Washington’s intelligence and law enforcement chiefs have issued a stern warning to American companies that “the Chinese government is trying to replace you.”
The message, delivered in CNBC’s new documentary, “China’s Corporate Espionage War,” details the increasingly sophisticated Chinese government’s efforts to steal sensitive U.S. technology and corporate information. are doing.
For many years, American corporations largely viewed the theft by the Chinese government and state-owned enterprises as an attempt to catch up with America’s technological advances. But officials now say the effort is often seen as an adversary that not only wants to close the gap between Chinese companies and their U.S. competitors, but also eliminates the U.S. companies they target. is worse than commonly understood.
Asked whether the Chinese government wants to compete with or exclude U.S. companies, FBI Director Christopher Wray told CNBC, “Well, their definition of competition is embracing the idea of exclusion. I think it includes,” he said.
Senator Marco Rubio (Florida Republican) warned in an interview that U.S. companies “are committing long-term suicide” by doing business with China and jeopardizing their high-tech trade secrets.
“I think any major U.S. company in these areas should assume that they will be replaced or dismantled,” Rubio said.
The committee’s Democratic counterpart, Sen. Mark Warner (D., Va.), admitted in an interview with CNBC that the approach to China had turned out to be wrong.
“I was part of the more general consensus: if you bring China into more of the world, [World Trade Organization] “…everything will be fine,” said Warner. “And I think that speculation that we were all grappling with, the assumption that the more we all came together, the more Kumbaya it would be, was proven wrong by the facts.”
“China’s Corporate Espionage War” details the FBI sting operation that cracked down on Chinese Ministry of State Security official Xu Yanjun, a spy who targeted employees of an iconic US aerospace company. GE, boeing and Honeywell.
In 2017, Xu Yanjun sought out GE Aviation engineers for their valuable knowledge of the company’s jet engine composite fan blade technology. Posing as an academic and using a pseudonym, Mr. Xu was introduced to a GE engineer who was visiting Nanjing, China, to speak at a prestigious university. Xu has launched a pressure campaign to force the engineer, who has family in China, to reveal more and more information about engine technology being targeted by the Chinese government.
However, the FBI discovered the GE engineer’s travels and alerted GE, who confronted the engineer in a dramatic meeting in their Cincinnati offices. An FBI agent presented the engineer with a tough choice. Either he faces the consequences of his actions so far, or he cooperates with U.S. law enforcement in an operation to expose China’s operations.
When this technician agreed to cooperate, he became a double agent and ended up fighting a Chinese agent for the FBI.
James Olson, a decorated 31-year CIA veteran and former counterintelligence director, called the operation a textbook double agent operation. U.S. intelligence agencies should deploy more double operatives to counterattack Chinese intelligence agencies to thwart Chinese intelligence efforts to collect U.S. secrets, he said. added.
The Chinese Embassy issued the following statement to CNBC:
The Chinese government has never been involved in or assisted in any form of theft of commercial secrets. Some people and institutions in the United States have made false accusations. We urge the US side to handle this case in accordance with the law without prejudice and to protect the lawful rights and interests of the Chinese people.
These facts show that China remains a popular destination for foreign investment. The American Chamber of Commerce in South China (AmCham South China) recently released its 2023 White Paper on China’s Business Environment, showing that more than 90% of participating companies chose China as one of the most important investment destinations, and 75% He said he has chosen China as one of the most important investment destinations. companies plan to reinvest in China in his 2023. This is because China has a huge market and a full-fledged industrial and supply chain network. It is also the result of our tireless efforts to promote high levels of openness, a multilateral trading system, and support for a market-oriented world-class business environment governed by a sound legal framework.
There was an influx of foreign investment into China in January this year. Overseas investment amounted to 127.69 billion yuan, up 14.5% year-on-year. Foreign companies, including US investors, are open to the Chinese market and plan to expand there. According to US Department of Commerce statistics, total merchandise trade between the US and China in 2022 will reach a record $690.6 billion. All this speaks to the fact that China-US trade and investment cooperation is mutually beneficial and win-win. . No one benefits from decoupling or cutting industrial and supply chains. No support, nowhere to go.
No matter how the international situation changes, we remain unwavering in our determination to open the world to a higher standard and to share development opportunities with the rest of the world. We welcome U.S. and other foreign companies to access China’s market, share its development benefits, and work together for a stronger global economy.
Xu Yanjun’s attorney declined CNBC’s request for an interview. Former GE engineer David Jenn declined to comment. “Intellectual property is one of our most valuable assets, and we appreciate the Department of Justice’s efforts to pursue this lawsuit,” a GE spokesperson said in a statement sent to CNBC on Wednesday. .
– CNBC’s Katherine Liu, Bria Cousins, Laura Mischer and Wally Griffiths contributed to this report.
“China’s Corporate Espionage War” ben hours CNBC documentarypremieres Wednesdays at 10 p.m. ET on CNBC.