Simone Gao: On September 3, Linda Sun, a Chinese-American and former deputy chief of staff to the Governor of New York State, was arrested on charges of acting as an unregistered overseas agent for the Chinese Communist government. Her arrest sent shockwaves through the media, rekindling conversations about Chinese espionage. But was it truly surprising?
The Chinese Communist Party (CCP) has a long history of infiltrating foreign countries by controlling Chinese organizations and influencing local elites to advance its interests. Known as “united front work,” this strategy was described by Mao Zedong, the PRC’s founding leader, as one of the Party’s key tools for defeating its enemies. Consequently, the presence of CCP agents abroad is not uncommon.
This is true, but the situation today is a bit different. While previous Chinese leaders maintained the united front effort, under Xi Jinping’s rule, it has intensified significantly. As a result, both the CCP’s influence and its capacity for action on American soil have grown rapidly, far beyond what most Americans realize. And there is a reason behind Xi’s determination.
Last April, the U.S. Attorney’s Office for the Eastern District of New York filed its first criminal charges against a Chinese overseas police station, hidden in the heart of New York’s Chinatown. Two individuals were arrested. According to reports from The New York Times, this unauthorized police station was one of more than 100 such stations worldwide, used by the CCP to intimidate and control Chinese citizens abroad, as well as to silence critics of the regime.
The U.S. Justice Department filed two other charges. One accuses 34 Chinese police officers of harassing Chinese nationals in the New York area. The other charge involves eight Chinese officials instructing a Zoom employee in China to remove dissidents from the platform.
David Newman, the Justice Department’s top national security official, stated, The trio of cases detail how the People’s Republic of China, through its Ministry of Public Security, has engaged in a multi-front campaign to extend the reach and impacts of its authoritarian system into the United States and elsewhere around the world”.
These cases reveal a troubling reality: the Chinese Communist Party is no longer merely exerting soft power in America; it’s actively building substantial enforcement capabilities. Now, those efforts are starting to pay off. If you look closely, you’ll see that the CCP has developed enforcement capacities in several areas across the United States.”
Linda Sun’s case is a prime example. According to the indictment, she received instructions from Chinese consulate officials to covertly prevent Taiwanese representatives from meeting with New York State politicians. She also facilitated Chinese officials’ travel to the U.S. by forging signatures—one of which was that of current New York Governor Kathy Hochul.
Sun’s case is not an isolated incident, but rather a clear example of China’s deep influence in local government. During last November’s APEC summit, the CCP’s unprecedented mobilization of Chinese communities—particularly international students—to welcome Xi Jinping once again, showcased the consulate’s organizational power. We’ll explore this in greater detail in our next episode.
But why are Xi Jinping’s united front efforts so much more aggressive than those of his predecessors? There’s an old Chinese saying: “Raise an army for a thousand days and use it for an hour.” Historically, the united front was used to steadily build power and achieve long-term strategic goals. But under Xi, the united front has become the first line of defense in what he views as a life-or-death struggle.
In recent years, Xi has been confronted with a dire economic situation in China. His policies have hit the economy hard, and more importantly, they’ve shattered confidence in China’s economic future. No matter what new policies the central government announces, the Chinese economy remains stagnant. People aren’t spending, businesses aren’t investing, and the culture of saving is stronger than ever.
Recently, the government enacted yet another round of dramatic monetary policies aimed at stimulating growth, sparking a brief surge in the stock market. But analysts doubt the momentum will last. China’s stock market is heavily influenced by state policy, not the actual economic fundamentals. More importantly, the real estate sector—once the backbone of China’s rapid growth—shows no signs of recovery.
The reason? China’s population is shrinking rapidly, and the supply of housing far exceeds demand. The bursting of the real estate bubble has shattered many people’s expectations that housing prices would continue to rise. Most Chinese citizens no longer view real estate as a viable investment.
