CHINESE SPIES AND SPIES IN CHINA

SHI PEI PU, SINGER, SPY AND “M. BUTTERFLY”

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Captured French and Russian Spies
Perhaps the most famous Chinese spy is Shi Pei Pu, a Beijing opera singer who was convicted of espionage in France in 1986 along with his male lover, French diplomat Bernard Boursicot, and was pardoned a year later by French President Francious Mitterrand. The whole episode was the subject of the the Broadway show and David Croneberg film M. Butterfly. Shi had convinced Boursicot that he was a woman and even told him a son was born from their affair. The two met in 1964 and their relationship lasted until Boursicot claimed at his trial that he had been betrayed by Shi. [Source: Joyce Wadler, New York Times, July 1, 2009]

For years Boursicot believed that Shi (pronounced Shuh) was a woman. He served time in prison after the affair and became a laughingstock in France.” In the 1988 Broadway play and the 1993 film M. Butterfly, Boursicot was depicted as a high-ranking diplomat and Shi Pei Pu as a beautiful female opera singer who met in 1964. In fact, Boursicot was a 20-year-old high school dropout who had finagled a job as an accountant at the newly opened French Embassy in Beijing. His few sexual experiences had been with male schoolmates, and he was determined to fall in love with a woman, he wrote in his diary. [Ibid]

Book: Tiger Trap: America's Secret Spy War with China by David Wise (Houghton Mifflin Harcourt. 292 pp. $28). John Pomfret wrote in the Washington Post, “The author of bestsellers on spies and counterspies, Wise is a master of page-turning nonfiction, and from that perspective “Tiger Trap” doesn’t disappoint. Wise has written an important book about the spy-vs.-spy games that are guaranteed to capture the imagination of the next generation of espionage aficionados. One can only hope someday to hear the Chinese side of the tale."

Good Websites and Sources: U.S.-China Policy Foundation www.uscpf.org/v2 ;Nixon’s Visit to China chizeng.com/nixon ; Wikipedia article on Sino-American Relations Wikipedia ; Links in this Website: CHINA, THE WORLD AND CHINESE NATIONALISM Factsanddetails.com/China ; CHINA AND ASIA RELATIONS Factsanddetails.com/China ; CHINA AND JAPAN RELATIONS Factsanddetails.com/China ; CHINA AND INDIA RELATIONS Factsanddetails.com/China ; CHINA, RUSSIA, EUROPE AFRICA AND THE MIDDLE EAST Factsanddetails.com/China ; Factsanddetails.com/China ;CHINA AND UNITED STATES Factsanddetails.com/China ; AMERICAN AND CHINESE POLICY Factsanddetails.com/China ;UNITED STATES, CHINA AND SPIES Factsanddetails.com/China ;GOVERNMENT IN CHINA Factsanddetails.com/China ; CHINESE ARMED FORCES Factsanddetails.com/China ; TIBETAN GOVERNMENT Factsanddetails.com/China ; CHINA AND TIBET Factsanddetails.com/China ; DALAI LAMA AND POLITICS Factsanddetails.com/China ; CHINESE TRADE Factsanddetails.com/China ; CHINESE TRADE WITH THE U.S., EUROPE AND JAPAN Factsanddetails.com/China ; FOREIGN COMPANIES AND INVESTMENT IN CHINA Factsanddetails.com/China ; MAO MEETS NIXON Factsanddetails.com/China ; EARLY COMMUNIST RULE UNDER MAO, with a section on the Korean War and C.I.A. Spies Factsanddetails.com/China ; CHINESE MILITARY Factsanddetails.com/China ; CHINESE ARMED FORCES Factsanddetails.com/China ; MISSILES, NUCLEAR BOMBS AND SPACE WEAPONS Factsanddetails.com/China ; CHINESE MILITARY, HACKERS AND SPIES Factsanddetails.com/China ; TERRORISM AND BOMBINGS IN CHINA Factsanddetails.com/China ;

Romance Between Shi Pei Pu and Bouricot

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Ding Moichun and Li Sequn
Shi Pei Pu was 26 when they met, delicate and charming. He lived as a man and taught Chinese to the diplomatic wives. He told Boursicot that he had been a singer and a librettist in the Beijing Opera. One perfect night in the Forbidden City Shi told Boursicot a story no romantic could resist: Shi said he was a woman who had been forced to go through life as a man, because her father required a son. A short time later, the men became lovers, although the sex, Boursicot would later say, was fast and furtive, always carried out in the dark. [Source: Joyce Wadler, New York Times, July 1, 2009]

When the affair was discovered by the Chinese authorities, Boursicot passed them French documents, first from the embassy in Beijing and later from his posting at the consulate in Ulan Bator, Mongolia.

Boursicot spent most of his life outside China and was romantically involved with men and women. On his rare visits to Shi Pei Pu, sexual contact was circumscribed. On one visit, Shi presented him with a 4-year-old boy, Shi Du Du, who Shi said was their son.

