Insider: How the Chinese Communist Intelligence Community “Bear Hugged” Tech Companies There are no “Ordinary Companies” in China

Zach Dorfman, a senior contributor to the National Security Project at the Aspen Institute, a U.S. think tank, recently published a series of investigative reports in Foreign Policy magazine. Zach Dorfman, a senior contributor to the Aspen Institute’s National Security Project, recently published a series of investigative reports in Foreign Policy magazine that provide an inside look at the intelligence and data competition between the United States and the Chinese Communist Party over the past decade. He was interviewed by our reporter Tang Jiajie about the findings of the investigation, which took more than a year.

Foreign Policy magazine began publishing three consecutive exclusive investigative reports on the 21st. In the first article, “The Chinese Communist Party Stole Hundreds of Millions of Dollars of Data to Undermine the U.S. Intelligence System,” the author discusses how the Chinese Communist Party has been rebuilding its intelligence and data analysis teams since 2010. The second article focuses on the Obama years, when the U.S. began to confront the Chinese Communist threat after the destruction of the Communist Party’s intelligence network.

How the Chinese Communist Intelligence Community is “Bear Hugging” Technology Companies

Reporter: Hello, Mr. Dorfman, today’s issue is the last in your series of investigative reports on the Trump era, focusing on the Chinese Communist Party’s intelligence community’s cooperation with technology companies.

Dorfman: I want to be very clear up front that the background of this investigative reporting is my interviews with more than thirty current and former U.S. intelligence and national security officials.

The main finding of the third report is that Chinese Communist Party intelligence services are increasingly involved in bear hug relationships with Chinese companies. Some of this is public information, such as the National Intelligence Law passed in 2017, which requires Chinese companies to cooperate with the requirements of Communist Party intelligence services, such as the Ministry of State Security and Public Security.

What I also learned through my research is that the CCP intelligence services essentially “outsource” their data processing needs to major Chinese technology companies. For example, if a Communist Party intelligence unit wants to target someone and does not have sufficient capacity or resources, it hands over to a major company to handle the cross-analysis of big data, allowing a capable Chinese company to serve the intelligence unit.

U.S. officials told me that by the Trump era, they had more evidence of such activities.

There are no “ordinary companies” in China

Reporter: You quote a very vivid analogy in your report from a U.S. intelligence official who says it’s like the U.S. intelligence community being able to freely direct Google, Amazon, Microsoft and say, “Here, we need this analysis, give it to us next week,” and China has Baidu, Alibaba and others helping the Chinese Communist Party’s intelligence system grow in size, which he says is not going to happen in the United States. He said this could never happen in the United States. So what does this relationship between the Chinese Communist intelligence community and Chinese technology companies mean for the United States?

Dorfman: I think the big point is that these large Chinese technology companies are not likely to be operating as “normal companies” by U.S. or European standards. Even though these companies may have significant operations unrelated to intelligence gathering, because they are embedded in a political system that requires them to be auxiliaries in the defense of the (Communist) system when necessary.

It also means that U.S. policy makers, the American public, must view these Chinese companies differently than they view companies from other countries.

Reporter: What does the U.S. national security intelligence community think of the controls that the Trump administration has imposed on Chinese technology companies over the past four years?

Dorfman: I think there is a broad consensus in the U.S., and even in Europe, that there needs to be more vigilance and control over the potential security threats posed by Chinese companies operating overseas. But there is still disagreement on the level of threat identification and specific approaches.

When we’re talking about ByteDance, huawei or ZTE, they are different entities and different businesses, and may pose different levels of threat. Another point is that people are also hesitant about the Trump administration using the crackdown on Chinese tech giants as a trade war bargaining chip. For example, Trump’s repeated ban on Chinese telecom company ZTE (2018) and the (2018) hint that the U.S. might drop the extradition of Huawei’s Treasurer Meng Wanzhou as a trade war bargaining chip.

This sounds as if there is actually no concern that Chinese tech companies are a real threat. A frustrating situation for those who support a decisive approach to Chinese companies.

“This is a competitor the U.S. has never had before.”

Reporter:To summarize your three reports on the U.S.-China big data intelligence war, what do you most want readers to read? What kind of discussion can there be?

Dorfman: That’s a good question. I’d like to make two points, if I may.

First, the Chinese Communist intelligence community has capabilities that the United States has never had as a competitor. Over the last decade, Chinese Communist intelligence has placed a lot of emphasis on developing data and weaponizing it. When data is just singular, it’s worthless. But when you have the ability to connect the data together, coupled with the construction of sophisticated artificial intelligence and analytical systems, it becomes a new, dynamic, ongoing competition. And the United States has never faced this type of competition.

The other thing I want to say is that as I was covering this event, I began to look at what did the U.S. and Chinese Communist intelligence agencies do? And what did the leadership of both countries do? It got me thinking about a problem where both sides are taking action and each action is affecting each other.

For example, when the U.S. CIA network was figured out by the Chinese government about ten years ago, the Chinese Communist Party was terrified and they began to take all the actions to prevent a repeat. When the Chinese Communist Party started operating, there was a new reaction from the U.S. It was like ping pong balls reverberating between two very powerful countries. My reporting just shows how the last decade has unfolded, and the future we can’t even fully anticipate.

Reporter: I’m curious, you say you’re not a China Line reporter, what made you spend over a year doing this story on China?

Dorfman: I’m an intelligence reporter, and I do national security and intelligence-related stories, so I’ve focused on countries like Russia and the Middle East. But I think the U.S.-China relationship is going to define the world for the next 50, 75 years, and it’s the most important bilateral relationship in the world.

I’m trying to get a sense of where this relationship is going from my little corner – intelligence and espionage – and it’s a window into the big issues.