Meanwhile, the Chinese government is relying on the same old playbook: massive infrastructure projects. It’s a tried and true method to artificially boost GDP numbers. But after decades of overcapacity, the country is littered with unused airports, roads, and even entire towns. Nonetheless, the government is doubling down on this strategy, despite the fact it’s only quenching a temporary thirst.
With domestic consumption faltering, China’s economy must look outward. China has the world’s largest manufacturing capacity, producing nearly 30% of global goods. But its consumer market is only 15-18% of the world’s total. This mismatch means China must export its excess production abroad to survive.
A source familiar with China’s domestic manufacturing industry told me that almost all Chinese manufacturers are thinking of going overseas. Yet the diplomatic environment in China has been deteriorating in the meantime. For Xi Jinping, it’s a make-or-break situation, and he’s not a sitting duck. He’s not going to sit back and watch the U.S. embargo technology and raise tariffs on him and do nothing.
This is the port of Long Beach in Southern California. It is a major gateway of U.S.- Asian trade. The container port occupies 3200 acres of land with 2.4 miles of waterfront in the city of Long Beach.
Behind me are containers from cosco shipping, China Shipping, and OCCL, actually they are all under Cosco Shipping, the world’s largest ocean shipping company and a Chinese central government owned enterprise.
The Port of Long Beach and the neighboring Port of Los Angeles are the largest ports in the United States in terms of container throughput. Together these two ports handle about 40% of U.S. container imports and 30% of exports. They are also the first stop for Chinese goods crossing the Pacific Ocean into the United States.
In 2001, a subsidiary of China Ocean Shipping Company or COSCO leased portions of both ports through a joint venture, contributing to their rapid growth.
In 2018, the U.S. government required COSCO Shipping to divest from the Long Beach Container Terminal at the Long Beach Port during its acquisition of the Hong Kong based Orient Overseas Container Line which owns the US asset. The terminal was sold to a consortium led by an Australian firm in 2019, but China’s involvement in U.S. port operations remains significant.
The Chinese government is now building a logistics network controlled by state-owned enterprises, acquiring or leasing terminals, establishing overseas warehouses, and expanding last-mile delivery capabilities.
According to COSCO’s newsrelease, in August 2024, COSCO and TCL launched a partnership in North America, covering warehousing and last-mile delivery. Earlier in 2024, COSCO also began operating its own warehouse in the U.S., aiming to streamline cross-border e-commerce.
Two decades ago, this would have been celebrated as globalization at work. Americans enjoyed cheap Chinese goods, and Chinese Americans easily accessed Chinese groceries from home. But today,U.S.-China relations have changed drastically. Many in Congress worry about China’s logistics footprint in the U.S. because behind these business ventures lies a strategic agenda to gain control over vital infrastructure.
On September 13, congresswoman Michelle Steel from the 45th congressional district in Southern Calfornia drafted the Secure Our Port Act, prohibiting state-owned enterprises from China, Russia, North Korea, and Iran from operating or managing U.S. ports.
Michelle Steel: “It’s very important because you don’t know how much China has infiltrated in this country. So that’s one of the things that it’s going to hurt our supply chain crisis.
China try to bring something in specially like fentanyl. Now we have one very big fentanyl issue in the United States. precursor Fentanyl is coming in. And you know what? Since we imposed 25% tariff on Chinese merchandise, you know what they do. Everything comes in that under the minimize $800 worth of all these merchandise coming in, millions and millions of packages coming in, and they try to just control that.”
What representative Steel refers to is the “de minimis” rule which stipulates that imported goods packages valued under $800 are generally exempt from duties and formal customs inspections in U.S. ports.
Michelle Steel: “Millions and millions. There’s just no way we can inspect. Sometimes you see it’s like a keyboard, $300 when you open it, it’s precursor fentanyl that’s coming in. So it’s very, very dangerous because most of the precursor fentanyl that are coming in are from actually China. And then it goes down to Mexico and most fentanyl comes in through Mexico is from China to Mexico. Mexico makes that fentanyl pills or powder and then coming through California border.
