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China's Propaganda and Influence Operations, Its Intelligence Activities That Target the United States, and the Resulting Impacts on U.S

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China's Propaganda and Influence Operations, Its Intelligence Activities That Target the United States, and the Resulting Impacts on U.S CHINA’S PROPAGANDA AND INFLUENCE OPERATIONS, ITS INTELLIGENCE ACTIVITIES THAT TARGET THE UNITED STATES, AND THE RESULTING IMPACTS ON U.S. NATIONAL SECURITY HEARING BEFORE THE U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION ONE HUNDRED ELEVENTH CONGRESS FIRST SESSION _________ APRIL 30, 2009 _________ Printed for use of the United States-China Economic and Security Review Commission Available via the World Wide Web: www.uscc.gov UNITED STATES-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION WASHINGTON : JUNE 2009 U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION CAROLYN BARTHOLOMEW, Chairman LARRY M.WORTZEL, Vice Chairman Commissioners: PETER T.R. BROOKES Hon. WILLIAM A. REINSCH DANIEL BLUMENTHAL DENNIS C. SHEA ROBIN CLEVELAND DANIEL M. SLANE JEFFREY FIEDLER PETER VIDENIEKS Hon. PATRICK A. MULLOY MICHAEL R. WESSEL T. SCOTT BUNTON, Executive Director KATHLEEN J. MICHELS, Associate Director The Commission was created on October 30, 2000 by the Floyd D. Spence National Defense Authorization Act for 2001 § 1238, Public Law No. 106-398, 114 STAT. 1654A-334 (2000) (codified at 22 U.S.C.§ 7002 (2001), as amended by the Treasury and General Government Appropriations Act for 2002 § 645 (regarding employment status of staff) & § 648 (regarding changing annual report due date from March to June), Public Law No. 107-67, 115 STAT. 514 (Nov. 12, 2001); as amended by Division P of the "Consolidated Appropriations Resolution, 2003," Pub L. No. 108-7 (Feb. 20, 2003) (regarding Commission name change, terms of Commissioners, and responsibilities of Commission); as amended by Public Law No. 109-108 (H.R. 2862) (Nov. 22, 2005) (regarding responsibilities of Commission and applicability of FACA); as amended by Division J of the “Consolidated Appropriations Act, 2008, “Public Law No. 110-161 (December 26, 2007) (regarding responsibilities of the Commission, and changing the Annual Report due date from June to December). The Commission’s full charter is available at www.uscc.gov. ii May 26, 2009 The Honorable ROBERT C. BYRD President Pro Tempore of the Senate, Washington, D.C. 20510 The Honorable NANCY PELOSI Speaker of the House of Representatives, Washington, D.C. 20515 DEAR SENATOR BYRD AND SPEAKER PELOSI: We are pleased to transmit the record of our April 30, 2009 public hearing on “China’s Propaganda and Influence Operations, Its Intelligence Activities that Target the United States, and the Resulting Impacts on U.S. National Security.” The Floyd D. Spence National Defense Authorization Act (amended by Pub. L. No. 109-108, section 635(a)) provides the basis for this hearing, stating that the Commission shall examine “…the triangular economic and security relationship among the United States, Taipei and the People's Republic of China,” as well as “…the implications of restrictions on speech and access to information in the People's Republic of China for its relations with the United States in the areas of economic and security policy.” The first panel of the day examined the Chinese government’s propaganda directed to foreign audiences, and the extent to which this might affect U.S.-China relations. Dr. Nicholas J. Cull, professor of public diplomacy at the University of Southern California, opened the panel with a discussion of China’s public diplomacy, which he defined as “the process by which an international actor conducts foreign policy by engaging a foreign public.” He identified five components in this process: listening, advocacy, cultural diplomacy, exchange diplomacy, and international broadcasting, and maintained that the People’s Republic of China (PRC) engages actively in all of them. He also described an effort by the PRC to “buy friends” by cultivating influential figures in developing countries, and advised that such efforts could be successful in displacing western influence and values throughout much of the world. In response, he advocated renewed efforts for U.S. public diplomacy, particularly through the expansion or revival of U.S.-supported news broadcasting. Next, Dr. Judy Polumbaum, professor of journalism and mass communications at the University of Iowa, focused on the role of journalists within China’s state-controlled media system. She emphasized that China’s media system is not monolithic, and that different institutional actors may have differing outlooks and interests. She also stated that China’s reported plan to expand English- language media outlets does not necessarily represent a systematic effort to enhance the PRC’s foreign propaganda, but might be explained at least in part as bureaucratic “empire building” by actors such as the Xinhua state news agency. Finally, Dr. Anne-Marie Brady, associate professor of political science at the University of Canterbury, New Zealand, discussed the Chinese Communist Party (CCP)’s efforts to take a less visible hand in direction of the state media—to employ “management” rather than “control”— and to make its propaganda more convincing and effective through the adoption of western practices. Despite this seemingly softer touch, Dr. Brady emphasized the continuing critical importance of propaganda as the “life blood of the Party” and its effort iii to maintain itself in power. Witnesses in the second panel examined ways in which the Chinese government has allegedly sought to levy influence over U.S. institutions. Dr. Ross Terrill, associate in research with the John K. Fairbank Center for Chinese Studies at Harvard University, testified about PRC efforts to influence the writings of U.S. opinion-makers such as academics and think tank researchers. He described both coercive steps, such as the denial of visas to writers who angered the Chinese government, as well as more subtle efforts to co-opt scholars and institutions through financial donations made by parties friendly to Beijing’s views. In response, he recommended that the United States resist such efforts to “pick winners and losers” among academics who study China. Following these remarks, Dr. Eric Anderson, analyst with Science Applications International Corporation, described in his testimony alleged efforts by the PRC to gain leverage over U.S. policy through state-backed investments in the U.S. financial sector. Dr. Anderson concluded that no signs of such efforts could be found, and that Chinese investments were benign actions undertaken in the expectation of profitable returns. The last speaker of the panel, Dr. Jacqueline Newmyer, President and CEO of the Long-Term Strategy Project, analyzed alleged PRC efforts to influence U.S. institutions within the broader context of PRC foreign policy strategy. In her testimony, she described an active and coordinated effort by the PRC authorities to manipulate foreign perceptions of China’s rise and future course, supporting this assertion with quotations from internal, restricted- distribution CCP publications. As cited by Dr. Newmyer, these documents called for the use of “public relations weapons”—such as the cultivation of prominent people and media outlets in other countries—to create a benign and reassuring image of China. The third panel discussed the extent of Chinese espionage directed against the United States. Drawing upon 25 years of service with the FBI, Mr. I.C. Smith, a former special agent with the Federal Bureau of Investigation, observed that the PRC views the United States as its “number one adversary,” and he also directly stated his opinion that the PRC represented the “number one threat to the United States.” He described the Chinese model of espionage as relying heavily on seeking to recruit or intimidate Americans of Chinese heritage into performing tasks on behalf of the Chinese government. He also noted the decentralized and frequently amateur nature of Chinese intelligence gathering, particularly as it pertains to the acquisition of technology. Mr. Smith warned that the large numbers of Chinese students entering the United States would include many students either encouraged or intimidated by the government into seeking out technological acquisitions on behalf of the PRC. He advised “stricter reciprocity in dealing with the PRC,” to include possibly cutting the number of visas granted to Chinese students. Dr. James Mulvenon, director of the Center for Intelligence Research and Analysis, Defense Group, Incorporated, focused his remarks on economic espionage carried out by “espionage entrepreneurs” who did not possess any formal intelligence training. He identified the PRC as the largest perpetrator of economic espionage against the United States, and described extensive “mom and pop” operations directed at acquiring technology through “secondary market distributors,” as well as via exports that involved the obfuscation of end users. By way of response, he advised that the United States apply a means-ends test in order to best focus on items that the Chinese iv seek to acquire in order to fill gaps in their military capabilities, and to work more closely with the Hong Kong authorities to block transshipments of dual-use technology. The hearing’s final panel examined Chinese cyber espionage directed against the United States. In his testimony, Mr. Kevin Coleman, senior fellow with the Technolytics Institute, assessed that “we are in the early stages of a cyber arms race,” and presented a stern warning that the United States is not adequately prepared for the level of cyber threat that it currently faces. He opined that China, in particular, was the source of four times as many cyber attacks against U.S. targets as any other country. Next, Mr. Rafal Rohozinski, principal with the SecDev Group of Ottawa, Canada, described his recent research analyzing a cyber-espionage network called “Ghost Net” that had infected over 1,200 computers of government and other political entities in 103 different countries. His organization traced the control servers for this network back to China; and while he could not conclusively prove PRC government involvement, he opined that aspects of Ghost Net’s activities showed signs of consciously directed intelligence collection whose effective exploitation would require resources beyond that of a private actor. However, Mr.
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