Report Details CIA's Struggles To Rebuild Spy Network In China: "No Real Insight Into Leadership Plans"

This week The Wall Street Journal published a lengthy investigative article titled "American spies confront a new, formidable China," which highlights setbacks and difficulties of the CIA's ability to spy on China even as the Biden administration has called the country a top 'pacing threat'. 

A main theme of the report is seen where the WSJ quotes a former US intelligence official who acknowledged, "We have no real insight into leadership plans and intentions in China at all." The report reviews what led up to this state of things, namely the CIA's catastrophic failure in China about a decade ago, and the agency's struggle to rebuild its network in the tightly controlled Communist surveillance state.

The 2012 incident refers to when dozens of US spies were reportedly caught red-handed in China. Very likely this major bust-up of an alleged CIA network was a key trigger for President Xi Jinping's anticorruption drive, given that government corruption left Beijing exposed to vulnerabilities by Western spy agencies. Dozens of CIA assets were reportedly imprisoned between 2010 and 2012, and others reportedly executed. In 2018, a Foreign Policy report estimated that the number caught consisted of 30 CIA assess, and described further the spy ring was discovered largely due to a botched communication system.

Last summer CIA officials gave rare public statements confirming the agency has been busy trying to rebuild its spy networks inside China. The arena of human intelligence was believed left particularly weakened after 2012. CIA Director William Burns said last July before the Aspen Security Forum, "We’ve made progress, and we’re working very hard over recent years to ensure that we have strong human intelligence capability to complement what we can acquire through other methods."

And now Burns has issued a fresh quote and updated statement to the Journal, saying "We are approaching the PRC as a global priority, more than doubling the budget resources devoted to the China mission over the past three years, and establishing the China Mission Center as CIA’s only single country mission center to coordinate the full agency’s efforts on this issue."

Burns added: "Even as we are balancing multiple priorities including ongoing conflicts, we remain intensely engaged on the strategic long-term challenge posed by the PRC."

Chinese state media has meanwhile responded on Thursday, blasting Washington as the true "source of chaos" in the international order...

Below are some further key quotes and highlights from the fresh WSJ report (subheadings by ZH)...

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Beijing's spycatchers and CIA's monumental blunder

"Beijing’s spycatchers all but blinded the U.S. in China a decade ago when they systematically rounded up a network of Chinese agents working for the CIA. As many as two dozen assets providing information to the U.S. were executed or imprisoned, among them high-ranking Chinese officials."

Other geopolitical flashpoints have complicated the CIA's China focus

"The pivot hasn’t been simple. Hamas’s surprise Oct. 7 attack on Israel and the ensuing war in Gaza, and Russia’s invasion of Ukraine have demanded White House attention and intelligence resources, complicating CIA Director William Burns’s drive to ensure China is the top long-term priority. One agency veteran said that handling the two crises, while keeping a sustained focus on Beijing, will test the agency’s agility."

Vast majority of China US intel today comes from signals/electronic snooping

"Today, U.S. spy satellites closely monitor China’s military deployments and modernization plans, while cyber and eavesdropping tools scoop up vast swaths of Chinese communications. Beyond that, U.S. knowledge of Xi’s plans comes mostly from inference and from parsing his frequent public statements, officials said.

China is a much tougher intelligence target than it was a decade ago, when the agents were lost. Xi’s security-first state employs Orwellian surveillance systems that vastly complicate spy operations inside the country. And U.S. intelligence must track China’s progress in fields as disparate as artificial intelligence and synthetic biology. 

...The vast majority of U.S. intelligence on China now comes from electronic snooping—intercepting phone calls, emails and every other form of digital communication, the current and former officials indicated. Such signals intelligence can rarely replace human spies in divining an adversary’s true intentions or weaknesses, officials say."

Leveraging corruption for human intel

"The CIA leveraged endemic corruption in the upper reaches of the Communist Party and government ministries to recruit dozens of officials as paid agents, former officials familiar with the events said. But in a catastrophic setback, this network was obliterated as China caught the traitors in its midst one by one.

A flaw in the CIA’s covert communications with its agents, exploited by Beijing, is the suspected cause of the compromise, former officials said. The details of what went wrong aren’t publicly known, and it is unclear if anyone at the agency was held accountable."

Horrendous!

“Horrendous. Horrendous. Horrendous,” a former senior U.S. official said of the losses in China. “And I have doubts about whether there’s been much of a recovery since then.”

China has ramped up its own spying in America

"China also ramped up its own human espionage, often using social media sites such as LinkedIn to contact and recruit former U.S. intelligence officials. Its successes included Kevin Patrick Mallory, a former CIA officer who had become deeply in debt and sold secrets for cash, including the identities of U.S. intelligence officers due to travel to China. Mallory was convicted in 2018. 

In August, the Justice Department revealed the arrest of two U.S. Navy sailors charged with providing military information to China. Both were U.S. naturalized citizens born in China."

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Regional analyst and China watcher Arnaud Bertrand has a contrarian take on the new WSJ report...

This CIA network they discovered and dismantled in 2012 was undoubtedly one of the key triggers for Xi's anticorruption drive, when they noticed the extent to which they could be infiltrated... To be added to the now VERY long list of US actions on China that backfired big time.

Funny the WSJ now laments the US has "no real insight into leadership plans" as if this was somehow abnormal: it should be the norm, countries should be sovereign, free to make their own decisions in private and without foreign interference.

In fact this is what International law dictates! Sadly only China seems to actually put that in practice nowadays... I am still waiting on Europe holding the US accountable for Snowden's revelations that they basically systematically listen in on European leaders...