A New Cold War

Five lessons to keep in mind in the coming months and years of our new stand-off with China.
Home » Articles » A New Cold War

Are we in a new Cold War? If not, how is it best to describe the struggle between China and Western democracies? Some have suggested “hot peace”— but such wordplay doesn’t get us far. In fact, as far as intelligence and national security are concerned, the West is unmistakably in a new Cold War with China— and has been for some time. This shadowy conflict between East and West has echoes with the last century’s Cold War.

Like the previous Cold War, intelligence is once again at the frontline of today’s geopolitical clash. Understanding the activities of intelligence services is important because governments use them to do what they cannot in public. They execute secret, non-avowed, foreign policy. If you want to understand what a government’s true priorities and strategies are, away from the niceties of open diplomacy, thus look to their intelligence services. Doing so for the last century’s Cold War offers five lessons that inform our understanding of Western-Chinese relations today.

The first lesson is to appreciate the asymmetric nature of the intelligence conflict between East and West. From the earliest days of the Soviet Union, its intelligence services threw more resources at foreign intelligence than the Western powers. At key junctures, like before the Second World War and immediately after it, Britain’s intelligence had thread-bare existences. The image of Britain’s omniscient secret service, with networks reaching across the world, was fiction, not fact.

Then there is the nature of the Soviet regime itself. During the Cold War, Moscow was a graveyard for foreign espionage. As CIA and British foreign office records reveal, it was colossally difficult to conduct espionage operations behind the Iron Curtain: the regimes there were closed police states, with oppressive surveillance. Even relatively simple matters like posting a letter to an agent in the Soviet Union was a complex ordeal for MI6 as the Cold War set in. By contrast, it was vastly easier for Soviet intelligence to collect intelligence— primarily, to steal secrets— in Western free, open, democracies. They were soft targets. While Western services lumbered under blanket surveillance in Moscow, Soviet services could obtain valuable information in the West by simply picking up technical publications and going to trade fairs.

The same applies for Western intelligence services China today. But now the challenges are even more acute than the past. Beijing, like Moscow, has created a digital authoritarian regime with ubiquitous technical surveillance, to use the professional intelligence term. Technologies like facial recognition have created a Orwellian surveillance state in China about which the KGB could only have dreamed. This makes it difficult, if not impossible, for western services to operate effectively in China.

A second lesson is Western strategic myopia. Cold Wars tend to start before Western powers recognize them or are prepared for them. This is what happened after 1945. By the end of the war, the Western powers were effectively locked in a Cold War with Stalin’s Soviet Union— they just did not recognize it. The Western powers and the Soviet Union, with their two divergent and incompatible forms of government, had been on a collision course since the Bolsheviks seized power in Russia in 1917 and the Western powers intervened militarily in the subsequent Russian civil war. The actual collision between the Soviets and the West occurred, in the shadows, during the Second World War.

While Britain and the United States were strategically distracted fighting the Axis Powers, Stalin conducted an intelligence assault on his Western allies. Stalin used the opportunity of London and Washington’s defences being down, as they concentrated their efforts on defeating Nazi Germany and imperial Japan, to steal scientific and technical secrets from them on an industrial scale. The most important secrets stolen by Stalin’s spies were from the MANHATTAN Project. Stalin’s reason for authorizing his spies to target the Anglo-American atomic bomb project had nothing to do with the Second World War, for he knew he would not have the bomb in time for use against the Axis Powers. Instead, Stalin wanted it for after the war: to prepare for conflict with the Western capitalist powers, which Stalin’s reading of Marxist-Leninism told him would be inevitable.

Kim Philby

By 1945, the Soviets had stolen the plans of the Anglo-American atomic bomb. Doing so would change history. The phrase Cold War was popularized by George Orwell in an essay You and the Atom Bomb, published two months after the US ended the war by dropping bombs on Japan. As Orwell noted, the Cold War, a “peace that is no peace,” would be dictated by nuclear weapons. As usual, Orwell was correct. Four years later, in 1949, the Soviets detonated their first atomic weapon. Thanks to Soviet espionage, it was an exact replica of that dropped on Nagasaki.

