How Belgium Became Europe’s Den of Spies and a Gateway for China

(Bloomberg) -- When a suspected Chinese spy was extradited to the U.S. last year, the Department of Justice praised the “significant assistance” given by authorities in Belgium.

Xu Yanjun was arrested in Belgium after going there to meet a contact “for the purpose of discussing and receiving the sensitive information he had requested,” according to the U.S. indictment. Xu was charged with attempting to commit economic espionage, with GE Aviation the main target. The case is pending.

Belgium may seem an unlikely destination for a Chinese agent. In fact, it's a den of spies, according to domestic intelligence agency State Security (VSSE). It says the number of operatives is at least as high as during the Cold War, and Brussels is their “chessboard.”

Host to the European Union's institutions and North Atlantic Treaty Organization headquarters, Belgium is an alluring draw card for aspiring espionage-makers. Diplomats, lawmakers and military officials mingle, sharing gossip and ideas, while Belgium's strategic location makes it important to China in its own right as a place to exert influence in Europe.

“The mere fact that we hold international institutions such as NATO and the EU makes Belgium a natural focus for China,” said Bruno Hellendorff, a research fellow at the Brussels-based Egmont Royal Institute for International Relations. “It's common knowledge that there are many spies in Brussels, and these days espionage from China is a major and growing concern.”

In February, German newspaper Die Welt cited an unpublished assessment by the EU's foreign and diplomatic wing, the European External Action Service, that about 250 Chinese spies were working in Brussels—more than from Russia. The Chinese mission to the EU said it was “deeply shocked” at the “unfounded” reports. “China respects the sovereignty of all countries and does not interfere in the internal affairs of other countries,” it said.

And yet the incidents keep coming. The Chinese director of the Confucius Institute at the VUB Brussels University was barred in October from entering the EU's passport-free Schengen area for eight years after being accused of espionage, a charge he denies.

An insight into the methods employed by China are outlined in the indictment for Xu, whose duties allegedly included obtaining trade secrets from aviation and aerospace companies in the U.S. “and throughout Europe.” He used aliases and invited experts on paid trips to China to deliver presentations at the Nanjing University of Aeronautics and Astronautics, operated by the information ministry. He ensured targets carried a work computer whose data could be captured.

The U.S. remains at the core of Beijing's espionage activities—the head of the FBI said in July that China was trying to “steal their way up the economic ladder at our expense.” Yet Europe appears increasingly in focus, with cases of so-called interference by China identified in Poland, France, Germany and the U.K.

“The Chinese are becoming far more active than they were 10 or 20 years ago,” said Charles Parton, a former British diplomat with more than two decades of experience of China.

Espionage is “the far end of the spectrum” of interference that ranges from academia to “technological spillover”—collecting data to send back to China for mining, said Parton, a senior associate fellow at the London-based Royal United Services Institute.

Belgium's elite generally has a relaxed attitude toward China that can open it to charges of complacency. A fractured political system makes it harder to craft a unified strategy—there's still no government six months after elections. A delegation to China this month included four ministers responsible for trade relations: a federal minister plus one each for Dutch-speaking Flanders, Francophone Wallonia and Brussels.

Even as the EU adopts a  more skeptical stance toward China—losing its naivety, as one senior European official put it—Belgium is opening the gates to Chinese investments in strategic areas from energy to shipping and technology. Belgium is responding to China's rise “in a pragmatic way,” stressing its advantages in areas such as logistics while ensuring “attention to the sustainability of the projects and respect for international standards,” according to the Foreign Ministry.

“They have very advanced technologies that China needs,” Wang Yiwei, director of Renmin University's Institute of International Affairs and a former Chinese diplomat based in Brussels, said of Belgium's appeal. “Through Brussels you can access Europe and even the United States.” He said that Chinese innovation is fast catching up with the U.S. and talk of industrial espionage was exaggerated.

All countries make efforts to win over hearts and minds, and much influence-building is legitimate diplomatic activity. But there's also a gray zone and it can be “difficult to tell the hand of the Chinese state from a much more diffuse web of influence-peddling,” the European Council on Foreign Relations said in a 2017 report.

Brecht Vermeulen, who was chairman of the Belgian federal parliament's home affairs committee until losing his seat this year, joined the assembly's China friendship group soon after his election in 2014 as a lawmaker for the Flemish nationalist N-VA party, the largest group in the then-ruling coalition.

Over the course of his five-year term, Vermeulen made several trips to China, where officials briefed him on technological advances in artificial intelligence, facial recognition and cybersecurity. During that time, N-VA policy evolved from sympathizing with efforts by some in Taiwan and Hong Kong to keep a distance from China, toward what Vermeulen called Realpolitik.

“I think we must open more doors to the Chinese and see how they react,” he said in an interview in the Flemish city of Ghent. “If they open their doors too, then it's good on both sides. Of course we are a small country and China is enormous. But if we act in one way and there's a reaction in the same way, then OK, we can proceed, step by step.”

Still, there are signs that Belgian authorities are attuned to potential threats.

In 2016, State Grid Corp. of China, which has more employees than Brussels has inhabitants, bid for a stake in energy company Eandis. A last-minute leak of a VSSE dossier urged “extreme caution,” citing the risk that Belgian technology could be used by the Chinese military, and a planned vote on the bid never took place.

And engaging with China's influence apparatus is not without risks. Filip Dewinter, a regional lawmaker with the far-right Vlaams Belang party, was investigated over his ties to an organization suspected of spying for China. The probe was dropped after it was found Dewinter had committed no crime. “Maybe I had too much faith in these people,” De Morgen newspaper cited him as saying in February, adding he was now “more informed” about Chinese espionage and the need “to be careful.”

But while there is now “some strategic thinking” on China in Belgium, the institutional setup means it's not across the board, said the Egmont Institute's Hellendorff. He sees “little to no dialogue between regions on the implications of growing Chinese investment in the country, not only in economic terms but also in terms of its impact on values and influence.”

That lack of coordination between regions and layers of government allows the N-VA mayor of Antwerp, Bart de Wever, to play an outsize role in ties with Beijing. Antwerp is home to Europe's second-largest port, and has a direct rail link to China.

Renmin University's Wang for one thinks bilateral relations are developing well. “In Europe there's a saying that small is beautiful,” he said. “Belgium is beautiful in the Chinese understanding.”

--With assistance from David McLaughlin.

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net, Richard Bravo

©2019 Bloomberg L.P.