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Recent Chinese Spy Cases in Taiwan: Knowns, Unknowns, and Implications

Recent Chinese Spy Cases in Taiwan: Knowns, Unknowns, and Implications

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Recent Chinese Spy Cases in Taiwan: Knowns, Unknowns, and Implications

In late August, the Taiwan High Prosecutors Office (臺灣高等檢察署) handed down an extraordinary set of sentences involving a 10-person spy ring working for the People’s Republic of China (PRC) on the island democracy. An extensive investigation, led by an assortment of national security agencies within Taiwan, reportedly began in mid-2023 and focused on looking into the new—but aggressive—spy ring that ensnared seven active-duty and three retired military personnel. The readout of the cases included charges related to the transfer of classified intelligence about key military sites, and training and troop deployments. In addition to the sensitive intelligence, the cases further involved a sensational conspiracy to have a special forces wing commander pilot defect by flying a CH-47 Chinook onto a Chinese aircraft carrier, as well as the creation of propaganda videos by active service junior military personnel stating that they would surrender to the People’s Liberation Army (PLA) in the event of a war. The following analyses provide the background, key features, and implications of these recent cases based on publicly available information. 

Background

The 10-person espionage ring was headed by retired Taiwan Army servicemember-cum-businessman, Chen Yu-hsin (陳裕炘)—who remains a wanted fugitive by the authorities in Taiwan. Taiwanese investigators believe that Chen was recruited by Chinese intelligence sometime in 2021. After retiring from the military, Chen became a businessman and began to work in China, where he was believed to have been recruited by the Chinese government to spy on Taiwan. Chen then recruited Army Major Hsiao Hsiang-yun (蕭翔云), who had just retired from the military in April 2023 and served in the Republic of China (ROC) Army’s Chemical, Biological, Radiological and Nuclear (CBRN) Training Center (陸軍化生放核訓練中心). 

Hsiao served as one of two key middlemen for Chen in recruiting active-duty army personnel. Based on public reporting, investigators believe that Hsiao had joined Chen’s spy ring around August/September 2021, and then helped to recruit his comrades in the Republic of China Army (ROCA). These recruits included Hsieh Ping-cheng (謝秉成)—the other major co-conspirator in the spy ring—and other active-duty military officers, such as intelligence officer Kang Yi-pin (康奕彬) and Major Ho Hsin-ju (何信儒). From the end of 2022 to March 2023, Hsieh then successfully recruited several active-duty military personnel: Lieutenant Colonel Hsieh Meng-shu (謝孟書), Captain Hung Jui-yang (洪睿洋), and Lu Chun-fang (陸駿方) to join Chen’s spy ring. In totality, Chen, Hsiao, and Hsieh successfully recruited seven active-duty junior officers.

While the officers that Chen’s cabal had recruited were junior in rank, they were posted at important military sites for the ROCA. They were tasked by Chen and his lieutenants to spy on secrets such as the Han Kuang Military Exercise (漢光演習) and the top-secret Gu-An Combat Plan (固安作戰計畫), and other classified military plans and internal assessments.

In addition to passing classified military information to the enemy, the recruitment of Lieutenant Colonel Hsieh Meng-shu exposed a dormant but renewed threat in Chinese intelligence operations against Taiwan: defection. 

When he was approached by Hsieh Ping-chang, Lieutenant Colonel Hsieh was serving in the 601st Brigade of the Army Aviation and Special Force Command (陸軍航特部601旅). To entice Hsieh to join the spy ring, Chen invited Hsieh Meng-shu to travel to Thailand (a frequent location used by Chinese intelligence) and promised to assist Hsieh’s wife and children in fleeing Taiwan and obtaining Thai visas if and when war broke out. Most interestingly, Chen’s handlers were two Chinese persons reportedly with PLA affiliations: one was identified as a PLA general referred to as “General Wang,” and another a commander of the Guangzhou Military Region (廣州軍區) who went by the name of “General Wu.” They provided Hsieh with a mobile phone equipped with an encrypted cryptocurrency program and an accompanying account code. As part of the original proposed deal, in addition to passing along classified information, Hsieh would fly a CH-47 Chinook helicopter onto a Chinese aircraft carrier. The Chinese intelligence agents promised to pay Hsieh NTD $200,000 (USD $6,250) per month.

