57th Director General of Police Conference

What’s in today’s article?

• Why in news?
• Chinese commercial companies and India’s internal security
• What were the findings of investigating agencies?
• What is the modus operandi of these entities?
• How Chinese Commercial Entities are posing threat for India’s internal security?
• What are the steps taken by the government to address this issue?

 

Why in news?

• The 57^th Director General of Police conference discussed the issue of influence wielded by Chinese commercial firms.
• The three-day Conference, from January 20 to 22, 2023, was held in hybrid format in New Delhi.
• The conference was inaugurated by the Union Home Minister and PM Modi also participated in the conference and addressed it.

 

Chinese commercial companies and India’s internal security

• Background: Action on Chinese commercial companies by Indian investigating agencies
  • A disturbing picture of Chinese Commercial Entities (CCE) has emerged after a series of actions by Indian authorities since 2020.
    • The investigation began after the June 15, 2020, incident in Ladakh’s Galwan.
  • Actions by Indian authorities included busting of spying rings, tax raids on major Chinese telecom companies, a crackdown on mobile apps and a study of incoming investments into India.
  • The actions by these agencies revealed a web of companies and individuals indulging in espionage, profiling of high value individuals, large-scale tax evasion and exfiltration of bulk data.
  • These facts point to Beijing’s growing hunger for data and secrets.

 

What were the findings of investigating agencies?

• The assessment by agencies found that the Chinese commercial entities operate in India with five primary objectives: 
  • influencing minds, 
  • build economic control, 
  • acquisition of data, 
  • for espionage and 
  • to target scientists to compromise innovation and intellectual property rights (IPRs).
• The objective of counterintelligence is pursued through top officials of Chinese companies in India.
• Small-size shell companies were also used as financial conduits to fund espionage rings and resident agents.

 

What is the modus operandi of these entities?

• Hundreds of small companies controlled by Chinese nationals have dummy Indian directors and managers for a show of legitimacy.
  • Many of these companies did not physically exist at their registered offices. However, their banking accounts were active and being operated from abroad.
• A cheap (and sometimes below production cost) pricing model that has given them control of a large chunk of the telecom and hardware markets in India.
• Investigations also show that some senior Chinese employees of these companies are documented members of the Chinese Communist Party.
  • Hence, Beijing has a strong leverage on their operations in India.
• Agencies also found a seamless flow of data to Chinese servers through remote access of modems, switches, routers and networks sold and installed by these companies in India.
• Similarly, a seamless data link through Chinese origin mobile phones was also established during investigations. 
  • The data collected has helped Chinese artificial intelligence (AI) engines create portraits, with biometric details of millions of Indians.

 

How Chinese Commercial Entities are posing threat for India’s internal security?

•  Access to personal data of Indians
  • Investments by Chinese companies such as Alibaba and Tencent were used to manage and control Indian companies which had a repository of large set of personal data of Indians.
  • Chinese entities have been storing away information and data using multiple methods, with the objective of gaining strategic advantage over India’s economic and security systems.

 

Influencing minds

• Deep cover resident agents, posing as officials of these companies, are attempting to fund and influence masses in India.
• This is being done to foment the sentiments of masses and create internal disturbances.
• Such entities are also used to influence Tibetan monks living in India.
  • Chinese national Luo Sang, who was arrested for money laundering in August 2020, was actively sending money in packets to Tibetan monks.
  • Agencies are suspecting that it was intended to gather information about the Dalai Lama and the Tibetan government in exile.

 

Espionage and money laundering

• Small-size shell companies were also used as financial conduits to fund espionage rings and resident agents.
• E.g., operating under the name of Charlie Peng, the web is believed to have laundered over Rs 1,000 crore, with some of the proceeds used to gather intelligence in India.
• Recently, a top executive of a telecom company found in the possession of sensitive documents.
• The investigation also revealed of exhaustive profiling of key business leaders.

 

What are the steps taken by the government to address this issue?

•  Crackdown by investigating agencies
  • Chinese commercial entities are under sustained investigation by the intelligence agencies since 2020.
  • Multiple raids have been conducted by the ED under the provision of Prevention of Money Laundering Act.

 

Clampdown on Chinese investment

• In 2020, Central govt declared that foreign investments from countries with which India shares land border shall be under approval route.
• Since China shares a land boundary with India, this announcement clamped down on investments from China making prior government clearance mandatory for all forms investments, even indirect ones.

 

Ban on Chinese app

• The govt of India has banned more than 250 Chinese apps including PUBG Mobile, Tiktok, Shein, AliExpress and more.

 

Other steps

• The Intelligence Bureau created a new wing — China Coordination Centre — to collaborate with financial enforcement agencies to investigate Chinese companies.

 

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Q1) What is money laundering?

 Money laundering is the illegal process of making large amounts of money generated by criminal activity, such as drug trafficking or terrorist funding, appear to have come from a legitimate source. 

The money from the criminal activity is considered dirty, and the process “launders” it to make it look clean.

 

Q2) What is espionage?

 Espionage is the crime of spying or secretly watching a person, company, government, etc. for the purpose of gathering secret information or detecting wrongdoing, and to transfer such information to another organization or state.

 

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Source: Police meet will discuss influence wielded by Chinese commercial firms | The Economic Times | India Today