In early 2013, as Communist Party General Secretary Xi Jinping prepared
to assume the Chinese presidency, very few people in the West had any
idea what kind of leader he was. In January of that year, the New York Times’ Nick Kristof, an experienced China correspondent, wrote that Xi “will spearhead a resurgence of economic reform, and probably some political easing as well.”
It was a radically mistaken assessment. But even inside the U.S.
government, knowledge of China—and its intensions—was at a low point.
During the 2000s, U.S. intelligence had operated with relative
confidence against Beijing. But during China’s biggest political
transition in decades, American officials were looking through an
increasingly opaque glass.
The twin disasters of the Office of Personnel Management (OPM) hack,
which had helped the Chinese to identify undercover U.S. intelligence
officials, and the obliteration of the CIA’s network of Chinese assets
significantly “affected the quality of insight” into what the United
States understood about events in that country, according to a former
U.S. national security official. There was a noticeable decrease in
high-quality intelligence reporting percolating up to senior
policymakers, this source recalled. “Things weren’t the same.”
And as U.S. officials struggled to try and grasp what was happening
on the other side of the Pacific, China was doubling down on a hacking
spree that would see unprecedented amounts of data stolen and fed into
an increasingly sophisticated intelligence apparatus.
At the time, White House officials trying to craft new China policies
debated Xi’s character and intentions, a senior Obama-era official
said. Administration officials were split in their views on Xi. There
was a “set of analysis” that led some to argue that Xi was a possible
reformer: a product of the Chinese Communist Party (CCP), yes, but a
leader capable of ameliorating some of the excesses of the Chinese
system, this former official recalled. Others, however, argued that Xi
was a “neo-Maoist”: that is, a dangerous hard-liner. The difference in
views was “very stark,” this person recalled.
Other officials who served under U.S. President Barack Obama recall
more consensus regarding the new Chinese president. “There was never any
romanticism about Xi,” said the former national security official. But
ultimately, this source said, “no one was able to foresee the kind of
leader he was to become.” And, as the Xi-led purges soon revealed, “the
Communist Party leadership didn’t see it either,” this official
recalled.
Inside
the CIA, senior officials were also divided about Xi’s rise, if perhaps
more skeptical than at the White House, a former senior CIA official
recalled. “There was some wishful thinking that Xi would come in and
promote some kind of continued reform,” this source said. “But the vast
majority [within the agency] thought the party was moving toward the
strongman model, [the idea] that China should stand up and become more
aggressive in its viewpoint. Within elite party corners that was a big
debate at the time.” But “what CIA was hearing from sources pointed to a
re-centralization for the party to maintain power,” this person
recalled.
“There was concern in Washington about what Xi was going to pursue,
both in terms of domestic liberties, but also his approach to America,”
said Gail Helt, a former CIA China analyst. “The Chinese Communist Party
is corrupt, to put it mildly, but there were initial indicators that he
was going to clean up that corruption, there was a little glimmer of
hope. Then it was clear that he was going to purge and create a
personality cult.”
Some of the gaps in intelligence were because U.S. officials had
grown more cautious. There was “reluctance or concern or anxiety about
putting our officers in the field given that our protective shield had
been punctured [by the OPM breach],” recalled the former national
security official. “We didn’t fully know what they knew about us.”
Subsequently, “dozens of postings” for CIA officers scheduled for
assignments in China were canceled, according to The Perfect Weapon,
a 2018 book by David Sanger. “CIA, for many years, was not willing to
do forward facing ops in China,” because its confidence was so shaken by
the asset roll-up and other breaches, said a former senior intelligence
analyst.
China was also hardening its digital defenses against U.S. spying
during 2012-2014, the former analyst said. It was “a gradual change over
a year or two, as Chinese leaders started incorporating insights into
increasing their control over their own internet space.” Intelligence
collection by U.S. cyberspies suffered as a result. China’s tightening
domestic-focused digital surveillance dragnet—like its increasing use of
biometrics and closed-circuit TV—also made U.S. intelligence gathering
there more difficult, former officials say.
Prior leaks had accentuated the difficulty of even routine
communications by U.S. officials with their Chinese counterparts. The
release of a massive tranche of U.S. diplomatic cables by WikiLeaks in
2010 and 2011 left some Chinese officials, whose relatively frank discussions
with their American counterparts were documented in the cables,
dangerously exposed at home. (Two Chinese government or state media
sources named in the cables, for instance, had their careers stymied
after the leak.) In the past, this type of relatively open diplomatic
intercourse had played an important role in helping U.S. officials form a
picture of China. “Chinese officials became much more reluctant to talk
after [the WikiLeaks cables], because they didn’t believe we could keep
it a secret,” recalled a current State Department official with
extensive experience in China.
And while the United States maintained significant eavesdropping and
cyberspying capabilities against China, Chinese officials were becoming
much more reluctant to talk on many channels. This wasn’t just out of
the knowledge, revealed by the Edward Snowden leaks and other
disclosures, that the United States might be intercepting
communications; it was also out of fears that they were under
surveillance by China’s own security services, according to a former Defense Intelligence Agency official. In the aftermath of the Bo Xilai affair
in 2012—the first of Xi’s purges of the party, which felled both
top-level government officials and army officers—Chinese officials
became even more devoted to face-to-face meetings for any sensitive
matter. “Disclosure of state secrets,” intentional or otherwise, was one
of the most common charges brought against Xi’s targets.
As Xi began a comprehensive purge of the party and restructuring of
the state, the answers about his character and intentions became
clearer—at least to some members of the Obama administration. “The
debates over what kind of leader Xi was going to be, that got settled
pretty early for some of us,” the Obama-era official recalled. “Some did
not see that as quickly.”
For this official, the meeting between Xi and Obama in 2013 in
Southern California was an immediate revelation. It “wasn’t even an open
question anymore” that Xi would rule with increasing authoritarianism,
this person said. Over the next few years, Xi’s hard-line policies would
extend into almost every area of Chinese life, from the estimated 1
million Uighurs subjected to detention, surveillance, and torture in
Xinjiang; to a mass clampdown on freedom of speech; to supposed
anti-corruption purges that swept up hundreds of thousands of Chinese
officials. But the U.S. administration often remained reluctant to act,
said the Obama-era official.
Meanwhile, the hacks continued. Beijing’s spies were ransacking
Americans’ data at an almost Olympian scale. In addition to
masterminding the OPM breach, hackers linked to Chinese intelligence
would filch private information from over 383 million individuals,
including passport and credit card data, in a massive 2014 compromise of
the hotel giant Marriott; pilfer personal information from over 78
million Americans in a 2014 breach of Anthem, the major health insurance
provider; breach the networks
of American Airlines, United Airlines, and Sabre, a top travel
reservation provider (and key target for China’s travel intelligence
program); and burrow into computer systems belonging to the U.S.
Department of the Navy, stealing sensitive data linked to over 100,000
naval personnel, among other penetrations of the U.S. private and public
sectors. The Chinese “were always a Hoover, sucking up mountains of
data beyond anything else in the world,” recalled a former senior
National Security Agency official.
U.S. intelligence and national security officials, in particular,
were becoming increasingly incensed by China’s actions. The Obama
administration began to take more aggressive steps against Chinese
cyberspying, indicting five Chinese military hackers in 2014 for a
massive espionage campaign targeting U.S. companies—the first-ever
public U.S. indictment of nation-state hackers—and threatening Beijing
with sanctions. But senior U.S. officials under Obama still believed
there were key, if narrowing, areas to carve out mutual cooperation with
their Chinese counterparts.....
