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U.S. intel agencies failing to counter threat from China, says House Intelligence Committee report

"Absent a significant realignment, [the] intelligence community will fail [to enable] U.S. competition with China on the global stage," says the report.
Image: NSA Administration building
An exterior of the National Security Administration (NSA) campus in Fort Meade, Md., on June 6, 2013.Patrick Semansky / AP file

WASHINGTON — After two decades of prioritizing counterterrorism, U.S. intelligence agencies are failing to sufficiently understand and counter the national security threat posed by China, the House Intelligence Committee concludes in a new report issued Wednesday.

The report, based on hundreds of hours of interviews with intelligence officers and thousands of analytic assessments, finds that the intelligence community must change how it does business — not only to improve its insights into China, but also to better address "the growing importance of interlocking non-military transnational threats, such as global health, economic security, and climate change."

The report recommends that spy agencies make better use of open source data, modernize hiring practices and reorient spending priorities. Although the committee's Democratic majority wrote the report, the full committee approved it Wednesday morning in a bipartisan voice vote.

Click here to read the report

"The United States' Intelligence Community has not sufficiently adapted to a changing geopolitical and technological environment increasingly shaped by a rising China," the report says. "Absent a significant realignment of resources, the U.S. government and intelligence community will fail to achieve the outcomes required to enable continued U.S. competition with China on the global stage for decades to come, and to protect the U.S. health and security."

In addition to critiquing U.S. spy agencies, the report offers a stark portrayal of China as a rogue nation that threatens global security, underscoring how dramatically the bipartisan foreign policy consensus about China has changed in the last decade.

"The People's Republic of China (PRC) has increasingly sought to revise the international order and global norms in a way that furthers its own strategic interests and undermines those of the United States specifically, and the West generally," the report says. "Militarily, China has embarked on a massive modernization drive — creating a 'blue water' navy, investing heavily in hypersonic weapons, developing its own fifth-generation fighter, militarizing a series of atolls and islets in the South China Sea to strengthen its claims in the region, and building its first overseas military base in Djibouti."

Also disturbing, the report says, is China's use of technology to create "a post-modern authoritarian state in which the country's population is monitored around the clock through their phones and an ever-growing network of surveillance cameras equipped with facial-recognition technology. This 'digital authoritarianism' has not only been deployed at home, but has been increasingly marketed to aspiring authoritarians abroad."

In a statement to NBC News, Director of National Intelligence John Ratcliffe said, “I’m glad to see that there’s Congressional recognition of what I’ve been saying since my confirmation: China poses a greater national security threat to the U.S. than any other nation. As DNI, I’m committing the Intelligence Community resources needed to fully understand the threat posed by China and provide policymakers with the best intelligence to counter China’s activities."

On Wednesday the committee made public a 37-page report that included a number of redactions, and said it had also produced a classified document of more than 100 pages. The classified version is likely to have addressed a number of intelligence failings too sensitive to discuss publicly, including the severe damage done to CIA spying in China by a former CIA officer convicted of espionage, and a catastrophic failure in how the CIA communicated secretly with its foreign informants. Those incidents contributed to the loss of about 20 Chinese agents who were spying for the U.S., current and former officials have told NBC News.

The public version of the report also is silent on whether the intelligence community gained insights into what officials in China knew early on about the emerging COVID-19 pandemic, or whether a lack of those insights was an intelligence failure. The committee is conducting a separate review of that issue.

Another issue bedeviling intelligence agencies — but omitted from the public version of the report — is the difficulty of spying in China because of the same technology the government uses to monitor its citizens: Biometric checks at the border, cell phone geolocation, closed-circuit video on the street and facial recognition technology.

The committee began reviewing the issue in May 2019, the report said, for two main reasons.

"First, the Committee assessed that the IC's ability to fulfill emerging intelligence requirements regarding near-peer nation states had atrophied, in part because of the United States' long-standing focus on counterterrorism and Middle East regional issues," the report said. "Second, the Committee believes that China poses a unique and growing strategic challenge to U.S. national security."

The review resulted in 23 public findings on China and 36 public recommendations, in addition to more than 100 classified recommendations, the report says.

The public report is filled with intelligence agency jargon that speaks to huge, intractable problems facing the spy agencies.

For example: "The Intelligence Community is struggling to adapt to the increasing availability and commodification of data." And: "The compartmentation of intelligence limits decision-makers' ability to develop a common understanding of China's intent, actions, and likely future behavior."

Those two bland sentences sum up a massive challenge, and what some argue is the failure of intelligence agencies to keep pace with how private industry makes use of information, former officials say. In a world in which analysis of huge troves of open source data produces revelatory insights, intelligence agencies continue to prioritize the getting and keeping of secrets. And those secrets often remain in locked boxes, inaccessible to others in the government who might be able to make use of them if only they had access.

"Is collected intelligence converted to a digestible format in a timely fashion? Is raw intelligence reporting stored in accessible locations? Are intelligence community processing techniques on par, or superior, to comparable commercial capabilities?" the committee inquired, according to the report.

The answers to those questions are not included in the public version of the document.