Clandestine Services, Part 1: Chinese Intelligence



Clandestine Services, Part 1: Chinese Intelligence

[Teaser:] Beijing’s espionage efforts are nothing if not pervasive, patient and persistent. Part 1 of an ongoing series on major state intelligence operations.

Summary

The January hubbub over Google’s operations in China, sparked by what could have been a hacking attempt by the Chinese government, seems to be blowing over. But it did remind the world how foreign businesses in China must be vigilant about the country’s pervasive intelligence apparatus. China’s covert bag of tricks seems enormous, in large part due to the magnitude of the country’s population and the historic Chinese diaspora that has spread worldwide. Traditionally focused inward, China as an emerging power is determined to compete with more established powers by aiming its intelligence operations at a more global audience. China is driven most of all by the fact that it has abundant resources and a lot of catching up to do.

Editor’s Note: This is part one in an ongoing series on major state intelligence operations.

Analysis

China’s clandestine services may not be as famous as the CIA or the KGB, but their operations are widespread and well known to counterintelligence agencies throughout the world. Chinese intelligence operations have been in the news most recently for an alleged cyberattack against California-based Google, but two other recent cases shed more light on the ways of Chinese intelligence gathering. One involved a Chinese-born naturalized American citizen named Dongfan Chung, who had been working as an engineer at Rockwell International and Boeing. He was [convicted of espionage?] on Jan. 8 and sentenced to 15 years in prison. The other involved a former U.S. Defense Department official, an American named James Fondren, who was convicted of [espionage?] on Jan. 22 after being recruited by a Chinese case officer and was sentenced to three years in prison.

Together, these cases exemplify the three main Chinese intelligence-gathering methods, which often overlap. One is “human-wave” or “mosaic” collection, which involves assigning or dispatching thousands of assets to gather a massive amount of available information. Another is recruiting and periodically debriefing Chinese-born residents of other countries in order to gather a deeper level of intelligence on more specific subjects. The third method is patiently cultivating foreign assets of influence for long-term leverage, insight and espionage.

Chinese intelligence operations stand out in the intelligence world most of all because of their sheer numbers. China has the largest population in the world, at 1.2 billion, which means that it has a vast pool of people from which to recruit for any kind of national endeavor, from domestic road-building projects to international espionage. Emerging from this capability are China’s trademark human-wave and mosaic intelligence-gathering techniques, which can overload foreign counterintelligence agencies by the painstaking collection of many small pieces of intelligence that make sense only in the aggregate. This is a slow and tedious process, and it reflects the traditional Chinese hallmarks of patience and persistence as well as the centuries-old Chinese custom of “guanxi,” the cultivation and use of personal networks to influence events and engage in various ventures.

And though China has long been obsessed with internal stability, traditionally focusing its intelligence operations inward, it is now taking advantage of the historic migration of Chinese around the world, particularly in the West, to obtain the technological and economic intelligence so crucial to its national development. To Western eyes, China’s whole approach to intelligence gathering may seem unsophisticated and risk-averse, particularly when you consider the bureaucratic inefficiencies inherent in the Communist Party of China’s (CPC) administrative structure. But it is an approach that takes a long and wide view, and it is more effective than it may seem at first glance.

A Brief History

China’s first intelligence advocate was military theorist Sun Zi[Tzu?], who, in his fifth[sixth?] century B.C. classic The Art of War, emphasized the importance of gathering timely and accurate intelligence in order to win battles. Modern Chinese intelligence began during the Chinese Communist[Nationalist?] Revolution, when Chiang Kai-Shek’s Chinese Nationalist Party (the Kuomintang, or KMT) created its Investigation Section. The Chinese communists later followed suit with a series of agencies that eventually became the Social Affairs Department (SAD)[Central Department of Social Affairs (CDSA)?], the party’s intelligence and counterintelligence organ.