In 1982, Boursicot---then living openly with a male companion, Thierry Toulet---was able to arrange for Shi Pei Pu and Shi Du Du to live with him in Paris. Shortly thereafter, Boursicot and Shi Pei Pu were arrested. Shi first told the police he was a woman, but he admitted the truth to prison doctors, showing them how he hid his genitals.

Later Life of Shi Pei Pu and Bouricot

In 1986, Shi and Boursicot received six-year sentences for espionage. They were pardoned a year later. On hearing that Shi Pei Pu was a man and always had been, Boursicot sliced his throat with a razor blade in prison.

Shi enjoyed the spotlight, performing in public as an opera singer, but disliked talking about his romance with Boursicot, particularly the sexual specifics. I used to fascinate both men and women, he said in a rare interview in 1988. What I was and what they were didn’t matter. On his background Shi told police: he was from China’s Uighur minority, and had been sold by his mother. It was not that my mother did not love me, he said. We were starving.

Shi died in Paris at the age of 70 in June 2009. Asked if he was sad about of Shi’s death the 64-year-old Boursicot said, “He did so many things against me that he had no pity for, I think it is stupid to play another game now and say I am sad. The plate is clean now. I am free.” Although Boursicot and Shi occasionally spoke over the years, relations were strained. Boursicot said that they last spoke a fewmonths ago and that Shi told him he still loved him. Shi is survived by Shi Du Du, who lives in Paris and who, Boursicot said, has three young sons.

Chinese Reporter- Spy

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Ding Moichun
Ding Ke , a former reporter for Guangming Daily, a Chinese state-owned newspaper, revealed some of his responsibilities to the Epoch Times in 2005 when he shared his experience as a foreign correspondent stationed in Washington, D.C. Now living in the United States, Ke said his journalist moniker was a cover for his work as a spy. [Source: Matthew Little, Epoch Times, September 21, 2011]

“On one hand I was engaged in news reporting, on the other hand I collected information for the Ministry of State Security,” he said. “We were required to contact different groups of people to ferret out useful information, especially among the nearly 30 million overseas Chinese people.”

Ding said that after graduating from Beijing Language Institute in the 1980s, he was assigned to the Central Investigation Agency (later named National Security Department) for a month’s training. Then he was sent to work at the Daily and to “prepare for intelligence gathering for the future.” “At the time, we were asked to learn how to gather useful intelligence from the variety of people we came in contact with.”

Ding said that for intelligence gathering it was important to make friends with all kinds of people and establish long-term relationships, and when the conditions were right a steady stream of intelligence information would be easy to obtain. Other spies worked as diplomats, economic analysts, or within cultural organizations, he said.

Chinese Reporter- Spy Organization

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Chien Juanfei
At one time, Xinhua was almost synonymous with the CCP in some parts of the world, and top Xinhua positions were held by high-ranking Party cadres. Xu Jiatun was the head of Xinhua News Agency in Hong Kong from 1983 to 1990 and the secretary of the Hong Kong and Macao Work Committee of the Chinese Communist Party.

He left China after the Tiananmen Square massacre and revealed in 2010 how Xinhua was the functioning representative of the Party in Hong Kong during the 1980s when it was still a British colony. Xu spent a third of this time in China and a third wining and dining important figures in Hong Kong, sometimes, to the tune of five to six different meals a day. Xu’s successor, Zhou Nan, was Vice-Minister of the Foreign Affairs Department.

Xu said that in the 1980s, Xinhua reporters in Hong Kong were not allowed to wander the street alone and were isolated from the outside world to keep them from getting corrupted by the “big dye vat of capitalism.”

The Communication University of China (CUC) recently published a report on its website about how the Chinese regime prepared students for careers in overseas branches of major Chinese media agencies. In the article, titled “To Report a Strong China to the World: On How Communication University of China Trained Reserved Talents on International Communication,” the university detailed an important ritual done just before graduates began their overseas internships.

The article described the students being taken to Yan’an, the birthplace of the Chinese Communist Party, to make oaths to the Party. “At three o’clock sharp in the afternoon of July 14, 2011, student representatives from Tsinghua University and Communication University of China stood on the peak of Qingliang of Yan’an City. Bathed in drizzling rain, they held their fists and made an oath: 'To carry on and promote the good traditions of the Party in journalism, holding the flag and considering the whole situation S try our best to satisfy the Party and satisfy our people as a journalist.'”

Chinese Spying Tactics

In a review of David Wise’s book, “Tiger Trap,” John Pomfret wrote in the Washington Post, “The Chinese gather intelligence differently from Western nations... While Russians and Americans rely on professional snoops or fancy equipment, the Chinese count on friends and connections to piece together information. He quotes one FBI analyst as saying that if the Chinese wanted to learn about a beach, they would send in a thousand tourists, each assigned to collect a single grain of sand. “When they returned,” Wise writes, “they would be asked to shake out their towels. And [the Chinese] would end up knowing more about the sand than anyone else.” [Source: John Pomfret, Washington Post, June 24, 2011]

But is China’s approach more efficient than the West’s? How much have the Chinese really benefited from all their snooping in the United States? My sense is that the jury is still out. First, while Wise and others report that, thanks in part to its intelligence operations in the United States, China has succeeded in miniaturizing its nuclear weapons---a key step in creating an unstoppable second-strike capability---China doesn’t appear to have made such weapons operational. That’s because after decades of stealing technology, the Chinese continue to have significant trouble building advanced weapons. Another example is in aerospace. The Chinese have been spying on Russian industry for decades, but they still can’t make a reliable jet engine.

