How Congress Can End China’s Theft of U.S. Military Secrets
American innovation is a significant factor in what makes us the envy of the world. But we are becoming increasingly vulnerable to losing that advantage. Our enemies are finding they can steal our technology without creating their own. And, as Secretary of State Mike Pompeo made clear in a recent speech, no enemy tries to steal our technology more than China. The communist state has a long record of intellectual property theft against the American government and American companies. According to Pompeo, its predatory actions force the FBI to open an IP theft-related case once every 10 hours.
But Congress is considering legislation to counter this threat. Sen. Cory Gardner (R-CO) recently proposed amendments to the NASA Authorization Act, which passed the Senate Commerce Committee, to protect American space technology. The amendments would order the Government Accountability Office (GAO) to review NASA contractors for any possible Chinese ties and require the NASA administrator to review any possible Chinese involvement when awarding contracts. With these safeguards, our most sensitive technology would be much less vulnerable to the claws of Chinese intelligence.
There are plenty of other examples of this danger just from the last few weeks. The Justice Department recently charged five Chinese nationals this month for hacking over 100 companies, universities, and nonprofits. In August, federal agents arrested a Chinese national for allegedly transferring sensitive data to his home country. The man, who worked as a researcher at the University of California-Los Angeles, destroyed his hard drive right before his arrest. That same month, federal agents arrested a former CIA officer for conspiring to send classified information to the Chinese government.
These are not isolated events — they are part of China's larger plot to steal our nation's intellectual property.
William Schneider Jr., a former undersecretary of state, said at a conference last year that, "China has institutionalized a system that combines legal and illegal means of technology acquisition from abroad." He remarked that China primarily engages in IP theft to enhance the nation's military capabilities and outlined how the clandestine system works.
First, the stolen information is smuggled through China's leading universities. The universities then apply for Chinese patents on the illicitly acquired material. Once the patents are obtained, they are then distributed to several Chinese companies. Now China has our tech spread throughout its defense industry. No doubt, this is already being used in the unprecedented buildup of the Chinese military.
China also steals intellectual property through joint ventures, buying companies outright, partnerships with government research institutions, and hiring foreign experts and bringing them to China to work. In his speech, Schneider said, "that is unlike anything we have had to deal with in the past. The scale of the problem is obvious."
The Pentagon agrees with this risk assessment. In its 2019 report to Congress, it said that "China uses a variety of methods to acquire foreign military and dual-use technologies, including targeted foreign direct investment, cyber theft, and exploitation of private Chinese nationals' access to these technologies, as well as harnessing its intelligence services, computer intrusions, and other illicit approaches.”
Because of the growing space race, NASA has become one of the communist regime’s latest primary IP theft targets. NASA’s extensive ties to the defense industry make it a high-value target as well.
NASA's inspector general reported in 2012 that 13 infiltration attacks were successfully carried out against the agency's computer systems. Just one attack procured 150 user credentials, which gave the hackers extensive access to sensitive agency material. Feds charged five Chinese military officials for hacking into American nuclear, metal, and solar companies to steal trade secrets. The five were later found guilty. In April 2017, Chinese hackers began stealing university research about maritime technology being developed for military use.
One way the communist state manages to gather so much intel is through a sinister law it enacted in 2017. The law compels Chinese citizens and companies to cooperate with intelligence services, effectively making all Chinese nationals working and studying in America potential collaborators. This state law enables a vast and powerful global network to gather sensitive information for the communist government.
One such company is SpaceX. Its CEO, Elon Musk, has depended on Chinese government officials to secure loans estimated to be worth over $1 billion to build its Shanghai Gigafactory. It secured these loans through Chinese banks with strong ties to the communist government. Tesla works closely with SpaceX, according to Tesla’s 2020 SEC filing.
Unfortunately, many of the companies that work with our defense and space agencies maintain extensive ties to China — and because of the 2017 law that they must follow, they are putting America’s security at risk.
Letting China-linked contractors work with federal government agencies is too great of a danger. We must crack down on this problem and pressure contractors to divest from China or lose their taxpayer-funded business.
Sen. Gardner’s amendments are a good first step in addressing this problem and keeping us safe. It’s common sense to require the government to make sure our contractors work for America, not our enemies.
Terry Thompson is a retired U.S. Air Force colonel and war planner at the Pentagon and wing commander at Dyess Air Force Base, Texas. He has a blog, Terry Thompson on America, at www.terrythompson.org.