The [founding?] head of the CDSA was Kang Sheng, who had become involved in the communist movement while a student at Shanghai University in the [1920s?]. During the first half of the 20th century, the epicenter for espionage in East Asia was Shanghai, where Chinese agents cut their teeth operating against nationalists, communists, triad gangs, warlord factions and Russian, French, Japanese, British and American intelligence services. Later, Kang traveled to Moscow, where he would spend four years being taught what the Soviets wanted him to know about intelligence operations. Much like “Wild Bill” Donovan of the United States and Russia’s Laventriy Beria, Kang is considered the father of his country’s clandestine services -- the first Chinese official to appreciate the practice of global intelligence.

Following the communist victory over KMT forces on Oct. 1, 1949, the domestic and counterintelligence functions of the CDSA became part of the Ministry of Public Security (MPS), and the military kept its own Military Intelligence Department (MID). Given China’s size and its insular geography, its first geopolitical imperative was to maintain internal security, especially along its periphery. China’s intelligence services would both police the Han population to guarantee security and monitor foreigners who worked their way in from the coast as the Chinese economy developed. The emphasis on internal security means extensive informant networks, domestic surveillance and political control and censorship by domestic Chinese [intelligence?] services.

By the mid-1950s, Beijing’s Central Investigation Department (CID) had taken on the foreign responsibilities of CDSA. By the mid-1960s, in the midst of the Cultural Revolution, the CID was be disbanded, only to be reinstituted in 1971, when Deng Xiaoping came back into favor.[what do you mean by this, exactly? Wikipedia says he became PRC leader in ’78. shouldn’t we allude to the ‘opening up’ here, since that was such a dramatic turning point for china?]. Deng wanted China’s intelligence services to stop using journalists and businessmen as cover for intelligence operations, and he later borrowed a centuries-old saying for his policy, “Hide brightness; nourish obscurity,” which was meant for the development of China’s military development but could just as well apply to its intelligence agencies.[not sure I get why this saying applies to Deng’s desire not to use journalists and businessmen as cover. Can you clarify/elaborate? wouldn’t this be when intelligence focus turned outward?]

The Ministry of State Security (MSS) was created in 1983 in a merger of the CID and the counterintelligence elements of the MPS. It is currently the main civilian foreign intelligence service and reports to the premier, the State Council, the CPC and its Political and Legislative Affairs Committee. In China, as in most countries, all domestic and foreign intelligence organizations feed into this executive structure, with the exception of military intelligence, which goes directly to the CPC.

The Chin Case

Since the time of Sun Tzu, perhaps the most successful Chinese spy has been the legendary Larry Wu-Tai Chin (Jin Wudai), an American national of Chinese descent who began his career as a U.S. Army translator and was later recruited by the MSS while working in a liaison office in Fuzhou, China, during the Korean War. Following his army service, he joined the CIA and became a translator for the Foreign Broadcast Information Service (FBIS), beginning a 30-year career as a double agent within the world’s most famous intelligence agency. His most valuable intelligence may have been the information he passed about President Richard Nixon’s desire to establish relations with China in 1970, which gave the Chinese leadership a leg up during subsequent negotiations with the United States.

The key to Chin’s success may have been his use of third-country “cutouts” (when a case officer travels from one country and an agent travels from another to meet in a third country) and his careful money laundering. Chin traveled to Canada and Hong Kong to pass along intelligence, in meetings that could last as little as five minutes. He was paid significant amounts of money for his espionage activities, and after he moved to Virginia to work for the CIA he became a slumlord in Baltimore, investing his cash in low-income properties.

