FBI and MI5 chiefs have warned that China’s industrial espionage poses a growing threat to Western groups, including through special-purpose acquisition firms.
At a joint hearing in London, the heads of the US and UK intelligence agencies called on companies to be much more vigilant about Porcelain.
FBI Director Christopher Wray said Beijing was using “elaborate trickery” to disguise its espionage and was even taking advantage of the Spacs.
“The Chinese government poses an even more serious threat to Western news block than many sophisticated businessmen realize,” Wray told corporate leaders at an event with his MI5 counterpart Ken McCallum. “I want to encourage you to take a long-term view when measuring the threat.”
Intelligence chiefs were holding the first public event between the two agencies, a move Wray said underscored the need to address sprawl. espionage Beijing challenge.
McCallum said MI5 had seen a seven-fold increase in China-related investigations since 2018, had doubled its capacity to deal with them in the last three years and would likely double its capacity again in the next “handful of years”.
Wray said that FBI field offices across the United States opened a Chinese espionage investigation on average every 12 hours.
“We’re not screaming wolf,” McCallum said. “China is the most revolutionary of all threats in that it pervades many aspects of our national life.”
Wray said Beijing was using “every tool” at its disposal to steal Western technology in an effort to eventually undermine non-Chinese companies and dominate their markets, including stealing genetically modified seeds from American farmland.
He added that the Ministry of State Security, which oversees Chinese espionage efforts abroad, was targeting Western companies it wanted to “loot” to help obtain corporate secrets. Meanwhile, assessing Chinese counterparty risks was becoming more difficult because Beijing was restricting access to data needed for due diligence, he said.
Both intelligence chiefs noted that China often employed people not directly connected to its intelligence services. target western companies — a group Wray called “co-opted.”
They said companies needed to be more attuned to the fact that their dealings with Chinese companies could have connections to Beijing’s intelligence services, which McCallum described as “hidden manipulation.”
“When you deal with a Chinese company, you know that you are also dealing with the Chinese government, meaning the MSS and the PLA. [People’s Liberation Army] – also, almost like silent partners,” Wray said in his speech.
The two intelligence chiefs urged the companies to intensify cooperation with the FBI and MI5, highlighting China’s ability to conduct large-scale espionage in a wide variety of activities and take a long-term view, courting politicians who their careers are just beginning.
McCallum and Wray insisted that companies be more vigilant, but not necessarily disassociate themselves from China.
“The goal here is not to isolate yourself from China. We want a UK that is connected and resilient,” McCallum said.
He cited the presence of 150,000 Chinese students studying at UK universities as “good for them and good for us”. But he said the investigation had led to 50 of them with military ties to leave.
Wray also said that companies should think more about the implications of China’s threat to Taiwan in the wake of the Russian invasion of Ukraine, stressing that Western companies had been caught up in anti-Moscow sanctions and economic disruption.
“There were a lot of Western companies that still had their fingers in that door when it slammed shut,” he said. “If China invades Taiwan, we could see the same thing again, on a much larger scale. As in Russia, Western investments built up for years could become hostages.”
The Chinese embassy in Washington rejected Wray and McCallum’s accusations. “Some US politicians have been tarnishing China’s image and painting China as a threat with false accusations,” an embassy spokesman said. “We resolutely oppose his comments.”