Commentary on Political Economy

Tuesday 7 March 2023

KILL ALL CHINESE RATS!

 


An illustration of a man looking at a screen in the dark with technical information reflecting off his glasses.
Credit...Illustrations by Hokyoung Kim

The Daring Ruse That Exposed China’s Campaign to Steal American Secrets

How the downfall of one intelligence agent revealed the astonishing depth of Chinese industrial espionage.

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In March 2017, an engineer at G.E. Aviation in Cincinnati whom I will refer to using part of his Chinese given name — received a request on LinkedIn. Hua is in his 40s, tall and athletic, with a boyish face that makes him look a decade younger. He moved to the United States from China in 2003 for graduate studies in structural engineering. After earning his Ph.D. in 2007, he went to work for G.E., first at the company’s research facility in Niskayuna, N.Y., for a few years, then at G.E. Aviation.

The LinkedIn request came from Chen Feng, a school official at the Nanjing University of Aeronautics and Astronautics (N.U.A.A.), in eastern China. Like most people who use LinkedIn, Hua was accustomed to connecting with professionals on the site whom he didn’t know personally, so the request did not strike him as unusual. “I didn’t even think much about it before accepting,” Hua told me. Days later, Chen sent him an email inviting him to N.U.A.A. to give a research presentation.

Hua had always desired academic recognition. “When I did my Ph.D., I initially wanted to be a professor in China or in the United States,” he says. But because his studies were focused more on practical applications than pure research, a career in industry made more sense than one in academia. At G.E. Aviation, he was part of a group that designed containment cases for the rotating fan blades of jet engines. The use of carbon-based composites in fan blades and their casings, instead of metal, means lighter engines and a commercial advantage.

“I felt honored to be invited to give a talk,” Hua says. Being recognized back home was especially fulfilling for Hua, who grew up poor in a small village and was the only child there from his generation to go to college. Beyond the prestige, the invitation also provided a free trip to China to see his friends and family. Hua arranged to arrive in May, so he could attend a nephew’s wedding and his college reunion at Harbin Institute of Technology. There was one problem, though: Hua knew that G.E. would deny permission to give the talk if he asked, which he was supposed to do. “Since G.E. is a high-tech company, it is difficult to get approval even to present at conferences in the United States,” he says. The company was concerned about giving away proprietary information.

Hua made it clear to Chen that he would be able to discuss only research on composite materials generally, without going into the specifics of what he did at G.E. Aviation. To prepare, Hua told me, he went back over the work he had done for his doctorate and gathered additional information from scientific papers. He also downloaded a few G.E. training files onto his laptop. These contained instructions from G.E. experts on using composites; Hua thought they would help him save time when putting together his presentation, which he planned to do on his flight.

After he landed in China, Hua took a high-speed train from Beijing to Nanjing, where Chen drove him to a hotel on the Nanjing University campus. The next morning, Chen and Hua went to a meeting with a man who was introduced as Qu Hui, deputy director of the Jiangsu Provincial Association for International Science and Technology Development. Qu gave Hua a welcome gift: loose Chinese tea nicely packaged in a gift box. “I accepted it as an honor,” Hua says. “I’ve liked drinking tea since I was a kid.”

A few dozen students and faculty members attended Hua’s talk. They asked several questions that Hua was happy to answer. “I remember one student asked specifically about the architecture of the material I was talking about in my presentation,” he says. “I said: This is G.E. proprietary information. I am just using this picture as an example, but I cannot share the details of what we are designing or using.”

After the presentation, Chen handed Hua an envelope filled with $3,500 in U.S. dollars — reimbursement for his plane ticket and an honorarium for the talk. Then they went to dinner with Qu and a couple of professors. That night, Hua took a train back to Shanghai; the next day, he flew back to the United States. Once home, he realized he had forgotten to delete his presentation from the computer at the university auditorium in Nanjing. He was concerned because the slides included some pictures with G.E.’s logo. “So,” Hua told me, “I emailed one of the students and said, Hey, can you delete the presentation?” He thought that would be the end of the matter.

The images of a Chinese spy balloon drifting through American airspace last month before being shot down by a fighter jet off the coast of South Carolina were a conspicuous reminder of the escalating geopolitical antagonisms between the United States and China. Although world powers spying on each other is hardly unusual, the impunity with which the Chinese were apparently conducting surveillance over U.S. military sites alarmed many. The U.S. House of Representatives passed a resolution condemning China’s “brazen violation of United States sovereignty” in deploying the balloon, which was fitted with antennas capable of collecting signals intelligence; the Chinese government condemned its downing as an overreaction. The incident — reminiscent of Cold War confrontations — inflamed tensions between two countries already locked in a race for military, technological and economic supremacy.

