This is the 1st part in a 4-part series: Murder, Money, and Spies: An Investigative Series on the Chinese Military’s For-Profit Ventures
An army is attacking the United States. Its war is being waged without bullets or fanfare. Denied by its government, these soldiers operate in shadows and in silence. Yet, glimpses of their operations are seen on a daily basis—hackers and spies attacking and stealing from U.S. businesses and the U.S. government.
Until now, a complete view of their operations and of the military department that gives them their orders remained hidden. Yet, China’s spy and cyberoperations all share one thing in common: they’re all orchestrated under the People’s Liberation Army General Staff Department (GSD), the Chinese military’s top-level department dedicated to warfighting.
One military unit of China’s hacker army, Unit 61398, was revealed by a security company in February 2013. It is just one of around 20 similar units operating under the GSD’s Third Department, and alongside the Third Department are the Chinese regime’s other spy departments fighting against the West.
Under the GSD, three departments work on its spy campaigns for unconventional warfare. Its Second Department focuses on human spies and intelligence (HUMINT). The Third Department focuses on cyberespionage and signals intelligence (SIGINT). The Fourth Department focuses on electronic warfare, intercepting satellite data, and electronics intelligence (ELINT).
The GSD also oversees China’s military regions, the army, navy, and air force, and the Second Artillery, the home for China’s nuclear weapons.
Casey Fleming, CEO of BlackOps Partners Corporation, which does counterintelligence and protection of trade secrets for Fortune 500 companies, spoke about the dangers posed by the army of spies at work against the United States under the direction of the GSD.
“It is clearly America’s biggest threat,” he said.
“It’s a war of the technology age, an economic war, a war where bombs are not dropped and guns are not fired, but it’s a war we’re squarely in,” he said.
One way to estimate the damage done in this war is through the cost of intellectual property theft, most of which is done by the Chinese regime.
The Commission on the Theft of Intellectual Property estimated such theft costs the United States $300 billion and 1.2 million jobs a year.
Fleming said, based on research from his company’s intelligence unit and client situations, the cost is closer to $500 billion worth of raw innovation that is stolen from U.S. companies.
That $500 billion would otherwise generate revenue, profits, and jobs. In a previous interview, Fleming estimated the total loss to the economy from the theft of innovation is $5 trillion each year when considering the expected 10-year life of the research and development.
An Unseen Battle
The question then is why China’s warfighting apparatus is hacking American companies. According to a Sept. 26 report from U.S. Special Operations Forces Command, the Chinese regime is waging hybrid warfare on the United States.
The Chinese regime’s theft of intellectual property for economic gain is just one piece of a larger strategy to fight a war while avoiding troop-to-troop combat. The report states, “Hybrid warfare involves a state or state-like actor’s use of all available diplomatic, informational, military, and economic means to destabilize an adversary.”
“Recent Chinese doctrine articulates the use of a wide spectrum of warfare against its adversaries, including the United States,” states the report, which quotes China’s Maj. Gen. Qiao Liang saying “The first rule of unrestricted warfare is that there are no rules, with nothing forbidden.”
The report outlines China’s uses of hybrid warfare, which include, “trade warfare, financial warfare, ecological warfare, psychological warfare, smuggling warfare, media warfare, drug warfare, network warfare, technological warfare, fabrication warfare, resources warfare, economic aid warfare, cultural warfare, and international law warfare.”
Estimates on the number of soldiers in each GSD varies, and most only focus on cyberspies in the Third Department. The Project 2049 Institute estimated in November 2011 there were 130,000 personnel under the Third Department. The Wall Street Journal estimated in July that the Third Department has 100,000 hackers, linguists, and analysts.
Both, however, estimate the Third Department has only 12 operational bureaus.
Fleming, whose company runs counterintelligence operations and researches the Chinese regime’s systems for espionage and unconventional warfare, said that under the Third Department there are 20 operational bureaus and between 250,000 and 300,000 soldiers dedicated to cyberespionage. The New York Times has also reported 20 bureaus.
Under the Second Department, between 30,000 and 50,000 human spies are working on insider operations targeting U.S. and foreign companies.
No source has been able to give an estimate on the number of operatives under the Fourth Department, which works on electronic intelligence.
A former soldier who worked under the Fourth Department, and whose job was to monitor Chinese weather satellites, told Epoch Times the soldiers who worked on its intelligence operations were highly secretive, and their operations were unknown even to others in the Fourth Department.
The source said, however, soldiers in the Fourth Department’s spy operations run rolling shifts. “For example, if Russia is launching a satellite, they’ll monitor that,” he said, noting it would be outside their schedule for monitoring the United States. “They’re working on this 24 hours.”
The Party’s Interest
The People’s Liberation Army (PLA) “is not a national army belonging to the state,” states a Nov. 12 report from the Congressional Research Service. “Rather, it serves as the Party’s armed wing.”
The PLA is not fighting its war on behalf of the Chinese people, and the soldiers under the GSD’s spy departments are being used to further the financial and political ambitions of the Chinese Communist Party.
According to Richard Fisher, senior fellow at the International Assessment and Strategy Center, “The PLA is kind of a state within a state that is completely devoted to the survival of the Party, and the Party returns that by showering the PLA with resources.”
“The PLA and its subordinate offices exist to carry out the leadership of the Communist Party,” he said, noting that if the Party’s leadership wanted them to feed the homeless, that’s what they’d be doing.
Regarding the cyberattacks and spy operations, “all of this is happening at the order and behest of the General Staff Department, because it is acting at the behest and order of the Chinese Communist Party,” Fisher said.
The state-run cyberattacks and China’s use of more conventional spies are part of a larger, coordinated effort under the GSD. The office operates under the Central Military Commission, which answers to the Chinese regime’s top leaders in the Central Committee of the Chinese Communist Party.
Unlike the other warfighting branches under the GSD, the Chinese regime’s spy departments have more flexibility in how they operate. Their orders come through the Chinese Communist Party’s Five-Year Plans, which often include targeted industries and economic goals of the Party.
One of the clearest links between the Five-Year Plans and the campaigns of economic theft by the Chinese military is Project 863, which was set in motion by former Chinese Communist Party leader Deng Xiaoping in March 1986. The program identified targeted industries for the Chinese regime to develop, and is widely regarded as a program that mandates theft.
Project 863 is “an emblematic program,” in the Chinese regime’s drive for “catching up fast and surpassing” the West, according to a 2011 report from the U.S. Office of the National Counterintelligence Executive. It states Project 863, “provides funding and guidance for efforts to clandestinely acquire US technology and sensitive economic information.”