The Chin case exemplifies, above all, a careful use of operational security that allowed him to operate undetected until a defector exposed him in 1985. (The use of third-country cutouts and personal meetings with agents, rather than dead drops, may be an MSS specialty.) Chin had the same handler for 30 years, which means both agent and [case officer?] had a high level of experience and the ability to keep all knowledge of the operation within the MSS. And the Chinese government never acted on Chin’s intelligence in a way that would reveal his existence. The only way he could have been detected, other than through exposure by a defector, would have been during his foreign travel or by extensive investigation into his property holdings. And that is what happened to Chin: He was exposed by a senior MSS official, Yu Zhensan (Yu Qiangsheng??), who defected to the FBI in the early 1980s.[We’ve already said he was exposed by a defector. Was Chin convicted and sent to prison? When and where? Is he still alive?]

Current Organization

Today, China’s intelligence bureaucracy is just that -- a vast array of intelligence agencies, military departments, police bureaus, party organs, research institutions and media outlets. All of these entities report directly to executive governmental decision makers, but with the CPC structure in place there is parallel leadership for intelligence operations, with the CPC institutions holding the ultimate power. Beyond the party itself, the opaque nature of China’s intelligence apparatus makes it difficult to determine exactly where or with whom the authority really lies.

The Ministry of State Security

The Guojia Anquan Bu, or Ministry of State Security, is China’s primary foreign intelligence organization, but it also handles counterintelligence in cooperation with the Ministry of Public Security (MPS). MSS involvement in domestic operations is widespread through its First and Fifth Bureaus, activities that are coordinated with the MPS. (Due to this overlap, we will discuss domestic operations in the MPS section below.) One target set that clearly falls under MSS jurisdiction are foreign diplomats. Bugging embassies and surveilling embassy employees or those traveling on diplomatic passports is common practice for the MSS. According to one MSS publication, “foreign diplomats are open spies.” This is not a false statement, but it does reflect a certain paranoia on the part of the agency and an intention to target such officials. It also underscores the fact that Beijing views all foreigners with suspicion.

As did its predecessor organizations, the MSS follows the bureaucratic structure of the Soviet Union’s KGB (the result of founder Sheng’s formative tour in Moscow), but it operates like no other intelligence agency in the world. We call it espionage with Chinese characteristics. The MSS network is so diffuse and decentralized that each individual asset may be doing nothing particularly illegal -- often merely collecting open-source information or asking innocuous questions. But when all the information these assets have collected is analyzed at the Institutes of Contemporary International Relations[is this officially an MSS entity? is it in Beijing?], it can produce valuable intelligence products. Still, it remains to be seen from the outside whether such a process is effective in producing actionable intelligence in a timely manner. For example, in the case of technology theft -- a growing focus of the MSS -- by the time the intelligence is processed and exploited the technology may already be outdated.

While it is difficult to assess MSS analytical capabilities, much is known about its recruitment and operations. Training for most MSS intelligence officers begins at the Beijing University of International Relations[is this the same entity mentioned above?]. This is a key difference in the Chinese approach to recruiting intelligence agents. The MSS approaches university-bound students prior to their university entrance exams, choosing qualified students with a lack of foreign contacts or travel[you mean, they pick students who lack foreign contacts or travel? Why?]. The MSS also places a heavy emphasis on the mastery of foreign languages and operates an intensive language school for recruits. To root out possible defectors and moles embedded in the MSS network, the agency runs an internal security department known as the Ninth Bureau for Anti-Defection and Counter-Surveillance.

The decentralized operations of the MSS are really what set it apart from the intelligence services of other countries. Instead of intelligence officers[then who are the students it’s recruiting in China? do the students then become case officers who manage the ordinary students and business people living overseas? very unclear. please clarify], the MSS employs Chinese nationals living abroad, some of whom function as temporary agents and the rest of whom [function as what? full-time agents?]. For budgetary and security reasons, the MSS prefers to recruit its assets in China, before they venture overseas. It prefers ethnic Chinese because they are believed to be more trustworthy and easier to control. The MSS relies first on pride in national heritage for asset recruitment (known as the “help China” approach), but it can always revert to pressure tactics -- threatening to revoke their visas[how so? the destination country issues the visa, correct?] or passports, promising a dismal future upon their return, making life difficult for their families still living in China -- if more coercion is needed.

