles and "friends" in 
less formal networks, a category analysts said Chen's 1,000 spies 
would fall into.

China employs a relatively small number of well-trained, professional 
spies, intelligence analysts said, charged with digging up the most 
sensitive military secrets and strategic policy.

In the second tier, China relies on well-placed front companies and 
scientists to go after key technologies, including dual military and 
civilian-use products that are easier to acquire than top-secret 
military items. 

"But you use dual-use or trading companies as far from the embassy as 
possible," said an intelligence expert who declined to be identified. 
"They're a big radioactive tag."

In one recent case, a Chinese American couple in Wisconsin was 
arrested on suspicion of selling China $500,000 worth of computer 
parts with potential applications in enhanced missile systems.

But it's China's biggest concentric ring that often garners the most 
attention. Beijing is known for gathering small bits of information 
from "friends" — Chinese businesspeople, students, scientists, trade 
delegations and tourists traveling overseas - which it assembles into 
a bigger picture.

"They spread a rather wide net," said James R. Lilley, a former CIA 
station chief and U.S. ambassador to China. "It's often a rather 
blurred line between 'cooperator' and 'undercover agent.' "

People may be motivated to provide information by money, patriotism, 
flattery or various forms of persuasion, analysts said. An overseas 
Chinese with a family back home might be approached, said Oxford's 
Tsang, and told: "I understand you have a daughter trying to get into 
college. I hear she may not be so bright, but I have a friend at that 
college and can put in a good word."

China's approach, sometimes referred to as "1,000 grains of sand," has 
complicated life for foreign counterintelligence agencies already 
burdened by the U.S.-declared war on terrorism, analysts said.

"There are 150,000 students from China. Some of those are sent here to 
work their way up into the corporations," Dan Szady, the FBI's 
assistant director for counterintelligence, told the National 
Intelligence Conference and Exposition in Arlington, Va., in February. 
"There are about 300,000 Chinese visitors annually and 15,000 
delegations touring the U.S. every year."

Many of these people are potential spies, he added, gathering 
information or being questioned when they return to China.

"Even as we increase our numbers of agents, we can't possibly totally 
stop it," Szady said.

But the intelligence expert who requested anonymity said there was a 
temptation to believe that everyone who vaguely looks Chinese is busy 
funneling information back to Beijing. "There's a lot of hysteria," he 
said, citing an unsubstantiated claim by a bipartisan congressional 
commission five years ago that China operates 3,000 front companies in 
the United States.

"It's jingoism of the highest order," he said. "Also, what they do in 
appealing to patriotism is not a lot different from the French and the 
Israelis. The Israelis pulled a lot of the same motherland appeals 
with [Jonathan Jay] Pollard," an American military analyst sentenced 
to life imprisonment in 1986 for leaking secrets to Israel. 

Espionage also works both ways. In 1995, the Australian media reported 
that China's embassy in Canberra, the capital, was bugged as part of a 
joint Australian-U.S. spy operation. And a U.S.-made Boeing 767 bought 
for then-Chinese President Jiang Zemin in 2000 reportedly contained 
more than 20 spying devices.

One analyst said that even if Chen's claim of 1,000 spies in Australia 
was accurate, they were almost certainly not all well-trained field 
agents. "The idea that they have such a large number working on behalf 
of Chinese intelligence seems a bit dubious," said Jonathan D. 
Pollack, director of strategic research at the Naval War College in 
Newport, R.I. "It's obvious that anyone wanting to defect wants to up 
their value."