Tech war becomes industrial espionage

Photo credit: DepositPhotos
Photo credit: DepositPhotos

China has been accused of sponsoring an industrial espionage against the United states.

Zheng Xiaoqing used to work for General Electric Power. He was fired because of a picture that didn’t seem like a big deal.

An indictment from the Department of Justice says that the US citizen hid confidential files he stole from his employers in the binary code of a digital photo of a sunset. He then emailed the photo to himself (DOJ). The DOJ has called this act “industrial espionage.”

It was a way to hide the contents of a data file inside the code of another file. The word for this is “steganography.” Mr. Zheng stole secret documents from GE with it more than once.

GE is a multinational company that is known for its work in healthcare, energy, and aerospace. It makes everything from refrigerators to airplane engines.

Zheng stole information about how to make gas and steam turbine parts like turbine blades and seals. His business partner in China got it. People thought it was very valuable. In the long run, it would help the government, businesses, and schools in China.

Zheng got two years in prison at the beginning of this month. It is the latest time that the US government has looked into a case like this. In November, Chinese citizen Xu Yanjun, who was said to be a professional spy, was given a 20-year prison sentence for plotting to steal trade secrets from GE and other US aviation and aerospace companies.

It is part of a bigger fight between the United States and China. China wants to learn more about technology to help its economy and change how things are done in the world. On the other hand, the US wants to stop a powerful rival from getting stronger.

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.

Christopher Wray, the head of the FBI, told a group of business leaders and academics in London last July that China wanted to “ransack” the intellectual property of Western companies to speed up its 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 100 companies to start-ups, and on people who work on everything from aviation to AI to pharma.”

Zhao Lijian, a spokesman for China’s foreign ministry at the time, said that Mr. Wray was “smearing China” and still thought it was the Cold War.

China looks to topple the US via industrial espionage

Alan Kohler Jr. of the FBI said in the DOJ statement about Zheng that China was trying to steal “American ingenuity” and “topple our status” as a world leader.

Zheng was an engineer who specialized in turbine sealing technology and worked on leakage containment technologies in steam turbine engineering. The DOJ said that these seals improve the performance of turbines “by making the engine more powerful or more efficient or by making it last longer.”

Gas turbines power planes in China, so their growth depends on them.

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 making 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 nanometer is equal to one billionth of a meter.

It also includes drugs and bioengineering, making things like biocompatible prosthetics and regenerative tissue growth by imitating biological processes.

Mr. Wang told a story about how a former head of research and development at a Fortune 100 company told him that “the person he trusted the most” was found to be working for the Chinese Communist Party. He was close enough to this person that their kids grew up together.

Mr. Marro said that industrial espionage from Japan, South Korea, Taiwan, and Singapore was a problem in the past. But when 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.

Read Also: ASML thinks employee is behind data theft

Mr. Marro said, “We’ve seen a clear strengthening of intellectual property rights protection at home as Chinese companies have become more innovative over the past ten years.”

China has also learned new things by making foreign companies give up their technology as part of joint ventures in exchange for access to the Chinese market. Even though people have complained, the Chinese government has always denied using force.