China’s theft of intellectual property in technology, including in AI, and other trade secrets is a major threat to the West, global intelligence leaders warn.
Intelligence leaders from the U.S., Canada, United Kingdom, Australia and New Zealand — collectively known as the Five Eyes — explain that the scale of China’s theft is unprecedented. FBI Director Christopher Wray believes China is the “defining threat of this generation.”
“There is no country that presents a broader, more comprehensive threat to our ideas, our innovation, our economic security and ultimately our national security,” Wray said. “We have seen efforts by the Chinese government, directly or indirectly, trying to steal intellectual property, trade secrets, personal data — all across the country.”
Why is China’s espionage such a threat?
A company based in China was convicted of stealing the technology secrets of wind turbine technology company. The company lost its competitive advantage, sales collapsed and the company laid off nearly 700 workers.
“It is a threat to our way of life in a number of ways,” Wray said. “The first is that when people talk about stealing innovation or intellectual property, that’s not just a Wall Street problem. That’s a Main Street problem. That means American jobs, American families, American livelihoods, and the same thing for every one of our five countries, directly impacted by that theft. It’s not some abstract concept. It has flesh and blood, kitchen-table consequences.”
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China’s threat extends beyond just espionage, the intelligence leaders said. The Five Eyes also warned of China’s meddling in elections and violence aimed at silencing Chinese dissidents living in their countries.
What makes China’s spying different?
Countries spying on each other is nothing new, but the scale and techniques of China’s operation worries the intelligence leaders.
All countries spy to covertly learn information, Australia’s Director-General of Security Mike Burgess said.
“But the behavior we’re talking about here goes well beyond traditional espionage,” Burgess said of China. “This scale of the theft is unprecedented in human history.”
Burgess said the scale is why they felt it was important to call out China’s activities publicly.
“Essentially what you have with the Chinese government is the autocracy and oppressive regime of, you know, East Germany combined with the cutting edge technology of Silicon Valley,” Wray said. “And the combination represents a daunting first of its kind threat for the United States and for our allies.”
What is China stealing?
Wray pointed to theft from Fortune 100 companies down to small startups. He said the theft occurs in the fields of agriculture, biotech, health care, robotics, aviation and academic research.
“We probably have somewhere in the order of 2,000 active investigations that are just related to the Chinese government’s effort to steal information,” Wray said.
Ken McCallum, director general of the U.K.’s MI5, said the espionage concerns include government and military secrets and critical infrastructure. He also worries about the theft targeting academic research at universities and startup companies.
“People, in short, who probably don’t think national security is about them,” McCallum said.
How is China stealing information?
The theft happens in several ways, McCallum said. Company employees are often manipulated, sometimes without being aware of what’s happening.
“We have seen, for example, the use of professional networking sites to reach out in sort of masked, disguised ways to people in the U.K., either who have security clearance or who are working in interesting areas of technology,” he said. “We’ve now seen over 20,000 examples of that kind of disguised approach to people in the U.K. who have information that the Chinese state wishes to get its hands on.”
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China also has the biggest hacking program in the world, FBI Director Wray said.
“[It has] stolen more of our personal and corporate data than every nation, big or small, combined,” Wray said.
Chinese companies overseen by the Communist Party are also a concern, the intelligence leaders said. Sometimes Chinese companies acquire land and companies in other countries for espionage purposes, the director of the Canadian Security Intelligence Service David Vigneault said.
“We’ve seen a variety of efforts by Chinese businesses, in some cases state-owned enterprises, in some cases ostensibly private companies, attempting to acquire businesses, land, infrastructure, what have you, in the United States in a way that presents national security concerns,” Wray said.
What are intelligence leaders doing to stop China’s global espionage campaign?
The Five Eyes intelligence leaders privately met Wednesday with 15 top Silicon Valley executives and Stanford University.
They came into the meetings to figure out ways to protect the companies and their intellectual property, Wray said. The companies, in turn, told the intelligence heads some of their needs and how they felt they could help.
MI5 Director General McCallum has a message for companies that may now want their guidance.
“I would say that if you are operating at the cutting edge of tech in this decade, you may not be interested in geopolitics, but geopolitics is interested in you,” McCallum said. “And you would be reckless, not just with my secrets but with your own company’s viability, with your shareholders’ capital if you didn’t think about what that means.”
The Five Eyes partnership is an important part of the effort dealing with intelligence threats, New Zealand Security Intelligence Service Director-General Andrew Hampton said.
The Five Eyes’ message to China
With all the worries over China, Wray said the U.S. still welcomes business, visitors and academic exchange with China, but not cheating, theft or repression.
“I would say to the Chinese government, if they want to be a great nation, it’s time for them to start acting like one,” Wray said. “And that includes abiding by its own commitments not to steal innovation. That includes not exporting repression to other countries. That includes working with all of our countries and all the other countries that we work with all the time who have common threats, like cybercrime, fentanyl trafficking, money laundering. It means not working with criminals but rather working to uphold the rule of law.”
China, for its part, had its own message to the Five Eyes, saying in part: “We firmly oppose the groundless allegations and smears toward China.”