Spying Between Taiwan and China

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Gu Soonzhang
Andrew Higgins wrote in the Washington Post, “Espionage across the Taiwan Strait is hardly new. When the KMT decamped to Taiwan in 1949---along with tens of thousands of soldiers such as Lo’s father---it left a network of agents behind and has worked to keep intelligence flowing ever since. Meanwhile, Beijing has developed its own network in Taiwan. In August, a court in Taipei convicted a Taiwanese software engineer for trying to obtain information about Taiwan’s U.S.-made Patriot missile defense system from friends in the military. [Source: Andrew Higgins, Washington Post, September 27, 2011]

In 2008, former Pentagon employee and Alexandria resident Gregg W. Bergersen pleaded guilty to providing classified information on U.S. weapons sales after the FBI uncovered a Beijing spy ring focused on American military cooperation with Taiwan. One of its main targets, according to an affidavit presented in court, was Po Sheng.

Edward Womg wrote in the New York Times, “Although the situation across the strait is easing, mainland China has never stopped spying on our military intelligence, and it’s being intensified, “the Taiwanese defense ministry said in the online statement. “Our military staff and civilians should be more alert and improve our awareness of unexpected incidents.”

Spies Cases Involving South Korea and Taiwan

In May 2009, Yu Jiafu, a former reporter for the state-owned Xinhua news agency, was given a prison sentence of 18 years for passing on state secrets to Japanese and South Korea diplomats.

In November 2008, Wo Weihan a Chinese medical researcher and businessman, was executed on charges of spying for Taiwan. Wo had been detained for four years and was sentenced to death in May 2007. The U.S. State Department was “deeply disturbed” by the news saying his arrest and trial “fell far short of international standards for due process.”

In March 2011, it was revealed that three South Korea diplomats gave up cell phone numbers of leading South Korean politicians and other confidential information to the same woman---who was dubbed by the Korean press as the “sexy Shanghai siren”---in a sex-for-favors sandal.

See Chinese-American Activists Detained in China, Dissidents

Taiwan Detains General on Spy Charges

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Guo Ru Gui
In January 2011, the government of Taiwan has arrested a general on accusations of spying for China in what is seen as the basis for the most prominent espionage case in Taiwan in decades. The New York Times reported: “The Ministry of National Defense discovered suspicious activity last year and arrested Maj. Gen. Lo Hsieh-che on Jan. 25, according to a statement posted on the ministry’s Web site late Tuesday. The statement did not give any details on what espionage activities the general might have been engaged in. The general was recruited to spy for China sometime during a posting overseas between 2002 and 2005, the statement said. [Source: Edward Wong, New York Times, February 9, 2011]

The Chinese government had no immediate comment on the case. According to to the Apple Daily, Lo was recruited by another Taiwanese double agent and allegedly sold lists of spies stationed on the mainland and other secret information China . He was supposedly paid $100,000 for his work, which began in 2007. An unnamed military source said, the information Lo had provided compromised crucial Taiwan spy networks in the mainland and the agents were now “running for their lives.”

Andrew Higgins wrote in the Washington Post, In early 2011, “military intelligence agents and prosecutors showed up at a white, single-story farmhouse here in southern Taiwan and told Lo Hsien-sheng that they needed to search the premises. They hunted in sacks of rice, burrowed in the garden and checked the chicken pen. “They said they were looking for money,” recalled Lo, a 52-year-old retired soldier whose younger brother---a senior officer in the Taiwanese military---had just been arrested in Taipei, the capital, and charged with spying for China.[Source: Andrew Higgins, Washington Post, September 27, 2011]

The search was part of a frenzied effort to answer questions deeply troubling to not only Taiwan but also Washington: Why did a successful and seemingly loyal officer in a military rooted in hostility to the Chinese Communist Party turn against his country, and what secrets did he betray?

Until his arrest in late January, Maj.Gen. Lo Hsien-che ran the army command’s communications and electronic information department. This put him at the heart of a command-and-control system built around sophisticated and highly secret American technology that China had been trying to get its hands on for years. Lo’s job gave him access to some of Taiwan’s most closely guarded secrets---involving a new command, control and communications system known as Po Sheng, or “Broad Victory,” long a target of Chinese espionage here and in the United States. Andrew N.D. Yang Yang, Taiwan’s deputy defense minister, said the system “has not been compromised” by Lo’s spying, which involved at least five separate transfers of information to, and illicit payments from, a Chinese handler.

Sentenced to life in prison in July by the Military High Court, Lo is the highest-ranking officer convicted of espionage in Taiwan in decades---and a reminder, according to the Ministry of National Defense, that, despite a recent warming of relations between Taipei and Beijing, “mainland China’s efforts to collect our military intelligence have not stopped but intensified.”

