Understanding China’s Intelligence and Cyber Threat

East Asia Regional Issues
Chinese Spy Looking Into America

As the United States (U.S.) Government starts to look away from counterterrorism efforts in the Middle East officials are starting to realize China took advantage of the opportunity to build infrastructure and advance its capabilities to counter its rivals. China presents a critical and highly advanced intelligence and cyber threat to U.S. national security. They are equipped to damage and sustain intelligence operations against the U.S. government, military personnel, and critical infrastructure. China plans to be the strategic overall global power by 2049 most likely encouraging Chinese officials to utilize all of its capabilities to target the U.S. government. ii China will continue its already persistent influence operations, cyber-attacks, U.S. investments, and intelligence collection to further its political and military agenda. This report will serve as a foundational analysis for the National Security and Policy Analysis Organization.

​China’s Intelligence Services

Like the U.S. China has its intelligence agencies who are assigned to specific roles and functions that support the goals of the Chinese Government which consists of both civilian and military personnel. The Chinese Communist Party (CCP) is the sole ruling political party of China, also referred to as the People’s Republic of China the CCP has been around since 1949 and has been the main benefactor in moving China towards global power. In 2012, President Xi Jinping came into control and prioritized the party’s goals and political ventures which made the CCP stronger to what we know today as one of the leading global powers. The CCP focuses on the control of personnel, propaganda, and the People’s Liberation Army. The CCP has nearly 90 million members. iii The Ministry of State Security (MSS) a civilian-led intelligence agency is a similar mixture to that of the U.S. Central Intelligence Agency and the U.S. Federal Bureau of Investigations. The MSS’s priority is to oversee and conduct intelligence collection operations through human intelligence and cyber operations. iv The MSS specifically the second bureau is responsible for foreign operations. Their job is to task, monitor, and report to higher regarding intelligence collection operations abroad. Intelligence Officers insert themselves in U.S. embassies and conduct clandestine operations outside of the embassy acting as a political party member or part of a Chinese bank, an insurance company, or shipping company. v The MSS is a critical piece in China’s intelligence operations and specifically focuses on gaining information regarding U.S. military weapon systems, science and technology, and research and development. Understanding this information China is capable of creating similar equipment for resale to the U.S. military or build counterattack measures for use during a time of war. China’s military intelligence is operated by the People’s Liberation Army (PLA). The PLA is broken down into many facets, the PLA Army, PLA Navy, PLA Air Force, PLA Rocket Force, PLA Strategic Support Force, and the PLA joint logistics support force. PLA strategic support force carry’s China’s military cyber and space capabilities conducting cyber-attacks and cyber collection operations as well as electronic and psychological warfare. vi The PLA intelligence component is responsible for intelligence collection with a focus on foreign military, economic, and political intelligence to support its military operations. The PLA consists of multiple intelligencecomponents targeting different priority intelligence requirements. PLA intelligence organizations conduct human intelligence collection and cyber operations. vii The PLA over the years has built a strong and powerful military capable of withstanding an attack if targeted by a foreign power. Its power is not to be seen as a show of force but an understanding that although their military and countermeasures are likely the best next to Russia’s their effective intelligence collection and cyber capabilities continue to make their military forces stronger. With the stand-up of the U.S. Space Force, China’s PLA Strategic Support Force in combination with MSS will likely create missions for operatives, agents, and cyber actors to gain valuable sensitive information that can put China ahead in space over the U.S.

​Influence Operations

China proudly controls the influence of its citizens and looks to expand its reach to many countries that have little to no political or economic stability. For instance, China is currently working on developing and controlling The Bahamas. When Hurricane Dorian hit The Bahamas, China took steps to help provide relief and rebuild The Bahamian infrastructure. viii China’s influence in countries like The Bahamas will continue to grow over the years as China pushes to build a strong bond with political leaders to increase its influence and collection reach. China’s presence in The Bahamas is a concern to the U.S. government because of its proximity to the U.S. Becoming a political ally with The Bahamian government will bolster collection capabilities against American citizens, especially U.S. government personnel due to it being a tourist destination. China also stayed busy in 2020 conducting influence operations in the U.S. as the U.S. battled with the global pandemic, the U.S. Presidential election, and topics regarding racism in America. China took advantage by utilizing its cyber capabilities to influence the American population through social media platforms like TikTok and Instagram. Chinese influence operations can disrupt U.S. politics and persuade U.S. government and military personnel to vote for a certain political party especially on controversial topics. China utilized multiple social media platforms to push viewpoints and encourage action that would benefit the CCP.

