China syndromesU.S. Cracks Down on Chinese Economic Espionage

The U.S. Justice Department is escalating prosecution of Chinese economic espionage cases, part of the Trump administration’s crackdown on China’s alleged theft of American intellectual property and other predatory practices that are at the heart of trade tensions between Washington and Beijing. 

In the last ten months, the Justice Department has brought charges against Chinese nationals and entities in at least seven separate economic espionage cases, up from three during the prior ten months.  In addition, the department has obtained guilty pleas and convictions in six older espionage cases, while charging four Chinese nationals for evading sanctions against North Korea.

Last week the Justice Department indicted a University of Kansas researcher on federal fraud charges for concealing his ties to a Chinese university while working on a government-funded research project.  While not charged as economic espionage, the case is part of a broader U.S. effort to block Chinese attempts to steal American technology.

“The indictments and prosecutions that you’re seeing the public face of now are consistent with and a natural follow-up to the highest public priority now assigned by the Justice Department to countering Chinese-sponsored economic espionage,” said David Laufman, a partner at the Wiggin and Dana law firm who previously oversaw the prosecution of economic espionage cases at the Justice Department.

The surge in prosecutions is part of a “China Initiative” launched last November by then attorney general Jeff Sessions in response to growing Chinese theft of American intellectual property, which officials say costs the U.S. economy billions of dollars every year.  

The escalating trade war between the U.S. and China started amid U.S. allegations of rampant Chinese theft of American technology. China has denied the allegations.  With talks bogged down, U.S. President Donald Trump again accused China of “stealing our intellectual property.” 

While focused on economic espionage, the initiative is also charged with identifying corruption cases involving Chinese companies that compete with U.S. businesses, implementing new rules for Chinese and other foreign investors in U.S. companies, and applying the Foreign Agents Registration Act to actors seeking to advance China’s political agenda in the United States.

“The purpose of (the initiative) was to underscore the strategic priority of countering Chinese national security threat across a spectrum of behavior,” Laufman said.