Lo’s spying on behalf of Beijing, which went on for at least seven years, has stirred deep unease, not only because he had access to secrets but also because of his background. The son of a Kuomintang (KMT) soldier who fled to Taiwan in 1949 to escape Mao Zedong’s victorious Red Army, Lo grew up infused with the values that dominate the military establishment of Taiwan, also called the Republic of China.

Motives Behind the Taiwanese General Spying for China

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Li Kenon
Andrew Higgins wrote in the Washington Post, “Lo’s motives for spying, said Andrew N.D. Yang, deputy minister of national defense, are under investigation. “It is a jigsaw puzzle. We haven’t reached the final stage yet,” he said in an interview in his office, the walls plastered with military maps of Taiwan and mainland China, which lies just over 100 miles away---and claims Taiwan as its territory. [Source: Andrew Higgins, Washington Post, September 27, 2011]

Taiwan’s government, which was tipped off about Lo’s double game by the United States, has released few details of his treachery. But, through media leaks and occasional statements, it has sought to calm fears that he betrayed Taiwan because of any pro-Beijing ideology or desire for swift reunification. “His motive was just money and sex---mainly sex,” said Lin Yu-fang, a KMT lawmaker and member of the legislature’s Foreign Affairs and National Defense Committee. This explanation holds that Lo---a married father of three---simply stumbled into a Beijing-sprung “honey trap” while serving in Bangkok from 2002 to 2005 as a military attache.

It was a time of frustration and even anger in Taiwan’s KMT-dominated military and civilian bureaucracies, which worried about the country’s direction under then-President Chen Shui-bian, the island’s first non-KMT leader since 1949. Chen, who left office in 2008 and is now in jail for corruption, alarmed many in the KMT by stressing Taiwan’s separate identity from that of the mainland and by making gestures, mostly symbolic, that tilted toward independence for Taiwan, something that Beijing has vowed to stop at any cost and which the KMT also opposes.

Lo’s brother told the Washington Post his jailed sibling never revealed any sympathy for the Communist Party but didn’t consider it Taiwan’s enemy anymore. “We were raised on slogans about fighting communists and serving the Republic of China,” said the spy’s older brother. “I know my brother would never betray Taiwan’s interests.” Beijing, the brother said, “stopped being our enemy” when Taiwan lifted restrictions on travel to the mainland in the 1980s, and their father, along with many other former KMT soldiers, began making trips back to visit relatives. Jean-Pierre Cabestan, a Taiwan expert at Hong Kong Baptist University, said the case suggested that Taiwan’s espionage and counter-espionage networks are “deeply gangrened” by communist agents.

Lo’s brother, however, said he doubts that sex led his sibling astray, noting that Lo was a devout Buddhist and could “control his desires.” He instead blamed his brother’s troubles on the United States, suggesting that he had been set up. He said Lo returned from a visit to Hawaii with a Taiwan military delegation last year complaining that he’d been approached by unidentified Americans in his hotel and treated “very rudely.” It is not clear who they were or what they wanted, although one former Taiwan defense official said the FBI had tried to turn Lo and recruit him as a double agent.

York Chen, a pro-opposition defense expert, said he met Lo while serving as a senior adviser to Taiwan’s national security council under President Chen. Sex, he believes, “was just a trigger” for deeper grievances against civilian politicians. “To him, the situation looked hopeless,” York Chen said. Tiehlin Yen, a retired naval captain and a scholar at National Chengchi University’s Center for Security Studies, also met Lo but thinks his treachery was simply a desperate attempt to protect his career after getting trapped in a sexual liaison he wanted to keep quiet. “He had everything. He was a future star,” Yen said.

Shortly before Lo’s arrest, his son enrolled in a Taipei military academy, continuing the family’s military tradition into a third generation. (The son has since been expelled, officially because of poor grades.) Tsai Jung-ming, a 91-year-old KMT veteran who lives next to the Lo family farm, said Lo used to visit him whenever he came from Taipei to see his mother and brother. They sometimes talked about the trips that Lo’s father had made to see family on the mainland. China, Tsai said, is “now much richer,” but “I still hate the communists.” He can’t believe that Lo would have spied for them. “One day maybe we will understand---and he will be clean again.”

Scientist Executed for Spying in China

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Hu Dee
In November 2008, Wo Weihan, 59, a scientist and owner of medical supply company, was executed for spying. He had been convicted of passing military documents and classified information about an unidentified Chinese leader to Taiwan. Wo’s family said he initially confessed to the crimes but later recanted, saying the confession had been coerced. The evidence against him was deemed a state secret, and even his lawyer was not allowed to discuss it with his family. A distant relative of Wo, Guo Wanjun, 66, was convicted as a conspirator and also put to death on Friday, family members said. [Source: Andrew Jacobs, New York Times, November 28, 2008]

A biomedical inventor who was partly educated in Europe, Wo was arrested in 2005 and suffered a stroke two weeks into his detention. He had been held at a prison hospital until Friday morning, when he was executed by a gunshot to the head, according to family members. [Ibid]

