February 3, 2025 | Policy Brief

Philippines Busts Chinese Spy Ring Targeting U.S. and Allied Military Infrastructure

February 3, 2025 | Policy Brief

Philippines Busts Chinese Spy Ring Targeting U.S. and Allied Military Infrastructure

China is mapping U.S. and allied military installations around the world. Filipino security officials arrested five Chinese nationals on January 30 as part of a larger investigation into an espionage ring using LiDAR, an advanced remote sensing technology, to map U.S.-Philippines joint military installations and critical infrastructure.

Alleged Chinese Spies Use LiDAR Technology to Map Sensitive Military Installations

The arrests follow a month-long pattern of mounting concerns over Chinese espionage in the Philippines. On January 20, the Philippines’ National Bureau of Investigation announced the arrest of Deng Yuanqing, a Chinese national and graduate of the People’s Liberation Army University of Science and Technology, in addition to two Filipino residents. According to Philippine officials, the group had been conducting espionage on critical infrastructure and joint U.S.-Philippines military installations around Luzon and Manila using a car that contained a range of surveillance and communications equipment.

Images posted to Facebook by the Philippine Star, a local newspaper, also show that the vehicle was equipped with a Chinese-manufactured LiDAR system. Further investigations discovered that this equipment had been used to produce images, high-quality topographical maps, and other sources of information that could be employed for military targeting or sabotage efforts.

China’s LiDAR Industry Poses a National Security Threat to the U.S.

Recent busts highlight the danger of China’s growing dominance of the LiDAR industry. Beijing has long recognized the importance of being a global leader in the sector, having identified LiDAR as a critical “chokepoint” technology in 2018. The U.S. Department of Defense has raised concerns about the threat posed by Chinese LiDAR systems, re-designating Hesai, a leading Chinese LiDAR manufacturer, as a Chinese military company last year. With state backing, Chinese LiDAR companies have undercut their Western competitors to seize a dominant share of a growing global market, with Chinese firms accounting for 80 percent of global sales in 2024.

Chinese LiDAR dominance places the United States, along with its allies and partners, at heightened vulnerability to espionage and sabotage. As LiDAR technology continues to integrate into a range of military and commercial technologies, including drones, critical infrastructure, and passenger vehicles, Chinese firms will likely have access to vast quantities of sensitive data, all of which can be accessed by Beijing under Chinese law. The combination of access and integration also raises the risk of Chinese sabotage of U.S. civilian and military infrastructure during a crisis by remotely compromising or disabling LiDAR sensors.

Washington Needs to Disrupt and Dismantle Chinese LiDAR Infrastructure

In response to China’s use of LiDAR for espionage, Washington must act to prevent its further spread within the United States while working with allies and partners to counter Beijing’s dominance.

While the Department of Defense is banned from procuring Chinese LiDAR under the current National Defense Authorization Act, Congress should consider expanding this ban to defense-adjacent industries. The Trump administration should direct the Commerce Department’s Information and Communications Technology and Services unit to evaluate — and, if necessary, restrict — the use of Chinese LiDAR within U.S. critical infrastructure, following similar bans on Huawei and ZTE.

The United States should also consider working with its allies and partners to establish a “Trusted LiDAR” supply chain initiative to educate allies and partners on the risks posed by Chinese LiDAR. Likewise, Washington should raise tariffs to counter Beijing’s unfair trade practices and strengthen domestic manufacturing and procurement.

Jack Burnhamis a research analyst in the China Program at the Foundation for Defense of Democracies (FDD). Johanna (Jo) Yang is a research and editorial associate at the Center on Cyber and Technology Innovation (CCTI) at FDD, where she works on issues related to nation-state cyber threats, critical infrastructure protection, and U.S. cybersecurity policy. For more analysis from Jack, Johanna, and FDD, please subscribe HERE. Follow Jack on X @JackBurnham802. Follow FDD on X @FDD. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.

Issues:

Issues:

China Cyber Cyber-Enabled Economic Warfare U.S. Defense Policy and Strategy

Topics:

Topics:

Washington China Donald Trump United States Congress Beijing United States Department of Defense Facebook Philippines National Defense Authorization Act Huawei Jack Burnham Manila