Since the end of the Cold War, the US-China espionage battle has arguably become the largest on Earth. Spying on China is vital for the US, as China’s growing military and technological capabilities pose direct challenges to its interests, especially in defending Taiwan and maintaining security in the Indo-Pacific.
Intelligence gathering helps the US counter Chinese aggression, stay ahead of threats and safeguard not only its own security, but also the stability of global trade routes. Unchecked Chinese expansion could destabilize the region and have far-reaching global consequences.
In recent years, spying on China has become increasingly difficult for the US due to several factors complicating intelligence gathering and counterespionage.
One major hurdle is China’s rapid advancement in surveillance technology, particularly in artificial intelligence-driven facial recognition and cybersecurity. China’s surveillance state, combined with big data analytics and millions of cameras, makes recruiting Chinese operatives and conducting espionage extremely risky.
US spies are now more likely to be tracked, even in third countries, when attempting to recruit Chinese officials or businessmen. Additionally, China’s robust digital surveillance infrastructure, including its “Great Firewall,” enables close monitoring of communications, further complicating covert operations.
Despite the US intelligence community’s increased focus on countering China, the challenges are growing due to the expanding scope of Chinese espionage.
While Chinese spying once primarily targeted military and defense assets, the US-China rivalry has now expanded to critical fields such as quantum computing, nuclear fusion and rare earth minerals.
China’s strategy involves embedding spy equipment in hardware and using Trojan horses in software, creating vulnerabilities in everyday devices with hackable chips and Wi-Fi capabilities.
On the digital front, China’s shift toward cyberattacks and intellectual property theft has allowed them to bypass traditional espionage methods, successfully hacking US government databases and private companies.
As China’s cyber capabilities grow, protecting US assets becomes increasingly difficult.
At the same time, many US apps and technologies, such as Google, Facebook and X, are outright banned in China, while others, such as Microsoft services, face heavy restrictions or shadow bans.
For example, Microsoft Windows is still in use, but the Chinese government has developed its own operating systems, such as Kylin and UOS, to cut down reliance on foreign software. The contrast is clear: While China embeds Trojan horses in its tech to spy on the US, the US is severely hamstrung by Chinese bans and restrictions, making it nearly impossible to conduct the same level of espionage within China.
China’s legal framework has shifted dramatically, granting state security agencies sweeping powers under new counterespionage laws to investigate and detain people suspected of working with foreign intelligence services.
These changes have significantly increased risks for US operatives and local contacts gathering intelligence.
Diplomatic tensions between the US and China have also reduced opportunities for intelligence collection.
Furthermore, the US has become increasingly suspicious of Chinese expatriates, students and researchers abroad, given China’s pressure on its citizens to provide intelligence. Traditional intelligence-gathering channels, such as diplomatic missions and academic exchanges, have also narrowed due to visa restrictions and the expulsion of diplomats.
Now, US intelligence in China relies heavily on electronic surveillance, but this is not a substitute for human intelligence.
Compounding the issue is China’s sophisticated human intelligence network and complex counterintelligence apparatus, which includes not only state-of-the-art surveillance, but also grassroots efforts encouraging citizens to report on family, friends and colleagues.
In response to the growing threat, the CIA established the China Mission Center in 2021. However, the CIA struggles with chronic underfunding.
While its share of the National Defense Authorization Act budget remains classified, it is notably smaller than the Pentagon’s budget, which reaches nearly US$1 trillion.
Unlike the Pentagon, which benefits from a vast network of contractors and lobbyists, the CIA operates with limited resources, and any budget increases come with strict conditions that complicate long-term planning.
These budget constraints hampers the CIA’s ability to act decisively. In contrast, China employs low-cost, creative tactics for virtual espionage, particularly targeting current and former US Department of Defense personnel.
Chinese state-backed media has responded to US claims about the espionage threat from China, accusing US intelligence agencies of exaggerating the danger to secure more funding. With US press transparency, CIA funding issues are publicly known — something the CCP closely monitors.
Chinese state-backed media have also cited several failed US espionage operations in China. Despite these setbacks, Chinese analysts expect the CIA to intensify its efforts, prompting China to enhance its counterespionage capabilities.
Antonio Graceffo, a China economic analyst who holds a China MBA from Shanghai Jiaotong University, studies national defense at the American Military University in West Virginia.
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