On July 6, Taiwanese authorities charged recently-graduated Chinese student Zhou Hongxu with espionage, roughly four months after he was first detained on suspicion of spying for Beijing (Central News Agency [Taiwan], July 6). The young man, who attended National Cheng-chi University, allegedly attempted to pay a junior Foreign Ministry official with cash and travel for classified government papers (Taipei Times, March 11). In 2009 then-President Ma Ying-jeou opened the flow of people and business across the strait without consulting security officials on how to mitigate the risks. Zhou’s case is one of the first public espionage cases of Beijing exploiting the ability to send intelligence operatives directly to the island enabled by that law. Zhou’s arrest highlights the challenges President Tsai Ing-wen faces—not only from increasingly aggressive Chinese intelligence and influence operations—but also in developing more effective countermeasures absent a clear consensus of the China threat inside and outside her party.
Despite Beijing’s relentless and sometimes fruitful efforts to penetrate the most sensitive parts of Taiwan’s national security institutions and society, Taiwan’s leaders have not been able to push forward a stronger legal foundation for counterintelligence. In March, Tsai’s cabinet vetoed new security regulations over legitimate concerns about overreach, and the failure of the Legislative Yuan to push forward new legislation leave Taiwan vulnerable. Without such tools, the island’s counterintelligence professionals can observe the change in scope and intensity of China’s operations but are unable to act effectively. The problem is worsened because the Kuomintang (KMT) and the Democratic Progressive Party (DPP) struggle to find common ground despite their shared interest in not allowing Beijing to decide Taiwan’s future.
Chinese Intelligence Presses Onward
In addition to Zhou, two other major Chinese espionage cases struck Taiwan in earlier this year that penetrated the most sensitive areas of national security. The first is Wang Hung-ju, Vice President Annette Lu’s former bodyguard, who was arrested because of his connections to an espionage case cracked in 2010 (Taiwan News, March 16). The second is the former commander of the Air Defense Command, Hsieh Chia-kang, who may have begun spying as early as 2009 or 2010 (China Post, May 12).
The Wang Hung-ju case probably is the more important of the two cases, because of his connections to Taiwan’s intelligence agencies and leadership protection details. Wang was a former official in the Special Service Command Center in the National Security Bureau. Mr. Wang served for a short period as the bodyguard for Vice President Annette Lu before retiring in 2003 (Taipei Times, March 17). After his retirement, he traveled to China where he was recruited by the Tianjin State Security Bureau in 2009.  Wang attempted to recruit two friends into his intelligence network, including an officer in the Military Police Command (United Daily News, May 12). The links between Wang’s case and Taiwanese businessman Ho Chih-chiang’s are unclear, but Taiwanese press repeatedly reported that Wang was uncovered as part of the Ho investigation. Chinese intelligence, possibly the Tianjin State Security Bureau, recruited Ho in 2007 and used him to approach Taiwanese intelligence officials. Ho’s case officers empowered him to offer money and other inducements to recruit serving officials (Focus Taiwan, April 15, 2010). Such intermediaries are typical of Taiwan’s espionage cases, especially when they involve the military, and their discovery may lead to multiple Chinese spies as the authorities work back on a case (China Brief, November 7, 2014).
In May, Taiwanese authorities detained a serving major general, Hsieh Chia-kang, and a retired colonel, Hsin Peng-sheng, for selling secrets to China. At the time, Hsieh was serving as the deputy commander of the Matsu Defense Command and had overseen the Air Defense Command. In the latter position, he would have had access to the specifications for the U.S.-made Patriot missiles as well as the Taiwanese Tien-kung III and Hsiung-feng 2E cruise missiles. Chinese intelligence recruited Hsin while he was leading a Taiwanese tour group in China. Hsin allegedly recruited Hsieh with whom he had served years before. According to the prosecutors, Hsieh traveled to Malaysia and Thailand to meet his handlers, and his travel suggests he may have been working for Chinese intelligence since 2009 or 2010. Both men agreed to assist Chinese intelligence in identifying and recruiting other sources (Liberty Times, May 10; Taipei Times, May 11; China Post, May 12).
