HONG KONG: Spies Move Deeper Underground in Post-Handover Era

By IPS Correspondents Reprint | | Print |

Yojana Sharma

HONG KONG, Jun 15 1997 (IPS) - A major outpost for foreign and Chinese spies, the British military is shipping out its intelligence operations from Hong Kong, but analysts say the handover is unlikely to reduce Hong Kong’s role in Asia as a hotbed of Western spying operations.

Hong Kong is one of Britain’s largest spying outposts, and the departing Colonial power is not alone in having major spying operations here.

Ever since the Communists took over on the mainland in 1949, heralding periods of isolation from the West, Hong Kong has been the main listening post for Western and Asia countries trying to make sense of the secretive Communist giant.

According to China’s former top official to Hong Kong Xu Jiatun, who was once the head of the New China News Agency, Beijing’s de facto consulate here until his defection to the U.S in 1990, the U.S, Britain and Taiwan all had extensive intelligence operations in Hong Kong. China had as many as 6,000 agents here in the 1980s, Xu said in his memoirs.

Foreign intelligence services gathered information through Hong Kong groups and individuals. “There is a relationship between foreign intelligence activities in Hong Kong and the motive to subvert Chinese authority,” Xu said.

In a recent interview with the China-watching magazine, ‘The Nineties’, in April, Xu said “no foreign government is going to give up such activities in Hong Kong. We have to admit that they exist.”

The former controller of Britain’s Secret Intelligence Service (SIS) also known as the MI6 spy network, Baroness Park said publicly at theed of 1993 that the British intelligence organisation viewed China as a “major taret” and that Hong Kong was an extremely important spy station.

In particular SIS specialised in monitoring weapons of mass destruction, including China’s sale of M-9 and M-11 missiles to Pakistan which has caused tension in the Sino-US relationship in recent years.

Information gathered by British spies in Hong Kong was routinely passed on to the U.S, Australia, New Zealand and Canada in intelligence sharing operations, although the British kept the bulk of the information, particularly commercial secrets to themselves.

Nowadays the British have particularly close links with the US National Security Agency (NSA) which monitors the entire electromagnetic spectrum. This includes faxes, telephones, fibre- optics, computer networks, satellite and cellular systems

“Anything that transmits information from one place to another, all the time, anywhere. Then it stores it in computers that can handle four million characters a second,” according to Phillip Knightly, author of several books on espionage.

“GCHQ’s relationship with the NSA remains so close that some espionage experts believe that it is more realistic to talk about “global eavesdropping agencies” rather than national signals intelligence services,” Knightly said.

According to Knightly a recent decision by the two intelligence agencies to invest in the next generation of U.S optical spy satellites known as the 8X series “will give them the ability to photograph and film any activity not physically under cover anywhere in the world.”

This means that Britain in particular, looked on with extreme suspicion by the Chinese as wanting to destabilise Hong Kong after the handover, does not need to have a signals gathering operation physically in Hong Kong to be as effective as before.

GCHQ established by the Air Force in the quiet seaside hamlet of Chung Hom Kok in Hong Kong 1977 was the British electronic eavesdropping agency which listened in to international phone calls, radio broadcasts and that station has now been transferred to Geraldton in Western Australia where a large satellite communications station was built in 1993 by the Australian Defence Signals Directorate. Analysts say only a small staff will remain in Hong Kong based at the British Consulate, which is likely to be one of its largest anywhere in the world after the handover.

A recent article in the London ‘Times’ newspaper said SIS agents with experience in Chinese affairs have relocated to the British embassies in South Korea, Thailand and Malaysia, all

countries which have traditionally monitored China due to their anti-communist history.

However intelligence sources say both SIS and GCHQ have established an extensive “stay behind” network in Hong Kong including agents in play in key business and financial institutions.

This reflects Britain’s shift — although not necessarily Asia’s or Washington’s — from military and political espionage to more economic and commercial spying as British companies, among the largest investors in China, look to expand their commercial presence, using Hong Kong as a jumping off point.

Popular writers of spy stories also say the British have been spending the last few years bugging buildings, computers and in ceilings in advance of China’s arrival, although this is difficult to verify and is strongly denied by Roger Goodwin, the British Ministry of Defence spokesman in Hong Kong.

“Why would we want to do that?” he asks, apparently not disingenuously. But others note it is unlikely that the People’s Liberation Army would move into barracks vacated by the departing British without first doing a complete sweep for bugs.

As Britain pulls out as least its visible intelligence presence, others are making their’s more transparent.

The U.S is negotiating for its defence liaison office to continue operating in Hong Kong. Based at the U.S consulate here, staff analyse information and intelligence on China’s armed forces.

However, in return for allowing them to stay, U.S officials say Beijing is likely to restrict their numbers usually on the basis of “reciprocity” arrangements and insist that they arrive as civilians. For the U.S, this is seen as a downgrading of its defence intelligence presence in Hong Kong.

“The change of sovereignty becomes tricky for us,” notes a defence liaison officer of a European country which used to liaise with the British Army. “Before we were working under the protection of one of our NATO allies, now we have to do our work under the nose of a non-ally.”

Another European diplomat was more succinct, “after Jun. 30 we are effectively operating behind enemy lines with all its implications.”

This means that any untoward behaviour detected by China among Western and Asian spies in Hong Kong could blow up into a huge diplomatic incident which could affect bilateral relations in general. Most countries intent on maintaining their spy networks in Hong Kong t atch China are keen to avoid this.

Others fear it is not worth the risk. Taiwan has already said it will recall its Hong Kong-based intelligence agents before the handover “to prevent mishaps”, but the mass-circulation Taipei daily ‘China Times’ reported in April that Taipei planned to recruit more local informants and continue to gather intelligence on China by using underground networks.

Taiwan’s National Security Bureau, Military Intelligence Bureau and Bureau of investigation all have staff in Hong Kong, although precise numbers are never revealed.