On 21 July, the indictment against two Chinese hackers alleged to be contractors for China’s Ministry of State Security (MSS) was made public. Soon after, the US Government ordered for the closure of the Chinese consulate in Houston. Acting Chairman of the Senate Intelligence Committee Marco Rubio later described it as “a central node of a massive spy operation”. On 23 July, the US Justice Department charged four Chinese scientists with visa fraud for concealing their ties with China’s People’s Liberation Army. Separately, a Singaporean pleaded guilty to acting in the US as an illegal agent of Chinese intelligence the next day. A new diplomatic row had ensued following the US’ recent crackdown on alleged Chinese espionage.
The Chinese Hackers
Li Xiaoyu and Dong Jiazhi are alleged to have conducted a hacking campaign lasting more than ten years, targeting companies from various industries across the high tech world. More recently, they are accused to be probing for “vulnerabilities in the networks of [companies] publicly known for work on COVID-19”. US officials mentioned that it was the hackers’ breach into a network belonging to a decommissioned US nuclear complex in 2015 that triggered the investigations against them. While the prosecutors acknowledge that these were private hackers who sometimes acted for their own interests, they argue that the hackers “worked with, were assisted by, and operated with the acquiescence of” the MSS.
Error 404: Consulates Not Found
The Chinese consulate in Houston was China’s first consulate in the US after diplomatic relations between the two were established in 1979. It was closed on 24 July, after the US Government ordered its closure “to protect American intellectual property and Americans’ private information”. Retired Senior US Intelligence Officer Nicholas Eftimiades highlighted that there were 43 cases of intellectual property theft in his database for the area served by the Chinese consulate in Houston, many of which are directly attributable to the Chinese government.
US Secretary of State Mike Pompeo claims the move is meant to set out “clear expectations” for how the Chinese government is to behave in the US. China decried the move as a “political provocation” and blamed the US for “fanning hatred against China”, which has led to bomb and death threats directed at the Chinese embassy in Washington D.C.
In a diplomatic tit-for-tat, China ordered the closure of the US consulate in Chengdu, which then closed on 27 July. The Chengdu consulate was representing US interests in Southwest China. It was seen as strategically important because it was the closest US consulate to Tibet – a region which had long sought independence from China. Trump warned that it is “always possible” for him to order the closure of more Chinese consulates.