Former White House national security adviser H.R. McMaster told Congress on 22 July that the United States was ‘extraordinarily negligent’ as China systematically expanded its military, intelligence, and technological capabilities over the past 25 years. Testifying before the House Intelligence Committee, McMaster said Washington’s post-9/11 preoccupation with counterterrorism allowed its counterintelligence posture to fall critically behind.

McMaster’s Core Charge

McMaster argued that the gap in US vigilance opened as China and Russia grew more assertive and a coalition of hostile states began consolidating. He pointed to China’s entry into the World Trade Organization as a pivotal moment — one that delivered enormous economic gains which Beijing channelled into military and intelligence expansion.

‘The counterintelligence threat has lagged way behind,’ McMaster said during the hearing, which marked 25 years since the September 11 attacks. ‘So we were not only so far behind, I think we were extraordinarily negligent in this period of time. And I think we’re racing to catch up and we have a lot of work to do.’

Scale of China’s Military and Intelligence Build-up

China’s military had grown 46-fold since 2001, McMaster told the committee. Beijing also invested heavily in the Ministry of State Security (MSS) and the Chinese Communist Party’s United Front activities, he said. Simultaneously, the US opened its economy to China and allowed scientists affiliated with the People’s Liberation Army (PLA) to access American intellectual property and expertise — knowledge that was then used to secure both commercial and military advantages.

McMaster also criticised investments by US banks and private equity firms in Chinese companies developing military technology, calling it a structural vulnerability that compounded the intelligence deficit.

Wider Testimony: Agencies Not Equipped for State Threats

National security expert Seth Jones, also testifying before the committee, said agencies created after 9/11 to improve information sharing were not adequately prepared to confront hostile governments operating inside the United States. He pointed specifically to the National Counterterrorism Center, the Office of the Director of National Intelligence (ODNI), Joint Terrorism Task Forces (JTTFs), and state fusion centres.

‘Our fusion centers and our JTTFs and most of our state and local entities don’t even know what to look for, aren’t equipped to look for the activities of the MSS in our states,’ Jones said. He warned that local organisations were likely to be the first to encounter Chinese intelligence or United Front activities but lacked the infrastructure to identify and respond effectively.

The Evolving Threat Landscape

Homeland security expert Frank Cilluffo told the committee that counterintelligence could no longer be viewed solely through the lens of traditional government-to-government espionage. Foreign intelligence agencies, he said, were increasingly targeting private companies developing advanced technologies.

‘If you’re MSS today, you’re looking at frontier model companies,’ Cilluffo said — a pointed reference to the AI and deep-tech firms now at the centre of the US-China strategic competition.

The Post-9/11 Architecture and Its Limits

The September 11 attacks prompted the largest reorganisation of the US national security establishment in decades. Congress created the ODNI and the National Counterterrorism Center to improve coordination and prevent intelligence from remaining siloed within individual agencies. Notably, the hearing underscored that the very framework built to guard against terrorism may have structurally deprioritised the state-actor threat — a contradiction that experts say is now urgent to address.