'Five Eyes' intel chiefs warn on China tech theft

By Bill Gertz
The chiefs of intelligence services from the “Five Eyes” spy alliance met in California on Tuesday and warned that China remains deeply engaged in the theft of high technology.

Hosted by FBI Director Christopher Wray, the intelligence directors of Britain, Canada, Australia and New Zealand made their first public appearance at a security conference in Palo Alto.

The security leaders joined in warning Silicon Valley tech leaders that China is engaged in stealing know-how in areas including quantum technology, robotics, biotechnology and artificial intelligence.

“The Chinese Communist Party is the No. 1 threat to innovation, period,” Mr. Wray said. “China has made economic espionage — stealing other’s work and ideas — a central component of its national strategy.”

Mr. Wray said Beijing is targeting businesses using a combination of techniques including cyber intrusions and human intelligence operations, as well as seemingly innocuous corporate investments and transactions.

“Every strand of that web has become more brazen and more dangerous,” he said.

Mike Burgess, director of the Australian Security Intelligence Organization, told the conference that the Chinese government “is engaged in the most sustained, scaled and sophisticated theft of intellectual property and expertise in human history.”

Mr. Burgess said that while it is appropriate for China to innovate in support of its national interests, the Chinese effort to secure foreign technology and know-how “goes well beyond traditional espionage.”

In a recent case, the Australian spy service uncovered a Chinese effort to infiltrate an Australian research institution by placing an agent inside to obtain secrets, Mr. Burgess disclosed.

“This sort of thing is happening every day in Australia, as it is in the countries here,” he said.

The director of the Canadian Security Intelligence Service, David Vigneault, noted that China has passed a law requiring any person of Chinese origin anywhere in the world to support Beijing’s efforts to acquire overseas technology.

Chinese President Xi Jinping “has been the best advocate for all of us to do more of what we do because [the intelligence services] have been so bold about what they are doing, how they have been stealing intellectual property, how they have been [threatening] our democratic processes,” Mr. Vigneault said.

The FBI director said China’s hacking operations are larger than those of every other major nation combined and that the stolen trade secrets have provided Beijing with enormous power.

“Part of what makes it so challenging is all of those tools deployed in tandem, at a scale the likes of which we’ve never seen,” Mr. Wray said.

Of particular concern is China’s efforts to develop artificial intelligence, a drive that Mr. Wray described as “an amplifier of all sorts of misconduct.”

“If you think about what AI can do to help leverage that data to take what’s already the largest hacking program in the world by a country mile and make it that much more effective — that’s what we’re worried about,” he said.

China’s government denied the accusations. Chinese Embassy spokesman Liu Pengyu said China is committed to protecting intellectual property.

“We firmly oppose the groundless allegations and smears towards China and hope the relevant parties can view China’s development objectively and fairly,” he said in a statement to Inside the Ring.

Fighter escorts urged for China surveillance flights
The Pentagon this week released details of what it said were 180 dangerous aerial interactions between U.S. and allied surveillance and patrol aircraft and Chinese fighter jets in just the past few years, but offered no solution to the problem.

Retired Navy Capt. Jim Fanell, a former director of intelligence for the Navy’s Pacific Fleet, has one: Send fighter escorts to protect the flights.

“Given the Department of Defense’s release of videos showing PLA air force’s coercive and dangerous flight operations against U.S. intelligence, surveillance and reconnaissance aircraft over the past two years, it is time for these unarmed ISR aircraft to be escorted by armed fighter escorts,” Capt. Fanell told Inside the Ring.

The Pentagon said the incidents were “risky and coercive” during a briefing for reports that included the release of videos of 14 dangerous incidents over the South China and East China seas.

The operations were described as part of a systematic Beijing program designed to intimidate surveillance of China conducted in international airspace.

In an appearance at the Pentagon briefing room, Ely Ratner, assistant defense secretary for Indo-Pacific security affairs, and Adm. John Aquilino, commander of the Indo-Pacific Command, said the activities were endangering air crews and risking a conflict with China over a skirmish that might spiral out of control.

But neither Mr. Ratner and Adm. Aquilino directly demanded that China halt the dangerous aerial encounters, with Mr. Ratner only repeating a past remark by Defense Secretary Lloyd Austin that China must end the close-in intercepts.

Capt. Fanell said the change in posture for protecting such flights is not a new issue for Adm. Aquilino. The challenge goes back 22 years to the 2001 incident involving a Chinese J-8 fighter that crashed into an unarmed U.S. Navy EP-3 over the South China Sea.

Since that time, Adm. Aquilino has been confronted by Chinese harassment since his time as director of the U.S. Pacific Fleet Maritime Operations Center in 2013.

“The strategic trend line is clear,” Capt. Fanell said. “The PRC’s strategic goal is to drive the U.S. out of the western Pacific, and their operational tactic increasingly appears to be using armed fighters to intimidate or even disrupt unarmed U.S. ISR flights.”

Capt. Fanell said some might argue that escorting the surveillance flights would be a heavy burden on U.S. and allied air forces in the region.

“These are unsatisfactory reasons if the alternative is to have American aircraft destroyed and our aircrew murdered,” he said. “It is time to act, it is time to get ahead of this problem before we are behind the power curve.”

Asked about the use of fighter escorts, a spokesman for the Indo-Pacific Command quoted Adm. Aquilino who said Tuesday that most intercepts around the world are safe “and there’s no reason for the intercepts with the PRC in the Indo-Pacific region to be any different.”

“This is not about the number or types of aircraft flying, but our ability to, as Dr. Ratner said, ‘operate safely in places where we and every country in the world have every right to be, under international law,’” said Cmdr. Matthew Comer, the spokesman.

Space Force to speed up arms development
The U.S. Space Force strategy for protecting American satellites and other interests in space calls for speeding up work on building defenses and weapons in the face of growing threats from China.

“China remains the pacing challenge and continues to move forward with aggressive modernization programs to deny our use of space in conflict,” the strategy says. “To counter these efforts and maintain a competitive advantage, the service must accelerate the delivery of resilient space warfighting capabilities.”

The key vision for the new military service, one that will include 8,600 Guardians, centers on warfighting, the report states.

A primary goal is to allow U.S. government and commercial satellites to be launched and operated. Another objective is to conduct space operations, defined in the report as building, deploying and using military space capabilities.

In protecting American interests in space, the force must be prepared to deter and defeat adversaries.

No details, however, are contained in the report on what types of offensive and defensive weapons will be used, in keeping with what critics say is excessive secrecy within the new command created by President Trump.

“Space Forces must be resilient, ready and combat-credible,” the report said.

The report warns that both China and Russia are already making large investments in weapons and systems that can counter U.S. space-based assets. Both nations have counterspace systems that threaten the ability of the United States to operate freely in space and are expanding the use of space to support military forces.

China and Russia are also enhancing the use of space-based targeting to threaten American forces on land, air and sea.

“The pace at which they are doing so is a concern,” the report said.

Many details of the threat are contained in a secret annex to the strategy.

The report said the most significant problem for the Space Force is “staying ahead of strategic competitors’ growing arsenal of space and counterspace weapons.”

“Guardians, along with the rest of the services and joint force, are currently postured to deter and, if required, defeat these potential threats,” the report said, without elaborating.

China and Russia both have deployed anti-satellite missiles, electronic warfare tools and maneuvering satellites that can disrupt or destroy U.S. satellites. By contrast, the U.S. Space Force has a single publicly announced weapon — an electronic jammer.