After assessing the risks, Hsieh Meng-shu allegedly declined the initial offer, but agreed after the offer was raised to USD $15 million. In June/July 2023, Hsieh Ping-cheng, Chen Yu-hsin, Hsieh Meng-shu, held a video conference with “General Wang” and “General Wu” and conspired to have Hsieh Meng-shu fly the military helicopter to the aircraft carrier during an exercise off the coast of Kaohsiung. The plan was intercepted and foiled by Taiwan’s Ministry of National Defense (MND, 國防部 ) and foiled by counterintelligence units before the plan was realized.

The cabal’s exploits did not stop with encouraging Hsieh’s defection. Junior officers enlisted by Chen, Hsiao, and Hsieh—presumably at the instructions of Chen’s handlers—also filmed videos to ostensibly encourage desertion by fellow Taiwanese soldiers. The video not only detailed the soldiers’ service units and professional titles but also had enlisted active duty soldiers stating how they were “willing to surrender to the People’s Liberation Army.”

Other junior members in the spy ring were focused on collecting military intelligence at posts. Sergeant Liu li-chi (劉立齊) stole military secrets that he should not have had the clearance to access. One of the other recruits, Ho Hsin-ju, had reportedly used his mobile phone to copy the “0221 Project” (0221專案), which is related to secret military deployment, communication links, and mobilization plans. These officers would send the classified intelligence via encrypted messaging app Telegram to Chen, the spy ring leader, who then passed it on to the Chinese agents. Hsieh Ping-cheng would also make an appointment with the junior officers involved in the case to drop the stolen intelligence at a locker in the Taipei Railway Station, and Hsiao would then pick up the payload.

Money appeared to be the primary inducement in this case for the successful recruitment in collecting military intelligence for the Chinese Communist Party (CCP, 中國共產黨). According to Taiwan investigators, Hsiao received NTD $620,000 (USD $19,396) from Chinese agents, while Kang received NTD $700,000 (USD $21,799) and Ho NTD $600,000 (USD $18,686) for collecting and passing classified military materials. Hsieh Meng-shu collected a total of NTD $556,000 (USD $17,316) and 40,000 Thai baht in payments, Hong Jui-yang received a payment of NTD $446,000 (USD $13,890), and Lu chun-fang received a bribe of NTD $10,000 (USD $311). The price for each delivered item of military intelligence was reportedly NTD $100,000 (USD $3,114).

RankEnglishChineseTitleActivitySentence
 Chen Yu-hsin (Ringleader)陳裕炘BusinessmanForming spy ringAt-large
MajorHsiao Hsiang-yun蕭翔云

Army’s Chemical, Biological, Radiological and Nuclear Training Center

(discharged April 14, 2023) 

Forming spy ring; stealing classified information13 years
 Hsieh Ping-cheng謝秉成BusinessmanForming spy ring8 years
Lieutenant ColonelHsieh Meng-shu謝孟書601st Brigade of the Army Aviation and Special Force CommandConspired to defect and steal「CH-47 」Chinook helicopter; stealing classified information 9 years
Intelligence OfficerKang Yi-pin康奕彬Kinmen Garrison Command stealing classified information7 years 2 months
MajorHo Hsin-ju何信儒Huadong Defense Commandstealing classified information7 years 4 months
CaptainHung Jui-yang洪睿洋Army Infantry 104th Brigade stealing classified information7 years
OfficerLu Chun-fang陸駿方Army Infantry 104th Brigade (discharged September 23, 2023)Filming surrender video5 years 6 months
SergeantLiu Li-chi劉立齊Tainan City Reserve Brigade Filming surrender video; stealing classified information1 year 6 months
OfficerWu Chih-peng吳志鵬 Tainan City Reserve BrigadeFilming surrender videoInnocent

Table created by author. (Table sources: Taipei Times, Ctwant, Tai Sounds, Liberty Times, UDN, and UDN.)

The investigation into the spy ring was purportedly launched at the end of May or July 2023—two years after Chen was believed to have been recruited as a Chinese spy. The breakthrough for the case likely began with Hsieh Ping-cheng. After his discharge from the military, Hsieh set up a male escort business in the central city of Taichung to recruit military personnel who presumably needed the money. Hsieh brazenly even called the front the PLA’s Taiwan Garrison command center and would refer to himself as a senior colonel in the PLA Guangdong Southern Theater Command Taiwan Branch. In August 2023, the warrant for Hsieh Ping-cheng was approved and expanded after investigators unraveled suspicious financial transactions between Lieutenant Colonel Hsieh Meng-shu and Hsieh Ping-cheng that led to an indictment issued in November 2023. 

