china

Is China Stealing Its Way to Innovation?

Posted by Abe Sauer on February 23, 2012 10:31 AM

Some officials and the media in China got their shots in on the US during the recent Apple trademark case loss to China-based Proview Technologies. Well, here's hoping they got it all out of their system because it's all swinging back China's way again.

And this isn't just knocking off some Prada or pressing DVDs of the latest Ghost Rider movie. The latest charges against China's just-steal-it corporate culture carries the ominous term: "Espionage."

Federal prosecutors in California handed down indictments against five companies charging them with theft of trade secrets and economic espionage. The companies are all under the management of the Chinese state. The indictments charge several Chinese and Americans citizens with conspiracy to steal from DuPont the secrets of a food additive compound commonly used to made food white, like the inside of an Oreo.

The charges come as an avalanche of evidence is mounting that depicts Chinese corporations as master (and amateur) spies and thieves. A recent Wall Street Journal report revealed that Nortel had been the victim of Chinese hackers who "over the years downloaded technical papers, research-and-development reports, business plans, employee emails and other documents."

Oddly enough, what is considered one of the earliest cases of industrial espionage was against China. In 1712, a priest working in China named Francois Xavier d'Entrecolles chronicled Chinese manufacturers' system of making porcelain and then revealed it to European manufactures via a detailed letter.

But in the modern era, the flow of stolen cooperate secrets has almost exclusively flowed into China. From "Ghostnet" to the 2009 attach on Google, China has constantly, and increasingly, been identified as a giant vacuum sucking up the world's industrial secrets.

In recent months, it has been an open secret that China is luring US car manufacturers into joint ventures in order to steal trade secrets and launch its own "home-grown" electric vehicle manufacturers.

A November 2011 report by US intelligence agencies listed China as the top source of hacking threats to U.S. corporations. Unsurprisingly, China denies all such claims. 

American officials and politicians bristle, but beyond "beefing up security," what is to be done about China's theft? For every indictment such as in the DuPont case, a handful, or a dump truck-full, of similar cases of espionage go unpunished and even unknown.

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