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Industrial espionage

Written by  Klaus Dodds

Published in Geopolitical Hotspot

Klaus Dodds explores corporate espionage in the US and the danger of alienating legitimate Chinese and Chinese-American researchers

For some retired spies in the United States, a new career working in the corporate world awaits where their field intelligence skills can be put to work. Former CIA employees have discovered that they don’t have to stop being spies as domestic US companies are eager to acquire insights into what their potential competitors are engaged in. It is not uncommon to read that private detectives and ex-spies will purchase, clandestinely, the rubbish of other firms and trade support groups. Or speak discreetly to employees in the hope of learning commercially sensitive information. Indeed, many ex-spies run private ‘corporate intelligence’ firms.

All of which is important to bear in mind, the next time you hear a US president railing against foreign industrial espionage. Donald Trump is angry with China for corporate spying and technology transfer. Intellectual property rights are being undermined by a country that is regularly accused by the US of taking all the ‘benefits’ and not the ‘costs’ of globalisation. In April, Trump proposed a new measure designed to restrict Chinese research staff working in US research institutions because there was a danger that industrial spying would simply continue unabated. The proposal was designed to reassure the public that Chinese staff were not going to be able to acquire and/or steal information about projects with military and intelligence components. China has made it clear, under its Made in China 2025 initiative, that it wishes to be a world-leader in industrial technologies such as robotics and artificial intelligence. Trump is worried that the US might accidentally facilitate such a milestone.

China is a leader in industrial espionage but it would be mistaken to think it’s alone in this matter. Edward Snowden reminded us in 2014 that the US has plans to capture knowledge that would be useful to US industry. What is disturbing about some of the recent commentary by figures such as the FBI director Christopher Wray is an insinuation that Chinese and Chinese-American researchers might constitute a ‘whole-of-society threat’. Speaking to the Senate Intelligence Committee in February, Wray chose to paint the threat of Chinese industrial espionage in a way that might lead the US public to think that Chinese-Americans in particular can not be trusted.

The reality is a great deal more complicated, and it is important not to think of China as a monolithic actor. There are multiple Chinese stakeholders and, like any state engaged in any form of spying, it uses a variety of individuals and groups to achieve its aims. Made in China 2025 signals Chinese industrial ambition in the same way that ‘Make America Great Again’ signals the US’ desire to consolidate its industrial-military hegemony.

Complicating all of this is the fact that the US and China do work together, including many academics working in networks spanning the two countries and beyond. The boundary between legitimate knowledge exchange and intellectual property theft can be a blurry one. Practices such as science diplomacy are often funded and supported by states precisely because it is recognised that international academic collaboration can contribute to wider national economic and political objectives. Universities, companies and governments work closely with one another and the danger is that in animating fears about industrial espionage you end up pointing the finger at researchers who are engaged in sanctioned activities undertaken at the behest of academic and funding bodies.

There are precedents to be mindful of. The Clinton and Obama administrations both worried about Chinese intellectual property theft and improper technology transfers. One of the most notorious cases involved a Chinese-American scientist called Dr Wen Ho Lee who worked at the Los Alamos National Laboratory. In December 1999, Lee was accused of stealing sensitive material so that China could develop miniature nuclear weapons. Lee was convicted of improper use of restricted materials but the FBI did not secure any convictions for more serious federal crimes. Ultimately, Lee was awarded substantial compensation for his treatment, which included solitary confinement. Discredited testimony was shown to have played a disproportionate role in his charging, while others suspected his Chinese-Taiwanese ancestry was a factor in heightening suspicion. The controversy led other Chinese-born scientists to leave and return to China. A racial-ethnic McCarthyism took hold.

The moral of the story is an important one. For 18 months, US commentators and politicians were convinced that Lee was a clear and present danger to the US. This was not only unproven but also sparked an exodus of scientists and led other Asian-Americans to doubt whether it was sensible to continue working at Los Alamos and other ‘sensitive’ institutions. If you want to ‘Make America Great Again’, you need in part to ensure that US companies can access growing markets in Asia, including China. Alienating China and the Chinese diaspora might not, therefore, make a great deal of sense.

Klaus Dodds is Professor of Geopolitics at Royal Holloway, University of London and author of Geopolitics: A Very Short Introduction 

This was published in the October 2018 edition of Geographical magazine


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