While these two cases represent traditional methods of Chinese intelligence, Zhou Hongxu’s case is different in that he is part of the large group of mainlanders able to visit Taiwan after 2009. Zhou originally came to Taiwan in 2009 as an exchange student from Zhejiang University and returned to the island in 2012 for graduate studies in business administration at National Cheng-chi University (NCCU), where he earned a degree in 2016. He returned to China after completing his degree in July 2016, but came back to Taiwan in February on a business visa to work for Taiwanese firm. In addition to attempting to ply a Taiwanese diplomat with cash and an all-expense paid trip to Japan, prosecutors alleged Zhou attempted to conduct intelligence work while an NCCU student, and he built a network of contacts that may have touched senior Kuomintang figures (Taipei Times, March 11; United Daily News, March 11). Zhou’s exact role remains out of the public view. His attempted recruitment of a MOFA official suggests that he is an intelligence officer. However, many Chinese intelligence operations involve a case officer inside China and a principal agent outside China, like Ho Chih-chiang or Hsin, recruiting and handling sources (China Brief, November 7, 2014).
Such operations also are well-known to U.S. counterintelligence and would not be unusual. A recent criminal affidavit related to the arrest of State Department secretary Candace Claiborne noted that Chinese intelligence employed “cut-out” or “co-optees.” According to the FBI, these are:
mutually trusted person[s] or mechanism[s] used to create a compartment between members of an operation to enable them to pass material and/or messages securely. A cut-out or co-optee can operate under a variety of covers, posing as diplomats, journalists, academics, or business people both at home and abroad. These individuals are tasked with spotting, assessing, targeting, collecting, and running sources (U.S. Department of Justice, March 29).
Using cut-outs and co-optees may have been the typical Chinese approach, Taiwanese reporting on China’s intelligence operations suggests change may be in the air. If Zhou was an intelligence officer, then the case suggests Chinese intelligence is moving toward a more proactive approach to collection rather than just exploiting Taiwanese who come to China. Meetings in Southeast Asia, including Singapore, are apparently more common, and the Zhou case shows Japan is also considered an acceptable third-country meeting site. Using third-country meeting sites can hide the China connection once typical of Taiwan’s espionage cases, making it more difficult for Taiwanese counterintelligence (Taiwan News, March 16; China Brief, July 1, 2011).
Speaking to Taiwan’s Legislative Yuan in March, National Security Bureau director Peng Sheng-chu said “China will employ all methods [of espionage], and the issue [of Chinese infiltration] is more serious than ever” (Taipei Times, March 10). It might be easy to read Peng’s remarks as a standard warning, but the author’s recent discussions in Taiwan indicate that covert Chinese activities have increased in scope, sophistication, and intensity. For the first time in many years, Taiwan’s national security officials see change rather than continuity as a hallmark of Beijing’s intelligence and subversive operations. What is not clear is whether they have the political support to counter such Chinese operations effectively.
Breakdown on Counterintelligence Bill Leaves Gaps
The most significant proposal put forward to address the Chinese espionage and infiltration threat collapsed amid valid concerns of executive overreach and intrusions on civil liberties. Although the DPP cabinet vetoed the law before releasing any details, the draft generated controversy because it resurrected policies from the Martial Law Era. The law would have authorized the establishment of security offices at all levels of government, an additional security agency with overlapping authorities with existing organizations, and easier access to suspected spies’ private background information (Taipei Times, March 17).
After the failure of the cabinet’s draft, DPP legislators considered resurrecting some form of counterintelligence legislation, recognizing the need for legislative rather than administrative authorities for counterintelligence. An administrative order, Operational Essentials for Security Work (保防工作作業要點), provides the only legal guidance for counterintelligence operations within Taiwan. As the now-embattled DPP legislator Lo Chih-cheng put it, “Without counterintelligence legislation that has higher legal powers, intelligence agencies can bypass proper oversight. Only legislation can set clear standards, protect human rights, and dictate what can and cannot be done” (Taiwan News, March 14). Although Taiwanese legislators might have had some momentum in the spring from which to build following a national security official’s contested claim that Beijing had 5,000 people working on its behalf in Taiwan, nothing further has been proposed or contemplated (Liberty Times, March 13; Focus Taiwan, March 16).