They do different things to because of that imposing 25% tariffs, they’re sending their merchandise to another country and they change the labels. And coming in acting like that, the other country actually make those in the merchandises.”
Steel also mentioned the danger of using China made cranes in US ports. For example, Shanghai Zhenhua Heavy Industries Co. or ZPMC is a Chinese state-owned enterprise and one of the world’s largest manufacturers of container cranes used in ports around the world, including in the Port of Los Angeles and the Port of Long Beach.
Modern port cranes today are not just mechanical devices; they are equipped with advanced technology, including cellular modems, sensors, cameras, GPS systems, and data processing software. These technologies allow the cranes to monitor, track, and optimize cargo movement.
According to a September report from the Wall Street Journal, a year-long congressional investigation found that ZPMC had at times pressured port operators to allow the company to maintain remote access.
The committees said the cellular modems built into the cranes could potentially allow access by the Chinese government due to the country’s national-security laws that mandate companies cooperate with state intelligence agencies.
The modems, the report said, “created an obscure method to collect information, and bypass firewalls in a manner that could potentially disrupt port operations.”
Michelle Steel: “More than 75% of the cranes were made in China. Mm-Hmm. , we are using it in our ports. Think about that. You know what? They are controlling it in China, and they can create a lot of chaos.
How about maritime tracking system that we are not using it fortunately we are not, but you know what? Our allies are using it. So they call lodging. It’s made in China, China controls it. And South Korea, Japan Portugal, Spain, they’re all using their maritime tracking system. So they know exactly what’s on those ships when they’re coming in, when they’re going out on the top of that, they even know that our Navy ships are going into our allies ports, they know when, when it’s coming in and when it’s leaving. That’s why I said it’s a national security issue because China, it’s been infiltrated just every area.”
The challenge with trade involving China is that any aspect can present problems. What appears to be a simple commercial transaction may conceal serious national security risks, because we cannot trust Chinese technology. At the same time, history told us, if the U.S. opens its market to China under free trade principles, China floods it with cheap goods, driving out competitors. With China’s urgent needs to export, this for sure would happen.
The Secure Our Ports Act will be voted on after the 2024 election. While China’s overseas expansion plans face resistance at the federal level, this hasn’t deterred them. On the contrary, China is doubling down on these efforts from top to bottom.
Over the past few years, Chinese e-commerce platforms like Temu and Shein have aggressively entered the U.S. market with prices so low, they’re hard to ignore. They consistently show up in search results, offering products that appear both cheap and high-quality, until eventually, you’re tempted to click “buy.” In addition, a growing number of China-focused e-commerce sites are targeting overseas Chinese communities, making it easier than ever to order foods and consumer products that once required long drives to Chinese supermarkets—all just a few clicks away.
China has also forged unprecedentedly close ties with the Chinese-American community. Chinese businesses expanding overseas are enlisting the help of these communities for all aspects of their U.S. operations—ranging from research and networking to managing businesses, marketing, shipping, warehousing, and last-mile delivery. This wave of Chinese expansion has created significant opportunities and benefits for Chinese-American communities, especially on the East and West coasts, with many of these communities now thriving around this dynamic.
Xi Jinping has a particular trait: the more he values something, the tighter he holds it in his grasp. When it comes to U.S.-China relations, Xi has a clear strategy: “To improve U.S.-China relations, he needs to bring together forces from all sides.”
He personally told California Governor Gavin Newsom, during his visit to China last year that, “When I met with Bill Gates, I said that the foundation of U.S.-China relations lies in the people. In my reply to the Washington State China-U.S. Youth Exchange Association, I added that the future lies with the youth. Now, seeing you today, I’ll add another point: vitality lies in local regions.”
In summary, Xi focuses on three key areas: the people, the youth, and local government. He sees these as the focal points for reshaping U.S.-China relations, and he is working hard in all three areas to ensure his vision is carried out. In our next episode, we’ll explore these areas in greater detail.