​Cyber Threat

China consistently targets the U.S. government, U.S. businesses, and U.S. universities focusing on science and technology, and research and development. China has invested time and money in targeting U.S. businesses that have relationships and contracts with the U.S. government. x Chinese cyber actors are under fire after allegations from U.S. lawmakers stating China exploited a flawed software made by U.S. company SolarWinds Corp to break into U.S. government computers to access sensitive information. There were two different cyber break-ins into SolarWinds, and Federal Bureau of Investigations (FBI) agents accessed that both break-ins were separate, and according to tactics, techniques, and procedures they access the two groups were from a Russian cyber group and a Chinese cyber group. According to the FBI, China has the infrastructure and capabilities to conduct this type of complex attack to target U.S. government information. xi China’s capabilities and manpower allow for consistent cyber-attacks on Department of Defense network systems as well as U.S. critical infrastructure, gaining access to sensitive information.

​Huawei, a Chinese-owned telecommunications giant was banned in the U.S. and was one of the most significant national security concerns in the past four years. If Huawei had created a stronghold in the U.S. it would have amplified China’s cyber collection capabilities drastically. In 2019, the Trump Administration added Chinese telecommunications giant, Huawei to a list that restricted U.S. companies the ability to work with them. The U.S. intelligence community stated that Huawei presented a national security concern to the U.S. military and intelligence agencies. xii Although Huawei may not be in the U.S. China can create large telecommunications companies that can penetrate the U.S. government. Huawei is touching bases with many other countries even though it was banned in the U.S. New Zealand is the only country among the Five Eyes intelligence alliance that has yet to denounce Huawei according to the most recent report from December 2020. Huawei celebrated its partnership with New Zealand in December. Canada is not using Huawei 5G networks but hasn’t confirmed its official ban leaving the door open for further communication. Australia and the United Kingdom followed suit after the U.S. quickly banned the Chinese government-backed company. xiii Germany on the other hand has yet to participate in the ban on Huawei forcing the U.S. to hold conversations such as threatening to withhold from sharing intelligence with Berlin.

​Economics and Business

China continues to benefit from U.S. businesses that outsource their products to China. China uses this economic gain to fund its political and military operations to target the U.S. government. China also continues to invest millions of dollars into U.S. corporations that develop science and technology and/or research and development for the U.S. government. They believe that by investing in the corporations that have contracts with the U.S. government they will be able to enter the U.S. supply chain and gain valuable intelligence to further their agenda. China will continue to leverage its wealth to build Chinese-owned businesses in the U.S. to further intelligence collection capabilities and rebuild infrastructure in underdeveloped countries to fund their political and military operations.

​Intelligence Collection

China conducts intelligence collection in the U.S. by leveraging U.S.-based Chinese citizens, insertion of its businesses, and through Chinese government officials. Chinese students studying in the U.S. had to go to battle with Former President Donald Trump due to information supporting that Chinese students are a national security concern. The Trump administration called for the idea of banning Chinese students due to their connection with the CCP. The CCP plays a large role in selecting who will attend universities in the U.S., specifically those who have ties to the PLA and those wanting to study science. When the CCP makes decisions, it most likely aligns with their agenda. When selected these students must relay information back to the Chinese Government which makes it not a hard choice knowing that the Chinese Government cover this college tuition.

​According to the U.S. Department of Justice (DOJ) court documents, a Harvard professor and two Chinese Nationals were charged in three separate related issues that involved supporting and aiding PRC and its goals. Dr. Charles Lieber served as thePrincipal Investigator of the Lieber Research Group at Harvard University which received more than $15 million in grant funding from the National Institutes of Health and the DoD. Dr. Lieber was a part of China’s Thousand Talents Program which spots, accesses, and recruits professionals that align with the CCPs agenda to further development, economic prosperity, and national security. Apart from his program agreement Lieber had to establish a research lab at the Wuhan University of Technology to build a program that involved cooperation with the U.S. including recruiting young teachers and students.

​More recently on July 23, 2020, the Chinese Houston Consulate closed down. The Trump administration ordered Chinese Officials to vacate the Houston Consulate because of observed intelligence collection. According to former U.S. Secretary of State Michael R. Pompeo, the Chinese Houston consulate was a hub for Chinese intelligence officers to spy and steal intellectual property. Officials from the consulate were directly involved in stealing U.S. intellectual property from research institutions and companies.


China is often referred to as the sleeping giant or to Retired U.S. Air Force Brigadier General (BG) Robert Spalding and former White House Director for Strategic Planning at the National Security Council as the country the U.S. has been at war with for years. The word “war” is normally associated with Afghanistan, Iraq, firefights, and improvised explosive devices or IEDs however Retired BG Spalding described the word “war” as “stealth”, a stealth war. A war where the CCP planned, trained and executed various operations ranging from influence operations, cyber operations, human intelligence collection, competitive business analysis, and intelligence collection under the nose of the U.S. government. xix The MSS operated out of Chinese embassies for years and used Chinese Nationals attending DoD-funded universities to conduct collection on science and technology. Chinese government officials turned money made by U.S. corporations outsourcing material to further their agenda and offer The Bahamian government money to further its reach in the Caribbean. China has presented a national security risk since the U.S. Government turned its head to focus on counterterrorism efforts on September 11, 2001. Since then, the CCP has made it a priority to advance its technology, cyber capabilities, and bolster its economy and influence in the U.S. and other countries. With China’s persistent influence, cyber- attacks, money growth, and intelligence collection by the year 2049 China expects to be the world power controlling the majority of the world’s infrastructure, telecommunications, and money. The DoD and the USG need to control space and expand the National Security Agency and U.S. Cyber Command to bolster its efforts to defeat cyber intrusions and influence.


