A new year has begun but the Chinese Communist Party maintains its old ways.
In early January, a Chinese scientist pleaded guilty to attempting to commit economic espionage against the U.S. in what is yet another attempt by Beijing to gain global economic supremacy by whatever means necessary.
U.S. officials have assessed that China is stealing between $200 billion and $600 billion of U.S. trade secrets every year since the early 2000s. Put together, the leaking of economic secrets translates to a loss of between $4 trillion and $12 trillion over the past 20 years.
In comparison, during the same amount of time, the U.S. has spent an average of about $736 billion per year on defense for a total of approximately $14.7 trillion since 2000. Thus, on the high end, Chinese espionage is stealing the equivalent of almost the entire U.S. military’s budget every year.
New cases seemingly every day
On Thursday, Xiang Haitao, a former imaging scientist for Monsanto, pleaded guilty to conspiracy to commit economic espionage.
From 2008 to 2017, Xiang worked on an algorithm known as “Nutrient Optimizer” for Monsanto and The Climate Corporation, a subsidiary of the international company that specializes in agricultural biotechnology.
The Nutrient Optimizer was a proprietary algorithm behind an online farming software platform that farmers could use to collect, store, and visualize farming data in order to make better decisions. Monsanto and its subsidiary kept close guard of their intellectual property, driven by the need to protect their trade secrets more than geopolitical competition.
As such, Xiang’s contract included a clause that required him to protect Monsanto’s intellectual property. In addition, he received recurring training on how to safeguard trade secrets and on his obligations to do so.
In June 2017, Xiang left Monsanto and bought a one-way ticket to his native China. But on his luggage, he was carrying more than clothes and memories. Federal investigators intercepted him at the airport and later discovered copies of the Nutrient Optimizer algorithm on his electronic devices. Once in China, the imaging scientist worked for the Chinese Academy of Science’s Institute of Soil Science. But when Xiang returned to the U.S. he was immediately arrested.
“Mr. Xiang used his insider status at a major international company to steal valuable trade secrets for use in his native China. We cannot allow U.S. citizens or foreign nationals to hand sensitive business information over to competitors in other countries, and we will continue our vigorous criminal enforcement of economic espionage and trade secret laws. These crimes present a danger to the U.S. economy and jeopardize our nation’s leadership in innovation and our national security,” U.S. Attorney Sayler Fleming for the Eastern District of Missouri, stated in a Department of Justice press release.
Now, Xiang has pleaded guilty to one count of conspiracy to commit economic espionage and is awaiting his sentence in April. He can be jailed for up to 15 years and fined $5 million.
“The American worker suffers when adversaries, like the Government of China, steal technology to grow their economies. It’s not just military technology developed in secret labs that adversaries want; in this case, it was agricultural technology used by American farmers to improve crop yields. The FBI will continue investigating the theft of technology from American companies because economic security is national security,” Assistant Director Alan E. Kohler Jr., who leads the Bureau’s Counterintelligence Division, stated about the incident.
But this case is just another example of the intense espionage Beijing is running against the U.S. and the West.
Chinese Economic Espionage
Last year, the National Counterintelligence and Security Center came out with a report on the five most important technology sectors that are vital to the American economy and U.S. national security. These sectors include artificial intelligence, bioeconomy, autonomous systems, quantum information science and technology, and semiconductors.
The report singled out China as one of the biggest threats to the U.S. economy because of Beijing’s willingness to steal its way to the top. Beijing has expressed its intentions to achieve global leadership in several emerging technologies by the end of the decade. As the second-largest economy in the world, China is well-positioned to achieve its goal.
To acquire technology and trade secrets, the Chinese Communist Party employs an incredibly wide range of methods, including intelligence activities, science and technology investments, academic collaboration, joint ventures, mergers and acquisitions, non-traditional collectors—this is where Xiang’s case would fall—talent recruitment programs, research partnerships, front companies, and legal and regulatory actions. Crucially, Beijing doesn’t hesitate from using quasi-legal and illegal methods to acquire American technology.
Although much of the stolen technology is used for economic purposes, the whole-of-nation approach Beijing employs for its defense means that purloined technology and trade secrets often end up benefitting the Chinese military and security apparatuses. China’s National Intelligence Law requires all Chinese entities and individuals to share technology and information with the Chinese military and intelligence and security services.
There have been countless examples of this in the past 20 years, including the theft of 5G technology from a Canadian company and the stealing of the F-35 Joint Strike Fighter’s blueprints. And China is pursuing this strategy with relentless determination. Only recently, U.S. counterintelligence officials lured and arrested Yanjun Xu, a senior intelligence officer at the Ministry of State Security (MSS), the primary intelligence agency of China, for trying to steal General Electric Aviation’s composite aircraft engine fan, a highly classified aircraft engine no other company has managed to reproduce.