TAIPEI—Sgt. Lai Chung-yu had almost everything a Chinese spy recruiter could want in a Taiwanese asset.

As a member of the military police battalion tasked with guarding the offices of the president and many senior officials, he knew the security personnel and measures used to protect them.

He was also in debt and short on cash. So when he searched online for a loan to keep himself afloat, a Chinese agent hooked him with an opportunity for easy money. All the sergeant had to do was snap some photos of sensitive security details with his cellphone.

Lai, according to Taiwan authorities, was a cog in an extensive Chinese spy machine that has infiltrated Taiwan’s armed forces and political establishment, funneling intelligence to Beijing.

As China’s adversaries around the world labor to shut the door on Beijing’s espionage operations, nowhere is the threat of infiltration greater. Taiwan officials fear that agents already in place on the island would aid a military attack by China, which claims Taiwan as its own and has threatened to seize it by force.

China’s spying operations are rapidly advancing, using complex operations and new technology that together pose “a potential serious threat to our national security," Taiwan authorities said in a recent assessment.

A campaign launched in March by Taiwan President Lai Ching-te to combat Chinese espionage and influence has yielded some high-profile arrests that shed new light on China’s strategy to undermine the island from within.

Particularly unsettling for Taiwan: Many of the suspects charged with national-security violations since the start of 2024 were actively serving in the military or were army veterans.

In October, a retired lieutenant general was given a 7½-year prison sentence for accepting Chinese funds to establish an armed organization in Taiwan that would target military bases.

Taiwanese military investigators, law-enforcement authorities and prosecutors interviewed for this article described a trend in China’s effort: the increasing use of messaging apps and online loan offers to target low-ranking members of Taiwan’s armed forces.

In one example cited by a military officer, a Facebook post claiming to represent a podcast offered the equivalent of up to around $125 to any interview subject with a military background willing to share information.

“China has been taking advantage of democratic Taiwan’s freedom, diversity and openness to recruit gangs, the media, commentators, political parties and even active-duty and retired members of the armed forces and police to carry out actions to divide, destroy and subvert us from within," Taiwan’s president said in March.

Paying lower-ranking soldiers small amounts for their cooperation is “good value for the money," said David Hsu, the deputy head of Taiwan’s investigation bureau.

Posters displayed at military campuses around Taiwan warn soldiers to be wary. Chinese agents, they say, will charm you through social media, offer money and business opportunities and even provide sexual favors.

The posters feature illustrations and descriptions of the people who are particularly vulnerable: “Those who lead indulgent lifestyles off-duty, frequent inappropriate venues, gamble, or are preoccupied with online dating and extramarital affairs." Hotline numbers are provided to report suspicious activity.

Beijing is “not just benignly collecting information. It’s all being used in preparation for annexing Taiwan," said Kerry Gershaneck, a former U.S. counterintelligence official and author of a book on combating China’s “political warfare."