New cold war: China-US spying steps out of the shadows

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It's the people of the United States who are the victims of what amounts to Chinese theft on a scale so massive that it represents one of the largest transfers of wealth in human history.

US officials this morning are blaming Chinese hackers for another serious data breach.

Hello, and welcome to a furtive edition of our monthly foreign policy and defence vlog. I say furtive because spying, of course, is meant to be done in secret. And US administrations in the past have been so worried about making things worse they used to refer to Chinese spying in decidedly delicate and obfuscatory terms, blaming APTs, advanced persistent threats, for attacks they often attributed in private to Beijing.

No more. US Secretary of State Mike Pompeo, the former CIA director, has led the charge in blaming Beijing for a new era of espionage that experts believe puts at risk not only America's dearest military secrets, but its lucrative commercial secrets too.

Great powers spy on each other. We recognise that too. We spy on you, you spy on us. But there's rules to this game.

James Lewis, a cyber security expert who served in government posts, has calculated that Chinese espionage has cost the American economy $600bn in past years. He's put together an eye-popping list of things China has allegedly stolen from the US - nuclear test data, plans for the F-35 fighter plane, commercial jet engine details, and bioengineered corn seed.

I remember a PLA colonel said to us: "For us, there is no difference between national security and technological advancement." Right? So this is a Chinese strategy, to build their economy, build their technological base, and displace the US.

The Trump administration has this year shut down the Chinese consulate in Houston, the energy capital of the world, claiming it was a spy hub. And the FBI says it now opens a counter-intelligence case into China every 10 hours.

Of the nearly 5,000 active FBI counter-intelligence cases currently underway across the country, almost half are all related to China. And at this very moment China is working to compromise American healthcare organisations, pharmaceutical companies, and academic institutions conducting essential Covid-19 research.

Mr Pompeo said that Chinese officials were targeting state and local US officials, even Parent Teacher Associations in schools and local city police.

Protecting American interests requires vigilance, a vigilance that starts with you and all state legislators, regardless of party. Know that when you're approached by a Chinese diplomat it is likely not in the spirit of co-operation or friendship.

US authorities say China has spent time and effort trying to recruit spies in the US, whether online through websites such as LinkedIn or in person, often targeting Americans with security clearances or Chinese nationals who are attending US universities or making their careers in the US.

You get invited to drink tea at the local Ministry of State Security headquarters. And in the room while you're drinking tea they suggest that it would be in your interest to co-operate with them. And if you didn't co-operate with them, well, bad things could happen, perhaps to your family that stayed behind in China. So that kind of pressure on individuals is very powerful.

Experts say the most trenchant spying from China in recent years has taken place online, however, bursting through in a series of mass cyber hacks, including the 2015 theft of vast amounts of data from OPM, the Office of Personnel Management.

The Chinese looked at a series of hacks, travel agents, insurance companies, OPM, of course, banks. And you pile all that data together, and you can use it, you can correlate it, you could manipulate it, and identify not just American agents, but Chinese who have been recruited.

China's cyber prowess is one reason the Trump administration is so worried by TikTok, the viral social media sensation that is owned by a Chinese company and which operates in the US. Spying, of course, is a two-way street. And as we all know from the revelations of Edward Snowden, the US has extraordinary tools of its own on the cyber side.

Experts say it's much harder for the US to carry out physical covert operations inside China, however, simply because they characterise it as a surveillance state. Chinese spying remains largely cloaked from view. But while the US complains that China is stealing its industrial secrets, China was once victim of colossal spy heists itself. Over hundreds of years the west stole the secrets of silk, porcelain, and tea.

Economic espionage has been around for centuries, millennia. And in fact, what's quite interesting is that it used to be China that was the target of espionage, economic espionage, from the west. And in fact, there are some stories about products which we probably don't think of as being of great value - you probably have them at home right now, or you might be wearing some of it - that at one point in time were seen as incredibly valuable commodities, so valuable that they were the targets of espionage.

Jim Lewis dismisses any notion of equivalence between US and Chinese industrial spying as feeble-minded. While declassification leaks and co-operation with US spy agencies have all helped Hollywood to tell America's own spy tales, Albion told me the best way to decode Chinese espionage is to turn to the country's own growing literary canon.

China denies many of these claims, and the US is generally mute on its own espionage efforts. While spying falls far short of out-and-out war, one thing seems for sure. With more and more data heading online and US-China tensions rising, spying is here to stay.