According to STRATFOR sources, [full-time? trained?] MSS intelligence officers are rarely used to collect intelligence. FBI statistics show that of hundreds of thousands of individuals and 3,000 front companies in the United States alone are involved in Chinese espionage. One should not assume, of course, that every Chinese national living overseas is a spy. Many may simply be Chinese students or professionals trying to collect information for their own legitimate academic or business purposes. The problem with China’s human-wave approach to intelligence gathering, from the targeted country’s perspective, is that it is difficult to tell if the activities constitute espionage or not.

The MSS divides its operatives into short-term and long-term agents. Short-term agents are recruited only a few days before leaving and tend to be Chinese dissidents. They may be promised financial stipends and good jobs upon their return, or they may be encouraged by the threat of having their passports revoked. Often dissidents are arrested and forced to spy as short-term agents, either overseas or domestically, in order to stay out of jail. Long-term agents are known as chen di yu, or “fish at the bottom of the ocean,” what Westerners would call “sleeper agents.” Though they constitute the minority of Chinese agents, they likely provide most of the intelligence. Before going overseas, long-term agents with foreign visas are often recruited through their danwei, or traditional Chinese work units, by local MSS intelligence officers. These “fish” are identified, recruited and trained months before departure, and they are deployed mainly to gather intelligence, develop networks and, in some cases, influence foreign policy and spread disinformation in the host country.

The MSS encourages agents abroad to achieve their academic or business goals as well as their intelligence goals, since China benefits either way, and legitimate pursuits provide effective cover for illicit ones. Agents are asked to write letters to their families at home about their arrival in country, studies or work and financial situation, letters that the MSS will intercept and monitor. Long-term agents are generally told to return to the mainland every two years for debriefing, though this can be done in Hong Kong or in third countries. Agents are expressly prohibited from contacting Chinese embassies and consulates, [which are known to be bugged and monitored by host country counterintelligence?].

It is not uncommon for the MSS to use the more traditional method of diplomatic cover for foreign operations. For example, in 1987 two Chinese military attaches were expelled from Washington, D.C., when they were caught trying to buy secrets from a National Security Agency (NSA) employee who was, in fact, an FBI double agent. While these two agents likely worked for China’s Military Intelligence Department (MID), it is believed that MSS agents also serve under similar cover. Since most of its recruitment is done in China, however, the MSS does not likely operate from within embassies. We have noticed a shift in the last 10 years or so to accessing non-Chinese agents, who are usually government officials, through this method. The meetings and collection, however, appear as regular liaison meetings.[not sure I get this. who is shifting? from what? to what method? very unclear. please clarify.]

A key MSS target these days is technological intelligence, which is gathered by ethnic Chinese agents in three primary ways: Chinese nationals are asked to acquire targeted technologies while traveling, foreign companies with the desired technologies are purchased by Chinese firms, and equipment with the desired technologies is purchased by Chinese front companies in Hong Kong.

In the first method, scholarly exchange programs -- most often involving recruits from the Chinese Student and Scholar Association -- have been the most productive, with the intelligence gathered by Chinese scientists and academics who have been co-opted by Chinese intelligence services. Sometimes technological intelligence it is gathered by MSS intelligence officers themselves. The trade-off in using untrained nationals is that the average scientist knows nothing about operational security, and Chinese assets are often caught red-handed. Typically they are not prosecuted, since the fragment of “stolen” information is not valuable in and of itself and is only a tiny piece of the much-larger puzzle.

