Chinese Economic Espionage in the United States of America – Part 1

Chinese Economic Espionage

This article looks at how the USA and its Western allies responded to intellectual property theft perpetrated by Beijing utilising cyberspace to achieve economic advantage. .

The crime happened prior to as well as after the two nations had signed off an agreement in September 2015 on a standard banning activities of this kind. It is difficult to evaluate espionage’s impact and trends because of the nature of the activity itself, which really is secret. Even so, there’s been strong agreement among experts that Chinese economic espionage directed against the U. S. experienced a decline in the calendar year after the signing of the pact, while they were divided as to why and how it rebounded beginning in 2017.

Numerous western governments and cybersecurity organisations, most of which are American, have uncovered IP theft operations by Advanced Persistent Threat (APT) actors linked with or coordinated by the Chinese Ministry of State Security (MSS). These campaigns include APT 10, which targets the aerospace, telecommunications, and government sectors; APT26, which has targeted various international manufacturers of the C919 passenger aircraft; and APT3, which stole “files include private information.” Hence, these state intelligence operations are entirely above board.

This case study will concentrate on the theft of intellectual property for the purpose of gaining a financial advantage. Nevertheless, it will also demonstrate how the goals of such an operation may overlap, leading to legal or political confrontation.

As a result, the question that has to be answered is whether or not such a theft was part of an intelligence operation for political-military aims, which is permissible outside of the context of international law, or whether or not it was an unlawful theft of intellectual property.

For the aim of improving its competitiveness and establishing itself as an economic and technological frontrunner, China uses cyber-enabled attacks and corrupts trustworthy insiders.

Theft of intellectual property in China is an integral aspect of a state-driven industrial plan called “Made in China 2025,” which aims to restructure China’s current rate of economic growth. The high-tech, telecommunications, pharmaceutical, energy, aviation, and defence sectors are the main focus of the Chinese govt’s industrial policy in South and Southeast Asia, Japan, Taiwan, Hong Kong, South Korea, Europe, and the USA.

Theft of intellectual property in the commercial and technological sectors helps the government attain its goals of self-sufficiency, survival, national security, and immunity from foreign interference by injecting innovation into its supply chains and technologies.

The expanding scope of Chinese economic espionage has prompted the United States to respond with a variety of actions, ranging from the prosecution of particular Chinese cyber actors and corporations to the threat of penalties.

This initial response established enough leverage for bilateral discussions to prevent reciprocal escalation by establishing a Memorandum of Understanding. Yet, the importance of these conversations, as well as the function of fines and indictments as motivators, is debatable.

Indictments: In May 2014, five Chinese military hackers were charged with cyber espionage against US corporations and a labour organisation. This was a change in the US strategy for countering economic espionage, which has had mixed results. After the U.S.-China agreement, indictments were still used.

In November 2017, the Justice Department charged three Chinese nationals who worked for the Chinese cybersecurity firm Boyusec with hacking into the computer systems of Moody’s Analytics, Siemens AG, and Trimble inc. “for commercial advantage and private financial gain.”

In 2018, Zhu Hua and Zhang Shilong, two of the five Chinese People’s Liberation Army (PLA) agents in APT 10, were charged with economic espionage. This, along with other countermeasures (like the bilateral agreement described below), led to a short break in PLA economic espionage. Even though most criminal measures against people who have been indicted can’t be enforced, the use of such legal tools gives the US and Europe more trust in their capacity to find specific PLA operatives.

So, they can link them to recognised APTs and to China’s economic espionage, which are both against international law and norms. US Attorney General William Barr said that the US will keep bringing charges and issuing indictments. This goes along with FBI Director Christopher Wray’s statement that there are about a thousand investigations into China’s attempts at stealing US technology.