18 July 2008

The Jamestown Foundation has a China Brief titled “The Evolution of Espionage: Beijing’s Red Spider Web”, another go at the diabolical machinations of Fu Manchu’s vast network of spies. Jamestown adds a caveat to this brief noting: “Although this article has no indigenous sources we felt that it was important enough article to be published in China Brief and wanted to share this analysis with our readers.” I’m still not sure why, since it provides no new information, is authored by someone without background in China issues, and gets more than a couple of things wrong.

The first thing to jump out is the claim, based on a 2005 WSJ article, that “According to FBI estimates there are currently more than 3,000 corporations operating in the United States that have ties to the PRC and its government technology collection program.” That’s half right. Even the Cox Report, which I’ll get to in a moment, and its author argued that there were, in 1999, roughly 3,000 Chinese companies in the U.S. and that some of them had links to PRC government military or security agencies. “Some”, presumably, being anything from 2 to 2,999. That hasn’t prevented various members of the press and government, however, from continuing to simply refer to the entire lot as having “links”, which could be an awful lot of different things.

The article repeats alot of claims found in the Cox Report, which has to be the most ominous looking government reports I’ve ever seen. The cover, headings and other layout design are done in a sinister red on black background, and on Page 67 (pdf) is a full page black and white photo of a mushroom cloud with the text, in what looks like the notorious Impact font, “The PRC has stolen classified information on every currently deployed thermonuclear warhead in the U.S. ICBM arsenal.” OMG, we’re all gonna die!

[caption id=”attachment_207” align=”aligncenter” width=”438” caption=”CAN HAZ NKREESD PENTAGONZ BUDJIT NOW?”]CAN HAZ NKREESD PENTAGONZ BUDJIT NOW?[/caption]

The Jamestown article repeats this, more or less, in the beginning, in a list of “What We Know”, namely that China “obtained by espionage” classified information on U.S. nuclear forces which has accelerated China’s nuclear development and included information on the Trident W-88 warhead and the neutron bomb. It does point out, to its credit, that “What We Don’t Know” includes how comprehensive this information is and that China likely used the information to “inform” its own programs and not replicate U.S. systems (which seems more like something we know rather than don’t).

At the time of the Cox Report, however, Energy Secretary Bill Richardson said the claim that China stole neutron bomb data (alleged to have happened in the 1970s, by the way) was based on one source and the F.B.I. had never identified a “logical suspect”. The claim that China had information on all seven kinds of U.S. nuclear warheads was also challenged, as analysts told the NYT that apparently they only had information on the nose cones and weight-to-yield ratios of four, two of which were no longer in use. Moreover, then President of the Arms Control Association Spurgeon Keeney told Lars-Erik Nelson in the New York Review of Books that “A lot of the stuff they are making a big deal about you will find in the Nuclear Weapons Databook that was put out [in the 1980s] by the Natural Resources Defense Council, including pictures.” Charles Ferguson of the Federation of American Scientists called the report “scaremongering”, Stephen Schwartz of the Bulletin of Atomic Scientists noted it was conducted while there was a push to justify missile defense systems, and the President’s Foreign Intelligence Advisory Board, headed by former Republican senator Warren Rudman declared “Possible damage has been minted as probable disaster; workaday delay and bureaucratic confusion have been cast as diabolical conspiracies. Enough is enough.” The Cox Committee had originally been created by Newt Gingrich in the hopes of finding ties between campaign contributions to the Clinton Administration and technology transfers to China, as part of the wider push for impeachment.

Regarding the W-88, Nelson also reports that US analysts believed Chinese underground nuclear tests in the 90s appeared to resemble the W-88. In 1995 a Chinese intelligence agent walked into the CIA station in Taiwan and produced data on various US systems, including the W-88. The “Walk-In”, who was a major character in the Cox Report, was later determined to be a Chinese double agent. Much of this data was from the NRDC report, which contained information still technically “classified” (I don’t believe anyone at NRDC ever got in trouble for that), but two bits seemed to not be available anywhere except secured facilities. And that’s how we got to the Wen Ho Lee scandal, as he had knowledge of the W-88 program. That turned out well.