Two examples of Chinese firms buying U.S. companies are China National Aero-Technology Import and Export Corp. (CATIC) and Huawei. In the first case, CATIC bought the American defense technology firm Mamco Manufacutring. Huawei has attempted to buy many foreign firms outright, including U.S.-based 3com. Huawei also has a relationship with the U.S. anti-virus software company Symantec. STRATFOR sources say that if Huawei were to be used for Chinese intelligence, it could easily insert spyware into computer systems subscribing to the service.[the point of this paragraph seems a little fuzzy. shouldn’t our examples be of acquisitions that were/are suspected of being for espionage purposes? shouldn’t we at least speculate on that? and what was the possible purpose behind the CATIC deal? Let’s at least include insight into what kind of espionage might have been possible. just mentioning a couple of U.S. companies purchased by Chinese companies isn’t enough.]

In Hong Kong, agents are recruited by the [MSS?] Third Bureau, which handles Chinese intelligence operations in Taiwan, Hong Kong and Macao, and tasked with purchasing targeted technologies through front companies. These businesses are usually not run by intelligence officers themselves but by people who have connections, sometimes overt, to the MSS. One recent case involved the 88 Queensway Group. This[88 Queensway is a?] building in central Hong Kong that houses many Chinese companies, along with the China Investment Corporation, the country’s sovereign wealth fund. A U.S. Congressional report claimed a possible link between [what? occupants of the building?] and “China’s intelligence apparatus.” In 1984, Hong Kong businessman Da Chuan Zheng (Zheng Daquan?)[?] was arrested in the United States for illegally acquiring radar and electronic surveillance technology for China. He told U.S. customs agents that he had shipped more than $25 million worth of high-technology equipment to China. MSS agents are usually honest about the end-use of a product they are purchasing. If not told outright, common indicators that a Chinese agent is trying to illegally export technology include: the buyer plans on paying cash when such a sale would usually involve financing, they deny follow-up services such as maintenance, the listed destination is a freight-forwarding term, or the buyer is generally evasive.[what does this have to do with 88 Queensway? Was Zheng an occupant of the building? why is this case infamous? That doesn’t come through here at all. Please clarify]

Another major focus of the MSS is identifying and influencing the foreign policy of other countries -- the classic goal of national intelligence operations. Goals in this case are common to all national intelligence agencies -- information on political, economic and security polices that may effect China; knowledge of foreign intelligence operations directed at China; biographical profiles of foreign politicians, intelligence officers and others, especially those who deal with China; technological capabilities of foreign countries; and information on Chinese citizens that may have defected.

This challenging mission [involves recruiting foreigners to spy on their native countries?]. This process used to involve rather crude methods, such as [what?], but more subtle methods have evolved. Two relatively simple techniques in China involve entrapment. Intelligence officers will offer classified information to reporters or other foreigners [visiting or working in China?] in what is commonly called a “false-flag operation,” then turn around and arrest them for spying. Another approach involves attractive Chinese women who will approach male foreigners visiting China for the purposes of establishing a sexual liaison. French diplomat Bernard Boursicot was recruited this way in 1964. He was finally arrested for spying for China 20 years later.

Even the more subtle recruitment methods have obvious signs. A typical approach might begin with Chinese nationals abroad, usually academics, identifying professors, journalists, policy researchers or business people native to the host country who focus on China. Next, these targets receive invitations to conferences at research associations or universities in China that are often controlled by the MSS or MID. The foreigner’s trip is paid for but he or she is subject to a packed and tiring schedule that includes bountiful banquets and no small amount of alcohol consumption. The goal is to make the target more vulnerable to recruitment or to cause him or her to divulge information accidentally.

Often the recruitment can be couched in the traditional Chinese custom of “guanxi.” A relationship is developed between Chinese host and foreign visitor in which information is shared equally that will inform their respective academic or business pursuits. More meetings are held and information exchanged, and soon the foreigner’s family is invited to visit as well. Eventually the foreigner comes to depend on his Chinese contacts for information crucial to his or her work. At first the Chinese contacts (usually intelligence officers) may ask only for general information about the foreigner’s government agency, university or company. As the dependence develops, the Chinese contact will begin to ask for more specific intelligence, even for classified information. At some point the contact may even threaten to cut the foreigner off from access to the information on which the foreigner now depends.

