U.S. Cracks Down on Chinese Economic Espionage

On the same day Sessions launched the “China Initiative,” the Justice Department announced a Chinese espionage case that officials said highlighted the scope of the problem.

A Chinese state-owned enterprise along with a Taiwan-based company and three Taiwanese nationals were charged with conspiracy to trade secrets from U.S. semiconductor maker Micron Technology.  The Idaho-based firm controls about 20 percent to 25 percent of the market for dynamic random access memory (DRAM) chips, a technology China did not have until recently. 

Then to add insult to injury, the company that stole and is working to clone the legitimate American product turned around and sued the American company for violating its patents rights — which were built on the stolen technology,” said John C. Demers, assistant attorney general in charge of the national security division.

In an unprecedented move, the Justice Department filed a civil action to stop the export of the illegal technology and to prevent the Chinese company from competing with Micron’s technology in the United States.

In January, the Justice Department charged Chinese telecom behemoth Huawei Technologies of a host of federal crimes, including stealing trade secrets from  wireless provider T-Mobile.

In April, Xiaoqing Zheng, a U.S. citizen of Chinese descent, and Zhaoxi Zhang, a 47-year-old Chinese national, were charged with conspiracy to steal turbine technology secrets from General Electric. The two allegedly received financial support from the Chinese government and had inked research agreements with state owned institutions in China to develop turbine technology.

The indictment alleges a textbook example of the Chinese government’s strategy to rob American companies of their intellectual property and to replicate their products in Chinese factories, enabling Chinese companies to replace the American company first in the Chinese market and later worldwide,” Demers said in announcing the indictment.

Nicholas Eftimiades, a former intelligence official, said China has “considerably” expanded its espionage over the last 20 years, increasingly targeting high tech sectors identified in its “Made in China 2025” industrial development strategy.

>Launched in 2015, “Made in China 2025” seeks to make China dominant in 10 strategic high-tech manufacturing sectors, from aerospace to robotics to new energy vehicles.  The U.S. sees the initiative as a threat, accusing China pursuing the project through intellectual property theft and forced technology transfer from companies that do business with China.   

You can clearly see a direction from the central government: these are the technologies we need for the future, and that (is) being executed through the bureaucracy, and out through the commercial sector in China,” Eftimiade said. 

This article is published courtesy of the Voice of America (VOA)