One of Wo’s daughters, Chen Ran, a graduate student in Berkeley, Calif., said her family was never given an official confirmation that their father’s death sentence had been upheld. On Thursday she and her stepmother were given 30 minutes to see Wo at the Second Intermediate People’s Court in Beijing, she said. He had seemed unaware that he was facing imminent death, she said, and insisted that he was innocent. Chen said he seemed assured that the conviction would be overturned. [Ibid]

Chinese Spy Steals Classified Rice Data in Japan

In June 2012, a Chinese diplomat accused of engaged in espionage in Japan was investigated for using a false identity to obtain a foreign resident card in the first case of a Chinese diplomat being subject to a criminal investigation by Japanese police. The diplomat---Li Chunguang, a first secretary of the Chinese Embassy in Tokyo---Li was not formally indicted as he left Japan to "temporarily return home" just after being asked by the MPD to appear for questioning. [Source: Yomiuri Shimbun, June 2, 2012]

The Yomiuri Shimbun reported: “Li is believed to have approached Japanese firms under the pretext of helping them expand their operations in China. His aim, in addition to private gain, was apparently to put the companies under the influence of China's People's Liberation Army, and make them a source of revenue, the sources said. According to a statement by Tokyo police Li is suspected of having renewed his alien registration card using a false address, and falsely identifying himself as a University of Tokyo researcher, in his application to Tokyo's Katsushika Ward government office on April 10, 2008. [Ibid]

In August 2009, Li told the Tokyo Regional Immigration Bureau that he was an employee of a Tokyo trading company and tried to renew his visa status as a researcher. However, the attempt failed, as an immigration officer discovered he was a Chinese diplomat. In January 2008, Li opened multiple bank accounts by fraudulently using the alien registration card obtained while he was a university researcher, even though he had already become a Chinese diplomat at that time, the investigative sources said. [Ibid]

Investigators discovered that from February to July 2008, 70,000 yen to 160,000 yen a month was wired into one of Li's bank accounts by a Tokyo-based health food marketing company as "advisory fees." After the health food company established a branch in Hong Kong, it transferred 720,000 yen to one of the diplomat's accounts in June 2009, the sources said. [Ibid]

Li is suspected of having obtained information that can influence rice market prices and the ministry's internal rules regarding cables, among confidential Agriculture, Forestry and Fisheries Ministry documents related to a program led by Senior Vice Agriculture, Forestry and Fisheries Minister Nobutaka Tsutsui. The documents in question were initially obtained by the head of the Promotion Association of Agriculture, Forestry, Fisheries & Foods Exporting to China. The association head, a former state-funded secretary of a House of Representatives member, also served as an adviser to the ministry before assuming the current post. [Source: Yomiuri Shimbun, June 4, 2012]

The Yomiuri Shimbun confirmed that the leaked documents were those the association head obtained after resigning as ministry adviser. These documents included five classified as "level 3" and five as "level 2," the highest and second-highest confidentiality levels, respectively, in the ministry's three-grade scale. In one document titled "Future prospects of rice supply and demand," it was said that about 100,000 tons of rice grown in Fukushima Prefecture could face circulation problems due to the crisis at the Fukushima No. 1 nuclear power plant. It also said shipments of rice produced in 2011 could decline because of expectations of a rise in prices. A senior ministry official pointed out the high confidentiality level of the documents, saying the ministry's rice price forecasts, if leaked, would greatly affect retail prices, as rice is handled in futures trading, too. [Ibid]

Chinese Espionage in Germany

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Li Kenon
Ties between between Germany and China were strained when it was revealed that Chinese officials were suspected of spying on Falun Gong supporters in Germany. The espionage affair began in 2005, when a man named Dan Sun traveled to Berlin and applied for a visa at the Chinese embassy there. He is a German citizen who has been living in Germany since the early 1990s, and he wanted to visit his father in China, who was seriously ill. The visa application process was complicated. Sun had been a member of Falun Gong for a long time. [Source: Sven Röbel and Holger Stark with translation by Christopher Sultan, Speigel International, June 30,2010]

The consular official bluntly asked Sun about his involvement with Falun Gong and suggested that he meet with what she called “Chinese experts” to discuss a “research project” on meditation. Sun, an academic, met with the experts in March 2006 in a restaurant in downtown Berlin. The meeting continued until after midnight, as they discussed the spiritual aspects of Falun Gong, the medical effects of the exercises and the political persecution of Falun Gong members in China.

