The Chinese MID -- the Military Intelligence Department of thePeople's Liberation Army General Staff is also known in the spycommunity as simply the "Second Department." According to a December1999 joint CIA/FBI report titled "Chinese Espionage Activities Againstthe United States", the Second Department is quite successful.
"Military intelligence collection against the United States isprimarily conducted by military attaches assigned to the DefenseAttaché's Office in the Chinese Embassy in Washington and the MilitaryStaff Committee at the United Nations in New York City," states the 1999report written by the CIA and FBI.
Advertisement - story continues below
"For the most part, attaches openly collect information from Westernpublications as well as from their contacts in accordance with MID/PLAdirectives. Nonetheless, since 1987 the FBI and the U.S. Customs servicehave detected and interdicted at least two MID/PLA clandestinecollection operations in the United States.
"The CIA and FBI also noted that the Second Department's greatestsuccess in America is not through its uniformed agents and clandestineoperatives. The Second has set up business in America.
"During the past 20 years, China has established a notableintelligence capability in the United States through its commercialpresence," states the joint CIA/FBI report. "China's commercial entitiesplay a significant role in its pursuit of proprietary/trade secret U.S.technology. The vast majority of Chinese commercial entities in theUnited States are legitimate companies; however, some are a platform forintelligence collection activities. Although a commercial entity may notbe directly involved in the acquisition of information/technology, itmay provide cover for both professional and non-professionalintelligence collectors."
The dual-use of civilian activities to cover economic and militaryespionage can be directly attributed to the rise of the Chinese army asa global force.
Advertisement - story continues below
The People's Liberation Army has remained loyal to the communistparty since the fall of the Soviet Union. The attempted coup thatbrought Boris Yeltsin to power and the student demonstrations of 1989frightened the Chinese communists into re-thinking their strategy,bringing the Army into communist political power. Chinese PresidentJiang Zemin is known to be a Chinese army "loyalist". Zemin not onlyleads the communist party but also has chaired the Central MilitaryCommand since his appointment to that position by Deng Xiaoping in April1990. The fundamental principles of the new strategy are embodied intwo People's Army terms for national defense: "Junzhuanmin" is theturning over of military resources to civilian use, and "junmin jieje"is the integration of the military and civilian. Both terms refer to thecombination of the military and civilian resources such as airports,seaports, roads and communications. However, "Junzhuanmin" and "junminjieje" also translate into a conversion that is reversible, with eachresource having a dual function -- military and civilian. The twintrack policy has resulted in increased budgets for the Chinese army,advanced technology for modern weapons and a strengthening of theChinese military-industrial complex.
According to a Commerce Department document on Chinese militarydefense industries, the People's Liberation Army's new strategy is aneconomic war against America. "(Chinese) Civilian resources should betransferable to military industries for weapons production," states thedocument, entitled "Swords Into Market Shares," which was forced fromthe Clinton administration by a Freedom of Information lawsuit. "Thisis not only to prepare for war, but also to use trading firms such asNORINCO (China North Industries Corporation) and China Great WallIndustry Corporation to acquire foreign technologies, such aselectronics, for military as well as economic modernization."Integration of the military and civilian economies has also put pressureon the Chinese army to make money. Budget cuts in the Army funds havebeen matched and surpassed by the increased income from Chinese armyowned businesses. "Arms sales to the Third World are a prime example,"noted the Commerce Department document. "Chinese arms sellers havefound a niche in the Third World arms markets, especially in the MiddleEast. They are not likely to yield to political pressure and abandonthese markets.
Whether or not these sales actually buy political influence forChina, they are evidently quite profitable. Various sources estimatethat between 17 and 25 percent of PLA profits from arms sales have beenused to make up for budget cuts." Chinese army units have used capitalto develop profitable business interests, such as owning a hotel andproviding labor for joint ventures. U.S. Ambassador to China JamesSasser wrote a State Department report on Chinese army communicationsactivities with the so-called Chinese civilian Ministry of Posts andTelecommunications or MPT. "For example," wrote Sasser, "In laying longdistance fiber optic lines for the MPT's telephones and digital datanetwork, the PLA has provided soldiers to do much of the work. The PLAcadres are considered disciplined and hard working. Once the cable hasbeen laid, the MPT typically allocates some of the bandwidth to thePLA." "The PLA is already involved in telecommunications in a number ofother areas," stated Sasser in his report. "The PLA is probablyinvolved in operation of some networks, particularly in southern China."
The Chinese army remains the greatest benefactor of continued tradewith America. Despite budget cutbacks by the central communistgovernment, the Chinese army's budget for strictly military resourceshas increased over 12 percent a year since 1990. The Chinese militarycontinues to note that it is entitled to a "fair share" of the country'sprosperity. The People's Liberation Army Second Department also sharedsome of its newfound wealth from U.S. trade with close friends insideAmerica. According to the joint CIA/FBI report, China provides cash andbenefits to American citizens in exchange for their support. "TheChinese government continues to seek influence in Congress throughvarious means, including inviting Congressional members to visit thePRC, lobbying ethnic Chinese voters and prominent U.S. citizens, andengaging U.S. business interests to weigh in on issues of mutualconcern," concluded the CIA/FBI report. Chinese military spies havepenetrated Capitol Hill and the White House. The new Chinese militaryespionage network now extends inside the boardroom of corporate America,and the war-room at the Pentagon. During the Clinton years, the ChineseArmy Second Department earned a reputation for success with victoryafter victory against the United States.