October 11, 2024:
The American F-22 recently had its sensors upgraded. This is one of its most extensive upgrades, as well as expensive, costing a billion dollars. At the same time, Raytheon, which is doing the upgrades, was fined $200 million because Raytheon employees' incompetence between 2017 and 2023 allowed Russia, China, Iran and other foreign countries to hack the laptop computers of employees employed by Raytheon subsidiary RTX containing technical details of the F-22 stealth fighter, Aegis BMD (Ballistic Missile Defense), the B2 bomber, as well as F-18 and F-35 fighters. These accidental and very damaging disclosures reduce the effectiveness of the American warplanes involved because potential opponents now have access to how electronic systems in these aircraft operate and what their weaknesses are. The extent of the damage was indicated by the $200 million fine imposed by the U.S. State Department on Raytheon.
This is not the first intelligence scandal of this magnitude. Previous information leaks involved Chinese students studying in South Korea and Japan being caught and arrested for espionage activities. This is nothing new as China has been expanding its espionage activities for some time. China has long developed an international network of spies, local agents, and operatives. The foreigners working for this network are often unaware that they are working for China. This is part of China’s concealment of the extent of their operations. China also obtains the services of internet hacking groups through a third party to conceal the fact that data is being stolen for the Chinese. Despite years of successful efforts to conceal the extent of their espionage network, that anonymity has been stripped away over the last few years. Chinese espionage has steadily been discovered and eliminated despite Chinese efforts to delay, disrupt, or stop the counterespionage efforts.
One side effect of the program is that Chinese spies and espionage efforts are becoming known in Europe, the Americas, the Middle East, Africa and south, southeast, and east Asia. An increasing number of arrests have taken place and subsequently been publicized. It’s not just the espionage that annoys foreigners but the covert meddling the Chinese were engaged in worldwide. China sought to influence foreign governments to cooperate with local Chinese goals without knowing or revealing what was being covertly done to benefit China.
Many of the operatives were nor local Chinese but ethnic locals covertly hired to support the local Chinese agenda. Many of the Chinese operatives convincingly presented themselves as anti-Chinese. This sort of deception was particularly useful when it came to sabotaging efforts by the major foreign intelligence and counterintelligence agencies of countries like the United States (FBI and CIA), Britain (SIS), Germany (BND), France (DGSE), and Turkey (MIT).
In Europe, the 27 members of the EU (European Union) concentrate on economic matters but are now more aware of the efforts and impact of foreign intelligence agencies and operatives. This is particularly true with the Chinese, who have the second largest economy in the world and want to obtain, one way or another, more market share from the United States, which has the largest economy in the world. American GDP is about $28 trillion while the Chinese economy is valued at $19 trillion. The global economy is currently worth $105 trillion with the Americans controlling 26 percent of it and China 18 percent.
The espionage often involves finding out details about how American warplanes and other military equipment are manufactured. This information enables Chinese manufacturers to become more efficient. Obtaining technical details of American weapons provides China with opportunities to improve their electronics while using those insights to degrade the effectiveness of U.S. military electronics.
The FBI and CIA noted several interesting patterns. While many of the returning Chinese students were operating legally, a large number of those new Chinese firms were operating illegally by depending on stolen IP. There were other patterns as well. A lot of the stolen tech seemed to involve Chinese and Americans associated with various Chinese efforts that helped returning Chinese to profit from what they had learned in the West. These programs involved establishing hundreds of Confucius Institutes associated with Western universities, including a hundred in the United States. Plus the aggressive recruiting of Chinese and non-Chinese academics willing to help China perpetrate the largest IP theft in history.
Participating in this program has become riskier. There are a growing number of convictions for conspiring to steal or actually stealing trade secrets. Many of the technologies involved are dual use, for commercial and military applications. Many of these investigations began when American companies provided the FBI with documentation showing how the Chinese obtained and applied the trade secrets. What the American firms usually lack is information about who was getting the information, often including detailed manufacturing techniques, to the Chinese. The U.S. is not the only victim here. Many other Western nations are experiencing the same losses. Even Chinese neighbor and ally Russia has suffered heavy losses due to this Chinese economic espionage.
By 2012 most American officials had come to openly admit that a whole lot of American military and commercial technical data has been stolen via Chinese internet as well as with more conventional espionage efforts. Details of exactly all the evidence of this is unclear, but apparently, it was pretty convincing for many American politicians and senior officials who had previously been skeptical. The Chinese efforts have resulted in most major American weapons systems having tech details obtained by the Chinese, in addition to a lot of non-defense or dual-use technology. It’s not just the United States that is being hit but most nations with anything worth stealing. Many of these nations are noticing that China is the source of most of this espionage and few are content to remain silent any longer.