Back to the Jamestown article: it cites a “16 Character Policy” mentioned in the Cox Report (pgs 14-15), which more or less repeats its source, Current and Future Challenges Facing Chinese Defence Industries (Frankenstein and Gill, China Quarterly 1996):

Jun-min jiehe (Combine the military and civil); Ping-zhan jiehe (Combine peace and war); Jun-pin youxian (Give priority to military products); Yi min yan jun (Let the civil support the military).


We are told by Jamestown this is meant to produce deliberate ambiguity between military and civilian operations so as to provide “cover” for military companies to acquire dual-use technology, and for spies to steal U.S. technology by posing as civilian technology workers. Even the Cox Report was less certain what it meant, stating it could “mean a short-term strategy to use defense conversion proceeds for immediate military modernization. Or it could mean a long-term strategy to build a civilian economy that will, in the future, support the building of modern military goods. In practice, however, the policy appears to have meant a little of both approaches.“

A quick look for Chinese material with the slogan finds stuff on defense conversion, which is also the context in which Frankenstein and Gill examine it. Defence conversion being the attempt to change inefficient, bureaucratic, noncompetitive defense industries (in China’s case a socialist planned economy to boot) into lean, profitable manufacturers of dual use technology. Its interesting that most of the examples of spies that the author goes on to provide are economic espionage. Fei Ye and Ming Zhong wanted to start a microprocessor company, allegedly with aid from Chinese government connected companies. The same goes for Hai Lin and Kai Xu, and Lan Lee and Yuefei Ge. But given the nature of defense conversion from the central planned Mao era, not to mention defense industries in general, it can’t be very easy to find companies in these industries that don’t have military or government ties. Several recent cases, including those of Gregg Bergersen and Dongfan “Greg” Chung, come out of the Chi Mak trial, which involved information that was not classified yet under export restrictions - highlighting that the blurring of lines involving such technology is an issue in U.S. law as well.

Defense conversion, if I’m not mistaken, is something U.S. has been working very hard on the past two decades as well. In fact, the author of the Jamestown piece, Dan Verton, seems to be doing very well working in precisely that sort of overlapping civilian/military industry. He runs HomelandSecurityTelevision.com, which offers Tech Showcase videos on DHS and military related technology from such dual-use superstars as Northrup Grumman (HST gave them an award), Iridium, and… wait for it… Cisco! He’s also got a Homeland Security Social Network. I hope Boeing writes on my FunWall. And just to add more irony, he has a security issues training/speaking/video service company named… I kid you not… Red Team.

Additional Notes:

1) Note for the Olympics: Verton alleges that “prominent Beijing hotels, such as the Palace Hotel, the Great Wall Hotel, and the Xiang Shan Hotel, are known to monitor the activities of their clientele.” In what way? Are they Van Eck phreaking?

2) The spider web metaphor recalls the “ants carrying grains of sand” metaphor made in the past, and both recall Cold War comparisons of Chinese people to insects. The suggestion of some sort of hive behavior that keeps cropping up kinda flies in the face of how much economic espionage appears motivated not by a grand strategy but personal greed.

2b)I’ve been looking again at the “grains of sand” Chinese saying that is often referred to in articles about Chinese espionage. It’s not from Sun Zi, but a Buddhist saying 聚沙成塔 (many grains of sand will a pagoda make). But there’s an even better one: 集腋成裘 (many tufts of fox armpit fur will a fur coat make). More importantly, I still haven’t seen anyone tackle how effective such a strategy would be in technological espionage - for example, its entirely unclear that the nuclear data the Cox Committee wet its collective pants over was any use at all to China.

3) Dan Verton also went ballistic over Google.cn and its collaboration with censorship, though Google.com ultimately remained available and untouched, with google.cn as a sort of fig leaf.

4) Bill Geertz of the Washington Times has been subpoenaed to explain how he received grand jury information in the Chi Mak case. I’m not a terribly big fan of Bill Geertz, but demanding a reporter justify the “newsworthiness” of his work in court sounds like a really bad idea. Moreover, the judge in question is the same one who considered encryption a sign of guilt. And L.A. courts seem to be on a roll deeming the use of privacy software potentially incriminating.

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