America and China have long had a contentious trade relationship. Aside from ever-present trade imbalances, a major source of tension emerges from China’s continuous efforts to acquire American technology and trade secrets, sometimes with bullying, sometimes in more illicit ways. For decades American business has complained to Washington about this, and every president since Ronald Reagan has made efforts to change Beijing’s practices. These efforts have all failed. The Biden administration seems set to follow in this pattern. Indeed, this White House has made little effort at all to remedy things.
Every nation, every business tries to get the trade secrets and technological edge of its competitors. That is why governments and international agreements enforce patents and copyrights as well as recognized trademarks. Because Beijing has largely ignored these international norms and laws, business has turned to Washington for help instead of to courts and international agencies.
Beijing’s most visible means of acquiring technologies and secrets is its insistence that any foreign firm operating in any China must have a Chinese partner to which it must transfer its trade secrets and technology. Though not strictly illegal, Beijing’s insistence does fly in the face of international norms. Still more objectionable to American business is the tendency for those secrets and techniques to leak out of their partners so that other Chinese firms, including state-owned entities as well as the designated partner, often use those secrets and techniques to outcompete the original American innovator.
The U.S. Trade Representative has documented how Chinese firms will buy high-tech American equipment and, despite patent protections, reproduce it for use in China and elsewhere outside the United States. Over the years, incidents of cyber theft have supplemented these practices. In 2010, for example, Google described a “highly sophisticated and targeted attack on its corporate infrastructure.” That attack, called Operation Aurora, went beyond the theft of technologies to invade the Gmail accounts of Chinese human rights advocates. Since, at least 34 American firms have reported similar attacks, including Yahoo, Adobe, Northrup Grumman, Dow Chemical, and McAfee. In 2014, evidence emerged that for years hackers from China’s Ministry of State Security had managed a cyber-theft operation called Cloudhopper. It compromised IBM and Hewlett Packard among others, and through them their clients, including the federal bureaucracy. Other Chinese operations targeted the AFL-CIO.
Beijing has also enticed or coerced Chinese nationals working and studying in the United States into more old-fashioned espionage efforts. The Bureau of Immigration and Naturalization records numerous instances of Chinese living to the United States as students when in fact they hold commissions in the Peoples Liberation Army and have been tasked with spying on academic research, especially when it supports industry and defense. Other Chinese nationals legitimately working in this country have been coerced or enticed to spy on their employers. China’s “Thousand Talents Plan” uses all sorts of incentives to induce people of any nationality to turn over to Beijing technologies and other valuable pieces of intellectual property, sometimes even when these people are working on U.S. government grants. The most famous example is the case of Harvard Professor Charles Lieber who was convicted of just this sort of activity in 2021.
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