Stealing innovations from the United States is a key part of the Chinese regime’s bid to become a global competitor in high tech.
The campaign to steal information is aggressive; Chinese spies now make up about 90 percent of perpetrators in U.S. espionage cases, according to the Washington-based think tank Center for Strategic and International Studies.
Earlier this year, an adjunct professor at the University of California–Los Angeles was convicted for his role in an elaborate scheme to fraudulently acquire sensitive microchip technology from a U.S. firm, and illegally export it to China.
The semiconductor chips in question have both commercial and military applications, including in missile guidance systems for the U.S. military.
Court documents show that the company was planning to make the chips for the Chinese military to be used for missile guidance.
Shih’s case is but one of a growing list of federal prosecutions in recent years against Chinese espionage—a blanket term encompassing theft of trade secrets, illegal export of technologies critical to national security, cyberhacking, and traditional spying.
Since January 2018, more than 30 China-related espionage cases, including those involving Chinese intelligence officers, former U.S. intelligence officials, Chinese nationals, and naturalized U.S. citizens from China, have made the headlines.
Growing Recognition
The ramped-up enforcement of Chinese economic and other espionage in recent years is the result of a growing recognition of the threats posed by the Chinese communist regime, according to experts.“The awareness has been raised across the board,” said Casey Fleming, espionage expert and CEO of BlackOps Partners, a consultancy specializing in guarding organizations against theft of trade secrets, adding that senior leaders across the private sector, government, and military are now realizing the true intentions of the Chinese regime.
He told The Epoch Times, “The Chinese Communist Party wants to replace the United States as a global superpower.”
It aims to achieve that through a strategy described by John C. Demers, the U.S. assistant attorney general for national security, as “rob, replicate, replace.”
“Rob the American company of its intellectual property, replicate the technology, and replace the American company in the Chinese market and, one day, the global market,” Demers told the Senate Judiciary Committee in December 2018.
The Chinese regime, meanwhile, has consistently denied that it’s stolen secrets from U.S. companies and institutions to further its economy.
“They have a master shopping list by industry, with heavy emphasis on technology and finance,” Fleming said.
Much of this shopping list can be found in Beijing’s ambitious “Made in China 2025” industrial plan, which aims to transform the country into a high-tech manufacturing powerhouse by the year 2025. The policy targets 10 industries for development including robotics, aerospace, and biotechnology.
The plan is “as much roadmap to theft as it is guidance to innovate,” Demers said in his December testimony before the Senate.
Nicholas Eftimiades, a former U.S. senior intelligence official and author of “Chinese Intelligence Operations,” told The Epoch Times that he’s compiled a database of 464 cases of China’s overall espionage efforts around the world, based on public prosecutions.
“Most of ... [the cases] fall into the technologies identified in ‘Made in China 2025,'” Eftimiades said.
Academic Espionage
Eftimiades said the Chinese regime employs a “whole-of-society approach” in its efforts to acquire targeted technologies, mobilizing a range of entities, from state bodies down to the individual.“They use not only the Ministry of State Security [China’s top intelligence agency], the People’s Liberation Army’s military intelligence department, but [also] state-owned enterprises, academia, and individual companies,” he said.
Fleming said that, based on his professional experience as well as interactions with representatives of government and businesses, he estimates that there are about 150,000 individuals operating on behalf of the Chinese regime throughout the U.S. private sector, military, and government.
This figure, however, doesn’t include Chinese students in the country, some of whom have been used by the Chinese regime to steal technology and cutting-edge research.
Liu took that technology back to China and established a research institute and a Hong Kong-listed company based on such innovations. The FBI investigated Liu’s activities but ultimately didn’t charge him with a crime.
There are roughly 360,000 Chinese studying in the United States, according to the latest estimates by the Institute of International Education.
While academic espionage only applies to a small minority of Chinese students, Eftimiades said, “the problem is that the technologies that they take are so devastating, and provide such an economic boost or a military boost to China, that its [impact] is ... disproportionate.”
He noted that it has only been within the past year that the U.S. has stepped up its efforts to tackle academic espionage by working with academic and research institutions.
The National Institutes of Health (NIH), the largest funder of biomedical research in the United States, sounded the alarm in a letter to 10,000 partner institutions in August of last year, warning of the threat of IP theft and foreign interference.
In December, the NIH published a report placing the spotlight on the Chinese state-sponsored recruitment program, the “Thousand Talents Plan,” which aims to attract foreign experts to work in China. The report raised concerns that the program could be used to transfer key research—often produced with federal research grants—to China.
Growing Sophistication
Chinese espionage methods have become more sophisticated, Eftimiades said, notably in how the Chinese regime has integrated human intelligence operations with cyber espionage.An example of this integrated human-cyber approach was recently uncovered in a report by U.S. cybersecurity firm CrowdStrike.
After analyzing federal indictments from 2017 to 2018, the firm concluded that the Jiangsu Province bureau of the MSS (known as JSSD) orchestrated an elaborate plan to steal aviation technology.
The operation, the report said, involved a hacking component that was supported by a range of human operatives, including intelligence officers, security researchers, and staff at foreign companies recruited by the MSS.
Whole-of-Society Response
Echoing comments made by senior U.S. officials, Eftimiades said that the United States will have to adopt a similar whole-of-society approach to fight the Chinese regime’s transgressions.“It can’t just be done by the government alone—It’s got to be done with the government in partnership with industry and academia,” he said. “While the government is very, very used to protecting its own secrets, it’s not so used to helping American industry protect their secrets.”
The private sector and academia need to be trained and educated on the threats, and also share relevant information with each other. The government could also help industry and academia set better standards to vet people for insider access to critical information and technologies.
Fleming said that every American needs to understand that China is a communist country, governed by a party that has been running a covert war against the United States.
While most Americans may subscribe to the concept of “win or lose,” he said “the Chinese Communist Party is another level above that.
“They believe in ‘live or die:’ ‘I must live. You must die, never to fight again.’”