Dan Sun did not know that two members of the Chinese group were not academics at all, but instead worked for “Office 610' “a Chinese intelligence agency that watches Falun Gong. One of them was a high-ranking official with the rank of vice minister. The fact that the Chinese government went to the trouble of flying in the head of the anti-Falun Gong unit from China to recruit a source in Germany demonstrates how important fighting the movement is to the government. It also points to the extremely offensive approach that is sometimes being taken by the Chinese intelligence agencies. [Ibid]

The two men established close ties with Dan Sun, and one of the presumed agent managers even developed a friendship of sorts with him. They exchanged e-mails regularly and communicated via Skype almost daily. According to the investigators' reconstruction of the case, Sun had been forwarding all e-mails from the German and European Falun Gong e-mail distribution list to a Hotmail address in China since September 2008 at the latest. On Jan. 2, 2009, the academic established another e-mail address with GMX, but he isn't the only one with access to the address. The Chinese also have access, which is usually masked to prevent anyone from discovering their identity. But they have been careless at times, which has allowed the BKA to track the access to the data from Germany to a place outside Shanghai. [Ibid]

In October 2009, two German officials rang Sun's doorbell at 9 a.m.. They were employees of the domestic intelligence service of the state of Lower Saxony. “We know that you work for the Chinese intelligence agency,” one of the men said. “You are under observation at all times.” While the German investigators describe the data as “important information,” Sun says that even though he did pass on extensive information about Falun Gong, all of it was from “sources available to the public,” such as passages in literature, copies of speeches and meditation guides. [Ibid]

Sun sees himself as a victim who was caught up in the clandestine workings of the intelligence agencies. He claims that “at no time” was he aware that the people he was dealing with were Chinese agents....Sun claims that he still believes that he managed to convinced his Chinesecontacts that government repression against Falun Gong must stop. [Ibid]

Spy Briefing by Chinese General Leaked onto YouTube

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Mao Renfong
Footage of a Chinese general discussing sensitive spying cases has been leaked onto video sharing site YouTube. The footage of a talk by Maj. Gen. Jin Yinan appears to be a potentially embarrassing failure of secrecy for the usually tightlipped military. Some of the cases had been publicly announced, but many details were secret. Among those discussed was former ambassador to South Korea Li Bin, who was sentenced to seven years for corruption. Jin said Li had actually been discovered passing secrets to South Korea, but the allegations were too embarrassing to make public. [Source: AP, August 29 2011]

On the revelation Dave Wise wrote in the Los Angeles Times, “A Chinese spy story with a reverse twist surfaced in Beijing, providing further evidence that China's rulers are having trouble maintaining their tight control over the Internet. Maj. Gen. Jin Yinan of the People's Liberation Army, in what he apparently thought was an internal briefing, revealed half a dozen cases of Chinese officials who had spied for Britain, the United States and other countries. Somehow, the video of his sensational disclosures leaked out. Clips of his hours-long talk appeared on at least two Chinese websites, Youku.com and Tudou.com, but were quickly removed by government censors. It was too late. The extraordinary video is on YouTube and can be viewed the world over, although not in China, where YouTube is blocked.[Source: David Wise, Los Angeles Times, September 06, 2011]

The video is the latest example of how in a wired world, China's government is beginning to lose its grip over the Internet and news events. When two high-speed trains crashed in July, sending four cars plunging off a viaduct, killing 40 people and injuring about 200, millions of microbloggers in China responded through the popular website Sina Weibo. Many vigorously protested the government's handling of the disaster.

When Jin gave his talk, and exactly how it leaked out to the Internet, was not made clear. Although China has often charged bureaucrats with corruption and fired several after the 2008 tainted-milk scandal and the recent high-speed train wreck, it has rarely identified its officials as foreign spies. In his videotaped talk, the general deplored what he described as a moral decline, the result of economic reforms and the opening up of China's institutions. He warned that the government would have to be on alert to detect and prevent more espionage cases.

Although it has been widely assumed that Jin's talk got out by mistake, it is at least possible that the leak was deliberate, an effort by the PLA to embarrass China's political leadership and to remind it of the military's power. Or it may have been a ploy by the PLA, which has its own intelligence service, to rattle the MSS, the Ministry of State Security, the intelligence service responsible for catching spies. The spies, it is true, were caught, but only after they had done their damage. The back story---just how the videotape got out---remains uncertain. But given the Chinese government's obsession with secrecy, a more likely scenario is that someone deep inside the bureaucracy decided that despite the risk of being caught, the spy story deserved to be shared on the Internet.

Revelations About Chinese Spies Leaked onto YouTube

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Pan Hannian
“In his talk,” Dave Wise wrote in the Los Angeles Times, “Jin, head of a department at the National Defense University, revealed details, many previously classified, of the espionage cases. The most prominent official he identified as a spy was Kang Rixin, the former head of China's nuclear power program and a member of the Communist Party Central Committee, who was sentenced to life in prison last year for taking bribes. But the general said the real story was that Kang sold secrets about the power industry to an unnamed foreign country. The details were too embarrassing to be made public, Jin said, because "the damage he has done by selling secrets was a lot more devastating than economic losses." According to Jin, Lu Jianhua, a researcher at the Chinese Academy of Social Sciences, passed information to five foreign governments, including the U.S., Japan and Taiwan. He was sentenced to 20 years. [Source: David Wise, Los Angeles Times, September 06, 2011]

But it was when Jin talked about Li Bin, China's former ambassador to South Korea, that his voice shook with indignation. Li was detained in 2007 but only "lightly sentenced" to seven or eight years on economic charges. "We could only talk about his involvement in economic problems in public," Jin said, "because the case was much too humiliating and damaging to make public. Have you ever heard of an ambassador spying for a foreign country?"According to the general, the information Li gave to South Korea had compromised China's negotiating position in the six-party talks on North Korea's nuclear weapons. The data, he said, "seriously compromised" China's national security.