The spy balloon’s flight over U.S. territory was a very public display of China’s intelligence gathering, but the Chinese government has for decades been conducting a much less visible and possibly more damaging campaign to steal American trade secrets and intellectual property. While weapons and military equipment have always been a focus — Chinese agents and civilians have been implicated in the theft or illicit transfer of various military technologies, including those related to radar, fighter jets, submarines and weapons systems — China’s espionage expanded in the 1980s and beyond to also target commercial technologies as diverse as pesticides, rice seeds, robotic cars and wind turbines.

Although China publicly denies engaging in economic espionage, Chinese officials will indirectly acknowledge behind closed doors that the theft of intellectual property from overseas is state policy. James Lewis, a former diplomat now at the Center for Strategic and International Studies in Washington, recalls participating in a meeting in 2014 or so at which Chinese and American government representatives, including an officer from the People’s Liberation Army, discussed the subject. “An assistant secretary from the U.S. Department of Defense was explaining: Look, spying is OK — we spy, you spy, everybody spies, but it’s for political and military purposes,” Lewis recounted for me. “It’s for national security. What we object to is your economic espionage. And a senior P.L.A. colonel said: Well, wait. We don’t draw the line between national security and economic espionage the way you do. Anything that builds our economy is good for our national security.” The U.S. government’s response increasingly appears to be a mirror image of the Chinese perspective: In the view of U.S. officials, the threat posed to America’s economic interests by Chinese espionage is a threat to American national security.

Like China’s economy, the spying carried out on its behalf is directed by the Chinese state. The Ministry of State Security, or M.S.S., which is responsible for gathering foreign intelligence, is tasked with collecting information in technologies that the Chinese government wants to build up. The current focus, according to U.S. counterintelligence experts, aligns with the “Made in China 2025” initiative announced in 2015. This industrial plan seeks to make China the world’s top manufacturer in 10 areas, including robotics, artificial intelligence, new synthetic materials and aerospace. In the words of one former U.S. national security official, the plan is a “road map for theft.”

The Chinese government relies not only on its intelligence services but also on businesses, institutions and individuals to gather proprietary information. A 2019 report from the U.S.-China Economic and Security Review Commission, a congressional committee, lists the myriad ways in which Chinese companies, often backed by their government, help transfer strategic know-how from the United States to China. The maneuvers range from seemingly benign (acquiring American firms with access to key intellectual property) to notoriously coercive (compelling American companies to form joint ventures with Chinese firms and share trade secrets with them in return for access to the Chinese market) to outright theft. Cyberattacks have become an increasingly common tactic because they can’t always be linked directly to the Chinese government. Over the past few years, however, federal agents and cybersecurity experts in the U.S. have identified the digital footprints left along the trails of these attacks — malware and I.P. addresses among them — and traced this evidence back to specific groups of hackers with proven ties to the Chinese government.

Perhaps most unsettling is the way China has sought to exploit the huge numbers of people of Chinese origin who have settled in the West. The Ministry of State Security, along with other Chinese government-backed organizations, spends considerable effort recruiting spies from this diaspora. Chinese students and faculty members at American universities are a major target, as are employees at American corporations. The Chinese leadership “made the declaration early on that all Chinese belong to China, no matter what country they were born or living” in, James Gaylord, a retired counterintelligence agent with the F.B.I., told me. “They started making appeals to Chinese Americans saying there’s no conflict between you being American and sharing information with us. We’re not a threat. We just want to be able to compete and make the Chinese people proud. You’re Chinese, and therefore you must want to see the Chinese nation prosper.”

Stripped of its context and underlying intent, that message can carry a powerful resonance for Chinese Americans and expatriates keen to contribute to nation-building back home. Not all can foresee that their willingness to help China could lead them to break American laws. An even more troubling consequence of China’s exploitation of people it regards as Chinese is that it can lead to the undue scrutiny of employees in American industry and academia, subjecting them to unfair suspicions of disloyalty toward the United States.

Hua didn’t regard his visit to China to share his technical expertise as extraordinary in any way. Many scientists and engineers of Chinese origin in the United States are invited to China to give presentations about their fields. Hua couldn’t have known that his trip to Nanjing would prove to be the start of a series of events that would end up giving the U.S. government an unprecedented look inside China’s widespread and tireless campaign of economic espionage targeting the United States, culminating in the first-ever conviction of a Chinese intelligence official on American soil.

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