It depends on what kind of intelligence. The West is great in all the big hardware, i.e. Echelon, but not so good when it comes to people out in the field in non-Western countries. Anyone can buy there way into getting information.
Look at Iraq. There are only six people out of a thousand in the US embassy who speak Arabic fluently? I've read in the CIA it's a worse situation. The FBI had only one and I think that guy got fired for being a whistle-blower. Someone certainly dropped the ball. Either because of the lack of forseeable vision of what resources are needed and/or plain simple prejudice. The movie, "The Good Shepard," shows how the birth of the CIA started by recruiting upper class US citizens from well-off families as agents because it was thought they had more to lose from foreign competitors so they would end up being more loyal in the end. Supposedly in China, the joke is US "spies" are easy to spot because they're never anything "Chinese." Added to that reports that Chinese language fluency is lacking too in the intelligence services.
Ever see the Frontline documentary, "From China with Love?" You watch that and it says the CIA and the FBI are frustrated and have no direct intelligence regarding China.