According to administration spokesman Alex Huang, the Tsai administration had “already taken measures to evaluate the national intelligence security situation and has established mechanisms to oversee security improvements” (Taipei Times, October 2, 2016). Some of those measures are necessarily secret and cannot be confirmed. One of the few public measures enacted by the present administration extended the time for which retired government officials needed to report their foreign travel, especially to China. In early March, the Cabinet revised the regulations governing cross-strait interaction, banning political appointees and senior military officials from traveling to China for three years after retirement (Focus Taiwan, March 3). The Tsai administration has taken two major steps to strengthen Taiwan’s organizational capacity for cybersecurity: establishing a department for cybersecurity within the Executive Yuan in August 2016 and creating the Information, Communications, and Electronic Force Command on June 29. Both organizations have far-reaching responsibilities across the government and should provide better information controls as well as the capacity for new secure network infrastructure (Executive Yuan, April 28; Taiwan Today, July 3). Other legislative measures, such as revising the National Security Act to increase the punishment for spying, are still being considered (Focus Taiwan, March 16). The public measures also hint at internal administrative changes to better handle classified information and improve security reviews of officials holding clearances. Although such changes improve counterintelligence, they do little to address the threat of Beijing’s subversion.
The challenge for Taiwan, however, is as much about discretion and awareness as dealing more effectively with China’s efforts to penetrate Taiwan’s democratic institutions and society. Many retired Taiwanese generals travel to China, attending political events and allowing themselves to be used as political props. Even within KMT circles, such visits have been controversial with former KMT Premier and Taiwan’s longest serving Chief of the General Staff Hau Pei-tsun calling for generals to be stripped of their pensions (South China Morning Post, August 28, 2015). The most recent uproar over such travel occurred after 32 generals traveled to China to attend an event commemorating Sun Yat-sen presided over by Xi Jinping, but such public appearances have troubled Taiwan for years (China Post, November 18, 2016; China Brief, October 14, 2011). In another case of poor judgment, DPP legislators raised concerns about National Defense University professor Chang Ching has become a regular guest on Chinese military shows while still holding a security clearance without immediate consequence (Taipei Times, July 29). Taiwan’s premier, Lin Chuan, said it well when he observed that former officials “are high-profile figures in society and their deeds and words must not compromise the national interest” (Focus Taiwan, March 3).
No Consensus on Looming China Threat
Strangely, Taiwan continues to debate the kind of threat Beijing poses and Chinese intentions toward the island. Not everyone shares the clarity exhibited by Mainland Affairs Council Katharine Chang when she told Legislative Yuan members that there are no Chinese hawks or doves in dealing with Taiwan (Taipei Times, March 11). Significant groups within both the DPP and KMT choose to hide behind dangerous illusions of the Chinese intentions toward Taiwan, based in part on recent conversations in Taipei.
Many in the DPP appear to think China’s threat to Taiwan can be mitigated by reducing the island’s economic dependence on the People’s Republic or that preserving Taiwan’s international space will be enough. Although such measures as exemplified in Tsai’s “Going South” policy may benefit Taiwan, Southeast Asia can never provide the political or economic counterweight to China. DPP leadership also seems willing to allow the party’s distrust of the national security apparatus—rightfully developed because of persecution during the KMT’s dictatorship—to undermine the interactions between the political and professional staffs. This may be the first time that Taiwan’s National Security Bureau has not had a senior official assigned to the National Security Council. A lack of regular contact or trusted intermediaries serves no one well. As Enoch Wu, a Taiwanese think tank scholar, wrote earlier this year, Taiwan’s political leadership on both sides has sapped military readiness, under-staffed national security, and lowered morale (New York Times, May 18).
