In Manila, how China set up an influence, espionage network
As COVID-19 restrictions were slowly easing around the world, a man identified by Philippine intelligence operatives as an agent of China’s Ministry of State Security (MSS) quietly slipped into the country, settling into a comfy, high-end condominium complex in one of Metro Manila’s posh enclaves.
From 2021 until 2024, Zhang “Steve” Song — publicly Manila’s bureau chief for the Shanghai Wen Hui Daily — “established a significant network in various strategic institutions,” according to a May 2024 Philippine intelligence report seen by Rappler.
The Wenhui Daily or Wenhui Bao is a newspaper based in Shanghai and owned by the Shanghai United Media Group, a company overseen by the Chinese Communist Party’s (CCP’s) committee in the city of Shanghai.
In 2024, Zhang was not registered under the Philippines’ International Press Center. IPC registration is typically a prerequisite for foreigners who want to practice journalism while in the Philippines, and a requirement for individuals who want to secure Philippine journalist visas.
It was “multiple inconsistencies in his disguise” that first raised the alarm of the intelligence team that tracked him. Rappler has independently verified this information with other informed sources.
In Manila, his written output was few and far between, and he rarely made public appearances in Chinese state media — a stark contrast to when he was the paper’s chief correspondent in Washington DC.
Beginning in 2023, intelligence operatives in the Philippines started closely tracking Zhang’s engagements in public spaces because of growing concerns over possible threats to national security.
It was how they learned that he was a frequent visitor of the Chinese embassy inside Dasmariñas Village, and that he’d already made direct and indirect connections with key personalities in Philippine government, media, and critical industries like energy and power that, according to intelligence sources, “threatens [the Philippines’] national security, political stability, and sovereignty.”
The same Filipino intelligence operatives confirmed in 2023 that in 2022, the US had flagged Zhang as an MSS agent during his stint as Wenhui Daily‘s chief correspondent.
These findings are based on a domestic investigation over 15 months in the making, beginning in the summer of 2023.
It’s a crucial discovery — perhaps the first of its kind documented in the Philippines. It also comes as the Philippines tries to bring tensions down in the West Philippine Sea while also guarding against influence and malign operations, especially those coming from China.
These reports, shared with Rappler over several months, are part of a bigger domestic intelligence effort to weed out foreign espionage and influence operations in the Philippines.
Rappler sought comment from the Chinese embassy in Manila Thursday evening, August 8, about these allegations. While embassy officials have acknowledged our request, they have yet to give a response. We will update this story once they do.
Red flags from Taguig
For the first two years of his stay in the Philippines, Zhang kept a relatively low profile. It was 2021 and 2022, after all, and the country was only starting to relax pandemic restrictions within its borders under then-president Rodrigo Duterte, while also slowly opening up to the rest of the world.
It was when it became easier to venture out and mingle in public post-lockdown that Zhang was flagged for what was regarded as “inconsistencies.”
Zhang had minimal media engagements in Manila, compared to his previous stint in the US as Wenhui Daily’s Washington DC bureau’s chief correspondent. In the US, he was a frequent resource person for China Global Television Network (CGTN) America, commenting on a wide range of topics — from US sanctions on Chinese tech giant Huawei, US-China bilateral ties, protests in Hong Kong, and even the internal workings of the CCP.
CGTN America, a channel under the Chinese state-run China Central Television, is among the 15 China state-owned media designated as “foreign missions” under the anti-China Donald Trump administration, because of the “very indisputable fact that all five of these are subject to the control of the Chinese Government,” according to a senior State Department official in 2020.
The designation meant that these media companies had to officially notify the Office of Foreign Missions of their staffing, as well as “current real property holdings.”
Wenhui Daily is not classified as a “foreign mission” by the US, but its sister paper, the Shanghai United Media Group’s Jiefang Daily, is considered as such in the US. China criticized the US for its “ideological prejudice and Cold War zero-sum game mentality” in classifying some China state-owned media as foreign missions.
In Manila, Zhang has had only a handful of public media engagements, including a slot in CGTN’s virtual panel discussion on Philippine President Ferdinand Marcos Jr.’s first state visit to Beijing back in January 2023.
And while media appearances and bylines were far apart, visits to the Chinese embassy were frequent.
Zhang visited the Dasmariñas Village-based embassy several times a week whenever he was in Manila, using different vehicles in the 15 months or so that he was monitored by intelligence operatives. His vehicles — at least three were in rotation — were registered with the village and bore its vehicle stickers.
Meetings with key personalities in the Philippines — government officials, business leaders, and even Philippine journalists — likewise raised red flags, according to the same May 2024 intelligence report, because these produced no actual news reportage.
For work meetings and even personal engagements, Zhang frequented mostly business districts and luxe hotels — the Shangri-La Fort in Bonifacio Global City, Seda in BGC, the Grand Hyatt, as well as a handful of restaurants in the same district, according to Philippine intelligence sources and surveillance reports seen by Rappler. He also occasionally picked the Westin in Ortigas and a popular brunch and pastry spot in San Juan City as meeting spots.
