December 8, 2019: Australia recently had Liqiang Wang, a Chinese intelligence officer known locally as Willian Wang, defect and ask for asylum. This was a first for China, which has thousands of such intel professionals operating in Western nations overseeing rapidly expanding Chinese espionage operations. China has lost some of these operatives in the past and what is going on now is to verify who Wang says he is and what he has been going during his espionage career. China will seek to discredit Wang so the flow of information will be confusing for a while.

Wang brought with him an enormous knowledge of Chinese intel operations in Australia and elsewhere in the region. The problem is verifying enough of it to support what cannot be verified. Wang is currently in an Australian safe house being debriefed. If his information proves credible, and not some bold new Chinese intel operation or Wang running a personal scam, Australia will risk the wrath of an angry China and grant Wang asylum and protection.

Like many Cold War era defectors from the Soviet Union, Wang will always be at risk of assassination by China. Defectors like this can do major damage to foreign intelligence operations. So far Wang has apparently provided revealing details about Chinese intel operations inside Australia, including aggressive efforts to control public opinion and protect Chinese interests. China is a major trading partner for Australia and a major reason that Australia has gone for decades without an economic recession. Even before Wang came forward, Australia had detected Chinese efforts to use their economic clout, combined with clandestine media and public opinion manipulation to keep Australia compliant and cooperative with whatever China wanted, even if some of these goals were not in Australis’s best interests. Wang offered similar information about Chinese clandestine operations in neighboring nations as well as the current crisis in Hong Kong.

Of more immediate interest was details of how China planned to interfere with upcoming national elections in Australia. Wang named names and revealed Chinese influenced controlled companies that acted as recruiters of Australians who might be inclined to adopt pro-Chinese attitudes or a less anti-Chinese outlook. Much of this had long been suspected by some Australian officials but without evidence, those suspicions were never a real threat to Chinese intel operations. Wang described how Chinese Cyber War operations (hacking and Internet media influencers) worked in Australia. Wang also provided details of how this had worked in Hong Kong where those subversive operations played a major role in triggering the current popular demonstrations..Wang is said to be providing details that could lead to indictments and prosecutions of Australians who were actively working for China. Wang has made it clear that these operations have for years used the same playbook that is applied throughout the world, especially in the United States and Europe. At the very least this will get interesting and possibly devastating for Chinese clandestine operations. Wang sounds too good to be true and the first task is to determine how much if that is true or false.

Chinese espionage efforts were increasingly being detected in many Western countries. In the last few years, the United States has been indicting, prosecuting and convicting a growing number of Chinese born men (and a few women) conspiring to commit or already carried out economic espionage in the United States. Some of these suspects are naturalized American citizens but a growing number are Chinese citizens here on legitimate visas. This is the sort of thing Wang is supposed to provide details about.

The Americans realized that China has used similar tactics in Russia, Japan, Australia, New Zealand and Taiwan. Russia was particularly hard hit this by this in the 1990s. After the Soviet Union dissolved in 1991 thousands of highly educated employees of defense industries were left unemployed because post-1991 Russia could no longer afford most military research and development efforts. The U.S. noticed the danger and sought to provide work for many of these Russia researchers and that succeeded to a certain extent. But the Chinese (Iranians and North Koreans) quietly made offers of employment or just cash for specific tech. In the case of Russia, the Chinese cash and offer of business opportunities also made it possible for high-tech military gear to be disposed of as scrap and show up in China largely intact. China also bought design and manufacturing documents or hired those who designed or were involved in the manufacture of these items. Even North Korea benefitted from Russian economic desperation, obtaining retired submarines and obsolete ballistic missiles to be turned into scrap metal. The North Koreans scrapped some of it, but the most intact items were studied by engineers who figured out how to make some of those in North Korea.

China hired Russia scientists for seemingly innocent commercial projects but then paid the new employees bonuses to work on military tech-related projects. The Russian government eventually found out and are still angry about that and the continued Chinese theft of their tech. By the late 1990s growing Russian threats over this caused the Chinese to sign agreements that declared Chinese firms would stop stealing and reselling Russian tech. In practice, this only slowed the Chinese down, but it placated the Russians for a while. Currently, the Americans are starting to sound like the Russians in the 1990s, but the Americans have more legal and economic clout to deploy and this situation is liable to get ugly before (if ever) it gets better.

The Australian situation is somewhat different as Australia obtains most of its high-tech military gear from the U.S. or Europe. But that makes Australia a target for Chinese espionage because those American tech secrets can be stolen from export customers and the Chinese have been caught doing this in the past.

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 (and more conventional) espionage efforts as described by Wang. Details of exactly all the evidence of this are 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. At the moment more scrutiny is making it more difficult for the Chinese to operate but is not stopping them.

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 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 needed. Such 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 is something Wang has extensive knowledge of. The tech they were sending back had limited military value but the sheer volume of these low-level items getting back to China added up and made a difference. American sailors at sea viewing new Chinese warships through binoculars are surprised to see so many familiar design features and a bit of equipment. It’s as if the Chinese were buying from the same suppliers the U.S. Navy uses. In a way, the Chinese were doing that, after getting samples of the real thing and duplicating it.

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 business people 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). Over 100,000 Chinese students go off to foreign universities each year. Even more, 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, 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" methods, brings in a lot of secrets.

The final ingredient is a shadowy venture capital operation, sometimes called Project 863, which offers money for Chinese entrepreneurs who will turn the stolen technology into something real. No questions asked. If you can get back to China with the secrets, you are home free and potentially very rich. This is the approach Chinese firms are often set up to do, and little else. While these firms are technically supposed to develop new technologies in China the unofficial mandate was to steal as much as possible from other nations and not get caught.

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.

But 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.