The almost legendary MI5 British counterintelligence service is said to be deeply concerned over an increase in spying by Chinese operatives in the United Kingdom. Although intelligence experts aren't certain how widespread the problem is, they believe the espionage is rampant and a serious consequence of the global economy.

MI5 suspects upwards of 15 foreign intelligence services are working within the UK and are a threat to the United Kingdom's interests, and the primary focus of their counterespionage efforts are the Chinese and Russians.

Using many of the same methods the Japanese used in the United States in the 1960s and 1970s, the Chinese are interested in any and all information that may give them a leg up in the competitive global economy.

In spite of repeated warnings to businesses, companies in the UK continue to hire Chinese workers without conducting background investigations or verifying previous employment.

Chinese government officials and businessmen are proven aggressive in their attempts to find out everything about how Western companies operate and how they are structured.

It is old-fashioned human intelligence gathering -- it's thousands of years old and it works. Taking a page out of Sun Tzu's "The Art of War," they believe intelligence operations will give them the victory they seek, whether in terms of military prowess or industrial success.

Using stealth tactics such as sending visiting delegations of Chinese businessmen, the spies are able to penetrate what little security companies employ to thwart theft of information.

One British firm eager to develop its business with China recently invited a delegation to visit its UK factory, according to The Guardian.  The Chinese authorities sent a delegation, but only a few of them turned up. The rest were believed to have traveled around Britain inviting themselves to defense and research establishments. Again, they were able to penetrate the security measures in place at these facilities.

According to one news story in the UK, if a British company creates a fuss about visitors who fail to turn up, the Chinese threaten to cancel the company's license to trade.

As with the Japanese spies in the US, the Chinese spies are interested in particular in scientific and high-tech developments. Their economy is said to be booming while at the same time there is a serious shortage in information technology and modern processing, manufacturing and design skills.

MI5 is also concerned over the loyalties of Chinese who are UK citizens or legal immigrants. Intelligence officers claim these workers may have mixed loyalties and strong ties to China.

In Britain, the Chinese and Russians appear to focus on high-tech production items, such as security and surveillance systems, conventional weapons systems, and especially dual use equipment -- materials that can be used by the private sector or by the military.

The problem is not exclusively a British one. The Federal Bureau of Investigation is alarmed about the impact of foreign spies within the United States, especially Chinese operatives. As with businesses in the United Kingdom, American companies seem to pay little attention to corporate espionage, putting most of their security budget into protection against terrorist attacks.

The FBI are suspicious of Russia, Iran, and North Korea but have focused mostly on the Chinese. The feds estimate that there are over 2,600 Chinese front companies in the US.

US and UK security experts believe that when nations such as China and Russia saw the speed and effectiveness with which the US conducted the invasion of Iraq, they decided widespread espionage operations were necessary to keep up with the world's sole superpower. 

Sources: Federal Bureau of Investigation, National Security Institute, American Society for Industrial Security, National Association of Chiefs of Police Private Security Committee, The Guardian