Huawei links
Crucial to Zhang’s activities were officials from non-media Chinese companies.
According to a series of intelligence reports that Rappler saw, Zhang met frequently with officials of at least two companies — the privately-owned tech giant Huawei Philippines and the China state-owned video surveillance company Hikvision.
Zhang, according to the same reports, “facilitated discussions” between Huawei executives Data Communication Product Line chief Kevin Hu and Huawei Technologies Philippines senior public affairs manager Liang Jiahao with the University of the Philippines (UP).
Huawei’s ties with the premiere Philippine university existed even before Filipino intelligence started tracking Zhang. Since July 2022, UP has had a memorandum of agreement with Huawei to give the university free access to the Huawei Authorized Information Network Academy (HAINA) program, as well as “free use” of Huawei’s simulator software, according to a release from the Diliman Information Office.
In exchange, the Philippine state university would “help Huawei disseminate the availability of the free training and certification exams and shall allow the HAINA programs to be offered to UPD [UP Diliman] students who are interested in the programs.” The agreement is valid for three years, or until July 2025.
A September 2022 post on the UP Office of International Linkages implied that Huawei may work with UP for its UP Data Commons, a high-performance computing and storage facility based in the Diliman campus. The post was accompanied by a picture of Huawei’s Liang and several officials of the university at a dinner.
Months later, Huawei met with UP officials in May 2023, and again in June 2023, according to the confidential intelligence reports, to talk about the UP Data Commons.
In November 2023, Rappler reported that information and communications technology experts from the different UP campuses, through a position paper, urged the UP administration to be careful about choosing a new provider in a separate planned system-wide upgrade of its network infrastructure.
The Rappler report, citing sources privy to talks, said that although no specific providers were mentioned in the report, “there had been active efforts from Huawei to convince UP decision makers to get its services.”
Zhang had apparently met the two Huawei officials twice in November, according to intelligence sources — on the 9th then on the 28th — weeks before and then days after the Rappler report on the position paper came out.
The same intelligence report also flagged a Huawei Philippines deal with Mapua University to extend a scholarship program. The deal, signed on January 12, 2024, covers school years 2023 to 2025, and would reportedly benefit students taking up engineering, computer science, or information technology courses.
To be clear, Huawei is privately owned. But analysts, as well as foreign governments, have long had concerns about the tech giant’s very close ties with the Chinese government.
Intelligence personnel whom Rappler spoke with from May to July 2024 flagged the Huawei deals — or at least the attempt at making deals — over concerns that it was part of a bigger plan to “embed Chinese technological infrastructure” into key Philippine sectors such as the academe.
Doowan Lee and Shannon Brandao wrote in Foreign Policy back in 2021: “China’s protection of Huawei is also exceptional because it is granted irrespective of allegations of illegality, wrongdoing, and dubious ethics, giving the impression that China sees Huawei’s liability for its own acts as on par with state immunity.”
Why is it a big deal if Huawei enters into agreements and partnerships with universities, whether or not they are facilitated by Zhang?
The concerns are two-fold as laid out in the intelligence report:
- Integrating tech like Huawei would “enable surveillance and data extraction” and lead to “dependencies” with their technology, compromising both personal privacy and national security
- Huawei’s engagement with high-profile initiatives could help degrade public trust in institutions “fostering a climate of mistrust and skepticism towards the government’s motives.”
The Philippine government’s engagements with Huawei had been flagged long before — especially its outsized role in the Duterte-era Safe Philippines Project. The China-funded project — had it pushed through — would have had Huawei tech installed all over the archipelago to “ensure the safety of Filipinos.”
“Huawei wants to know what you like to eat, where you want to go, to secure your safety,” one of its top officials told a business forum back in 2018.
Even the Philippines’ own Department of Foreign Affairs (DFA) flagged the budding deal, citing bans and restrictions against Huawei in Europe.
The project did not see the light of day because of many different reasons: former senator and now Finance Secretary Ralph Recto flagged it over the lack of requisite documents, there was slow approval of loans, the Chinese companies ended up not complying with Philippine government requirements, and the pandemic happened.
Understanding the AFP
Zhang also played a part in bridging knowledge gaps after the Philippines, through Defense Secretary Gilbert Teodoro Jr., “disallowed any contact” between the Chinese embassy and Filipino defense officials, including the Armed Forces of the Philippines (AFP).
Teodoro highlighted that decision in May 2024, when he issued a statement denying China’s claims of a “new model” to deal with bilateral tensions in the West Philippine Sea, especially in Ayungin or Second Thomas Shoal.
The last sectioned interaction, Teodoro noted then, was when Chinese Ambassador Huang Xilian paid him a call in July 2023, or weeks after he assumed his post.
For months, Beijing struggled to understand the Philippines’ sudden shift in strategy out at sea — a sentiment their diplomats expressed in background exchanges.
