The Chinese embassy building in Washington

The report has given an example of how a US-based company had to shut down because of Chinese espionage

NEW DELHI: Scores of intelligence agencies of the most powerful country in the world and their collective might are falling short in tackling the impact of overt and covert intelligence that China is indulging in against the United States. This has been stated in a 153-page Senate Select Committee on Intelligence report, a heavily redacted version of which was released last month.

In 2022, the budgetary allocation for the National Intelligence Program, which funds activities of US intelligence agencies, including that of the Central Intelligence Agency (CIA), which deals with external threat, was $62.3 billion or roughly Rs 5.60 trillion, which is more than the entire GDP of Ukraine, and more than that of about 130 of the roughly 190 countries in the world. To compare and put things in perspective, last year’s budgetary allocation for India’s internal intelligence agency, the Intelligence Bureau (IB), was Rs 3,168 crore.

The allocation to Research and Analysis Wing (R&AW), which takes care of India’s external intelligence part, is not made public, but is stated to be “more than” what the IB is allocated.

While US agencies and politicians have time and again mentioned that China is their primary adversary, Indian politicians, except the late George Fernandes, have stayed away from declaring China as India’s number one adversary, though this reading is something which intelligence officers have always maintained while talking in private. In the US Senate Committee report, China has been mentioned as the first country under the header “Global Adversaries”, the other notable mentions are Russia, Iran and North Korea.

“China poses the greater long-term strategic threat and is a unique challenge to the United States. China is a rising power approaching parity with the United States in gross domestic product as well as in certain aspects of military power. Unlike the prior rivalry with the Soviet Union, which was military and ideological in nature, the rivalry with China exists across the economic, technological, military, diplomatic, and ideological spectrums. Moreover, the United States and China are interdependent in ways that the United States has never been with other adversaries. China seeks to first displace the United States as the regional power in East Asia, and then to eventually displace the United States as the global hegemon,” the report states.

According to the director of the Federal Bureau of Investigation (FBI), Christopher Asher Wray, the Chinese government was “the deepest, most diverse, most vexing, most challenging, most comprehensive and most concerning CI (counter-intelligence) threat that US has faced, perhaps in its history.” The report states that at least 2,000 FBI investigations are in various stages that are focused on Chinese government efforts to steal US information and technology.

Quoting the FBI Director, the report has given an example of how a US-based company had to shut down because of Chinese espionage. “The harm from Chinese economic espionage isn’t just that Chinese companies pull ahead based on stolen technology; it’s that they push US companies and workers behind, leading to company failures and job losses. For instance, a Chinese government-owned company stole the proprietary source code for controlling wind turbines from a US company in Massachusetts, causing the company to lose over $1 billion in market capitalization and lay off 600 employees.”

The comprehensive Senate report is based on documents and interactions with officials and private individuals. “Whatever makes an industry tick, they target: source code from software companies, testing data and chemical designs from pharma firms, engineering designs from manufacturers, personal data from hospitals, credit bureaus and banks. They’ve even sent people to sneak into the agri-business field and dig up advanced seeds out of the ground. The common theme is that they steal things companies can’t afford to lose.”

As the world saw during the Covid pandemic, many of the countries are now dependent on China for the crucial Active Pharmaceutical Ingredient (API) needed for manufacturing of medicines, something this report too has talked about.

“China’s quest to become the world leader in biotech is a good example of the strategic risks that Chinese technology dominance could pose to the United States. Chinese pharmaceutical dominance would create US dependencies and bolster China’s influence over the drug supply chain, which would enable China to dictate price or limit supply. China already accounts for 50% of global trade.”

As per the findings, China, in order to leave little distinction between its public and private sectors, has brought laws which have mandated government access to private sector data and required citizens and private sector organizations to provide national security authorities, public security authorities, military authorities, and national intelligence efforts with any needed support and assistance.

As per the assessment by US agencies, shared with the Senate Committee, the Chinese government is using all available means of collection—including human intelligence collection, technical collection, and cyber espionage—to penetrate the US government, the private sector, and academia in order to collect information. This includes a wide variety of non-intelligence personnel, including businessmen, students studying at US universities, and researchers working at US laboratories, to transfer information back to China. Quoting the FBI Director, the committee has stated that China is adept at computer hacking and has “unleashed” massive, sophisticated computer hacking programs that are bigger than those of every other major nation combined. He adds that Chinese cyber forces operate from every major city in China and have robust funding and sophisticated tools.

Post Galwan, Indian assets, both government and private, have been repeatedly hit by state-backed Chinese hackers, the evidence of which is well documented and also strongly denied by Chinese government officials. The report was released even as it was revealed that Chinese intelligence has penetrated Los Alamos National Laboratory, New Mexico, with at least 150 Chinese scientists who gained employment between 1987 and 2021 at the laboratory subsequently moving back to China and joining government and private agencies to develop military technology such as deep-earth-penetrating warheads, hypersonic missiles, quiet submarines, and drones, something which they had seen and learnt in the US. The laboratory, a top secret facility, does highly sensitive work for the US government. This incident has been described as one of the biggest failures of US intelligence agencies in recent times.

The Senate Committee stated that the gap in responsibilities between the different agencies was being exploited by their Chinese counterparts. It further found that the central counterintelligence agencies were ill-equipped and poorly structured to counter growing foreign spy threats. “There is no consensus as to whether certain emergent threats, particularly foreign malign influence and cyber threats, fit within the definition of counter-intelligence,” the report says, adding that the agencies were unable to adapt to the growing role of cyber threat and the “whole-of-society threat landscape”.