In Germany, growing concern about Chinese spying

In the summer of 2016, the Cologne-based specialty chemicals company Lanxess reported two of its employees to the German authorities. For more than six years, the two had allegedly stolen secret knowledge about a patented chemical and passed it on to China, and then founded a rival company there. The Cologne public prosecutor’s office investigated the two Germans of Chinese origin for two years.

Despite indications that Chinese state agencies were involved in the theft of the technology, the authorities were only able to bring charges relating to the theft of business and trade secrets in 2018. The evidence was not sufficient to support the charge of secretly acting as an agent for a foreign service.

Eight years later, in April 2024, the police in Bad Homburg and Düsseldorf arrested three Germans. This time it was not about the formula for a chemical, with the spying aimed at gaining a business advantage. Rather, authorities are accusing the three of stealing the results of technological research into powerful marine engines and passing them on to a Chinese intelligence agency. Such engines are installed in warships, for example.

This military-technology espionage fits in with recent findings by Germany’s domestic intelligence service regarding China’s changing approach in Germany. After decades of focusing on economic spying, Beijing’s intelligence services are now increasingly seeking out political and military intelligence.

Seeking par with the United States

This has much to do with the officially proclaimed «Chinese dream» of becoming the world’s leading power alongside the United States. Beijing wants to be on an equal footing with the U.S. economically, politically and militarily by 2049. In pursuing this goal, any and all means are seen as justified in order to gain economic advantage. But there is more to this. For years, Chinese President Xi Jinping has publicly reiterated that the Chinese dream can be fulfilled only if the economic aspect goes hand in hand with a military counterpart.

To accomplish this goal, the country needs state-of-the-art military technologies. A dossier entitled «China’s New Approaches to Espionage» produced by the Federal Office for the Protection of the Constitution, the German domestic intelligence service responsible for counterintelligence, states that the Chinese do not care where such technologies come from. The communist state and party leadership’s need for knowledge and information about the West is growing in line with China’s importance as a so-called global player. In other words, the intensity of Chinese espionage in Germany is steadily increasing.

The economically strong democracies have been exposed to extensive Chinese espionage for decades. Beijing wants to implement its Made in China 2025 strategy by next year, and thereby become the strongest economic power in the world. The government is pursuing an «all-tools-and-all-sectors approach,» meaning that no industry is safe from Beijing’s agents. In addition, as U.S. Federal Bureau of Investigation Director Christopher Wray warned four years ago, the Chinese are increasingly seeking access to Western colleges, universities and other research institutions.

This fits in with the picture of the three suspects arrested in Germany in April. One of them, Thomas R., who was arrested in Bad Homburg, was allegedly recruited by an employee of the Chinese Ministry for State Security, which is responsible for foreign intelligence gathering. According to the investigating authorities, his mission was to obtain information about innovative technologies in Germany that could be used for military purposes. He is said to have been supported by the married couple Herwig and Ina F., who were arrested in Düsseldorf. Together they allegedly established contact with scientists and researchers at German universities and colleges.

China’s actions come as little surprise

For example, the trio allegedly obtained a university study on machine parts and passed it on to the Chinese secret service. The components can be used for the construction of warship engines, for instance. At the time of their arrest, the suspects were also allegedly in negotiations regarding further research projects that could be especially useful for expanding China’s maritime combat power.

This approach is not surprising. In July 2017, the Chinese National People’s Congress passed a new national intelligence law, in part intended to pave the way for China to become a leading global economic power. It gives the intelligence and secret services numerous special rights to operate almost without restriction at home and abroad. According to the findings of the German domestic intelligence service, one aspect of the law provides for individuals, companies, state structures and other organizations even overseas to be compelled to cooperate.

The Chinese intelligence and secret services play a central role in these endeavors. At the same time, however, in their efforts to research Western companies, parties, institutions and politicians, they are increasingly being supported by other actors. The German intelligence service’s report specifically mentions Chinese company representatives abroad and criminal hacker groups in China, for example. According to the dossier, drawing on the aid of such individuals offers the regime in Beijing the advantage that it is easier to deny any attempts at state espionage that are eventually exposed.

This can be seen in the behavior of official Chinese representatives following the arrest of the three suspects in April. Beijing’s embassy in Berlin rejected the accusations and called on «the German side to refrain from exploiting the accusation of espionage in order to politically manipulate the image of China and to defame China.» Just a few days later, the Dresden public prosecutor’s office arranged for the arrest of a staff member working for Maximilian Krah, the leading candidate for the European Parliament elections for the right-wing Alternative for Germany political party, typically called the AfD. In his case, too, authorities suspect espionage on behalf of China. Two weeks ago, police officers searched the suspect’s workplace in Krah’s parliamentary office in Brussels.

«Seemingly harmless contact management»

The fact that the employee of a member of the European Parliament may have been spying for China would fit the picture painted by the German domestic intelligence service in its 2022 annual report on the information-gathering methods used by the regime’s intelligence services. These include activities run from the country’s legal diplomatic missions.

That group includes the embassies in Berlin and Bonn, as well as the consulates in Düsseldorf, Hamburg, Frankfurt and Munich. According to Germany’s domestic intelligence service, «predominantly open information gathering, including the monitoring of media and other open publications» takes place in these missions. The Foreign Intelligence Service of Germany also works in this way.

In addition, members of the Chinese embassies and consulates have also collected information «in the context of seemingly harmless contact management activities,» particularly targeting active and former political and business decision-makers, the report says. Observers assume that the staffer for AfD politician Krah was engaging in similar activities. In the past, there have also been repeated reports of intensive links between former high-ranking German politicians and China. These include former Federal Minister of the Interior Hans-Peter Friedrich of the Christian Social Union political party, as well as former minister of defense and Social Democratic Party lawmaker Rudolf Scharping.

These «intelligence operations for covert information gathering» are controlled directly from China, reports the German intelligence service. During visits to China, «target persons from Germany» were approached and recruited, typically being offered money in return. Contacts in ministries, top political-party circles, companies and scientific institutes are said to be particularly important to the Chinese.

Spying cannot be completely prevented

Such discussions often take place on the fringes of events at Chinese universities. The German intelligence service’s report goes on to say that subsequent meetings typically take place in third countries or in China «in order to reduce operational risks in Germany.»

China expert Eberhard Sandschneider says he is not surprised by Beijing’s activities. Sandschneider has worked for many years as an East Asia expert for the German Council on Foreign Relations, among other bodies. The regime has long been trying to obtain information in Germany through all possible legal and illegal channels, he says – especially if such information is seen to provide economic, political or military benefit.

However, Sandschneider rejects the idea that every Chinese person living in Germany may be a spy. The general suspicion against all Chinese is «nonsense,» he says. At the same time, he calls on German companies and institutions to strengthen protections for valuable information. He says such efforts must include critically reviewing employees, especially after the recent cases of espionage.

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