President Obama continually warns us of the risk of “falling behind China” if we don’t adopt his economic policies, which are typically massive government spending schemes. In recent years, China has indeed emerged as a major economic competitor of the United States, but it’s not because Beijing has wisely implemented Obama’s economic prescriptions. In fact, Obama doesn’t like to mention at all one of the major factors behind China’s economic growth: its massive program of corporate espionage.
Here’s one recent example: A few years ago the USA subsidiary of the Japanese computer giant Fujitsu hired a contractor to help out at a big Chicago trade show. After the show closed for the evening, something was needed from the booth, so the contractor was sent in to fetch it. Imagine his surprise when he found a Chinese gentleman inside the Fujitsu booth disassembling a totally proprietary million-dollar Fujitsu optical networking device. The Chinese spy wasn’t in full ninja regalia, but the show’s security officers found almost everything else: phony ID, digital cameras, memory sticks and hand tools to get at the goodies.
When the cops shook him down, out tumbled two pages of proprietary diagrams of an AT&T Corporate Central office telecom set up-and a notebook packed with diagrams and other data, as well as a hit list of other companies he was targeting. The cops stripped the Chinese secret agent of his tools of the trade and tossed him out of the Exhibition Hall. Fujitsu followed up with a harsh letter to the agent’s employer with copies to Cisco, Lucent and Tellabs, putting them on notice that they were being targeted for espionage by the Chinese. But for the fortuitous return of Fujitsu’s contractor, tens of millions of dollars worth of America high-tech information and know-how would have walked its way to Beijing – and none of the companies would have known it was gone until they noticed its appearance tied to a Chinese competitor.
Discover the depth of Obama’s dereliction of duty in failing to defend America from the Chinese dragon. Read “Bowing to Beijing: How Barack Obama is Hastening America’s Decline and Ushering a Century of Chinese Domination”
And who employed the after-hours spy in Chicago? Huawei, the Chinese telecom giant that has become a poster company for bad corporate behavior. Founded by the Chinese Army and financially supported by the Chinese KGB, Huawei has mostly been in the news of late due to its running gunfight with the U.S. Congress – Huawei is trying to subvert its way into American security systems and Congress is blocking it. The company says they fired their secret agent, but we only have their word on that one – and, in any case, he has disappeared back into China, where I suspect he is teaching “Escape and Evasion” courses to the next generation of Chinese corporate spies.
Huawei’s Chicago operation was a Chinese corporate espionage assault on American firms from the outside-in, but what about from the inside-out? More of the same. Just in the past 15 months, China-born employees of six major American companies have either been fired, convicted, or pled guilty to stealing trade secrets from their employers. America Semiconductor Corporation, Ford, General Motors, Dow, DuPont and even the paint company Valspar have all been victimized. Other cases are still pending, and if corporate scuttlebutt is to be believed, many times these incidents have been quietly handled by easing the offending employees out the door. The “known-unknowns,” those cases of successful Chinese corporate espionage through suborned employees, is anyone’s guess. Thievery is so rampant that many European companies have taken to refusing to accept interns from China. There’s no doubt this is unfair to lots of honest, young, Chinese people just starting out, but the Europeans feel self-protection comes first.
The gentlemen’s game of cricket and the more proletarian sport of ice hockey are both played by players hitting a small round object with a stick. Both require a good bit of eye-hand coordination, but the comparison ends there. Looking at international business, finance and trade today, it seems as though the American and other Western firms are playing by the gentleman’s set of rules, and the Chinese are playing by a much more rough and ready system. Although you will always find some crooks in Western firms, our businesses are generally law-abiding. Not so in China, where state-run enterprises regularly resort to lying, stealing, cheating, corporate espionage and extortion to further the goals of China’s communist leadership, a regime that identifies the United States as a major – if not the major – foreign rival.
Republican candidates for president demonstrated in the CNBC debate last night that they understand the threat China is posing to the U.S. As Governor Mitt Romney put it, “China is playing by different rules … stealing intellectual property … [and] hacking into our computer systems, both government and corporate.” President Obama has done next to nothing to fight Chinese corporate espionage; indeed, he is even reluctant to acknowledge that the problem exists, for doing so risks destabilizing the U.S.-China trade relationship. Seeing as China’s corporate espionage program is allowing Beijing to reap major economic advantages and gain access to U.S. technologies with military applications, Obama’s “see-no-evil” approach is a short-sighted and potentially dangerous dereliction of his duty to protect the American people.
William C. Triplett II is the co-author of “Bowing to Beijing,” Regnery, November 2011. He is the former chief Republican counsel to the Senate Foreign Relations Committee. His articles on China have appeared in the New York Times, the Washington Post and the Washington Times.