China Security Memo: Feb. 3, 2011

13 MINS READFeb 3, 2011 | 04:28 GMT

Australian Jailed in China Back in the News

Australian citizen James Sun, a former member of China's People's Liberation Army Air Force (PLAAF), was jailed Feb. 11, 2006, on espionage charges, Australian daily The Age reported Feb. 1. Though Australia and China have had multiple spats over questionable Chinese accusations of spying, these charges appear to have more substance — buttressing Beijing's paranoia about espionage. Though his guilt or innocence cannot definitively be established, the case against Sun appears a better fit with traditional espionage than the accusations against Australians Stern Hu and Matthew Ng and American Xue Feng. The latter three were Chinese-born foreign nationals who worked for foreign companies within China. Beijing suspects people who fit this profile could be used to suborn or spy on Chinese officials. By contrast, the Sun case appears more like traditional espionage targeting military secrets. Sun worked for the Beijing Wanjia Cultural Exchange Co., an Australian firm that recruited students from China. According to a Chinese court filing, the Taiwanese Military Intelligence Bureau recruited him, after which he began returning to China with the purpose of recruiting acquaintances from the PLAAF. Sun was arrested in the evening in Beijing on his way to a dinner with old friends, including some he knew from the PLAAF, and taken to a prison on the outskirts of the city by officers from the Ministry of State Security (MSS). In 2002, Sun recruited one of his still-serving former PLAAF colleagues, Yang Delong, to steal PLAAF documents in exchange for money that Sun said came from the Taiwanese, according to reported confessions by both Sun and Yang. Between 2002 and 2005, Yang copied at least 1,012 documents with the training and equipment provided by Sun. In return, he received 1.04 million yuan (about $159,000) for eight document drops. These documents included eight classified "top confidential," 109 "national confidential," 479 "national secret" and 416 "internal circulated." The discovery of Yang's activities and subsequent confession probably precipitated Sun's arrest. Sun's confession apparently came under duress, and it would be unsurprising if Yang's did as well. According to The Age report, Chinese officers threatened his family in China and his wife and then-unborn child in Australia, implying Sun would be replaced as a husband and father. Though the extent of MSS operational capabilities in Australia remains unclear, the Australian security services no doubt evaluated the threat carefully. While China's intelligence services commonly threaten their perceived enemies' families in China, this takes things to a new level. Sun does not seem to have fought his case aggressively, possibly due to the threats, but also because he may be guilty. The MSS questioned him for months while his case proceeded until his conviction in September 2007. Sun turned down an MSS-appointed lawyer, and Australian consular officials were not allowed to observe the trial. They were, however, allowed to attend the 20-minute sentencing, in which the public information on his case was obtained. The publicity on Sun's case five years after his initial imprisonment, a period that included a two-year stint on death row (his sentence eventually was commuted to life imprisonment), is probably the result of his wife's efforts to coax Australian officials into passing a prisoner exchange treaty with China. Passage could create the opportunity for Sun to serve out his sentence in Australia, closer to his family. Australian officials do not seem to have protested much over Sun's arrest, trial and conviction, though that could be explained by Sun's apparent decision not to fight the legal proceedings against him. Questions of Sun's guilt and innocence aside, the Taiwanese security services are no stranger to spying on China, their primary target. High on their list of priorities is information on China's military capabilities, which probably were the focus of Sun and Yang's spying (assuming, of course, the allegations were true). Recruiting Sun in Australia would have been much safer than finding an agent in China, as Sun would have been under much less suspicion than a Taiwanese national. His extensive contacts with PLAAF officers who might have attained important positions would have given him access to the information on new Chinese technological developments, strategies and tactics, and other potential recruits the Taiwanese crave. (click here to view interactive map)

