This article was published today in the Taipei Times. I have included, in italics, sentences or paragraphs that were trimmed for space but that I believe were still relevant. During research for this article, I contacted a number of government agencies (AIT, DHS, the British Home Office, the Taiwanese NSC) for comment, but all refused to say anything. What also struck me was that Bill Gertz's story in the Washington Times didn't seem to have been noticed in Asia, and many academics and government officials (even in the US) whom I interviewed weren't aware that a policy change had occurred.
The Washington Times reported on Jan. 20 that the US National Security Council (NSC) had recently directed its spy agencies to lower the priority placed on intelligence collection for China. The decision, the report said, would downgrade China from “Priority 1” status — which includes countries such as Iran and North Korea — to “Priority 2,” which covers specific humanitarian crises and conflicts like Indo-Pakistani tensions.
The move, the paper wrote, was part of efforts by the administration of US President Barack Obama to “develop a more cooperative relationship with Beijing.”
Amid opposition within the intelligence community and fears that the downgrading would hamper efforts to monitor China's growing military strength and cyber-attack capabilities, the NSC said the change “would not affect the allocation of resources for spying on China or the urgency of focusing on Chinese spying targets.”
While proponents of the new policy maintain that the downgrade would not change anything, critics fear that while not immediate, the repercussions would be felt over time.
“A change in tier priority usually means that projects targeting a country will be scrutinized more skeptically on budgetary and other grounds,” the paper said.
Spending on human intelligence and electronic surveillance could also suffer, while the CIA and the US Defense Intelligence Agency could take fewer risks targeting the downgraded country.
Washington's decision allegedly came in the wake of protests by Beijing following the release in September of a National Intelligence Strategy that identified China among the top four threats to US interests alongside Iran, North Korea and Russia.
National Intelligence Director Dennis Blair, whose office released the strategy, as well as CIA Director Leon Panetta, have publicly opposed the downgrading.
The Washington Times also wrote that the announcement was made just as civilian and military leaders were pointing to deficiencies on intelligence collection and analysis on China, which often led to underestimates on Beijing's military and espionage capabilities.
Information obtained by the Taipei Times indicated that the downgrade would not only apply to foreign intelligence collection, such as by the CIA, the NSC and the Defense Intelligence Agency, but also domestically, meaning that the de-prioritization would also affect domestic agencies like the FBI, which handles counterespionage on US territory.
For security experts, the decision made little sense. While some said that better management of finite intelligence resources was desirable and agreed that priority No. 1 for the US intelligence apparatus should be terrorism, it did not mean that resources should be taken away from China.
“Given China's increased missile activity, not to mention the development of anti-satellite and space warfare capability, it does not make sense,” said Wendell Minnick, Asia bureau chief for the Washington-based weekly Defense News. “If there is one weak area for our intelligence collection it is what China is doing in the cyber warfare area. Speculation is rampant, but there are very few hard clues as to how many of the hacker attacks are patriotic netizens or government-sponsored ops,” he said.
For Toshi Yoshihara, associate professor of strategy at the US Naval War College, the main problem with the decision concerned the risk of underestimating China's military modernization.
“Part of the problem are the assumptions that underwrite assessments of the Chinese military,” Yoshihara told the Taipei Times on Tuesday. “In the 1990s, analysts tended to extrapolate how China's military-industrial complex will do in the early 21st century based on its performance in the 1960s and 1970s. Such linear projections, premised as they were on a qualitatively different kind of China, significantly skewed many of the forecasts.
“In this context, we need to learn more, not less, about China's military modernization. We need more data sets that can serve to challenge longstanding assumptions that are deeply ingrained in individuals and institutions,” he said. “Underestimation carries its own risks. If the US or Japan encounters a strategic technical surprise from China, then the risks of overreaction could substantially increase [and] overreaction might involve the kinds of worst-case scenario thinking that would not be conducive to stability.”
The American Institute in Taiwan on Tuesday refused to comment on the decision, saying it did not normally discuss intelligence and defense matters.
The reprioritization also comes at a time when the US has its hands full in Afghanistan and Pakistan, as well as with the North Koran and Iranian nuclear programs, all areas where assistance from China might be welcome.
Gary Schmitt, a US official during the Ronald Reagan administration and now director of advanced strategic studies at the American Enterprise Institute, said this wasn't the first time a US administration had sent political signals through a reassessment in the hope of securing China's cooperation elsewhere.
“At the time [in the 1980s], many in the [Reagan] administration believed that China would be a necessary asset for balancing against the Soviet Union. The thought was that by changing the priority given China for intelligence collection, we would be signaling them that we no longer saw them as an adversary,” he wrote on the Center for Defense Studies Web site.
“Ironically,” Schmitt wrote, “the effort made during the 1980s ... made more sense then than today ... given the fact that the US government is continually surprised by the military advances China is making, how little we really know about what the inner circle of the PRC [People's Republic of China] is thinking and, according to ... report after report by [US] counterintelligence officials, the avalanche of Chinese spying we are attempting to deal with. Downgrading the priority given the PRC as a target will certainly not make those gaps any easier to fill.”
Given the close relationship between US and Taiwanese intelligence and defense agencies, any downgrading of US collection on China could have serious repercussions for Taiwan's ability to monitor developments across the Taiwan Strait and defend itself, especially if intelligence-sharing agreements were undermined as a result.