June 14, 2012:
It was recently revealed that, earlier this year, China arrested a senior official of their MSS (Ministry of State Security, similar to the CIA and FBI combined). It's rare for the Chinese to admit that an officer of the MSS was working for the Americans. The last time was in 1985, when a MSS official managed to defect to the United States, making it impossible for the Chinese to cover up.
The MSS has very tight control over its key people, having learned many of their strict and harsh methods from the Cold War era Russian KGB. After the Cold War ended it became known how thorough the KGB was in trying to prevent their agents from being recruited by foreign espionage agencies. The KGB methods of monitoring their employees, especially when abroad, may seem obsessive and paranoid but they did not stop a lot of Russian KGB agents from switching sides. The oppressive scrutiny did make life uncomfortable for many KGB employees.
The MSS is more vulnerable than the KGB because many of their best people were educated in the West, or worked there for a while. The man recently arrested, in Hong Kong, had access to most of the secret operations the MSS was involved with. This would be very useful to the United States because the main job of the MSS is to keep the CCP (Chinese Communist Party) in control of China.
China has a huge global espionage operation, but most of its operatives spy on neighboring countries. Taiwan is a favorite target and Taiwan spies right back. But recruiting senior officials of the MSS is considered a major achievement in the murky world of counter-espionage (spying on spies). Then again, having your inside guy revealed and arrested is a major loss. But this latest incident apparently triggered a review of security within the MSS and a closer look at key people.