It’s no secret that Chinese intelligence collecting efforts since the late 1990s have been spectacularly successful. As the rest of the world comes to realize the extent of this success, there is a growing desire for retaliation. What form that payback takes remains to be seen. Collecting information, both military and commercial, often means breaking laws and striking or hacking back at the suspected attackers will involve even more felonies. China has broken a lot of laws. Technically, China has committed acts of war because of the degree to which it penetrated military networks and carried away copies of highly secret material. The U.S. and many other victims have been warning China there will be consequences. As the extent of Chinese espionage becomes known and understood, the call for consequences becomes louder.
China tries hard to conceal its espionage efforts. Not just denying anything and everything connected to hacking and conventional spying but also taking precautions. But as their success continued year after year, some of the Chinese hackers became cocky and sloppy. At the same time, the victims became more adept at detecting Chinese efforts and tracing them back to specific Chinese government organizations or non-government hackers inside China.
China has been getting away with something the Soviet Union never accomplished, stealing Western technology, and then using it to move ahead of the West. The Soviets lacked the many essential supporting industries found in the West. These firms were largely founded and run by entrepreneurs, which was illegal in the Soviet Union. Because of that, the Russians were never able to acquire all the many pieces needed to match Western technical accomplishments. Soviet copies of American computers, for example, were crude, less reliable, and less powerful. It was the same situation with their jet fighters, tanks, and warships.
China got around this by making it seemingly profitable for Western firms to set up factories in China, where Chinese managers and workers were taught how to make things right. At the same time, China allows thousands of their best students to go to the United States to study. While many of these students will stay in America, where there are better jobs and more opportunities, a growing number are coming back to China and bringing American business and technical skills with them. Finally, China energetically uses the thousand grains of sand approach to espionage. This involves China trying to get all Chinese going overseas, and those of Chinese ancestry living outside the motherland, to spy for China, if only a tiny bit.
This approach to espionage is nothing new. Other nations have used similar systems for centuries. What is unusual is the scale of the Chinese effort, and that makes a difference. Supporting it all is a Chinese intelligence bureaucracy back home that is huge, with nearly 100,000 people working just to keep track of the many Chinese overseas and what they could, or should, be trying to grab for the motherland. This is where many of the graduates of the National Intelligence College program will work.
It begins when Chinese intelligence officials examine who is going overseas and for what purpose. Chinese citizens cannot leave the country legally without state security organizations being notified. The intel people are not being asked to give permission. They are being alerted in case they want to have a talk with students, tourists, or businesspeople before leaving the country. Interviews are often held when these people come back as well.
Those who might be coming in contact with useful information are asked to remember what they saw or bring back souvenirs, legal or otherwise. There are over a million Chinese students attending foreign universities. Even more Chinese go abroad as tourists or on business. Most of these people were not asked to actually act as spies but simply to share, with Chinese government officials, who are not always identified as intelligence personnel, whatever information they obtained. The more ambitious of these people are getting caught and prosecuted. But the majority are quite casual and individually bring back relatively little and are almost impossible to catch, much less prosecute.
Like the Russians, the Chinese are also employing the traditional methods, using people with diplomatic immunity to recruit spies, and offering cash, or whatever, to get people to sell them information. This is still effective and when combined with the thousand grains of sand method brings in a lot of secrets.
Not getting caught is becoming more important because that can lead to increasingly dangerous diplomatic and legal problems. When the Chinese steal some technology and produce something that the Western victims can prove was stolen via patents and prior use of the technology, legal action can make it impossible, or very difficult, to sell anything using the stolen tech outside of China. For that reason, the Chinese long preferred stealing military technology and tried to avoid using stolen commercial tech in a way that made it easy to determine the source of stolen data. This meant keeping stolen commercial tech inside China. And in some cases, like manufacturing technology, there's an advantage to not selling it outside of China. Because China is still a communist dictatorship, the courts do as they are told, and they are rarely told to honor foreign patent claims when stolen tech is discovered in China by its foreign owners.
Increasingly, Chinese firms are boldly using their stolen technology, daring foreign firms to try and use Chinese courts to get justice. Instead, the foreign firms are trying to muster support from their governments for lawsuits outside China. Naturally, the Chinese government will howl and insist that it’s all a plot to oppress China. This has worked for a long time, but many of the victims are now telling China that this conflict is being taken to a new, and more dangerous, level.