Jan. 26

  • Wuhan police used an attractive young female detective working undercover to arrest a man suspected of fraud in Hubei province after the detective invited the man for coffee. The suspect sold fake government bonds worth 5 million yuan (about $760,000) to a victim for 100,000 yuan. He also stole 80,000 using the victim's credit card.
  • The National Development and Reform Commission (NDRC) required local governments to punish Carrefour and Walmart stores for price fraud. Many franchise stores were found to advertise prices lower than what they charged at the register. The NDRC mandated they return the income from the price differential and pay five times the amount in fines, up to 500,000 yuan. Stores included those located in Shanghai; Chongqing; Harbin, Heilongjiang province; Shenyang, Liaoning province; Nanning, Guangxi province; Kunming, Yunnan province; Wuhan, Hubei province; and Changsha, Hunan province. Both companies issued an apology to the public.
  • Chinese customs officials in Changsha, Hunan province, destroyed more than 8,000 counterfeit goods by incinerating pirated books and counterfeit Gucci handbags and directing trucks to roll over huge piles of counterfeit electronic devices, including imitation Nokia, Motorola and Apple cell phones and laptop computers, earphones and compact discs. In accordance with China's intellectual property rights protection regulations, some confiscated counterfeit goods were donated to Red Cross societies and earthquake-devastated regions.
  • Two labor contractors faked a robbery in order to avoid paying overdue wages to their workers in Hohhot, Inner Mongolia. The two called the police and claimed 200,000 yuan was stolen. Police noticed contradictory testimony from the witnesses and discovered the fraud.

Jan. 27

  • The director of the Tobacco Bureau of Shanwei, Guangdong province, is under investigation for possessing multiple fake identification documents, traveling overseas illegally and suspicion of abusing his 12 million yuan-expense account, Chinese media reported. He used the IDs to travel abroad 69 times in two years, which is illegal and considered an indication of corruption.
  • Chongqing prosecutors announced they were investigating six suspects allegedly running a pyramid scheme. In April 2009, the group began selling memberships in their "pure capital operation" for a minimum of 3,800 yuan. They collected more than 37 million yuan from 700 investors in Chongqing, Jiangsu, Zhejiang and Jiangxi.
  • Authorities in Guangxi province announced Jan. 25 they would begin a special campaign against illegal land use over the next five months by utilizing satellite photos, Xinhua reported. They had evidence of 4,127 cases of illegal use.
  • Shanghai prosecutors accused a seven-man crew of transporting newly arrived visitors in illegal taxis and robbing them of 300,000 yuan in cash and items between November 2009 and June 2010. According to prosecutors, the crew persuaded 12 travelers arriving on the shuttle bus from Pudong International Airport at Shanghai Railway Station to travel in their vehicles. Once on the road, the crew would raise the fare, beating their passengers or threatening to inject them with poison if they refused to pay. After robbing the victims, the crew would leave them in remote areas.

Jan. 28

  • Shenzhen's Intermediate People's Court put 22 members of a suspected organized criminal group on trial. They are accused of gambling, extortion, illegal possession of firearms, bribing police and using violence in business. The group has reportedly been active near the Jiangshi and Tangwei villages in the Gongming subdistrict of Baoan district.
  • The deputy director of Hunan Public Security Bureau, who is also a party committee member, is being investigated for corruption in Changsha. His case was transferred to prosecutors after the provincial Discipline Inspection Commission confirmed charges that he had used his position for personal gain, violating party regulations and criminal law.
  • A driver of a vehicle with a fake license plate shot at police officers and then killed two motorcycle riders while escaping police Jan. 24 in Huizhou, Guangdong province, Chinese media reported. Police were still looking for the car's occupants.
  • Nanchang police arrested eight people involved in robbing graves in Jiangxi province. They are suspected of digging holes in the Xiehe Tombs, a protected historic site. Police confiscated detonators, digging tools and metal detectors during the arrests.
  • China blocked the word "Egypt" from micro-blog Internet searches on web portal sites Sina, Sohu, and Weibo, which are comparable to Twitter. Search results for "Egypt" said the resulting page could not be found or displayed, according to regulations. The move shows the Chinese government is concerned that anti-government protests calling for reforms could inspire dissidents in China.

