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China has been accused of sponsoring an industrial espionage against the United states.
An employee who used to work for the energy company General Electric Power, Zheng Xiaoqing, was fired because of a harmless-looking picture.
An indictment from the Department of Justice (DOJ) says that the US citizen hid confidential files he stole from his employers in the binary code of a digital photo of a sunset, which he then mailed to himself. This act has been tagged an industrial espionage by the DOJ.
It was a method called “steganography,” which is a way to hide a file of data inside the code of another file of data. Mr. Zheng used it more than once to steal sensitive documents from GE.
GE is a multinational company known for its work in healthcare, energy, and aerospace. It makes everything from refrigerators to aircraft engines.
In an act of industrial espionage, Zheng stole information about designing and making gas and steam turbine parts, such as turbine blades and seals. It was sent to his partner in China. It was thought to be worth millions of dollars. It would help the Chinese government, companies, and universities in the long run.
Zheng was given a prison sentence of two years early this month. It is the latest industrial espionage case like this that US authorities have gone after. In November, Chinese citizen Xu Yanjun, who was said to be a professional spy, was given a 20-year prison sentence for planning to steal trade secrets from GE and other US aviation and aerospace companies.
It is part of a larger struggle between the US and China. China wants to learn more about technology to help its economy and challenge the geopolitical order. On the other hand, the US wants to stop a serious rival to American power from rising.
Industrial espionage acts like the theft of trade secrets is appealing because it lets countries “jumpfrog up global value chains relatively quickly and without the costs, both in time and money, of relying completely on their own capabilities,” Nick Marro told the BBC.
Last July, Christopher Wray FBI Director told a group of business leaders and academics in London that China wanted to “ransack” the intellectual property of Western companies to speed up its own industrial development and eventually take over key industries.
He warned that it was spying on companies everywhere, “from big cities to small towns, from Fortune 100s to start-ups, people who work on everything from aviation to AI to pharma.”
At the time, Zhao Lijian, who was a spokesman for China’s foreign ministry, said that Mr. Wray was “smearing China” and had a “Cold War mentality.”
Industrial espionage: “China is looking to take our place.”
In the DOJ statement about Zheng, Alan Kohler Jr. of the FBI said that China was going after “American ingenuity” and trying to “topple our status” as a world leader.
Zheng was an engineer who worked on leakage containment technologies in steam turbine engineering and specialized in turbine sealing technology. The DOJ said these seals improve turbine performance “by increasing power or efficiency or making the engine last longer.”
The growth of China’s aviation industry depends on gas turbines that power planes.
Aerospace and aviation equipment are two of the ten areas the Chinese government wants to see grow quickly so that the country doesn’t have to rely so much on foreign technology and can eventually surpass it.
But as part of the industrial espionage accusation, the Chinese are also spying on a wide range of other industries.
Ray Wang, the founder and CEO of the Silicon Valley consulting firm Constellation Research, says that they include the development of new drugs and nanotechnology, which is engineering and technology done at the nanoscale and used in areas like medicine, textiles, and cars. For example, one billionth of a meter is one nanometer.
It also includes drugs and bioengineering, which is the imitating of biological processes to make things like biocompatible prosthetics and regenerative tissue growth.
Mr. Wang told a story about how a former head of research and development for a Fortune 100 company told him that “the person he trusted the most” was found to be working for the Chinese Communist Party. This person was so close to him that their children grew up together.
Mr. Marro said that in the past, industrial espionage from places like Japan, South Korea, Taiwan, and Singapore was a worry. But once local companies become innovative market leaders in their own right and start to want to protect their intellectual property, their governments start passing laws to take the issue more seriously.
Mr. Marro said, “As Chinese companies have become more innovative over the past ten years, we’ve seen a clear strengthening of intellectual property rights protection at home.”
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China has also learned new things by making foreign companies give up their technology as part of joint venture deals in exchange for access to the Chinese market. Even though people have complained, the Chinese government has always denied that they used force.
