Huawei Row: US Senators Anxious Over Chinese Espionage Activities

The US Senators urged the Trump to initiate steps to address this major threat to the country’s national security.

Expressing strong concern over the massive Chinese espionage activities in the United States, top American Senators on Wednesday, 13 December, urged the Trump Administration to initiate steps to address this major threat to the country's national security.

“I am increasingly concerned that China is gaining access to American secrets, using non-traditional all-of-nation approaches, to conduct espionage against our allies,” Senator Ted Cruz said during a Congressional hearing on Chinese espionage activities.

During a Senate Judiciary Committee hearing, Cruz said he had spoken a number of times to the leadership of a major research institute in Texas that was facing the ongoing challenges of Chinese espionage activities.

In particular, Chinese nationals being paid by the Chinese government and working at that institution were working on sensitive research projects, he said, adding that they suddenly discovered projects that they were in the midst of working, companies out of China were filing US patent applications and seeking to get US intellectual property in the midst of the research.

“How widespread is this problem, is the threat of industrial espionage -- theft of intellectual property by Chinese nationals -- working here in the United States? And what are we doing about it? What should we be doing about it?,” Cruz asked senior government officials testifying before the committee.

Senator Chuck Grassley said China was believed to be responsible for 50 to 80 per cent of the cross-border intellectual property theft worldwide and over 90 per cent of cyber-enabled economic espionage in the US.

Reports issued this year by the White House Office of Trade and Manufacturing, the US trade representative and by ODNI detailed the findings on China’s role as a prime cyber attacker and thief of American intellectual property and technology.

When it comes to espionage, FBI Director Christopher Wray has said earlier, "there's no country that is even close" to the People's Republic of China. General Keith Alexander called China's estimated gains from economic espionage of up to USD 600 billion "the greatest transfer of wealth in history".

According to Grassley, Russia has distracted attention from an arguably greater, more existential threat, and that happens to be China's efforts to overtake the US as a world preeminent superpower in all phases of society and economy.

"Transfer and theft of American intellectual property by the Chinese government is today the most pressing economic and national security challenge facing our country and I believe China as well," Senator Diana Feinstein said, alleging that cyber espionage and theft remained a lucrative practice for the Chinese government.

China, she said had adopted non-traditional espionage tactics.

From placing Chinese scientists, including those associated with the Chinese military, at top US universities, research institutions and national laboratories, to acquiring small, promising US technology companies, to luring top US academics with lucrative contracts to institutions located in China, to forced joint ventures and dubious inspections requiring US firms to turn over source codes and other confidential information if they wanted to access Chinese markets and patents, the Chinese government, she alleged, had deliberately and purposefully created a system of maximum information extraction at nearly every level in every sector of the US economy.

Perhaps the most concerning aspect of the Chinese government's non-traditional espionage efforts was its scale, Feinstein said.

According to the Defense Innovation Unit, in 2015, Chinese investors participated in 271 early-stage investments in US tech firms with a total value of USD 11.5 billion, which was 16 per cent of all technology deals that year.

Near the end of 2017, Chinese investors participated in 69 deals worth USD 1.2 billion in US-based artificial intelligence technologies alone. In 2016, 328,000 Chinese foreign nationals studied at US colleges and universities and Chinese foreign nationals comprised 25 per cent of all US graduate students in stem fields, she said.

Senator Ben Sasse said China wanted to win a fight before it started by leveraging every tool at Chairman Xi’s disposal – sometimes that meant using the state and sometimes using Chinese citizens and businesses.

"We cannot sleep on this threat. The Assistant Director for Counterintelligence at the FBI gets this and is trying to bring urgency to the challenge," she said.

Observing that China was an economic juggernaut with no respect for the rule of law, Senator John Cornyn said the country was coercive and that state-driven industrial policies distorted and undermined the free market.

"It is engaged in aggressive military modernisation and intends to dominate not only its own region, but potentially beyond," he added.

"China is not just exploiting the freedom and openness of our society and our markets and our institutions, it is also eroding our national security advantage before our very eyes. What might this mean for our national security? We would potentially have an advisory that can dominate the cyber realm, defeat our weapons systems and control the skies as well or better than we can," Cornyn said.

One of the tools that China used was investment in the US, which was weaponised in order to vacuum up US industrial capabilities and emerging technologies, he added.

(This article has been published in an arrangement with PTI.)