China’s Ministry of State Security Is Operating in Silicon Valley, Says Former Intel Officer

August 30, 2018 Updated: August 30, 2018    

The Chinese regime’s Ministry of State Security (MSS) and Russia’s intelligence services are running spy operations in Silicon Valley, says former senior U.S. Naval Intelligence officer John Jordan.

According to Jordan, the MSS and Russian spy networks have been active in Silicon Valley since the 1970s. The Russian networks initially focused on advancing Soviet interests for political and military espionage, particularly around a naval base in Alameda and an Army base in the Presidio.

The Chinese operations, on the other hand, have continued unabated. Their focus is on the theft of technology, with the long-term goal to help the Chinese Communist Party catch up with and surpass the United States technologically and economically. Over time, the Russian operations have also switched focus in a similar way to the Chinese operations, Jordan said.

In the current environment, he said, the Chinese MSS is engaged in many operations to steal U.S. innovation, and includes the use of controlled Chinese student associations, foreign investment, recruitment of innovators, and other methods.

The following Q&A is from the interview with Jordan.

Joshua Philipp: I haven’t heard of the Ministry of State Security operating in Silicon Valley. I know that they do United Front operations, where they have front companies or student groups, or “investors,” going in there and looking for technology to bring back to China. But, on the Ministry of State Security, what do you know about this?

John Jordan: Well, you would never associate California with Russian and Chinese spying operations, but the fact is that Silicon Valley has been a den of espionage activity going back to the 1970s and 80s. That was when the Bay Area—there was a big naval base in Alameda and a big Army base at the Presidio—the Russians outside of Washington had always invested more resources, first directed by the KGB into Northern California, than any other part of the United States.

Then, we move into China’s emergence as a world power in the post-Cold War era, and China’s rapid economic expansion. And unlike the Russians, whose interests were at the time solely military and political—but primarily military—in the Bay Area, China has come to understand the power of Silicon Valley innovation, and the technologies that come from there were a big piece of bootstrapping the Chinese economy into the 21st century. And the Chinese adopted a broad range of strategies that are in many ways far more sophisticated than anything the Russians have done or are doing today.

Philipp: What would you say the key difference is between the nature of the Russian intelligence operations and the Chinese intelligence operations?

Jordan: The Russian efforts have always been very traditional spying. It’s girl traps—”honey traps,” as they’re called in the trade—its very top-down directed, whether looking for specific information or specific technology, when the agents in place are given very specific taskings. Russian thinking on this is morphing now, and is more and more following the Chinese model.

But the Chinese model is far more comprehensive. Their efforts to penetrate American society in this respect and obtain technologies, there’s numerous different ways in which they do it. There are 300,000 Chinese students in the United States, and pretty much all of them are taking a hard science, a STEM discipline—science, technology, engineering, or math. They are not majoring in psych or social-justice outrage or whatever is the rage on American campuses today.

Moreover, there’s investors that come into Silicon Valley to hire talent to get people to want to go work in China; innovators to go work in China. They also want to buy companies in Silicon Valley. You also have the Chinese Student and Scholar Associations (CSSAs), which are run through Chinese embassies and consulates throughout the United States that kind of keep tabs on Chinese students, encourage them to keep tabs on them—whether it’s dealing with Falun Gong or Tibetans—but they make their presence known in their lives, too, and that’s another big piece of growing these technologies. The Chinese want to buy and bring it back and grow it, while the Russians, historically, have always wanted to just take a bite here and a bite there.

Philipp: This is an interesting topic because I would say one of the reasons why a lot of people can’t understand Chinese spy operations is because a lot of these spies are not official spies, right? You mentioned the Chinese Student and Scholar Associations. This is, of course, operated through the consulates, financed a lot of times through the consulates … it’s done with the intention of having them learning things that they can bring back to China, or intentionally placing them in key positions in government or business where they can “serve their country,” either staying in place or returning to China.

It’s the same thing with a lot of the economic theft. A lot of the people stealing, from what I understand, aren’t necessarily the main spies, but instead people being handled by the spies. Oftentimes, they only have to steal one or two things which makes it hard to prosecute them. Is this what you are seeing as well?

Jordan: It is. Successful spy rings are run when handlers are able to operate multiple agents in place, and certainly, the Chinese model has safety in numbers. One of the other differences between the Chinese efforts and the Russian efforts is that China has the industrial and technological know-how, from inside China, to make use of a lot of these technologies and integrate them into factories and construction processes and things of that nature; where the Russians really don’t. Russia’s economy is smaller than that of Texas, where China is truly an economic power, and is able to digest a lot of these technologies successfully.