Stalin’s intelligence chiefs also skilfully recruited agents who penetrated deep inside wartime governments on both sides of the Atlantic. The most notorious were the five Cambridge spies, one of whom, Kim Philby, even managed to become head of MI6’s wartime department specializing in Soviet espionage. The head of MI6’s unit set up to counter Soviet espionage was thus himself a Soviet spy. Through Stalin’s agents in the West, he was given a ringside seat to all the major strategic decisions that London and Washington took as the Cold War set in. The history of espionage records few, if any, similar achievements.

Western governments showed similar strategic short-sightedness when it came to China in the first decade of the twenty-first century. The Chinese government, like Putin’s Russia, viewed 9/11 as an opportunity to pursue their own interests: to contain US dominance. In 2005, as the US-led war on terror raged, Chinese intelligence declared war on US intelligence. China’s strategy was to contain and supplant US influence in South-East Asia. China’s principal intelligence service, the Ministry of State Security (MSS), thereafter threw its best resources and officers at US intelligence. The MSS’s intelligence assault was soon paying off. In 2010, it dismantled a CIA network in China, leading to the imprisonment and death of US sources there. The gains being made by the MSS passed by the US intelligence community, unaware or underappreciated. It is unclear whether US human intelligence has ever recovered in China.

Since Xi Jinping became China’s authoritarian leader, now a decade ago, China’s intelligence assault on Western governments, and the US in particular, has exponentially increased. Its assault is across domains, using human intelligence, signals intelligence and other forms of technical collection, and the cyber realm. This is the context for the Chinese spy scandals that you may have seen glimpses of in the news in recent years— from cyber hacks, recruiting agents in Western parliaments, to Chinese operatives stealing military, commercial, and trade secrets from Western companies. According to the FBI’s Director, Christopher Wray, China has stolen more data on Americans than every other country combined.

Much like with the Soviets after 1945, Western governments are today again racing to understand damage inflicted by the Chinese government while they were strategically distracted. Matters are, however, improving. Even Britain’s traditionally secretive intelligence services have publicly warned of the profound challenge to the West posed by the Chinese Communist Party (CCP). MI5, MI6, and GCHQ are all throwing resources at the national security threat posed by China. The same is true for the US intelligence community. The issue for Western governments is how much damage Chinese intelligence has already done. In 2021, the FBI was opening China-related espionage investigations every twelve hours.

This relates to a third lesson: safeguarding civil liberties in Western countries. Given the scale of China’s intelligence offense, it is arguably more important than ever to protect civil liberties. Now is a time for nuance and debate, not grandstanding. There is a real risk of creating a new “red menace,” like that in the 1950s. The history of that period shows the dangers of Western governments not being transparent about foreign espionage. The US and British governments knew a fair amount about Soviet espionage in the post-war years. Their knowledge came from the work of British and US codebreakers, who managed to crack a series of Soviet communications, known as the VENONA decrypts, which revealed the nature, scope, and scale of Soviet wartime espionage. The VENONA decrypts showed the guilt of some of the people notoriously accused of being Soviet agents in the early Cold War: people like Julius Rosenberg in the MANHATTAN project, and Alger Hiss at the US State Department, were indeed Soviet agents, as VENONA showed.

The tragedy of the early Cold War was that Western governments did not disclose their knowledge of Soviet espionage even when the VENONA secret was known to be blown to the Kremlin. Any decent damage assessment would have concluded that by the early 1950s, and certainly by1963, when Kim Philby defected to the Soviet Union, the Soviets knew about the VENONA project. One senior FBI officer, Robert Lamphere, who was indoctrinated into VENONA and led many of the early Cold War spy cases, correctly questioned the NSA’s Director: “Who are you keeping the secret from? It’s not the KGB, it’s the American public”.