The Ministry of Public Security

The Gong An Bu, or Ministry of Public Security (MPS), is the national security organization that oversees all provincial and local police departments. But like any national security service, it also has important intelligence responsibilities, which it coordinates with the MSS. These responsibilities mainly involve dissidents and foreigners in China. This role overlaps with the MSS, and most analysts believe the MPS follows the direction of the MSS. There are likely some disagreements over territory and competition between the two agencies, but they seem to work together better than most modern domestic and foreign intelligence entities.

Domestic intelligence and security begins with the universal Chinese institution called danwei, or the work unit. Every Chinese citizen is a member of a work unit, depending on where they live, work or go to school. The danwei is an institution used by the Chinese Communist Party to promote its policies as well as monitor all Chinese citizens. Each unit is run by a party cadre and is often divided into personnel, administrative and security sections that work closely with the MPS and MSS. Files are kept on all unit members, including information ranging from family history to ideological correctness.

As a member of a work unit, any Chinese citizen can be recruited to [do anything on behalf of the state, including reporting?] on the activities of fellow citizens and foreign nationals in China. In terms of targeting foreigners, this usually happens in venues such as hotels and even dwellings, which are often wired and equipped with monitoring devices by Chinese intelligence services. Some hotels are even owned and operated by the MPS or Peoples Liberation Army (PLA).

The MPS and MSS are known to work together, but how effectively they do so is unclear. In 1986, a cable to Lhasa’s office of the MSS directed the People’s Armed Police and MPS, in their efforts to in regards to monitoring dissent in Tibet, and it specified that the MSS should be consulted before any action is taken.[I’m not following you here. Who’s Lhasa? Who sent the cable? This doesn’t make sense as is. Please clarify] This reflects standard operating procedure for many provincial and local MPS offices, which are as final responsibility[ultimately responsible?] for public security. Open-source information tells us that the MPS is mostly responsible for recruiting local agents, so it is believed that the MSS mainly acts to oversee operations.

The MPS tends to recruit many low-skilled agents who are not trained in operational tradecraft or given specific intelligence-gathering responsibilities. They send many[Multiple?] agents after different targets[are often assigned to the same target?] and even have them[told to?] report on each other [as well as the target]. This allows MPS to compare and analyze multiple reports in order to arrive at the required intelligence. One major component of the MPS that handles domestic espionage is the Domestic Security Department, which employs a huge network of informants, many of which can be used for intelligence operations[for what other purposes would MPS informants be employed?].

Occasionally, the MPS will recruit higher-level informants who are handled differently. They are often brought out of their home provinces to be debriefed, and they work on specific intelligence assignments that receive financial and technical support. Sometimes these higher-level assets, such as ranking members of dissident groups, are arrested and forced to cooperate, but [in all cases?] their missions are afforded a high-level of operational security.

Internal intelligence operations tend to be successful at the local and provincial levels but not at the national level. Most dissident groups are infiltrated and sometimes dismantled while still operating locally, and Beijing is fortunate that most groups emerge from single urban populations. The intelligence flow among provinces and from the provinces to Beijing is very weak[where is the flow good?], which has led to a number of intelligence failures. The Chinese have had very little success clamping down on democratic and religious activists, particularly foreigners, who can be spirited out of the country fairly easily. The main problem here is the parallel structure of the party and government. All intelligence has to be reported to the CPC before going to other government offices. Well aware that information is power, the party must stay informed to stay in control, but local party offices are slow to inform the higher levels, [and little information is shared in any orderly way between the government bureaucracy and the party bureaucracy?]. Indeed, such bureaucratic disconnects are the largest exploitable flaw in China’s intelligence apparatus.

