Inside the Ring: CIA opposed Chinese expulsions

NEWS AND ANALYSIS:

The CIA tried to block the expulsion of two Chinese intelligence officers in September who were caught illegally trying to enter a sensitive U.S. military base in Virginia.

The agency argued during interagency discussions on how to respond to the intrusion that sending the Chinese officers home might prompt Beijing’s intelligence services to alter their operating methods, according to a U.S. official.

The dispute is typical of the many political battles said to be underway within the Trump administration over the new tougher policy toward Beijing. That has included a trade war and a major crackdown on aggressive and large-scale Chinese intelligence-gathering operations in the United States.

CIA counterspies were concerned that expelling the Chinese who were operating under diplomatic cover would prompt the civilian Ministry of State Security and the military intelligence service once known as the Second Department of the General Staff of the People’s Liberation Army into adopting new and harder-to-counter spying operations.

A CIA spokesman declined to comment.

CIA is said to be among the intelligence agencies that have signed on to the new policy that was set off by new national security and defense strategies and by economic security reports produced by the White House and Office of the U.S. Trade Representative, outlining Chinese intellectual property theft on a massive scale.

However, the CIA’s directorate of analysis remains a center of entrenched conciliatory policies toward China among all U.S. intelligence agencies.

The internal counterintelligence dispute was disclosed after The New York Times reported last week that two Chinese officials were expelled secretly by the State Department after trespassing on a Virginia military base near Norfolk used by special operations forces.

The two intelligence officers, traveling with their wives, failed to exit the base after they were told by a base guard to turn around. They claimed to have not understood the guard’s English instructions.

Counterintelligence officials suspect the incident at the base was designed to test defenses in response to intrusions — a possible practice run for a more sophisticated penetration operation in the future.

The incident led to new restrictions by the Trump administration in October to limit the activities and travel of Chinese officials.

A Chinese government spokesman confirmed the expulsions, the first to be disclosed by the U.S. government in 30 years, on Monday. Foreign Ministry spokesman Geng Shuang denounced the action as a U.S. “mistake” that must be corrected.

The expulsion comes amid a large-scale crackdown on Chinese spying and intellectual property theft and other sanctions aimed to deterring Chinese technology collection in the United States.

U.S. shuns talks with China

The Trump administration is strictly adhering to a new policy toward China designed to end costly and unproductive conferences and meetings that have produced little in the way of substance.

For years, successive administrations — both Republican and Democratic — hosted high-level meetings commonly referred to as a “strategic and economic dialogue.” The meetings would be held in Washington and Beijing with great fanfare and long lists of supposed advances in relations.

U.S. officials said President Trump has authorized a new policy that all interactions with the Chinese must be geared to producing substantial and concrete results — not empty joint statements or platitudes. The Chinese are notorious for joining the dialogue with a set of talking points of Chinese positions, and have been known to endlessly repeat the talking points while rarely departing from prepared scripts.

Chinese diplomatic officials recently approached the administration with an offer to restart the high-level meetings and were rebuffed.

Beijing in recent weeks has stepped up attacks on the Trump administration with political broadsides against both Vice President Mike Pence and Secretary of State Mike Pompeo — both of whom in recent weeks have issued harsh speeches calling out Chinese Communist Party repression and other activities.

On Friday, Chinese Foreign Minister Wang Yi stepped up Beijing’s war of words.

At a meeting in Beijing, Mr. Wang labeled the United States the “troublemaker of the world,” repeated false Chinese government accusations that Washington is a “black hand” behind widespread pro-democracy protests in Hong Kong.

“We are willing to resolve the contradictions and differences with the U.S. through dialogue and discussions based on equality and mutual respect, but we will never accept unilateral sanctions or bullying,” he said.

The foreign minister accused the United States of holding “almost paranoid” views of China and “slander” against its communist system, he added.

“We hope that the U.S. side will promptly calm down, take a rational view towards China and the world, and work together with China to realize a nonconfrontational, mutually respectful, win-win path towards peaceful coexistence and mutual benefit,” he said.

The Communist Party of China has used the phrase “win-win” to describe its foreign policy that appears to favor equal benefits for the United States and China. Critics, however, say Beijing’s real formula for win-win relations is that China wins twice.

A State Department spokeswoman did not respond to multiple requests for comment about Mr. Wang’s attack.

China trade deal text

The Trump administration is working to produce a text of the U.S.-China trade deal announced last week, after first conducting legal and language reviews.

The so-called Phase 1 deal was reached Dec. 12 and hailed a major achievement by the administration.

“It’s an enormous first step. It represents an opening of China,” said Larry Kudlow, director of the White House National Economic Council.

The agreement covers issues such tariff adjustments, plans for China to purchase American goods and services, financial service reform, currency reform, intellectual property rights reform, and curbs on the forced transfer of technology reform.

“All of the key chapters have been covered in this deal,” Mr. Kudlow told reporters in announcing the deal.

Analysis of the partial trade deal has been difficult due to the lack of a public text. Markets were relieved that new tariffs set for this week were rolled back, but have been largely treading water waiting to learn exactly what was agreed to.

Critics already are charging the Trump administration gave away too much to the Chinese in the pressure to cut a deal and that the agreement will lack adequate enforcement mechanisms in the event of Chinese cheating.

But a senior administration official insisted that the deal contains a strong, effective enforcement mechanism, one that includes a forum led by U.S. Trade Representative Robert E. Lighthizer and Chinese Vice Premier Liu He.

The official said last week the text “will become public eventually.”

“We have to go through certain processes, including legal scrub and language authentication,” the official said. “And we have certain processes that we have to go through with our cleared advisers and through consultations with other agencies as well.”

The official said China made “very specific, substantive, important commitments” in the deal related to curbing theft of intellectual property, including trade secrets, pharmaceutical-related intellectual property patents, and trademarks. China also promised better enforcement aimed at stopping pirated and counterfeit goods. Unfair Chinese internet practices related to the infringement of online material also is included.

China also is promising to improve criminal and civil procedures for enforcement intellectual property rights, but many of the more difficult issues were put off for a later round of talks.

China’s record of abiding by agreements is considered spotty at best, according to U.S. officials.

• Contact Bill Gertz on Twitter @BillGertz.