But Washington and London continued to keep VENONA classified for decades, until after the Soviet Union’s collapse. If they had disclosed it earlier, much of the public misunderstanding about Soviet espionage in the West could have been avoided. It also seems reasonable to suppose that much of the tragedy of McCarthyism could have been circumvented. Absence of reliable information allowed a demagogue like Joseph McCarthy to emerge, making false accusations, and instigating a communist witch hunt in the United States.

Today, Western governments need to be as transparent as possible about their knowledge of Chinese espionage. Light is the best disinfectant for the CCP’s malign foreign activities. Western disclosures about Chinese espionage must also be challenged, and critiqued. This is the lifeblood of a healthy democracy.

Chinese spies are real, just as Soviet spies were real. But that does not mean every person of Asian descent is a Chinese spy, any more so than every Left-leaning person was a Soviet agent in the past. In fact, Chinese communities in Western countries are frequently the victims of Chinese intelligence. The MSS blackmails, and even kidnaps, people in those communities to work for the CCP.

The dilemma for governments about disclosing intelligence is the same today as it was in the past. Intelligence agencies regard their sources and methods for collecting intelligence as their prized secrets. Western governments have capabilities for stealing secrets that we, in the public, have no business knowing. But there is good news today compared even to the recent past: there is now so much information available through open sources, in our digitally interconnected world, and from commercial intelligence providers, that Western governments have new avenues for disclosing intelligence, without jeopardizing their sources and methods. According to a senior US intelligence official interviewed on condition of anonymity, it was the availability of commercial intelligence that proved a game-changer for the US government before Putin’s invasion of Ukraine in February 2022. Commercial providers allowed the US government to declassify intelligence about Putin’s war plans, in near real time, while safeguarding sources and methods. Job done. This is a formula for how to disclose intelligence on Chinese espionage.

A fourth lesson from the last century’s Cold War concerns reasonable expectations: what we can expect Western services to achieve when trying to collect intelligence on closed police states. In the intelligence world, a distinction exists between secrets and mysteries; the former being hidden and knowable information, the latter hidden but unknowable. The last century’s Cold War shows that even with the best available intelligence, from human and technical sources, it is impossible to turn a mystery into a knowable secret. It does not appear that Western services ever penetrated the decision making of Soviet leaders. Instead, they had to make informed analyses, based frequently on fragmentary data available. The same applies to Xi’s regime. By its nature, it is largely mysterious.

A final, major, lesson: despite the lessons that can be gleaned from the first Cold War, Western governments must not be shackled by the past. China’s national security threat today is not a replay of the last century’s Cold War; history does not repeat itself. China’s massive economic weight, and integration into the global economy, makes it unlike the Soviet Union. The latter was an economic pariah, a military superpower with Third World levels of living standards.

Through a series of draconian national security laws passed under Xi, China fuses intelligence with business. The West needs to think of new approaches to the mercantilist authoritarian model posed by China.

One way of doing so lies with open-source intelligence. In the West, the private sector is the leader of this field, not governments. The urgent challenge for Western intelligence agencies is how to incorporate the private sector into their work— using machine learning and artificial intelligence to analyze data collected from open and commercially available sources. Doing this will require a new intelligence public-private partnership. This will also require a fundamental rethinking about the nature of intelligence itself. It is no longer about clandestine collection, from spies and technical means, with some open-source reporting then incorporated. Instead, in this century, intelligence must be first and foremost about open source intelligence, which can then be supplemented by clandestine sources.

The problem is that governments on both sides of the Atlantic are still operating under national security establishments created in response to last century’s challenges. They are no longer fit for purpose in today’s interconnected cyber world. The age of the secret service is over. The future of intelligence lies in the private sector.

Calder Walton is the author of Spies: The Epic Intelligence War Between East and West.