On the list of spies, Jin included Col. Xu Junping, who defected in New York in 2000 while traveling with a Chinese military delegation. Xu had been a visiting scholar at the Kennedy School of Government at Harvard; he had also spent a year at Bath University in Britain and spoke near-perfect English. At the time he defected, Xu was director of the Chinese Defense Ministry's liaison office for the U.S. According to Jin, he would have been able to provide valuable information about the thinking of China's senior military leaders, their personalities "and their habits in making decisions." He was the highest-ranking defector from the PLA.

Another spy identified by Jin was Cai Xiaohong, who had been a senior official in Beijing's liaison office with Hong Kong before Britain handed over the territory to China in 1997. Cai was sentenced to 15 years in 2004 for passing state secrets to British intelligence well before the hand-over. Jin also referred to Tong Daning, a Chinese social security official, who was convicted of spying for Taiwan and executed in 2006. Tong was a senior official in the multibillion-dollar pension fund. Chinese civil servants were reportedly required to watch videos of his trial to deter others from engaging in espionage.

Espionage Strains China-Germany Relations

20111125-wiki c spies from china Shen_Jui.jpg
Shen Jui
For decades, the Chinese were seen as unproblematic partners. German authorities knew next to nothing about Beijing's clandestine practices...But times have changed, and China, now a major power, has since become one of the most important adversaries for German counterintelligence. A special department has been formed to address Chinese infiltration efforts, and the so-called “Russian policy,” developed during the Cold War, is being applied once again. Under the policy, when it is discovered that diplomats are in fact working for the intelligence agencies, they are to be expelled if the German authorities determine that they were engaged in illegal activities, and new embassy employees are subject to a review process before they can be accredited. What was once an amicable and neutral relationship has turned into a discreet war of espionage. [Ibid]

The conspiratorial activities are now straining the German-Chinese relationship, and during Merkel's 2007 trip to China, they cast a shadow on ties between the two countries for the first time. At the time, hackers, presumably authorized by the Chinese government, used so-called “Trojan horse” programs to attack the German government through e-mail messages. [Ibid]

In the early summer of 2009, German authorities caught a Chinese national who was with the Chinese general consulate in Munich, spying on Uighur expatriates in Germany. The diplomat managed a number of sources, had meetings in cafés, gathered internal information and sent his reports to Beijing. In keeping with the “Russian policy,” the German government pressured China to recall the diplomat. [Ibid]

Industrial Spying

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Xiong Xianhui
In January 2011, three top executives at Renault were suspended for leaking strategic information about their electric cars, including details on how to build batteries for electric cars. The French newspaper La Figaro reported that a Chinese firm paid undisclosed sums into Swiss and Liechtenstein bank accounts opened by two Renault executives implicated in the investigation. According to La Figaro their sources said the two accounts had about $800,000 in them and the money was paid by a Chinese power company. A Chinese foreign ministry spokesman said the allegations were “totally groundless, irresponsible, and unacceptable.”

Engineers Lan Lee, a U.S. citizen, and Yuefei Ge, a Chinese national, were charged with stealing trade secrets and industrial espionage for taking blueprints for a super-fast microchip from their Silicon valley employer NetLogic Microsystems and forming a company to produce the chip in China with the $3.6 million from a Beijing-based venture capital firm.

In December 2006, Ye Fei, a Chinese-born U.S. citizen, and Ming Zhong, a U.S. resident from China, were charged with stealing microchip designs from their employer, Santa-Clara-based Transmeta, and attempting to take them to China to start a company. They "were arrested in November 2001, as they were about to board a plane to China carrying suitcases full of trade secret documents, including microchip blueprints and computer-aided design scripts, totaling more than 8,800 pages and $10,000 in equipment that they had allegedly stole from four US high-tech companies: Sun Microsystems Inc, NEC Electronics Corp, Transmeta Corp and Trident Microsystems Inc. Both once worked at Transmeta and Trident. Likewise, Fei Ye also worked at Sun and NEC. Prosecutors alleged that both men, originally from China, planned to use the stolen technologies to start a microprocessor company with the assistance of the Chinese government. [Ibid]

According to court papers, Ye and Zhong established Supervision Inc (aka Hangzhou Zhongtian Microsystems Company Ltd, and aka Zhongtian Microsystems Corp) to sell microprocessors in China. They also allegedly sought the direct assistance of the Chinese government and stated in their corporate charter that their company would assist China in its ability to develop super-integrated circuit design, and form a powerful capability to compete with worldwide leaders in the field of integrated circuit design. [Ibid]

Although the indictment does not charge any government entity of China, it does suggest that there was considerable interest in and potential support from the Chinese government. A “panel of experts”, for example, found that the Supervision project had “important significance” for China's high-level embedded CPU development program and integrated circuit industry, and recommended that “every government department implement and provide energetic support?. [Ibid]

