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Intelligence Impact of Chengdu Consulate Closure

Updated: Oct 11, 2021

In response to Washington’s unexpected closure of its Huston Consulate, the People's Republic of China (PRC) ordered the United States' Chengdu Consulate permanently closed on July 23, 2020. By July 27, all US personnel and staff assigned to the diplomatic outpost had departed and were in the process of returning stateside. At 10:00 AM (GMT+8) this morning, Chinese authorities entered the facility, resulting in the mission's official closure.

To understand today’s tit-for-tat mission closures, one must look back to earlier this year. According to a high-level DOS official who spoke to CNN on the condition of anonymity, US officials attempting to depart the US consulate in Wuhan with diplomatic pouches amidst the COVID-19 pandemic were improperly searched by agents of the PRC. Chinese law enforcement and intelligence officers hindered the movement of American personnel and demanded they be allowed to search the pouches, a clear violation of the long agreed upon Vienna Convention. The action, which was previously shielded from the press, left senior leadership in the Trump Administration fuming. Seeking to respond, state department officials and intelligence officers determined that shuttering a Chinese embassy would be a proportionate response.

The Huston outpost was also a key facet of Chinese intelligence operations in the United States. The Federal Bureau of Investigation (FBI) and Department of Justice (DOJ) also allege that Chinese intelligence agencies, mainly the Ministry of State Security (MSS), conducted an unacceptable amount of scientific and technological theft through the consulate. MSS and PLA operatives in Huston reportedly utilized China's Thousand Talents Program (TTP) and vast amounts of money to lure researchers into sharing advanced research and proprietary information with the PRC. TTP was created by the Chinese government to identify and recruit leading researchers, experts, and scientists in foreign states. This program has proven extremely successful, with recruited agents sharing billions of dollars worth of trade secrets and classified material with their Chinese handlers.

Although limited in their ability to travel, intelligence officers commonly use a diplomatic cover while in a foreign country. Working out of a diplomatic mission grants an operative significant benefits, including diplomatic immunity. Intelligence services are generally given leeway by host states as to what information they may collect, but the FBI believes the MSS and People's Liberation Army (PLA) crossed the line in Huston.

DOJ officials acknowledge that the Chinese government operates a wide range of intelligence collection programs across the United States, with one declaring the Huston mission was, "a microcosm, we believe, of a broader network of individuals in more than 25 cities. That network is supported through the consulates here. Consulates have been giving individuals in that network guidance on how to evade [and] obstruct our investigation. And you can infer from that the ability to task that (a) network of associates nationwide."

Amidst the press surrounding the closure of the Huston consulate, four alleged PLA operatives were arrested by the FBI in conjunction with the DOJ for visa fraud and espionage.

The closure of the Huston consulate also drowned out the arrest of four alleged PLA operatives for visa fraud and espionage, and one Singaporean national pleaded guilty to working as an agent of China and seeking to recruit individuals with top secret clearances.

The closure of the Chengdu Consulate will exacerbate an already difficult situation for the US intelligence agencies. The diplomatic outpost provided the United States access to human intelligence (HUMINT) from otherwise inaccessible parts of the PRC. After combing through classified material leaked by Edward Snowden in 2014, The Intelligence Ledger assesses that the facility was home to an extensive surveillance outpost that provided Washington full coverage of Tibet and partial coverage of Xinjiang, two regions of China with a very uncomfortable relationship with Beijing.

China views the preservation of order in Tibet and Xinjiang as vital to its national security. Xinjiang is home to Uyghuri separatists who have engaged in acts of protest, both peaceful and violent, to promote independence. In Tibet, most of the population is loyal to the Dalai Lama, a monk who is in exile and believes in an autonomous state. Denying the ability of a foreign intelligence service to collect intelligence from these two regions is a major, albeit temporary win for the People’s Republic.

Communicating with pro-democracy activists and agents on the ground in these two provinces will grow significantly more difficult given the consulate's closure, although not entirely impossible. Technology can be relied upon to offset the loss of case officers on the ground and allow for the transfer of information and materials to the United States from previously recruited agents. The problem faced by the United States today is the recruitment of agents.

Without legal CIA case officers using diplomatic cover on the ground, the United States may be forced to use operatives under non-official cover (NOC). NOC officers have no diplomatic protections, may be disavowed by their government if captured, and face execution for their actions. The US may be apprehensive to use such covers given their inability to successfully protect assets within China. From 2010 through 2012, China systematically executed or imprisoned several high ranking Chinese officials who had secretly supplied the United States with information. In 2015, the CIA suffered a major cyber breach, resulting in millions of personnel files being accessed by the Ministry of State Security. If reliance on NOC officers to collect HUMINT is to become American policy in western China, the US must first learn to better protect its people.


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