While Marcos promised not to “abandon even one square inch of territory of the Republic of the Philippines to any foreign power” as early as his first State of the Nation Address (SONA) in July 2022, it was not until mid-2023 that the Philippines unprecedentedly introduced a more assertive — and transparent — approach to asserting its sovereign rights and claims in the West Philippine Sea, or part of the South China Sea that includes the Philippine exclusive economic zone.
Zhang, according to the report, regularly met with media personnel who had a deep understanding of how the Philippine military worked. Beyond strategy, Zhang “subtly extracted information” about the internal dynamics and politics of key personalities in the defense and security sectors.
What alarmed Filipino intelligence was the timing of Zhang’s meetings — in most cases, just days before or after a scheduled Philippine resupply mission to Ayungin Shoal in the West Philippine Sea, or the Atin Ito coalition’s first West Philippine Sea sojourn in December 2023.
“This approach allows him to obtain critical insights without direct inquiries, a classic method in intelligence tradecraft,” said the May 2024 intelligence report.
Missions to Ayungin have become flashpoints for tensions between China and the Philippines — the worst being a mission in June 17, when the China Coast Guard (CCG) attacked, towed, and destroyed the boats of Philippine soldiers already moored beside the BRP Sierra Madre. Zhang, according to intelligence sources, was not in the Philippines, however, when this mission unfolded.
The Filipino public’s trust
The point over concerns that engagement with companies like Huawei would endanger public trust resonates — especially if the average Filipino’s sentiments toward China are considered.
The Philippines is an outlier in Southeast Asia in terms of these sentiments. A July 2024 Pew Research survey found that only 34% of Filipinos had a favorable view of Beijing, compared to 74% who viewed its rival superpower, the US, favorably.
In contrast to Manila, over 64% in Malaysia had a favorable view of China. Singapore registered higher at 67%, while in Thailand, 80% said they viewed Beijing favorably. (Only four Southeast Asian countries were included in the latest Pew study.)
ISEAS-Yusof Ishak Institute’s State of Southeast Asia report for 2024, meanwhile, noted that “China has maintained its position as the most influential and strategic power in Southeast Asia.” And while the United States’ influence in the region has diminished, it “remains the preferred choice among respondents from the Philippines.”
In Unrequited Love: Duterte’s China Embrace, Rappler editor-at-large Marites Vitug and reporter Camille Elemia said it was the lack of support from the general public and from key institutions, that put breaks on the China pivot that Duterte wanted so badly.
No less than the country’s current top soldier had flagged Chinese influence operations publicly in the past. In an early July 2024 press conference, Armed Forces of the Philippines chief General Romeo Brawner Jr. told media, without elaborating further, that China influence operations had already made their mark in Philippine society.
”They are slowly entering our country and trying to influence various sectors in our society, including the education sector, business, even the media, and local government units,” he said, without going into specifics. The four-star general flagged China’s “United Front Works.”
Canberra-based Australian Strategic Policy Institute, in a 2020 report, noted that the “Ministry of State Security (MSS), which is China’s civilian intelligence agency, is involved in and benefits from united front work.”
China’s “strategic infiltration,” the same intelligence report noted, could limit the Philippines’ autonomy and could undermine its independence in the international sphere.
The Philippines need not look far for publicized probes into China’s suspected interference operations.
Canada, in its 2024 Special Report on Foreign Interference in Canada’s Democratic Processes and Institutions, noted that both China and India were the “most active perpetrators” in “sophisticated and pervasive foreign interference specifically targeting Canada’s democratic processes and institutions, occurring before, during and after elections and in all orders of government.”
“China has never had any interest in interfering in Canada’s internal affairs,” a spokesperson for the Chinese embassy in Canada had said, in response to election interference allegations.
The US has been especially tough on companies like Huawei over both security and privacy concerns. Most recently, Washington revoked licenses that would have allowed American companies to ship goods, including chips, to the Chinese telecommunications giant. Huawei was first placed in the US trade restriction list in 2019, over supposed espionage and privacy concerns.
Dutch newspaper De Volkskrant, in 2021, reported that Huawei was able to monitor calls made on Dutch company KPN’s network. The discovery was documented in a confidential 2010 report, but made public only a decade later. The KPN acknowledged the report but denied its network was compromised, and Huawei rejected the claims made by the report.
In 2023, the European Commission affirmed that “decisions adopted by Member States to restrict or exclude Huawei and ZTE from 5G networks are justified and compliant with the 5G Toolbox.”
“Consistently with such decisions, and on the basis of a broad range of available information, the Commission considers that Huawei and ZTE represent in fact materially higher risks than other 5G suppliers,” the Commission added.
By late April, Huawei Philippines managed to land the meeting of all meetings: face time with First Lady Liza Araneta-Marcos.
“Thank you, Huawei Philippines, for your continuing support for our Lab For All program. Your technology has truly helped us deliver telemedicine services to our kababayans (countrymen)!” said the First Lady in an April 2024 post on Instagram.
“Lab For All” is Araneta-Marcos’ flagship healthcare program as First Lady of the Philippines. – Rappler.com