Jan. 30

  • Wenzhou police released new evidence that they believe supports the claim that Qian Yunhui's death was an accident. He was run over by a truck Dec. 25 in Zhaiqiao, Zhejiang province, and many locals and Internet activists believe he was murdered. They said they acquired a watch Qian was wearing that had a built-in audio recorder running at the time of the accident. The watch was recovered by another villager, who gave it to the police on Jan. 14. The recording allegedly includes the screech of tires making a sudden stop, rather than slowing rolling over Qian as locals allege. A local court also sentenced the driver to three and a half years in prison for causing an accidental death.
  • The general manager of the China International Telecommunication Construction Corporation was on trial for accepting bribes of 130,000 from another official in return for a promotion. The lower-level official was already convicted of embezzling or accepting bribes worth a total of 580 million yuan in 2009.
  • Henan provincial police discovered 14,500 illegal security guards employed by 4,322 different companies since September 2010. They were operating without passing the required exam and acquiring the proper certificate. They also shut down 16 illegal security guard companies.

Jan. 31

  • The son of a senior police officer in Baoding, Hebei province, was sentenced at a Wangdu county court to six years in prison for killing one young woman and injuring another while driving drunk. Li Qiming, 23, is the son of the deputy head of the Public Security Bureau in Baoding's Beishi district, where the accident took place. The trial was moved to Wangdu to avoid favoritism. Prosecutors sought a sentence of three to seven years because the man had attempted to escape after killing the woman. The court issued a statement saying the verdict was "lenient" because Li had shown remorse and paid the killed woman's family 460,000 yuan ($69,880) and the injured woman's family 92,000 yuan.
  • A factory owner was sentenced to life in prison for stealing 5 million yuan-worth of electricity in Jinhua, Zhejiang province. The electricity was used to run his steel factory. Another employee was sentenced to 14 years in prison for aiding in the crime.

Feb. 1

  • Four police officers, including the local chief of public security, were seriously injured following a Jan. 30 altercation with two organized crime gangs in Hengyang, Hunan province. After receiving word that two rival gangs were planning to fight, the Qidong county police organized 40 officers to surround a local entertainment club where the gang members had gathered. During the arrest, Public Security Chief Tan Zhanglong was stabbed, puncturing a nerve in his arm, while three other officers sustained knife wounds of varying degrees.
  • A wrestling coach from Tianjin was arrested after fighting police in Beijing. When he tried to drive into Beijing he was stopped for not having a Beijing entrance permit for his vehicle. He refused to pay the fine and attacked the officer.
  • China's Zijin Mining Group Co. was fined 30 million yuan by the Xinluo District Court in Longyan, Fujian province, for a major pollution accident at the company's Zijinshan gold and copper mine in 2010. Five managers and employees directly responsible for the incident were sentenced to imprisonment of up to four years and six months and were also ordered to pay fines. The company is also being sued for $2.95 million by a city government in Guangdong province over a fatal dam collapse at a local tin mine in September 2010 that killed 22 people.
  • Shanghai police arrested a man for stealing cultural relics and calligraphy worth 30 million yuan. The suspect stole more than 160 pieces from a single owner in Baoshan district, the director of Shanghai's Cultural Relics Identification Center. The suspect broke into the man's house and also stole his bank cards. Police tracked him down when the suspect began using the cards at an ATM.
  • A man was attacked in his apartment building and had 37,000 yuan stolen after he visited a bank in Shanghai. The culprit presumably followed him to his home from the bank and then hit him in the head with a brick. A similar incident, involving a hammer, occurred a week before. Police are currently searching for a suspect.
  • The former deputy chief of the counternarcotics squad of Chongqing police and two drug traffickers were sentenced to death for murder, drug trafficking and corruption. The officer protected the two traffickers who brought 120 kilograms of heroin into Chongqing between 1997 and 2010. He later ordered the two to kill another trafficker who refused to pay bribes for protection. The two paid the officer 1.2 million yuan in bribes.
  • The National Audit Office announced that two major insurers were responsible for financial misconduct totaling more than 3 billion yuan in 2009. The China Life Insurance Company and the People's Insurance Company of China financial records included expense fraud, premium increases, false settlements for claims, and funds kept off the books. At least 350 employees involved in the misconduct have been identified and some have been fired.

Article Search

Copyright © Stratfor Enterprises, LLC. All rights reserved.

Stratfor Worldview


To empower members to confidently understand and navigate a continuously changing and complex global environment.