Revealed: China’s big game plan for success – steal intellectual property

New Delhi: China, under the leadership of President Xi Jinping, has resorted to almost every dirty trick and illegal activity to become a heavyweight in the international arena. One of the ways that China has advanced towards its goals in recent years, is through theft of ideas, research and key technologies. Christopher Wray, director of the U.S. Federal Bureau of Investigation, on July 7, 2020, said that the Chinese Communist Party (CCP) was “doing all it can to exploit the openness” of democracies by stealing research.

There are several methods that the CCP and the Chinese government employs to steal valuable research, data and critical technologies from other nations. Some examples of these are – hacking foreign companies, co-opting Chinese nationals, luring foreign experts and sending out personnel who intentionally hide their affiliations to China to obtain sensitive information.

On July 21, 2020, the US Department of Justice published a press release, wherein they stated that two Chinese hackers in the US were charged with operating a global intrusion campaign that targeted intellectual property and confidential business information. The press release also revealed that the two hackers worked with the Guangdong State Security Department of the Ministry of State Security (MSS). The MSS is the intelligence, security and secret police agency of the Chinese government, and is responsible for foreign intelligence. It was discovered that the hacking campaign run by the duo lasted for ten years and targeted companies were in technology-rich countries like – United States, Australia, Belgium, Germany, Japan, Lithuania, the Netherlands, Spain, South Korea, Sweden, and the United Kingdom. The press release also included remarks from Assistant Attorney General for National Security John C. Demers, stating that the CCP possesses “insatiable hunger for American and other non- Chinese companies’ hard-earned intellectual property, including COVID-19 research”.

In another case of Chinese theft, a US residing Chinese citizen admitted he was involved in stealing more than $1 billion worth of trade secrets. Hongjin Tan was employed as an associate scientist at a petroleum company, Tan was assigned to a group that was tasked with developing next-generation battery technologies for stationary energy storage. During his trial, Tan admitted to intentionally copying and downloading the technologies’ research and development materials without authorization from his employer. U.S. Attorney Trent Shores for the Northern District of Oklahoma stated that individuals like Tan wished to steal American trade secrets and take them home to China so that the Chinese government can replicate their technology.

In another similar incident, Hao Zhang of China was found guilty of economic espionage and theft of trade secrets. As per a press release of the US Department of Justice, between 2010 and 2015, Zhang managed to steal trade secrets from semiconductor companies Avago and Skyworks. Avago is a designer, developer and global supplier of a broad range of analog, digital, mixed-signal and optoelectronic components and subsystems with a focus on semiconductor design and processing. Whereas, Skyworks is an innovator of high-performance analog semiconductors. The Judge, in his verdict, stated that Zhang intended to steal the secrets for the benefit of the Chinese government, which for years has tried to develop high-performance semiconductors domestically but failed. U.S. Attorney David L. Anderson for the Northern District of California rightly stated that “countries without freedom are unable to innovate and when they fail to innovate, they resort to theft”. He added that theft was not innovation.

The most recent case of Chinese espionage and came to notice when an MIT professor was arrested in the US on charges of grant fraud. As per a January 14 press release of the US Department of Justice, Gang Chen had failed to disclose contracts, appointments and awards from the Chinese government to the US Department of Energy. Also, Chen was charged with failing to file a foreign bank account report (FBAR) and making a false statement in a tax return. As per reports, Chen received $29 million in undisclosed foreign funding, with $19 million coming from China’s Southern University of Science and Technology.

In February last year, top officials of the US government held a conference in Washington to discuss the topic of Chinese theft of intellectual property from US tech firms and the academic sector. John Demers, Assistant Attorney General for National Security who opened the conference stated that the threat from China was “real”, “persistent”, “well-orchestrated”, “well resourced”, and it was not going away anytime soon’. FBI Director Christopher Wray added that the threat of China stealing research, trade secrets, technology and sensitive data was one of the greatest long-term risks to the US and the world. Wray further stated that the FBI at the time of the conference has approximately a thousand cases involving China’s attempted theft of US-based technology.

According to Wray, Beijing has identified critical target areas and already has a well-established plan to carry out these kinds of thefts. In addition to targeting innovation and R&D data, the Chinese government is also going after cost and pricing data, as well as internal strategy documents. China’s plans also extend well beyond mere defence sector companies, but they also target other sectors from agriculture to wind turbines and medical equipment.

In this grand theft plan of China, the academic sector gets no exception. In January last year, the Chair of Harvard University’s Chemistry and Chemical Biology Department was changed for having a connection to the Chinese government and making a materially false, fictitious and fraudulent statement. US Officials now fear that sensitive R&D work done in Harvard with US government grants may have found its way to the hands of the CCP and the Chinese government.

The Chinese telecom giant Huawei which already has a bad reputation due to its links to the Chinese government has also been accused of stealing technology from six companies. The Chinese telecom firm has already been deemed a national security risk by many countries and has been banned from being a part of 5G installation projects in several governments due to fears that the company would share sensitive data with the Chinese Government. Cisco Systems Inc. was one of the first companies to take Huawei to court and sue it for unlawful copying of its intellectual property back in the early 2000s. Financial Times has also reported that during a trade show in Chicago in 2004, a Huawei employee was found to be going to a rival company’s booth in the middle of the night and taking pictures of the circuitry inside a networking device. Huawei, however evasively termed the incident as an ‘unfortunate misunderstanding’.

China’s growth and prosperity, in recent years, has not been fuelled by its hard work or innovation but on that of foreign companies and nations. Being unable to innovate, China turned to outright theft of the ideas, research and data of foreign firms that have spent years and a substantial amount of efforts & resources to develop their ideas. China has taken advantage of the openness of the free world to coerce, manipulate and encourage theft for its benefit. At the same time ,China has kept its markets and economy closed to the outside world. But the world has become aware of China’s predatory practices and its despicable tactics. China now finds itself cornered from multiple fronts and faces criticism for all its actions. From being tagged as an oppressor and human rights abuser for its aggressive  actions in the South China Sea and persecution of Uighur minorities in occupied East Turkistan, it has now won a new title of being a thief.  

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