China US Trade Secrets

Visitors look at a manufacturing robot from Chinese robot maker Aubo Robotics at the World Robot Conference in Beijing, China. China’s government has appealed to Washington to accept its industrial progress after U.S. intelligence officials said Beijing helps to steal and copy foreign technologies.

WASHINGTON — To hear the Americans tell it, the Chinese have gone on a commercial crime spree, pilfering trade secrets from seed corn to electronic brains behind wind turbines. China has stripped the arm off a T-Mobile robot, the U.S. says, and looted trade secrets about robotic cars from Apple.

The alleged victims of that crime spree are individual American companies, whose cases lie behind the Trump administration’s core complaint in the high-level U.S.-China trade talks going on in Washington: That Beijing systematically steals American and other foreign intellectual property in a bid to become the world’s technology superstar. Yet the odds of a resolution to the trade dispute this week — or anytime soon — appear dim, in part because China’s drive for technology supremacy is increasingly part of its self-identity.

The six-month standoff has shaken financial markets and likely weakened the global economy. The United States has imposed taxes on $250 billion in Chinese imports; Beijing has lashed back by taxing $110 billion in American products.

Determined to attain dominance in cutting-edge fields from robotics to electric cars, U.S. officials charge, Beijing is not only stealing trade secrets but also pressuring American companies to hand over technology to gain access to the vast Chinese market.

U.S. intelligence officials told Congress this week that China poses the biggest commercial and military threat to the United States. A separate report this week said Beijing will steal or copy technologies it can’t make itself.

Geng Shuang, a spokesman for the China’s Foreign Ministry spokesman, retorted that it’s “totally unreasonable to make random accusations.”

Beijing counters that the United States is just trying to suppress a rising competitor.

U.S. business groups broadly support the Trump administration’s decision to con­front China over its strong-arm tech policies. But they mostly object to the administration’s weapon of choice: Steep tariffs, which are taxes on importers and are usually passed on to consumers to pay.

Rooting out theft could prove im­poss­ible. Beijing typically doesn’t dispatch spies on missions of commercial espion­age. Rather, it encourages Chinese who study and work abroad to copy or steal tech­nology and rewards them when they do. So U.S. companies might have no reason to suspect anything — until a Chinese employee leaves and the em­ploy­er discovers that trade secrets have been compromised.

Most U.S. companies are reluctant to voice specific complaints about their encounters in China. Rather, most choose to speak through trade groups to avoid retribution from Chinese regulators. Last year, for example, the European Union Chamber of Commerce in China found that one in five foreign companies says it feels compelled to transfer technology to the Chinese as the price of market access.

Individual examples tend to surface only when the complaints wind up in court — often in cases brought by U.S. pros­ecutors. Consider:

• Federal prosecutors charged in an indictment unsealed this week that the Chinese tech giant Huawei stole trade secrets from U.S. cellphone company T-Mobile and offered bonuses to employees who managed to swipe technology from other companies.

U.S. authorities said Huawei was ob­sessed with a T-Mobile robot nicknamed Tappy that could detect problems in cell­phones by mimicking how people use them. T-Mobile was letting Huawei en­gin­eers into the Tappy lab to test their phones. In 2013, according to the in­dict­ment, a Huawei engineer spirited a Tappy robot arm out of the lab in a laptop bag. Questioned by T-Mobile, he returned it the next day. Prosecutors allege that the Chinese company hungered for T-Mobile technology to use on its own phone-testing robot.

• Apple would collect less revenue with­out China, the country where its iPhone is assembled and the market that accounts for the most sales of that device outside the U.S. But a secretive project that could become a future gold mine has been infiltrated by thieves trying to steal driverless car technology for a Chinese company, according to criminal charges filed in Silicon Valley. The FBI seized the latest suspect, Apple engineer Jizhong Chen, this month after he bought a plane ticket to China.

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