Two Chinese employees of Lucent technologies were charged with industrial espionage for stealing code from Lucent's PathStar Server and using it to make a Chinese server. "Hai Lin and Kai Xu were “Distinguished Members” of the Lucent’s technical staff. They approached a Chinese state-owned company named Datang Telecom Technology Co, seeking to establish a joint venture, which they stated would become the “Cisco of China”. Lin and Xu formed a company called ComTriad Technologies Inc, and with $1.2 million in funding from Datang. The Internet-based voice and data services product that Lin, Xu and Cheng were developing on behalf of the new venture (dubbed the CLX 1000) was based entirely on the proprietary software in Lucent's PathStar Server, a product that earned Lucent more than $100 million during the previous year. It also was the very same technology that Lin and Xu had been working on while employed by Lucent. [Source: Dan Verton, The Jamestown Foundation, Asia Times, July 22, 2008]

FBI searches of the computers used by Lin and Xu revealed that on January 21, 2001, Lin sent an e-mail to a representative of Datang advising that the “bare src”---allegedly referring to a portion of the PathStar source code---had been transferred to the ComTriad password-protected Internet site, and that more source code would follow. Raids of Lin and Xu’s houses uncovered large quantities of the component parts of the PathStar Access Server, including software and hardware, as well as schematic drawings and other technical documents related to the PathStar Access Server marked “proprietary” and “confidential”. Among other things, the agents seized a modified PathStar machine from Lin's basement. [Ibid]

In April 2009, Yan Zhu, a Chinese national working for a company in New Jersey, was charged with stealing software source codes used in modifying encryption programs, which were sold to environmental protection agencies in China’s Hebei and Shanxi provinces.

The Insider: A True Story and Black Ice: The Invisible Threat of Cyber-Terrorism by Dan Verton (McGraw-Hill, 2003). He can be contacted at editor@danverton.com

Rio Tinto Affair


In August 2009, Chinese authorities arrested four Rio Tinto employees in China---Australian Stern Hu and three Chinese staff---on charges of bribery and illegally obtaining commercial secrets. A Chinese security agency accused Rio Tinto of engaging in commercial spying on China for six years to gain information on China’s steel industry and its negotiating strategies in talks over iron ore prices.

The whole affair raised questions as to exactly what a state secret is. Often it seems that even the Chinese government is not sure. As it stands now, according to the 1989 Guarding State Secrets law, a state secret concerns “the safety and interests of the country” with an additional umbrella cause covering “any other secretive matters” as defined by the National State Secrets Bureau.” The Guarding State Secrets law in the eyes of many is out of date in the digital age. In any case, if one is accused of spying there us little one can do to fight it as there are no trials for such crimes.

In March 2010, four Rio Tinto executives were sentenced to between 7 and 14 years in jail for taking bribes and stealing commercial secrets by a Shanghai court. China-born Australian citizen Stern Hu---the head of Rio Tinto’s iron ore operations in China---was given 10 years (7 years for taking bribes and 5 years for stealing commercial secrets, with parts served concurrently) and was fined about $75,000 and had $75,000 worth of assets seized. The other three were Chinese citizens employed by Rio Tinto. The sentences were tougher than expected.

All four Rio employees pleaded guilty to receiving kickbacks but their lawyers said they took less than they were accused of taking. Bloomberg reported that Hu pleaded guilty to taking bribes worth $879,000. Leaked testimony described steel mills handing over piles of money in boxes and plastic bags to secure cheap iron ore. Rio Tinto fired the employees but objected to charges of commercial spying. The Australian government complained about a lack of transparency at the trial,

Since the incident Riot Tinto has been trying to improve relations with China, its largest customer.

Confusion About What is Chinese Espionage and What Isn’t


The New York Times has written about “the new trade in business secrets,” in which employees of Chinese descent are accused of sharing industrial and technology secrets with researchers in China who have a connection to the government. But courts are still figuring out when such cases constitute regular theft of trade secrets and when they rise to the level of espionage by contributing to the work of a foreign government. [Source: Evan Osnos, The New Yorker, October 26, 2010]

The New York Times noted the Justice Department lost a case involving two California engineers who the government accused of “working with a venture capitalist in China to seek financing for a microchip business from China’s 863 program, which supports development of technologies with military applications.” (The judge disagreed, and, indeed, this is a complex detail because, the 863 program is intended to promote not only military technology but civilian good as well. So if an electric-car engineer at G.M. shares designs with a Chinese firm that receives 863-funding, is the engineer guilty of theft or espionage? Perhaps both, but the courts will have to decide.) [Ibid]

James Lewis, a cyber-espionage expert who worked for the Departments of State and Commerce in the Clinton Administration told The New Yorker, China “is in full economic attack” inside the United States. “Some of it is economic espionage that we know and understand. Some of it is like the Wild West. Everybody is pirating from everybody else. The U.S.’s problem is what to do about it. I believe we have to begin by thinking about it---the Chinese cyber threat---as a trade issue that we have not dealt with.”

Image Sources: Wiki Commons

Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, National Geographic, The New Yorker, Time, Newsweek, Reuters, AP, Lonely Planet Guides, Compton’s Encyclopedia and various books and other publications.

Last updated January 2013



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