In an apparent first-of-its-kind operation, or at least the first to be successful against the Chinese government, U.S. authorities have secured the extradition of a senior member of that country’s top civilian intelligence agency from Belgium after coaxing him there in the first place. Yanjun Xu stands accused of orchestrating the theft of trade secrets, potentially including details on U.S. military-related systems, from American aerospace companies including GE Aviation. The news comes as President Donald Trump and his administration have become increasingly critical of various Chinese activities targeting the United States, including its long-standing economic and military espionage operations.
Belgian authorities arrested Xu on April 1, 2018, and the U.S. Department of Justice announced his extradition to the United States on Oct. 10, 2018. The intelligence officer, the deputy division head of the Jiangsu Province office of the Ministry of State Security (MSS), reportedly first began attempting to infiltrate into the American aviation and aerospace sectors in December 2013.
“This case is not an isolated incident. It is part of an overall economic policy of developing China at American expense,” Assistant U.S. Attorney General John Demers said in a statement. “We cannot tolerate a nation’s stealing our firepower and the fruits of our brainpower.”
Xu, using the aliases Qu Hui and Zhang Hui, is said to have lured experts to China under the pretenses of delivering presentations to university students and often passed himself off as a member of the Jiangsu Science and Technology Promotion Association. He would try to convince them to bring sensitive documents with them and then turn them over to him.
The nature of his capture suggests that he would then seek to expand the relationship and secure additional information. He arrived in Belgium in March 2018, to meet with an engineer from GE Aviation, but was instead detained by authorities in that country.
The unnamed engineer had kept up contacts with Xu and met with him in China between May and June 2017. GE Aviation had become aware of this security breach and shared that information with the FBI, which helped set the stage for the European sting.
The apparent goal of the Chinese effort to steal secrets from GE Aviation had to do with the desire to acquire details on advanced jet turbine engine technology. China has historically struggled to build efficient and reliable jet engines, which have hampered its civil and military aviation programs, especially with regards to large airliners and cargo aircraft.
In 2011, GE actually established a joint venture with a Chinese firm that involved the sharing of engine and other aviation-related technical data. The American company saw it as a path to increase engine sales to the country, a lucrative, but potentially risky market that it continues to work within. In 2017, it signed new deals with Chinese firms worth approximately $3.5 billion that included new engine sales.Y-20 large airlifter has been significantly limited by the need to use Russia D-30KP-2 jet engines due to delays in the development of the domestic WS-20 high-bypass turbofan engine." />
The Department of Justice did not name any other company swept up in the alleged affair, but Assistant Attorney General Demers’ reference to “firepower” suggests that defense contractors were also, not surprisingly, targets. The MSS is also implicated in the theft of information about a top-secret U.S. military anti-ship missile program called Sea Dragon earlier in 2018. That was reportedly the result of a cyber attack rather than the more traditional espionage Xu allegedly took part in, though.
In August 2018, the FBI had also detained Chinese national Xiaoqing Zheng for stealing thousands of sensitive files from GE's power division regarding turbines for powerplants, but it's not clear if this is related to Xu's operation. Zheng reportedly planned to smuggle the information back to China to support his own business venture.
Xu’s case is reportedly linked to the arrest of Ji Chaoqun, another Chinese national who was living in Chicago, in September 2018, according to The Washington Post. The U.S. government says that Ji helped pass information on potential recruitment targets for economic espionage to the MSS. It is not clear yet whether or not Ji was working directly with Xu or any member of his network.
“If not the first, this is an exceptionally rare achievement – that you’re able to catch an espionage operative and have them extradited to the United States,” John Carlin, a former Assistant U.S. Attorney General for National Security, told The Post. “It significantly raises the stakes for China and is a part of the deterrence program that some people thought would never be possible.”
It is certainly an important victory for the United States, which has openly criticized China’s efforts to steal important economic and military information for years, often exploiting Americans to do so. Just in June 2018, the FBI arrested Ron Rockwell Hansen, a former Defense Intelligence Agency case officer, for delivering classified and sensitive materials to Chinese intelligence agents in exchange for hundreds of thousands of dollars over the span of multiple years. In spite of those regular allegations, it has proven difficult to halt Chinese espionage activities in the physical realm, as well as in cyberspace.
Xu’s arrest and extradition also follow a new surge in terse rhetoric between American and Chinese officials, including from Trump and Vice President Pence. In the last year, relations between the two countries have gone from cool to frigid amid renewed disputes over the heavily contested South China Sea, an escalating trade war, a simmering row over U.S. ties with Taiwan, and now accusations that China is waging a more concerted influence operation to leverage criticism of the Trump Administration.
“Beijing is employing a whole-of-government approach, using political, economic, and military tools, as well as propaganda, to advance its influence and benefit its interests in the United States,” Vice President Pence said in a speech on Oct. 4, 2018. “Worst of all, Chinese security agencies have masterminded the wholesale theft of American technology – including cutting-edge military blueprints. And using that stolen technology, the Chinese Communist Party is turning plowshares into swords on a massive scale.”
The U.S. government’s charges against Xu also come as other vulnerabilities and potential become glaringly obvious. On Oct. 9, 2018, the Government Accountability Office (GAO) sounded the alarm that the U.S. military as a whole could be worryingly exposed to cyber attacks and did not have a good grasp on the full extent of the present risks it faces.
The Congressional watchdog’s report had no recommendations, in no small part because it was clear that there was not enough information on the extent of the problems that would need fixing. The U.S. military is more connected than ever, including with defense contractors and other third parties, which only expands the number of potential vectors for a cyber attack.
“Vulnerabilities that DOD [the Department of Defense] is aware of likely represent a fraction of total vulnerabilities due to testing limitations,” GAO’s investigators reported. “For example, not all programs have been tested and tests do not reflect the full range of threats.”
There are also increasing concerns about the security and surety of the physical supply chains supporting the U.S. military and the U.S. defense industry, both of which rely directly and indirectly on raw materials and manufacturing resources located in China. Though all of the parties involved have repeatedly denied its most basic details, a recent story from Bloomberg Businessweek alleged the Chinese government had manipulated computer parts at the factory to insert malicious components that could give it access to servers around the world.
Even if that report turns out to be false, it no doubt describes techniques China’s intelligence services would be interested in trying to employ if at all possible. It certainly would be well in line with what else is publicly understood about their attempts to vacuum up important information from their competitors and potential opponents.
“U.S. aerospace companies invest decades of time and billions of dollars in research. This is the American way,” Assistant Attorney General Demers said in his statement regarding Xu’s extradition. “We will not tolerate a nation that reaps what it does not sow.”
The ability to put the Chinese intelligence officer on trial in the United States will definitely show authorities in Beijing that the United States is serious about cracking down on its spying operations. It remains to be seen whether or not the U.S. government will be able to produce additional victories of this scale that will truly put the pressure on China to consider changing course after years of its own successes.
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