What is the role of Chinese espionage in the current U.S.-China trade war? With that question in mind, GeoTrends spoke with Nicholas Eftimiades, assistant professor of homeland security at Penn State University and author of Chinese Espionage: Operations and Tactics. Long regarded as a leading authority on this subject, Eftimiades has been personally targeted by the Chinese government and labeled “an enemy of the people.”
At the heart of this shadow conflict between the two nations, Mr. Eftimiades identifies in his analysis that rather than relying solely on professional intelligence operatives, China employs a “whole-of-society” methodology, mobilizing civilians, corporations, and even academics to serve the interests of the state. These interests, Mr. Eftimiades highlights, expand to the digital field, with Chinese platforms like TikTok sharing users’ personal data with the Chinese government.
– Mr. Eftimiades, before delving into the core of the interview, what should people understand today about the nature of China’s global espionage efforts?
China’s global espionage efforts are what we call a “whole-of-society” approach, which differs from any intelligence service in the West. They actually employ their population to conduct this espionage, which means they have hundreds of thousands of collectors globally. And I mean, they dwarf all the espionage efforts of every Western country put together. So, it is a massive campaign and unlike Western countries, which spy on each other to ensure their security, China’s spies primarily steal intellectual property and trade secrets to gain economic competitiveness and advantage and also to ensure their military and national security. So, it is a very wide scale of the things they do with a massive number of people involved.
– President Trump has declared a trade war on China. Do you think Chinese agencies will respond with psychological attrition operations inside the United States, for example, spreading fake news, creating artificial intelligence tensions, or even destabilization?
You can see this in place now, not only in the United States and throughout the West. Now, basically, China no longer relies heavily on the US, which now makes up only 11% of its market, and what is wrong and a U.S. fault is that American companies have been complacent, while China has focused on building its infrastructure. The U.S. is just greedy, and it does not address the fact that China has stolen trillions of dollars in intellectual property from the world and that China’s government has unfairly subsidized many of its industries to literally crush foreign competitors. And they violated virtually every agreement they made with the World Trade Organization.
However, now you can see the internal propaganda campaign in China, literally saying, “we are going to war with the U.S.” The type of propaganda they are putting out is so intense, but you can see the economic impact from the U.S., which China denies, but you can really watch it happening in China.
– And what are the key industries most targeted by Chinese influence and espionage operations?
Certainly, artificial intelligence is one, and we saw that recently in a case with a guy by the name of Leon Ding from Google who was arrested for bringing over Google’s artificial intelligence secrets. For years, he had worked on artificial intelligence and bringing the knowledge to China.
The biotech industry is another that they have been aggressively targeting, and also the information technology industry, specifically semiconductors and the manufacturing techniques for those, because they can’t simply steal semiconductors; they need to steal the manufacturing processes as well to be able to do that. And lastly, aerospace technologies so that they can compete with Airbus and Boeing.
– How vulnerable are U.S. companies to partnerships, investments, or joint ventures linked to Chinese state interests?
Well, you hit on a problem. This has been a problem for quite some time. The U.S. policy has been characterized by ignorance, arrogance, and greed. Ignorant because the U.S. policy officials were completely refused to see what the Communist Party of China was up to, and arrogant because they had in their mindset that the minute they make money (the Chinese), they will want to be just like Americans. And greed, because they are willing to sell out the national security of the country for near-term profits. And our industry is as guilty of this as our politicians are.
So, what they have wound up doing is they push for investments into China because they can have cheap products made very cheaply, meaning bringing down the labor costs. And after their investments are in the millions or hundreds of millions of dollars in China, then China turns around. Chinese companies turn around and demand that a foreign company, not just the U.S. by any means, but European companies, turn over their intellectual property. In the long term, this has resulted in a significant loss for our industries.
– Can the Chinese government disrupt the supply chain to the United States?
Absolutely! And that is because we have become so reliant on the supply chain. It is not just us it is Germany, Italy, France, Greece, and all the other major European countries have become completely reliant on the Chinese supply chain because we let this behavior go on for decades without considering the security interests.
Many tried to raise the security interests involved, but their concerns were dismissed. Frankly, we were told to stay quiet by those profiting from the status quo. So now we are at a point when it really is a security issue, and the fight still goes on. Many people just want to invest and make money, regardless of how reliant our security is on China.
– There is a discussion that the Chinese government is using espionage methods to strengthen its industry and competitiveness. How exactly is this being done?
Well, China is using its economic espionage in two ways. Number one is “cyber espionage”. And we have clear links in dozens of cases between the Ministry of State Security and cyber hackers, hacker organizations, and companies inside China. This method has been identified by France, the UK, Germany, and the United States. The other method is actually “insider threats.” People working in companies who take trade secrets and then turn around and want to open up businesses or work with China. So, in those two ways, the estimates are between 400 billion to 600 billion per year of theft. China is stealing from the world in intellectual property and which is an enormous figure.
– Speaking now of digital platforms, the U.S. state has repeatedly accused platforms like TikTok of being used to collect data and processed by the Chinese authorities to understand the behavioural patterns of Western societies and then manipulate them. How does Chinese espionage operate in this field of digital platforms?
Well, one has to understand that TikTok does not collect that much more than many of the other services that you sign up for. It has a user agreement, and it says that it collects and analyzes everything from your location to your contacts to the things you watch. It is not too different from many other services that you would sign up for. The difference is that by law, TikTok is obligated to provide that information to the Chinese government. They do not have an option in it, and they have to provide that information to the Chinese government, because it is a national intelligence law passed in 2017.
So the question comes down to, Do you want a hostile nation collecting that much information about your population, being able to target your population, being able to target your children, and all because they have developed massive data pools on you?
That is the difference between Facebook and TikTok or Google and TikTok, because those are American companies, and they are not passing the information off to anyone in the government.
– So, what measures can individuals and organizations take to protect themselves from such surveillance methods?
It is a long process and difficult, obviously not using the apps that link to Chinese companies because they have no choice in the matter. We saw this happen with Zoom and one of the individuals in Zoom was prosecuted for passing off information to the Chinese Ministry of Public Security. So, we know this exists.
How do you protect yourself? Well, there are standard things in having security on your own platforms, such as regularly removing your personal data from the web or avoiding Chinese-developed apps. Those are the types of things that you can do to minimally protect yourself. But if you are targeted and they want to come after you, they have extensive resources—more than any other country, including the United States—to pursue you.