US-China spy wars intensify under Trump 2.0 as tech competition heats up

The Star

5 days ago

When the Federal Bureau of Investigation last week arrested a suspected Chinese hacker for allegedly stealing sensitive American research on Covid-19 vaccines in 2020, the head of America's top law enforcement agency hailed the episode as 'manhunting' the Chinese Communist Party.
'The CCP's relentless attacks on our institutions will not go unanswered,' FBI Director Kash Patel wrote on social media.
'The FBI will hunt down those who threaten our national security – wherever they hide,' he wrote, adding, 'huge ... manhunting the CCP.'
Then, soon after the FBI announced taking 33-year-old Chinese national Xu Zewei into custody at Milan's Malpensa Airport, China's Ministry of State Security made a similarly dramatic announcement, saying it had disrupted three foreign espionage plots. It also warned government workers to remain alert.
In one of the cases publicised by the MSS, a provincial official identified as 'Li' was allegedly seduced by a foreign intelligence agent while abroad, then blackmailed, using intimate photos, and coerced into stealing 'confidential' documents when back in China.
'Foreign spies have become increasingly aggressive in infiltrating China and stealing secrets,' the MSS said in a statement that did not name any particular country but blamed 'a weakened sense of discipline' among officials for recent lapses.
The announcements come amid a shifting geopolitical tech rivalry between the two superpowers, which experts say has intensified into a broader intelligence contest, as both sides escalate espionage and counter-espionage efforts, and increasingly publicise spy arrests and covert operations.
The US government has toughened measures against technology theft, cyber espionage, and academic infiltration, including revoking visas for Chinese students and researchers deemed security risks. As part of that toughening, Patel has quickly reshaped FBI priorities, calling the Chinese Communist Party the 'adversary of our time'.
On the other hand, President Donald Trump has also eased some export controls he imposed earlier this year. On Tuesday, American tech giants Nvidia and AMD said they can resume selling of their artificial intelligence chips in the Chinese market. Earlier this month, the Trump administration lifted some curbs on exports design software to China in exchange for increased flow of critical minerals.
However, there is no expectation the spying competition will slow down.
Both countries have increased espionage against each other 'as the relationship has developed into one of intense competition on many fronts from trade to military supremacy to global influence', Dennis Wilder, the CIA's deputy assistant director for East Asia and the Pacific from 2015 to 2016, said by email.
Wilder, who now teaches at Georgetown University's School of Foreign Service, added that US intelligence agencies have 'stepped up ... efforts to recruit Chinese spies using such innovations as direct online appeals to disaffected Chinese officials.'
'Similarly, MSS operations against US citizens and business persons have also intensified,' he said.
He said he doubted that the Nvidia announcement would have any significant impact on the overall espionage efforts of either side.
'China's intelligence services might shift priorities a bit away from trying to steal secrets related to advanced chips but the overall effort is unlikely to be affected,' Wilder wrote.
Sheena Chestnut Greitens, an associate professor at the University of Texas, Austin, who is writing a book on Chinese internal security, agreed that as strategic competition between the US and China has heated up, 'intelligence competition between the two great powers has also intensified.'
'These cases likely reflect the growing global profile of China's intelligence apparatus — as well as increased global awareness of and efforts to counter Chinese espionage operations abroad,' she said.
A July 8 report by Kieran Green of Margin Research, an American cybersecurity firm, referred to a Chinese 'cyber militia system' composed of 'civilian volunteers operating under the dual leadership of local governments' and the Chinese military.
Greitens added that while external observers often look at announcements by agencies such as MSS through the lens of foreign policy, 'it is important to remember that these communications have a domestic audience also'.
'One reason for agencies like MSS to publicise espionage cases is to remind citizens that intelligence and security services can see what they are doing and make arrests to protect regime security, to try to deter citizens from acting in ways the regime does not like,' she said.
Sergey Radchenko of the Johns Hopkins School of Advanced International Studies, who has written extensively on Russian and Chinese foreign and security policies, described Chinese espionage in the West as 'pervasive'.
'It's so pervasive, it's becoming absurd,' he said, adding that he has been a target a 'couple of times.'
Denis Simon, a fellow at the Quincy Institute, said that loosening some controls could 'reduce the urgency or desperation that drives some forms of tech theft' and that fully cutting off access to high technology could increase the pressure to circumvent restrictions.
However, he also said US-China relations are framed increasingly in 'zero-sum terms' – especially in sensitive sectors such as AI, semiconductors, quantum computing, and aerospace, a competition that 'fuels an ongoing 'intelligence arms race'.'
Noting that Patel continues to 'frame China as a top espionage threat, which shapes both elite and public perceptions', he said that even if some sales resume, 'surveillance and public warnings will persist – reinforcing mutual suspicion.'
The FBI under Patel, with other agencies, has made a series of public spying disclosures in recent months while Beijing has announced spy arrests of its own.
US federal prosecutors last week charged two Chinese nationals with attempting to recruit US Navy personnel to leak classified information to the MSS. The suspects were arrested on June 27 in Oregon and Texas by the FBI after allegedly making a $10,000 'dead drop' payment for military secrets.
Also in June, three Chinese researchers were arrested in Michigan for allegedly attempting to smuggle biological materials into the US using false statements. The arrests followed the March arrest of two active-duty and one former US Army soldier of Chinese origin, accused of conspiring to sell 'sensitive' and 'top secret' national defence information to China.
On the Chinese side, in June, China arrested a Chinese couple said to have worked at 'core' confidential departments in a Chinese state agency on charges of spying for British intelligence.
Chinese students and researchers at American universities have now come under intense scrutiny as counter-intelligence efforts have ramped up.
That scrutiny includes a congressional investigation of ties between major US universities and the China Scholarship Council, which lawmakers say operates as a channel for Chinese intelligence, and an administration inquiry into the University of California, Berkeley's failure to report US$220 million in Chinese government funding linked to its partnership with Tsinghua University.
In addition, in May, Secretary of State Marco Rubio announced visa revocations for Chinese students with ties with Chinese Communist Party or involvement in sensitive scientific research.
'We may be entering a new phase in which mutual paranoia is the default posture, particularly in frontier technologies,' Simon said, adding that both the US and China increasingly treat every connection – whether a tech firm, scholar, or dating app – as a potential espionage risk. - SOUTH CHINA MORNING POST