Chinese Spies Stealing Technology from American Companies

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Several Chinese citizens were recently arrested within the United States on the charge of economic espionage. This sample business essay explores this recent happening in detail. The essay will proceed through four main parts:

1. An overview of the event itself
2. Related events over the past few years
3. The reaction of China to the legal action taken by the United States
4. The potential political implications of the present situation

Overview of Chinese espionage

According to a press release from the United States Department of Justice:

"On May 16, 2015, Tianjin University Professor Hao Zhang was arrested upon entry into the United States from the People's Republic of China . . . The 32-count indictment, which had previously been sealed, charges a total of six individuals with economic espionage and theft of trade secrets" (paragraphs 1-2).

The main idea here is that the Chinese citizens who have been indicted have been accused of specifically accused of coming to the United States, acquiring secret information through the roles they played during their time here, and then taking that information back to the Chinese government. This is somewhat different from committing a cybercrime by simply stealing the information for one's own personal use and benefit, insofar as the fact that the actions are meant to benefit a foreign nation would make one a spy. This is why the Chinese citizens in this recent event have been indicted under a legal provision that is reserved for cases of espionage.

What qualifies as economic espionage?

In order for an act to qualify as economic espionage, it must be demonstrated that the theft perpetrated by the indicted Chinese citizens was in fact meant to directly benefit the Chinese government. This is usually a difficult case to make, which is part of why cases of economic espionage are in fact relatively rare. In the present case, however, after stealing the technology, the Chinese citizens:

"set up a joint venture with China's state-controlled Tianjin University to produce and sell equipment using the technology, according to the indictment, and won contracts from both businesses and military entities" (Grossman, paragraph 3).

The key point here is that the stolen technology was given by the Chinese citizens to a state-controlled organization within China. Legally speaking, this is the same thing as actually giving the technology to the Chinese government itself. Therefore, the actions of the Chinese citizens would qualify as a form of espionage. Secrets which belonged to the United States were given to a foreign nation, China.

Of course, the fact that China is a Communist nation (a nation that follows the philosophies of Karl Marx) has made it significantly easier for the United States to press the charge of espionage. If the Chinese citizens had given the stolen technology to a private company alone, then no indictment of economic espionage would have been possible. However, not only was the Chinese university in question state-controlled, it is also reasonable to believe that several other stakeholders in the situation also had connections to the Chinese government—since this, after all, is the very definition of the kind of Communism that prevails in China today.

In principle, the more state-centered a given society is, the less of a space there is between state interests and individual interests, and the easier it thus becomes to bring charges of espionage in the case of theft by citizens of that society. This is exactly what has happened in the present situation: investigation has revealed that the Chinese citizens in question were acting in a way that would directly benefit the Chinese government.

Historical context of Chinas corporate espionage

This is not the first time that relations between the United States and China have become strained over the issue of intellectual property rights. For example, in an article written a full year ago, Bhattacharjee has indicated that Greg Chung:

"A Chinese-American engineer at Boeing who worked on NASA's space-shuttle program," who in the year 2009 "became the first American to be convicted in a jury trial on charges of economic espionage, for passing unclassified technical documents to China" (paragraph 1).

The same article also refers to a previous investigation involving a Chinese man named Chi Mak, which began in the year 2004. In short, the recent event involving Zhang and company is not a standalone case; it must be understood in terms of a broader history and pattern of Chinese espionage against the United States, especially with respect to intellectual property. In this context, the recent indictment would be a major step forward from the perspective of American law enforcement agencies. It indicates that they are beginning to make progress on an issue that has given them a great deal of trouble thus far.

Likewise, the year 2011, the Office of the National Counterintelligence Executive issued a report, in which it was indicated:

"Foreign collectors of sensitive economic information are able to operate in cyberspace with relatively little risk of detection by their private sector targets" (p. i).

In a word, this report identified the serious threat posed by hackers. Many of these hackers have been from China. In fact, the most recent event is somewhat distinctive in that it did not involve hacking, but rather simply a dishonest insider who was authorized to access information but then shared that information in unauthorized ways. All the same, though, it is clear that the recent event must be understood as part of a broader pattern of Chinese espionage within the United States. The fact that no actual hacking was involved does nothing to alter the moral or legal implications with respect to espionage.

Yet another specific case of Chinese espionage was reported near the end of the year 2013 As Krogstad wrote at that time:

"A corporate agriculture espionage case announced Thursday by federal prosecutors offered a glimpse into how at least seven Chinese men allegedly traveled across the Midwest to steal millions of dollars in seed technology" (paragraph 1).

Although this case may initially sound somewhat silly, one should absolutely not underestimate the real value that this kind of technology can have for a given nation. Moreover, the case is clearly conceptually related to both the history of Chinese espionage across cyberspace and the recent development regarding Zhang and company. What all the cases have in common is that they involve the theft of intellectual property from the United States, for the benefit of the Chinese government and Chinese society. Again, then, the case of Zhang and company must be understood as only the most recent event in a chain of events that have been occurring over the course of several years.

China denies all claims of espionage against America

Naturally, China is highly displeased that the United States has indicted its citizens on the charge of economic espionage. AFP has reported the following:

"A commentary in state-run news agency Xinhua said the six accused had fallen 'victim to Washington's growing paranoia', but did not elaborate on their case specifically, warning instead that if the US continued to bring 'unwarranted charges against innocent people' it could 'dent' bilateral relations" (paragraph 13).

