U.S. worries about Chinese espionage

Concern focuses on non-traditional agents like students, businessmen

WASHINGTON - University professor Gao Zhan, a human rights activist once celebrated in Washington, is today in U.S. custody, convicted of selling sensitive U.S. technology to China — microprocessors that could be used in missiles.

Gao's activities are part of what senior U.S. officials say is an intensified campaign by the People's Republic of China to steal military and civilian technology.

"Right now I would say that China is the No. 1 counterintelligence threat to the United States," says Dave Szady, the FBI's former top counterespionage official. "It's a very large threat, it's pervasive and it's extremely effective."
Story continues below ↓ advertisement

U.S. officials say there are now 400 active investigations here involving illegal exports to China — more than any other country.

"We've seen a significant spike in attempts to illegally acquire U.S. technology," says Stephen Bogni, with U.S. Immigrations and Customs Enforcement.

Undercover video — obtained exclusively by NBC News — shows Bill Moo, an employee of a U.S. defense contractor, inspecting a military jet engine that he planned to secretly buy for China.

Unbeknownst to him, Moo had made the deal with undercover U.S. agents and was later arrested. He pleaded guilty to being an unregistered foreign agent for China.

But officials say not everyone who steals technology is a traditional spy working for the Chinese government. Some are students, businessmen and academics.

"We're finding freelancers all over the country," says ICE Assistant Secretary Julie Myers, "and people are going to their friends and asking them, 'Do you know where we can get this microchip or this helicopter engine, or an air-to-air missile system?'"

"The Chinese are very good at using multiple redundant collection platforms," says former FBI Assistant Director Szady, "and by that I refer to students, delegations, visitors, researchers, development, partnerships, business deals and false front companies."

The Chinese government tells NBC News that it does not engage in espionage in the U.S., calling such accusations irresponsible.

But U.S. intelligence sources say China has a very specific shopping list here, focused on upgrading its Navy and Air Force.

"China really seeks technology across the board," says Szady. "But the primary target is the technology, the research and development that goes into developing their military."

And officials warn that U.S. corporations and universities are not sufficiently on guard to protect against this growing and pervasive threat.