News Updates

Chinese Industrial Espionage Requires Constant Vigilance

Industrial espionage is older than the first wheel ruts on the Silk Road, and in recent years the Chinese have proved themselves to be masters at it.

Like all forms of crime in bad financial times, industrial espionage has escalated over the last two years as negative economic news has overwhelmed the global economy. When people are desperate financially, their vulnerability increases to the most costly form of business damage: recruitment to commit industrial espionage on an international scale.

Over the last decade no nation has proved itself more adept at industrial espionage on an international basis than the country with the world’s fastest growing economy: China.

INCONTROVERTIBLE EVIDENCE

There has been incontrovertible evidence of the effectiveness of Chinese industrial espionage against the United States. Among many others, consider these news stories and developments:

  • China was able to replicate and manufacture a cruised missile based on the U.S. Tomahawk.
  • China coordinated a cyber attack against the Oak Ridge National Laboratory.
  • In northern California, Philip Cheng was sentenced to two years in prison and fined $50,000 in October 2007 for selling the Panther series infrared camera to China, enabling China to reverse engineer the camera’s night vision technology.
  • Silicon Valley businessmen Fei Ye and Ming Zhong, both natives of China, were arrested at San Francisco International Airport in 2001 with suitcases crammed with equipment and microchip blueprints and computer-enhanced design layouts from technology powerhouses like Sun Microsystems Inc., Transmeta Corporation, NEC Electronics Corporation and Trident Microsystems Inc.
  • A 2005 report by the U.S. House of Representatives asserted that China had achieved breakthroughs through industrial espionage that enabled it to produce a supercomputer that ran at speeds equivalent to the top speeds achieved to date only by the best supercomputers engineered in the U.S. and Japan.
  • China stole the blueprints to the American Aegis weapons system, replicated its technology, and installed a coastal defense system based on it, strengthening its position in the highly sensitive Taiwan Strait.

CHINA WATCH

In November 2007 the U.S.-China Economic and Security Commission (USCC) characterized the extent of Chinese industrial espionage in America as “the greatest threat to U.S. security.” In its report to Congress that month the USCC portrayed China as conducting an “aggressive and large-scale industrial espionage campaign” against America’s technology leaders, including those pioneering military and defense technology.

In doing this, China is guided by a central government based on strict communism for domestic governance but on liberal principles when it comes to international capitalism.

There are over 100,000 Chinese students studying abroad right now, and over the past quarter century 600,000 Chinese students have studied in foreign universities. Add this large student contingent to the Chinese diplomatic corps enjoying immunity abroad and the vast espionage recruiting apparatus available to China is astonishing.

More ominously still, China possesses a trade imbalance against the U.S. that totals $1.7 trillion.

THE DEBTOR’S PIN IN THE CHINESE CREDIT GRENADE

The U.S. owes China so much money that if China chose to pull the debtor’s pin on its U.S. credit grenade the resulting explosion might fragment the entire American economy. The U.S. has never found itself so economically vulnerable to another nation.

On March 13, 2009 at the annual press conference marking the close of the National People’s Congress, Chinese Premier Wen Jiabao exhorted the U.S. to take steps to guarantee its “good credit” and to ensure the “safety” of his country’s nearly $2 trillion investment in U.S. dollar-backed assets.

He did this two weeks before the G20 economic summit was set to begin in London on April 2. He also did it as:

  • The Dow Jones Industrial Average lost more than half its value in little over a year.
  • Employment in the U.S. reached a 26-year high at 8%, after the country lost 4.4 million jobs since the recession began.
  • The biggest U.S. banks, brokerage firms, and insurance companies teetered on the brink of collapse, buoyed only by congressional bailouts.
  • The U.S. housing foreclosure crisis deepened, despite a huge injection of government funds.

THE ANTIDOTE IS GREAT SECURITY

The only antidote to sophisticated industrial espionage is peerless security. That means vulnerable companies need a top-flight international security firm with global reach like The Repton Group. Repton has personnel experienced in intercontinental law enforcement and with proven track records in foiling espionage.  Repton also has experts skilled in forensic accounting, unraveling serpentine money trails, and in all phases of computer data security.

Repton also has vast experience in recognizing, analyzing and anticipating the motives that compel targeted humans to commit espionage, categorized under the Repton acronym MALICE:

  • Money
  • Anger
  • Lust
  • Ideology
  • Compromise
  • ·Ego
  • Companies enduring hard times often elect to cut security back just when they should go hard in the opposite direction. This is such a time.