Key Features 

Younger, Motivated by Money, and Army-Centered

An interesting feature that can be observed in this group of convicted spies is that they were all from the ROCA and involved relatively younger military personnel than have been typically present in prior major cases, which have often targeted older retirees from the military for espionage recruitment. The motivations of these recruited agents also stand in contrast with the older servicemembers implicated in espionage cases, in which the recruited agents were more driven by a mix of ideology reinforced by financial gains or other compromising enticements. In contrast, the primary inducement or motivation of these recent cases appears to be money. Moreover, while strong identification with a greater-Chinese identity would often play a role in enticing older military personnel to support the CCP, younger generations of soldiers have less of a natural affinity with the PRC in terms of identity, which would make it presumably harder for Chinese intelligence to recruit them. However, this case, along with some other recent cases, shows that even though there is a stronger sense of Taiwanese identity as a society overall, this is not a bulletproof vest against intelligence recruitment, and financial inducements are still powerful motivators for engaging in espionage.  [1]

PLA Political Work 

Another important feature of this case that warrants closer scrutiny, but is outside the scope of this preliminary analysis, stems from an organizational perspective of Chinese intelligence agencies and how the ringleader Chen’s handlers were ostensibly senior PLA personnel. This would seem to indicate that despite the fallout of the military purges under CCP General Secretary Xi Jinping (習近平), the political work/intelligence apparatuses within the Chinese military remain an active component of its intelligence operations. This type of work would be within the ambit of the Political Work Department under the Central Military Commission (中央軍委會政治工作部) (which would have been the General Political Department of the PLA before the major reorganization in 2015), or the Intelligence Bureau of the Joint Staff Department of the Central Military Commission (中央情報局聯合參謀部情報局). These cases serve as reminders that PRC intelligence activities are not just about stealing secrets but are also aimed at reinforcing psychological operations–such as the case involving active-duty Taiwan military personnel filming a surrender video, and in another case encouraging defection.

Recruitment Means: Online Recruitment and Cryptocurrencies

In terms of methods, these cases also reveal a mix of both traditional and new mediums of recruitment. As revealed by this case, Chinese intelligence agents are also using third-country locations for recruitment, as well as online mediums, encrypted messaging applications such as Telegram, and even cryptocurrencies as a method of payment. 

Trendlines and Implications

Indeed, the number of spy cases uncovered by the Taiwan military’s counterintelligence units has increased significantly in recent years. For example, a government assessment revealed that from 2011 to 2023, 40 spy cases had been uncovered by the Taiwanese authorities involving 113 military and civilian personnel. This period marked a significant increase from 2001 to 2009, in which only 13 spy cases had been uncovered, involving nine military and civilian personnel (including retired personnel). Since the COVID-19 pandemic, the Chinese Communist Party’s intelligence units have also begun using different tactics to recruit military personnel with a significant uptick in the use of online mediums through the Internet, with the number of such incidents reaching a staggering 1,706 in little over two years.

An even more notable change is that in recent years the CCP has adapted its infiltration methods in Taiwan to target people not solely based on their military rank, and not simply requiring traditional espionage or spy ring development. Instead, they include a promise by the recruits of “lying low and not resisting in wartime”—or fostering a fifth column—in exchange for financial rewards, which is different from previous infiltration methods.

Chinese intelligence operatives are also using the Internet to access popular online communities and gaming platforms to make contact and lure soldiers. Chinese operatives are posting loans to attract soldiers who need money, expanding its intelligence-gathering techniques. Chinese intelligence operations even use virtual currency as a payment tool, making it more difficult for counterintelligence officials to spot and verify. Indeed, the challenges currently faced by Taiwan’s counterintelligence efforts are formidable.

Conclusion: Intensifying Chinese Intelligence, National Counterintelligence Center, and International Cooperation

The Chen Yu-hsin spy ring is one link in a long string of cases uncovered in recent years that underscore the intensification of PRC intelligence operations directed at Taiwan and the international community. The National Security Bureau (NSB, 國家安全局)—Taiwan’s premier intelligence agency—revealed that government agencies have had to investigate 84 national security cases since 2023. These numbers reflect the growing trend of suspected espionage cases that spiked in 2018 amid growing tension in the Taiwan Strait—when Taipei revealed that it had uncovered 52 Chinese espionage cases. According to one 2017 account, Taiwan’s national security authorities estimate that about 5,000 individuals are collecting intelligence in Taiwan on behalf of the Chinese government.

