> no universe in which foreign intel trying to blackmail you over some bit of info is worse than the local agencies doing the same
You're comparing conditional probabilities without considering the priors. Given you're being coerced, it's worse to have that done by power close than power afar.
The downside for the FBI blackmailing an American is significant. Of course it happens and has happened. But it's weighed. The downside for the CIA doing pretty much fuckall is highly limited. This results in the common asymmetry in non-autocratic countries between domestic and foreign surveillance budgets and, subsequently, targets. (If it came out that the CIA had been leveraging the porn habits of Chinese citizens to coerce them into spying for it, I'm not sure there would be any backlash in Washington. That's literally their job.)
That example, by the way, hints at the lack of mutual exclusivity in your example. Every one of those disposable agents would subsequently be punished by Beijing. Same as if you got played by Russia or China (or Pyongyang or a non-state criminal outfit). The blackmail only works because you're rationally afraid of your local agencies--the CIA has limited means by which to directly coerce Chinese citizens in China.
> The downside for the FBI blackmailing an American is significant. Of course it happens and has happened
In what sane society is this an acceptable point in conversation to be hand-waived away. The FBI has murdered American citizens in some cases and no one has faced any consequence. To me how is the FBI any different from the FSB at that point?
You're comparing conditional probabilities without considering the priors. Given you're being coerced, it's worse to have that done by power close than power afar.
The downside for the FBI blackmailing an American is significant. Of course it happens and has happened. But it's weighed. The downside for the CIA doing pretty much fuckall is highly limited. This results in the common asymmetry in non-autocratic countries between domestic and foreign surveillance budgets and, subsequently, targets. (If it came out that the CIA had been leveraging the porn habits of Chinese citizens to coerce them into spying for it, I'm not sure there would be any backlash in Washington. That's literally their job.)
That example, by the way, hints at the lack of mutual exclusivity in your example. Every one of those disposable agents would subsequently be punished by Beijing. Same as if you got played by Russia or China (or Pyongyang or a non-state criminal outfit). The blackmail only works because you're rationally afraid of your local agencies--the CIA has limited means by which to directly coerce Chinese citizens in China.