What would another country gain from spying on another country’s citizens, rather than said country’s government?
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There are a bunch of reasons.
One is that governments are composed of people and so by spying on citizens in general you will inevitably end up spying on members of the government. If you spy on millions of people and get dirt to manipulate a few tens of thousands of people then statistically you will end up with the ability to manipulate some people in government positions. You can also get information to deduce important stuff the government is trying to hide by mass spying. For example when the Manhattan Project was happening the cities of Los Alamos, New Mexico; Oak Ridge, Tennessee; and Richland, Washington were supporting it. Spying on regular people there could provide hints into what was happening.
However that isn’t all the people who are important in a country; regular citizens are in positions of power in private industry which can have significant impacts in the world. Suppose you manage to spy on a bunch of people and get inside information about new CPU designs. That is very important strategic stuff that isn’t really part of the government.
Another reason that might be specific to China is that there are a lot of expatriate Chinese living in the US who still have connections to people in China. These people who are outside of China may have skills China desires, or be suspected of challenging the CCP’s control of China by expressing discontent or a different narrative to people in China. To try to stop this China has made an effort to spy on such people in order to influence their behavior, threatening their loved ones still in China or even directly attacking them within the US! Chinese law enforcement personnel could show up at a Chinese expat’s house in the USA and threaten to kidnap their children if they disobey the CCP, or don’t return to China. So for an oppressive government the ability to extend their oppression overseas is a reason to spy on regular citizens.
Finally another reason I can think of to spy on people is to gauge the impact of large scale psychological operations on a population. I’m sure you have heard of Russian troll farms, and Russia is hardly the only country with such operations. A country can run a campaign of various techniques aimed at shifting behavior and public opinion and then reference the information they get from spying on huge numbers of people to measure how successful their efforts were. By trying various techniques and referencing their spy data they can figure out how to improve their techniques and better manipulate the population. By extension this influenced the government.
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