The KMT’s answer to the Chinese threat runs through Beijing, based on the belief that a stable relationship will protect Taiwan. In March, KMT mouthpieces criticized the DPP for manufacturing the Zhou case to destabilize the cross-strait relationship, move the two sides further apart, and consolidate a “green terror” with the counterespionage bill (United Daily News, March 10; United Daily News, March 11; Taipei Times, March 17). Little mention was made of the fact that China’s intelligence operations never abated during the Ma years. Between 2008 and 2016, Taiwanese authorities publicly uncovered more than 50 cases of espionage and, according to an anonymous official, many more have not been prosecuted (Taipei Times, March 11; Liberty Times, March 13).
Foreign Pressure and Influence Operations
The absence of strategic clarity and consensus is striking in the face of Chinese activities against the island across a broad front. Beijing continues its campaign to erase the name “Republic of China” from international politics. China continues to entice countries that recognize Taiwan, and Panama switched diplomatic recognition to Beijing in June. Taiwanese arrested overseas in places like Cambodia, Kenya, and Spain have been extradited or deported to China rather than returned to Taiwan (Liberty Times, June 14, 2016; Taipei Times, August 6, 2016; China Post, February 19). Chinese pressure forced Taiwan’s representative offices in Nigeria remove “Republic of China” from their name, and Beijing also placed pressure on Dubai and Ecuador (Central News Agency, June 14). None of these things are new, but illustrate that Beijing’s pressure has never relented.
Accompanying the rise in espionage operations against the island, Beijing’s effort to shape or even destabilize Taiwanese society itself through united front work is intensifying. The aim, according to several Taiwanese interlocutors, is to create a “fake civil society” that can be used against Taiwan’s democratic system. Taiwan’s national security authorities recently revealed that China has been active in disseminating disinformation about the Tsai administration’s controversial pension reform plans through the popular LINE messaging app and content farm websites (Liberty Times, July 18). Beijing also supports China Unification Promotion Party (CUPP) led by former organized crime figure Chang An-Lo, also known as the “White Wolf” (白狼). The CUPP has been one of the significant forces in organizing the pension reform protests and organizing demonstrations when President Tsai travels around Taiwan in an effort to discredit the DPP administration. Chang also has acknowledged cooperating with China’s United Front Work Department, which rallies the Chinese Communist Party’s friends at home and abroad to exert influence (Taiwan Foundation for Democracy Bulletin, July 18; China Brief, July 6; Reuters, November 26, 2014). Concerns about these and other Chinese activities are pervasive across Taiwan’s government, but countermeasures are largely being left to the national security agencies themselves within their existing authorities and restrictions.
While Taiwan faces an espionage and subversion challenge from China at a scale that no modern democracy has faced, its leading political parties struggle to address the problem. Despite the stark divide between the DPP and KMT’s visions of Taiwan’s future, both sides share concerns that China is attempting to force an accommodation on Beijing’s rather than Taipei’s terms. Yet, neither side seems to trust the other enough to see the need for effective democratic controls over counterintelligence or build a consensus on how to address Chinese subversion. As China helps build a “fake civil society,” any Taiwanese government, whether DPP or KMT, will face Chinese pressure from within and without. The absence of a strong legal framework and a political consensus exacerbates the challenge of counterintelligence and countering covert influence in a democratic society. The stakes are not trivial spy-vs-spy games but the integrity of Taiwan’s democracy, and the weakness is every bit as crippling as an ill-equipped or poorly-prepared military.
- The Ministry of State Security (MSS) is a sprawling organization centered on a ministerial headquarters in Beijing with provincial departments and municipal or county bureaus. MSS units at every level run domestic intelligence and internal security operations. Several of the larger, more sophisticated provincial-level departments, such as the Guangdong State Security Department, Tianjin State Security Bureau, and the Shanghai State Security Bureau, also conduct foreign intelligence operations against external targets.
Peter Mattis is a Fellow in the China Program at The Jamestown Foundation, where he served as editor China Brief from 2011 to 2013. He is the author of Analyzing the Chinese Military: A Review Essay and Resource Guide on the People’s Liberation Army (2015).