In other words, the Chinese government is adopting the position of flatly denying that the Chinese citizens who have been indicted by the United States are guilty of any wrongdoing whatsoever. More specifically, it would seem that from China's perspective, any information sharing that has occurred was done under the umbrella of an academic context and was conceptually unrelated to the issue of espionage.

This is just yet another manifestation of a growing conflict between the United States and China over economic issues. For example, the new trade deal currently under discussion in Congress, which is geared toward improving trade relations between the United States and several Asian nations, specifically excludes China as a partner. Likewise, a great deal of Obama's justification regarding this deal has explicitly called attention to the economic rivalry between the United States and China: Obama is on record as specifically saying that it is necessary to pass the deal because it would be advantageous to China if the deal were to fail (see Seib). Chinese espionage clearly occurs within this broader context of economic competition.

It is not the case that relations between the United States and China are essentially cooperative, and that the indictment of Zhang and company on the charge of economic espionage is a disruption of that. Rather, what has been caused by the recent event is merely an exacerbation of relations that are already quite tense in the first place, and have been for quite a long time.

Reflection on the implications of China's economic espionage

In trying to understand the potential implications of the recent event of Chinese economic espionage, it is perhaps worth reflecting a little more closely on the concept itself. According to Keating:

The "U.S. government has sought to draw a distinction between government spying—which all countries do—and espionage for economic gain, a distinction that may not always translate in China, where much of the economy is controlled by the state" (paragraph 6).

Spying, as such, is relatively unproblematic, insofar as all nations do it, which would make it hypocritical for the United States to specifically hold the practice against China as a problem. Moreover, the transfer of information between nations is generally becoming increasingly difficult to prevent as the United States expands its globalization. Economic espionage in particular, however, could be specifically problematized; but within the context of Chinese society, it would be difficult to apply this conceptual distinction in a meaningful way due to the fact that China is a Communist nation.

Moreover, it is worth bearing in mind that the recent indictment of Chinese citizens, while seeming to be a potential catalyst of a negative slide in relations between the United States and China, could just as well actually be the effect of such a slide. That is: if the White House had felt that diplomatic efforts with China were going well, then it would have been unlikely to pursue the investigation in the way it has, since preventing harm to relations with China would have been a priority. The fact that the White House has in fact proceeded with the indictment thus implies that diplomatic efforts were stalling and that it was thus decided that it would be wise to use other avenues in order to promote American interests. The upshot is that far from being a cause of a deterioration in relations between the United States and China, the recent indictment is more likely a symptom of the fact that such a deterioration in relations has already occurred.

Final thoughts on China's assumed attack

In summary, this essay has consisted of a discussion of the issue of Chinese spies stealing technology from American companies. The essay discussed a recent event, the historical context of the event, the reaction of China, and the potential political implications. An important conclusion that has been drawn here is that the recent event must be understood as only the latest move in a much broader economic rivalry between the United States and China, and that the event could just as well cause a decline in the quality of relations between the two nations as itself constitute a symptom of already declining relations. In short, China continues to develop its status as an economic threat for the United States, and the United States is taking actions within this context in order to promote its own interests.

Works Cited

AFP. "China 'Severely Concerned' Over Arrest of Citizen on US Spying Charges." Guardian. 21 May 2015. Web. 1 Jun. 2015. http://www.theguardian.com/world/2015/may/21/china-severely-concerned-arrest-spying.

Bhattacharjee, Yudhijut. "How the F.B.I. Cracked a Chinese Spy Ring." New Yorker. 12 May 2014. Web. 1 Jun. 2015. http://www.newyorker.com/news/news-desk/how-the-f-b-i-cracked-a-chinese-spy-ring.

Grossman, Andrew. "U.S. Charges Six Chinese Citizens with Economic Espionage." Wall Street Journal. 19 May 2015. Web. 1 Jun. 2015. http://www.wsj.com/articles/u-s-charges-six-chinese-citizens-with-economic-espionage-1432046527.

Keating, Joshua. "U.S. Charges Chinese Citizens with 'Economic Espionage." Slate. 19 May 2015. Web. 1 Jun. 2015. http://www.slate.com/blogs/the_slatest/2015/05/19/u_s_charges_chinese_citizens_with_economic_espionage.html.

Krogstad, Jean Manuel. "Agriculture Spies Target Seed Technology, Feds Say." USA Today. 12 Dec. 2013. Web. 1 Jun. 2015. http://www.usatoday.com/story/news/nation/2013/12/12/agriculture-spies-target-seed-technology-feds-say/4005413/.

Office of the National Counterintelligence Executive. "Foreign Spies Stealing US Economic Secrets in Cyberspace." 2011. Web. 1 Jun. 2015. http://www.ncsc.gov/publications/reports/fecie_all/Foreign_Economic_Collection_2011.pdf.

Seib, Gerald, F. "Obama Presses Case for Asia Trade Deal, Warns Failure Would Benefit China." Wall Street Journal. 27 Apr. 2015. http://www.wsj.com/articles/obama-presses-case-for-asia-trade-deal-warns-failure-would-benefit-china-1430160415.

United States Department of Justice. "Chinese Professors among Six Defendants Charged with Economic Espionage and Theft of Trade Secrets for Benefit of People's Republic of China." 19 May 2015. Web. 1 Jun. 2015. http://www.justice.gov/opa/pr/chinese-professors-among-six-defendants-charged-economic-espionage-and-theft-trade-secrets.