[ISN] Thefts of U.S. technology boost China's weaponry

[InfoSec News]

http://washingtontimes.com/national/20050627-124855-6747r.htm

By Bill Gertz
THE WASHINGTON TIMES
June 27, 2005 

China is stepping up its overt and covert efforts to gather
intelligence and technology in the United States, and the activities
have boosted Beijing's plans to rapidly produce advanced-weapons
systems.
    
"I think you see it where something that would normally take 10 years
to develop takes them two or three," said David Szady, chief of FBI
counterintelligence operations.
    
He said the Chinese are prolific collectors of secrets and
military-related information.
    
"What we're finding is that [the spying is] much more focused in
certain areas than we ever thought, such as command and control and
things of that sort," Mr. Szady said.
    
"In the military area, the rapid development of their 'blue-water'
navy -- like the Aegis weapons systems -- in no small part is probably
due to some of the research and development they were able to get from
the United States," he said.
    
The danger of Chinese technology acquisition is that if the United
States were called on to fight a war with China over the Republic of
China (Taiwan), U.S. forces could find themselves battling a
U.S.-equipped enemy.
    
"I would hate for my grandson to be killed with U.S. technology"  in a
war over Taiwan, senior FBI counterintelligence official Tim Bereznay
told a conference earlier this year.

 The Chinese intelligence services use a variety of methods to spy,
including traditional intelligence operations targeting U.S.  
government agencies and defense contractors.
    
Additionally, the Chinese use hundreds of thousands of Chinese
visitors, students and other nonprofessional spies to gather valuable
data, most of it considered "open source," or unclassified
information.
    
"What keeps us up late at night is the asymmetrical, unofficial
presence," Mr. Szady said. "The official presence, too. I don't want
to minimize that at all in what they are doing."
    
China's spies use as many as 3,200 front companies -- many run by
groups linked to the Chinese military -- that are set up to covertly
obtain information, equipment and technology, U.S. officials say.
    
Recent examples include front businesses in Milwaukee; Trenton, N.J.;
and Palo Alto, Calif., Mr. Szady said.
    
In other cases, China has dispatched students, short-term visitors,
businesspeople and scientific delegations with the objective of
stealing technology and other secrets.
   
The Chinese "are very good at being where the information is," Mr.  
Szady said.
    
"If you build a submarine, no one is going to steal a submarine.  But
what they are looking for are the systems or materials or the designs
or the batteries or the air conditioning or the things that make that
thing tick," he said. "That's what they are very good at collecting,
going after both the private sector, the industrial complexes, as well
as the colleges and universities in collecting scientific developments
that they need."
    
One recent case involved two Chinese students at the University of
Pennsylvania who were found to be gathering nuclear submarine secrets
and passing them to their father in China, a senior military officer
involved in that country's submarine program.
    

Bit by bit
    
To counter such incidents, the FBI has been beefing up its
counterintelligence operations in the past three years and has special
sections in all 56 field offices across the country for counterspying.
    
But the problem of Chinese spying is daunting.
    
"It's pervasive," Mr. Szady said. "It's a massive presence, 150,000
students, 300,000 delegations in the New York area. That's not
counting the rest of the United States, probably 700,000 visitors a
year. They're very good at exchanges and business deals, and they're
persistent."
    
Chinese intelligence and business spies will go after a certain
technology, and they eventually get what they want, even after being
thwarted, he said.
    
Paul D. Moore, a former FBI intelligence specialist on China, said the
Chinese use a variety of methods to get small pieces of information
through numerous collectors, mostly from open, public sources.
    
The three main Chinese government units that run intelligence
operations are the Ministry of State Security, the military
intelligence department of the People's Liberation Army and a small
group known as the Liaison Office of the General Political Department
of the Chinese army, said Mr. Moore, now with the private Centre for
Counterintelligence Studies.
    
China gleans most of its important information not from spies but from
unwitting American visitors to China -- from both the U.S.  
government and the private sector -- who are "serially indiscreet" in
disclosing information sought by Beijing, Mr. Moore said in a recent
speech.
    
In the past several years, U.S. nuclear laboratory scientists were
fooled into providing Chinese scientists with important weapons
information during discussions in China through a process of
information elicitation -- asking questions and seeking help with
physics "problems" that the Chinese are trying to solve, he said.
    
"The model that China has for its intelligence, in general, is to
collect a small amount of information from a large amount of people,"  
Mr. Moore said during a conference of security specialists held by the
National Security Institute, a Massachusetts-based consulting firm.

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