i ZDNet (2018, January 17). China Spy Paranoia [Photograph]. ZDNet. https://zdnet3.cbsistatic.com/hub/i/r/2018/01/17/20e148a3-1c92-4b24-bc99- bfefef3977aa/resize/1200×900/bd6e251031ea195efb7209f3785d6ab2/china-spy-paranoia.jpg

ii Allison, G. (2017, May 13). What Xi Jinping Wants. The Atlantic. https://www.theatlantic.com/international/archive/2017/05/what-china-wants/528561/

iii Albert, E., Xu, B., & Maizland, L. (2020, June 9). The Chinese Communist Party. Council on Foreign Policy. https://www.cfr.org/backgrounder/chinese-communist-party

iv U.S.-China Economic and Security Review Commission (n.d.). Section 3: Chinese Intelligence Services and Espionage Threats to The United States. U.S.-China Economic and Security Review Commission. https://www.uscc.gov/sites/default/files/2019-11/Chapter%202,%20Section%203%20-%20China’s%20Intelligence%20Services%20and%20Espionage%20Threats%20to%20the%20United%20States.pdf

v Pike, J. (1997, November 26). Second Bureau Foreign Bureau. Federation of American Scientists. https://fas.org/irp/world/china/mss/org_02.html

vi Congressional Research Service (2021, January 5). China’s Military: The People’s Liberation Army (PLA). Congressional Research Service. https://crsreports.congress.gov/product/pdf/IF/IF11719

vii U.S.-China Economic and Security Review Commission (n.d.). Section 3: Chinese Intelligence Services and Espionage Threats to The United States. U.S.-China Economic and Security Review Commission. https://www.uscc.gov/sites/default/files/2019-11/Chapter%202,%20Section%203%20-%20China’s%20Intelligence%20Services%20and%20Espionage%20Threats%20to%20the%20United%20States.pdf

viii Ward, J. (2019, November 19). China’s Presence in The Bahamas: A Greater Role After Hurricane Dorian?. The Jamestown Foundation. https://jamestown.org/program/chinas-presence-in-the-bahamas-a-greater-role-after-hurricane-dorian/

ix Insikt Group (2019, May 6). Beyond Hybrid War: How China Exploits Social Media to Sway American Opinion. Recorded Future. https://www.recordedfuture.com/china-social-media-operations/

x Spalding, R. (2019). Steal War. Penguin.

xi Bing, C, Stubbs, J., Satter, & R., Joseph M. (2021, February 2). Exclusive: Suspected Chinese hackers used SolarWinds bug to spy on U.S. payroll agency – sources. Reuters. https://www.reuters.com/article/us-cyber-solarwinds-china-exclusive/exclusive-suspected-chinese-hackers-used-solarwinds-bug-to-spy-on-u-s-payroll-agency-sources-idUSKBN2A22K8

xii Ball, J. (2019, November 1). What’s really behind the US’s Huawei ban?. NewStatesman. https://www.newstatesman.com/spotlight-america/cyber/2019/11/whats-really-behind-uss-huawei-ban

xiii O’Neill, R. (2020, December 3). Huawei Technologies marks NZ milestone amid mounting uncertainty. Reseller News. https://www.reseller.co.nz/article/684946/huawei-technologies-celebrates-15-years-nz-amid-uncertainty/

xiv Donahue, P. (2020, September 22). Merkel Resists Full Ban on Huawei, Making Germany an Outlier. Bloomberg. https://www.bloomberg.com/news/articles/2020-09-22/merkel-resists-full-ban-on-huawei-making-germany-an-outlier

xv Congressional Research Service. (2019, June 25). China’s Economic Rise: History, Trends, Challenges, and Implications for the United States. Federation of American Scientists. https://fas.org/sgp/crs/row/RL33534.pdf

xvi Wong, E. & Barnes, J.E. (2020, December 3). U.S. to Expel Chinese Students With Ties to China’s Military Schools. The New York Times. https://www.nytimes.com/2020/05/28/us/politics/china-hong-kong-trump-student-visas.html

xvii Department of Justice (2020, January 28). Harvard University Professor and Two Chinese Nationals Charged in Three Separate China Related Cases. Department of Justice. https://www.justice.gov/opa/pr/harvard-university-professor-and-two-chinese-nationals-charged-three-separate-china-related

xviii U.S. Embassy Tbilisi (2020, August 12). China’s Houston consulate a center of malign activity. U.S. Embassy in Georgia. https://ge.usembassy.gov/chinas-houston-consulate-a-center-of-malign-activity/

xix Spalding, R. (2019). Steal War. Penguin

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