MPS interaction with foreigners usually amounts to technical and human surveillance. The growing number of foreigners in China, and Beijing’s fear of foreign influence, has resulted in more resources being devoted to this surveillance effort. [The MPS is particularly adept at?] mobile human surveillance. Many foreigners, especially journalists and businesspeople, have reported being followed during the workday. The surveillants are easily detected because the government wants the targets to know that they are being followed and to be intimidated. At the same time, the numbers required to surveil many different foreigners means that many barely trained informants and case officers are deployed for the job.

Military Intelligence Department

The Military Intelligence Department (MID), also known as the Second Department (Er Bu) of the PLA, focuses on tactical military intelligence. Another major priority for the MID is acquiring foreign technology to better develop China’s military capabilities. At the top level, the MID has a bureau structure similar to that of the MSS, and it also seems to be comparable in size.

The bulk of the intelligence it collects historically has been tactical information gleaned from China’s border regions, especially its frontier with Vietnam. Much of the information is gathered by PLA reconnaissance units and consists of the usual military intelligence, such as order of battle, doctrine, geography, targets, strategic intentions and counterintelligence. Each military region (MR, roughly equivalent to a U.S. Army corps) has its own recon units as well as a regional intelligence center for analyzing and disseminating the information gathered. The MID also has a centralized tactical reconnaissance bureau, called the Second Bureau, which coordinates the flow of information from each MR.

[The PLA?] has been known to send armed patrols along, and even across, its borders to identify opposing military positions and gather other forms of intelligence. Along the full length of China’s border with Southeast Asia (and particularly along the Vietnamese border), the MID often recruits residents from the neighboring country and sends them back into the country to gather intelligence. There are at least 24 different ethnic groups from which these agents are recruited along China’s border with Southeast Asia, since these groups often comprise isolated communities divided by abstract administrative boundaries whose members cross the border at will. Recruitment tactics are similar to those mentioned above for other agencies, including monetary incentives and threats of arrest (or even torture).

The First Bureau of the MID is responsible for gathering human intelligence (humint) overseas[do they really work in other countries that are actually over the ocean and not just part of the Asian landmass?] and focuses mainly on Taiwan, Hong Kong and Macao. It is responsible for obtaining much of the technological intelligence used to improve China’s military capabilities and for finding customers for Chinese arms exports. To hide any PLA involvement, the MID recruits arms dealers to sell to other countries, which in recent decades have included Iraq, North Korea, Argentina, Iran, Pakistan, Saudi Arabia and Syria. Careful in recruiting these dealers, the MID does extensive background investigations and prefers dealers who already have a lot of experience dealing with China. However, operational security for the actual deals can be shoddy, since so many are uncovered. China’s motives for these sales are generally based on profit, in order to support other military operations, though [gaining?] political influence in customer countries can be a contributing factor. Historically, the First Bureau has also been involved in establishing guerrilla warfare schools and assisting with insurgencies in such countries as Angola, Thailand and Afghanistan (in the 1980s).

The MID’s Third Bureau is made up of military attaches serving in overseas embassies, which are tacitly accepted worldwide as open intelligence receptacles. Some Chinese military attaches, not unlike those of other countries, have been caught in covert intelligence activities, including the two mentioned above who were arrested while trying to purchase NSA secrets in 1987. The lack of operational security in such cases involving the MID is noteworthy, including another in 1987 in which PLA[MID?] officers working at the United Nations in New York coordinated with Chinese nationals living in the United States to illegally export U.S. military technology to China (TOW and Sidewinder missiles and blueprints for F-14 fighters). In these cases[both cases?], the officers did not operate using cover identities, nor did they use clandestine communication methods such as dead drops. The military attaches [in the previous case?] even met openly with their “agent” in a Chinese restaurant.

The Third Bureau has improved its methods since the 1980s and appears to have had some success getting deeper into foreign intelligence agencies. In 2006, Ronald Montaperto, then a U.S. Defense Intelligence Agency analyst, pleaded guilty to illegally possessing classified documents and passing top secret information to Chinese military attaches. This is one particular case that deviates from the norm -- information was passed within the target country from agent to handler. This is likely a tactical shift in operations targeted at foreigners[involving foreign agents?] and not ethnic Chinese.