While the Taiwan military is a prime target for Chinese intelligence, it has also been traditionally more resourced and better organized to deal with the threat in comparison to other government departments. According to one account, “[a]lthough 80 percent of all detected incidents of Chinese espionage targeted the military, leaving just 20 percent aimed at the civilian government, the disparity was likely due to the military’s higher detection rate, as it has counterintelligence capabilities that are absent from the government’s administrative offices.” 

However, a recent Taiwan government assessment found that even though the overall number of personnel in the military has increased year-over-year, the military suffers from a severe shortage of personnel engaged in counterintelligence. For instance, the Political Warfare Bureau Headquarters (政戰局本部), various military headquarters, corps, command, joint brigades, and military security corps have not only failed to reach their personnel quota, but the overall number of staff has been on the decline—underscoring ongoing issues in terms of professional development and retention of expertise. The government assessment also identified serious issues in regard to internal reporting mechanisms and processes that could disincentivize reporting of suspicious activities. 

In the final analysis, given the relatively low ranks of the junior officers involved in the spy ring, the value of the intelligence passed to the other side is at least questionable given the publicly disclosed information. The sentences handed down by the court are notable in that they are clearly more severe than in more recent prior cases—this could be intended to send a deterrent signal for would-be spies. 

Still, the increase in the number of detected Chinese intelligence activities should be considered in its totality. On one hand, it may be an indicator that Taiwan’s counterintelligence capabilities are improving. On the other hand, it should serve as a serious cause for concern for national security officials that Chinese intelligence operations are clearly growing both in scope and scale. 

Counterintelligence efforts within Taiwan are currently spread throughout a sprawling array of military and civilian agencies, often with overlapping jurisdiction and authorities. This patchwork approach to counterintelligence can lead to inefficiencies in using Taiwan’s finite resources, both in terms of human and financial capital. In addition to an urgent need to increase investments into strengthening its counterintelligence efforts, Taiwan should consider establishing a centralized authority in the form of a National Counterintelligence and Security Center (NCSC), such as the one that exists in the United States housed under the Office of the Director of National Intelligence. The NCSC produces both public and classified assessments to help inform government agencies and the public about counterintelligence matters. Such a center would also help pool resources and information across the counterintelligence enterprise within Taiwan, which is currently under-resourced, understaffed, and residing among several agencies. 

In addition to its domestic and cross-Strait implications, these recent cases also underscore the importance of third-country parties in Taiwan’s counterintelligence efforts—both in terms of the physical space and in the virtual domain. Given Taiwan’s limited international space, however, it is more challenging for Taiwan to get the assistance it needs from other countries. Thailand remains a key location for Chinese intelligence agents to conduct recruitment. Just as Chinese actors could and would operate outside of the PRC to conduct information operations, they can conduct online intelligence recruitment campaigns on foreign soil as well. While the tough sentences handed down by the Taiwan High Prosecutors Office on the Chen Yu-hsin spy ring represent a step in the right direction, it is incumbent on Taiwan’s government to provide sufficient financial support and undertake reforms to its counterintelligence enterprise to demonstrate its seriousness in facing down an increasingly fierce cross-Strait espionage war. 

The main point: The recent Chen Yu-hsin spy ring is one link in a long string of cases uncovered in recent years that underscore the intensification of PRC intelligence operations directed at Taiwan. However, some key features of this case—namely, that those involved were younger, motivated by money, and that recruitment is now being done in third-party countries and online—represent important areas of concern for Taiwan’s counterintelligence efforts.


[1] In a separate, but related case to the Chen spy ring, a former marine sergeant, Chen Yimin (陳毅閔), was alleged to have leaked classified information to Chinese intelligence personnel between 2022 and 2023 for payments worth NTD $170,000 (USD $5,293). Sergeant Chen was reportedly recruited by Chinese intelligence by way of a loan advertisement that was posted on the Internet. The Chinese agent identified as “Mr. Zhang” posed as a business manager of the loan company and lured Chen to collect and transfer military secrets using communication software like Line and Telegram for payments of NTD $40,000 for each piece of information. The sergeant claimed that he did not know that “Mr. Zhang” was Chinese and an intelligence officer. 

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