Top Stories

PRC still stealing intellectual property worldwide, even from allies

FORUM Staff

The People’s Republic of China (PRC) continues to use a range of coercive tactics to steal intellectual property (IP) from around the world, even from purported allies, robbing hundreds of billions of dollars from economies, experts contend.

Russian authorities arrested a Russian scientist in late September 2020, for example, on charges of treason for attempting to transfer secret technology to the PRC, according to media reports.

Alexander Lukanin, a 64-year-old physicist, worked with several educational institutes, including the Tomsk Polytechnic University, on electromagnetic radiation research in nuclear physics, the BBC reported.

Russian authorities arrested another scientist, a former Soviet-Russian Navy submarine force captain, earlier in 2020 for allegedly passing Arctic-related research to the PRC while a visiting lecturer at Dalian University in Liaoning, China, according to lenta.ru, a Russian-language online newspaper.

The PRC is “the world’s principal IP infringer,” according to the U.S. Commission on the Theft of American Intellectual Property.

In addition to using human assets for traditional espionage and other forms of theft such as hacking, the PRC obtains foreign technology through legal, but underhanded, practices that force technology transfers through partnership agreements, corporate buyouts and joint ventures.

The PRC’s Ministry of State Security runs insider-focused operations to develop relationships with individuals at companies and universities who have access to IP, John Demers, head of the National Security Division at the U.S. Department of Justice, explained at an August 2020 event at the Center for Strategic and International Studies in Washington, D.C., according to the National Law Review journal.

The PRC’s “Thousand Talents” program, the best known of its more than 200 recruitment plans targeting foreign professors and academics, also facilitates IP transfers, Demers said. U.S. authorities arrested several U.S. scientists affiliated with such PRC-sponsored programs in 2020 for failing to disclose their ties to the Chinese government. More than 80% of all U.S. economic espionage cases, including theft of trade secrets, involve the PRC or its agents, Demers said.

Yet, the PRC strategy goes beyond mere theft. The PRC steals another country’s IP, replicates the technology, patents it in China, replaces the company in the Chinese domestic market and then displaces the company in the global market, Demers explained.

Telecommunications giant Huawei “is one of the best examples of this problem,” William Schneider Jr., former U.S. undersecretary of state for security assistance, science and technology and former chairman of the Defense Science Board, said at a November 2019 conference in Tokyo, National Defense reported.

The Chinese company has acquired 56,000 5G- and artificial intelligence-related Chinese patents with minimal investment in research and development, Schneider said. “It is very important for us to confront and mitigate this problem,” he said.

Russia’s weapons market may be among the industries to eventually succumb to the PRC’s industry domination strategy.

Russian state defense conglomerate Rostec, for example, accused the PRC in December 2019 of illegally copying a litany of Russian weaponry and other military hardware mainly through reverse engineering, Nikkei Asia newsmagazine reported.

“Unauthorized copying of our equipment abroad is a huge problem. There have been 500 such cases over the past 17 years,” Yevgeny Livadny, Rostec’s chief of IP projects, said. “China alone has copied aircraft engines, Sukhoi planes, deck jets, air defense systems, portable air defense missiles, and analogs of the Pantsir medium-range surface-to-air systems.”

The PRC’s emergence as a major arms exporter after decades of stealing IP and reverse engineering foreign technologies represents “a crisis and an opportunity” for Russia, Andrei Frolov, editor-in-chief of Arms Exports journal, told Nikkei Asia.

“On one hand, Russia is concerned that China will gradually squeeze Russia out of its traditional arms markets,” he said. “But on the other hand, China has money and a desire to cooperate, so this might be an opportunity for Russia to advance with the help of Chinese money and technology.”

Given that the PRC’s military-industrial complex has already overtaken Russia’s in several key areas, the PRC may no longer find Russia a suitable partner.

“I don’t know to what extent this new model will interest China, since it prefers to make everything on its own and only imports technologies from abroad,” Vadim Kozyulin, director of the Asian Security Project at the nongovernmental PIR Center, told Nikkei Asia.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button