U.S. intelligence agencies ill-suited for China competition, study warns

A version of this story appeared in the Threat Status newsletter from The Washington Times. Click here to receive Threat Status delivered directly to your inbox each Wednesday.

U.S. intelligence agencies are not structured to address threats and challenges posed by China and need urgent reforms, according to a report by a national security think tank.

The nation’s 18 intelligence agencies need to retool and refocus so they can do a better job addressing challenges posed by an increasingly aggressive China and its leaders, the report issued late last month by the MITRE Corp. warns.

The report identified several intelligence areas that need “urgent attention, resources and top-level government leadership engagement.”

A main concern is that the agencies, which were funded with nearly $100 billion for fiscal 2024, already face economic and technological activities from Beijing that “rival those of military threats,” the report said.

The intelligence community “is not positioned optimally to tackle the full spectrum of competition with the PRC,” wrote report author Margaret Stromecki, a former senior U.S. intelligence analyst and now an MITRE systems engineer, using the acronym for People’s Republic of China.

Current U.S. spy services are oriented toward collecting, analyzing and acting on security threats to military assets, borders, partners and the intelligence apparatus, the report said.

“Countering China’s economic espionage and its campaign of [intellectual property] theft and technology transfers require new skill sets in the [intelligence community’s]  operational, analytic, and counterintelligence communities,” the report said.

A White House report in 2018 estimated that illicit Chinese acquisition of U.S. high-tech intellectual property and related tech activities cost the U.S. economy between $225 billion and $600 billion annually.

A broader set of capabilities in key areas such as economic intelligence are needed, along with reorienting intelligence agencies to better collaborate and coordinate with other government agencies, like the Commerce Department and international partners.
The report is a rejoinder to the National Intelligence Strategy made public by Director of National Intelligence Avril Haines in August, which appears to emphasize that intelligence agencies need to follow strict ethics and diversity guidelines along with gathering and analyzing secrets.

“Our success as a community is measured as much by our defense of America’s values as it is by the execution of our intelligence mission,” the MITRE study said. The No. 1 goal is to “position” the agencies for stepped-up strategic competition, primarily with China.’

China “is the only U.S. competitor with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military and technological power to do so,” the strategy stated, adding that the threat posed by Moscow “lacks the across-the-spectrum capabilities of the PRC.”

Intelligence also needs to improve monitoring China’s ability to project its influence globally. Those activities include building military bases around the world, creating economic dependence by foreign states through economic development programs, and using propaganda and disinformation to improve the image of the communist state.

“While the [intelligence community] naturally focuses on China’s aggressive behavior in the Taiwan Strait and South China Sea to prepare the Department of Defense for possible armed conflict, agencies should also expand efforts to counter China globally to preserve the current global world order,” the report said.

Intelligence agencies should also do more to track Chinese global influence campaigns, the report said.

The spy agencies also lack the expertise and language capabilities needed for improved targeting of intelligence efforts against China, MITRE analysts said. The lack of personnel with deep expertise on China is faced by both analysts and clandestine operators.

Currently, education and think tank programs devoted to China are expanding in the United States but the report said it will take time to build a deep bench of China experts.
Chinese infiltration into critical supply chains, such as semiconductors, also is a problem for intelligence agencies that need more thorough monitoring of the problems.

Falling behind

The report warns that U.S. spy agencies are falling behind Beijing’s massive spying and cyberattack capabilities.

“The most serious threats are the PRC’s cyber, technical collection, and human penetration capabilities, both inside the United States and globally,” the report said.

To block Chinese spying, U.S. intelligence agencies need to expand their efforts to counter Chinese cyber and surveillance programs and need to better utilize open-source information to improve their understanding of China.

Intelligence agencies also have failed to utilize private-sector experts, outside analysts who could help in providing “critical understanding of the cultural forces shaping Chinese leadership behavior,” the report said.

New areas for intelligence collection and analysis should be created, including supply chain vulnerabilities, emerging Chinese technologies, technology theft and issues related to Chinese purchases in the United States.

The U.S. intelligence community “can and must pivot to meet this new challenge,” the report concluded.

Just as the Sept.11, 2001, attacks led to greater intelligence collaboration, the competition with China requires a similar transformation, the report said, noting the reforms will require a shift in culture within the heavily bureaucratic agencies.
           
A CIA spokeswoman had no immediate comment on the MITRE report.

According to U.S. officials, the CIA lost most of its recruited agents in China beginning around 2010 as a result of a communications failure and also through a former agency official who spied for China.

The MITRE report made no mention of the agent losses. CIA Director William Burns, however, said during a recent security conference that the agency is attempting to build up its networks after the loss of so many intelligence assets inside China.