Philipp: There are two angles on this we can go into. One is that we have given China our factories, we’ve given them the manufacturing know-how, right? In terms of the areas of industrial warfare where you are providing channels to establish production know-how and you’re making people who are capable of producing—you need to develop the supply chains, you need to develop the systems to develop the systems that manufacture management structures for those systems. It’s not easy to just go off and build these out of nothing, we’ve given them that.

The other interesting part is the nature of how information is stolen and transferred. I know how China has technology transfer centers that after thefts occur, it goes through, say, university-affiliated organizations which specialize in reverse-engineering technology.

You mentioned the differences between the Russian and Chinese methods of stealing tech, and there’s an interesting history there. What are your thoughts on this?

Jordan: Russia is coming out of a feudal society—you can argue that it still is one in many respects. But in terms of integrating and making itself part of Silicon Valley and facilitating these tech transfers, China has been very successful. That doesn’t mean that the Chinese economy, in many ways, has fully taken advantage of this. They’ve been successful, but China still has some very real challenges in terms of taking some of these technologies and making them effective weapons that we can discuss in the military sense.

The PLA [People’s Liberation Army] has some very big challenges in that respect, largely because it’s still a conscript military. But they have been successful and it’s something for us to watch and be cautious about, as Americans.

In 1996, the Economic Espionage Act was passed and no one was ever convicted of it until 2004, This law, for the first time, criminalizes not just the sale of national-security secrets by government insiders but also the theft and resale of technologies from the private sector. There have been a few high-profile prosecutions in California in district court there, but it has still got a long way to go. Law enforcement still has a lot of catching up to do.

Philipp: I’m interested in the conscript military angle. You mentioned that it’s one of the reasons why the Chinese military isn’t as effective as maybe we think it is. Can you explain?

Jordan: The Chinese military isn’t as effective as it’s largely perceived to be in the West, and largely for the same reasons that the Russian military had their challenges in the Cold War. Specifically, when you have someone in an army for two years, they can’t really learn to operate all of the technologies and learn to work as a team, and get that type of practical experience before they are out.

Inside the U.S. military, even as an enlisted person, the average [length of service] is four to seven years, while many people make entire careers out of it. In American society, being in the military is seen as an honorable profession. It’s desirable. It’s hard to get into a service academy or get a commission in the military.

In China, the military is where you go because its a place where you can get fed and can be kept warm, and it doesn’t place the emphasis on the training on the lower levels—the junior officers and the enlisted levels—that we certainly do.

Warfare has changed since our last encounter with the Chinese military in Korea in the early 50s. … Stalin said quantity has a quality all of its own. That is no longer true on the modern battlefield, where the emphasis is on technology and integrating that into a war-fighting system. A gadget doesn’t become a weapon until it’s able to be used effectively under stress by people that maybe aren’t engineers or scientists.

Philipp: In the United States, there have been arguments for and against the volunteer system we have. It’s interesting to understand the other side of that, that the conscript system also has its flaws—that maybe it’s not worth training people hard if they are going to be out in two years.

Jordan: You can’t train, you can’t create an effective warfighter in two years, in most military specialties.

Philipp: If we can switch back again to the Ministry of State Security, can you explain what your views are on the natures of its operations? How does the Ministry in its operations differ from the Chinese Student and Scholar Associations or other groups from the CCP [Chinese Communist Party] that we know are active in Silicon Valley.

Jordan: I’m not sure where the Ministry of State Security begins, I’m not sure where that line is, as an American. I tend to suspect that the ministry, at a minimum, has a say in all of these operations, so again I don’t think anybody’s sure where their purview begins and ends. But I think it’s safe to assume—and it would be dangerous to assume otherwise—that they aren’t involved as much as they can be, certainly in internal Chinese politics.

In Beijing, everyone seems to want a bigger share of the pie, so I have a hard time seeing the Ministry of State Security not being ambitious in terms of having as large a role as possible.

Philipp: The Ministry of State Security is government-side. If we talk about a lot of the cyberattacks and cyberthefts, much of that’s done through the military side. … The government spies and the military spies of the Chinese system, they don’t get along with each other, from what I’ve been told. In fact, they even sabotage each other and fight each other.

Jordan: China has an advantage, in that there is a Chinese population in the Bay Area. The Chinese language is nearly impossible for anglophones to learn, and there is a real shortage of Chinese speakers, let alone ones that have completed the vetting process for intelligence and counterintelligence operations. So that is muddying the waters—prosecutions become very difficult, as does rolling up a spy line.

This interview has been edited for clarity and brevity.