The Fourth Bureau covers analysis of[gathers and analyzes intelligence from?] the Former Soviet Union and Eastern Europe; the Fifth Bureau covers the United States and other countries in the Western hemisphere; and the Sixth Bureau focuses on Asian nations on China’s borders.[this is a little vague. just border nations? e.g., not Thailand?] These MID bureaus are all tasked with analysis on each of those regions,[this isn’t very clear. Another unnumbered MID bureau disseminates all-source[is this a term of art in intel circles? What does it mean?] intelligence to China’s Central Military Commission. Unlike many Western services, They[who? the Chinese? MID? These bureaus? The commission?] are known to put a great emphasis on open-source intelligence. [Is this graph really necessary? we don’t go into this level of detail regarding the bureaus and their functions in the MSS or MPS. Should we? In any case, our description here of the MID bureaus and functions is not all that clear.]

MID’s “seventh bureau” is the Bureau of Science and Technology. [This is where China’s vaunted “cyberintelligence” operations are designed and managed with the help of six government-linked research institutes, two computer centers and legions of patriotic citizen hackers?]. The bureau includes companies that produce electronic equipment[such as what, exactly? a little specificity here would be good….] for espionage and technical support. Computer espionage is ideally suited to China with its large, technologically savvy population and diffuse intelligence-gathering techniques, and these assets and methods have been described in previous STRATFOR coverage.

The MID also has a parallel structure [within?] the CPC[or do you mean that the structure of the MID parallels that of the CPC? Would it be the same for the MSS and the MPS? Not sure I get this….]. It has a political department that reports to the General Political Department (GPD) of the PLA[in this context, does the PLA represent the CPC? are you using these abbreviations interchangeably? I am extremely confused….] for the purpose of counterintelligence in terms of political control and the ideological commitment of the armed forces.[only for this purpose? I’m losing you here….] The political department[the PLA’s GPD?] has individuals within every level of the armed forces, including the MID, where it maintains its own offices for such functions as organization[administration?], personnel[I would consider this part of admin] and propaganda. Indeed, the MID is likely one of the Chinese organizations that is more thoroughly penetrated and monitored by PLA/GPD, since a group of well-trained clandestine intelligence officers that are part of the PLA could easily threaten any regime and specifically the CPC’s control of the military. The political department handles counterintelligence cases within its counter-sabotage department, and prosecutes them as ‘political’ cases. While obviously the purpose of this department is political, it seems to be the main counterintelligence arm of the MID.

While not part of the MID, the Third Department of the PLA is another intelligence organization that handles signals- and communications-intelligence collection (SIGINT and COMINT).[isn’t comint a subset of sigint. if so, wouldn’t mentioning both be redundant?] It monitors diplomatic, military and international communications, which effectively is all but domestic intercepts.

Intelligence organizations have been very successful in advancing China’s military capabilities, though it is unclear which particular intelligence organization is most responsible. It[China?] has developed the ability to clone advanced technology in a way that enables the PLA to keep up with other militaries. In the past, a major criticism of China’s intelligence operations was the time it took to gather the information, reverse-engineer a weapons system and put the pieces back together; by the time something was copied from an adversary’s arsenal, the adversary had already advanced another step ahead. That does not seem to be such a problem today, especially in those areas involving asymmetrical technologies such as anti-ship ballistic missiles, [which China is developing on its own?]. The PLA’s main challenge, one that rests specifically with the MID, is to develop advanced training, manpower and doctrinal capabilities. One recent step in this direction is the PLA navy’s anti-pirate mission in the Gulf of Aden, which gives it an opportunity to observe how other countries’ exercise command and control of their naval assets, lessons that will be of great value as China develops a blue-water navy. The new challenge is to figure out how to effectively use the technology, not just make it.

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