China Using American Private Tech to Advance Military

The Chinese Communist Party is using investment and partnerships to acquire advanced technology for its military
By Joshua Philipp, The Epoch Times
March 29, 2018 Updated: April 13, 2018

The Chinese Communist Party (CCP) has for decades used a comprehensive strategy to steal from the U.S. economy, with tools including espionage, currency manipulation, cybertheft, and intellectual property theft.

“Technology is probably the most important part of our economy,” said U.S. Trade Representative Robert E. Lighthizer before the Senate finance committee on March 22.

“We concluded that, in fact, China does have a policy of forced technology transfer; of requiring licensing at less than economic value; of state capitalism, wherein they go in and buy technology in the United States in noneconomic ways; and then, finally, of cybertheft,” he said.

The goals of this push were best expressed when the CCP launched its Project 863 program in 1986, with its directive for “catching up fast and surpassing” the West. The U.S. Office of the National Counterintelligence Executive stated in 2011 that the ongoing program “provides funding and guidance for efforts to clandestinely acquire U.S. technology and sensitive economic information.”

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Over the years, the CCP has started initiatives and created new tools for theft. Its push made global headlines in 2014, when a group of its military hackers were indicted for breaching the networks of private companies in the United States and stealing their intellectual property for the benefit of the CCP.

Rather than stopping after its hacker army was exposed, however, the CCP merely changed its tactics. It reduced the number of cyberattacks, but its hackers became more focused. It also passed additional laws that force foreign companies to hand over their data, and by early 2016 it had launched a new strategy for acquisitions and investment to gain control of targeted foreign markets.

A source familiar with the strategy shift told The Epoch Times in March 2017 that the CCP began “sending teams of individuals to the United States” to establish business and research partnerships, with the intention of “bringing people or technology back to the mainland.”

These strategies were known by many in the defense community and in the U.S. government, yet the United States has repeatedly failed to act. Richard Fisher, senior fellow at the International Assessment and Strategy Center, told The Epoch Times in 2015 that “in a sense, it is very clear cut, but we don’t want to accept what we see right before our eyes.”

On March 22, however, President Donald Trump put into motion an initiative to stop the CCP’s economic theft and to begin repairing trade with China.

Trump signed a memorandum that will impose tariffs on Chinese goods, worth between $50 billion and $60 billion annually, as a penalty for the CCP’s theft of U.S. intellectual property.

The actions follow a U.S. trade representative investigation into the CCP’s theft of intellectual property (IP). The trade representative will soon release a list of 1,300 products that have been targeted. Trump is also considering placing restrictions on Chinese investment, which the CCP has weaponized for economic warfare.

Video: How Industrial warfare has occurred between USA and China’

The $50 billion to $60 billion in tariffs will only go a small way toward fixing the overall problem, however. The U.S. trade deficit with China is estimated at $375 billion. According to the independent IP Commission’s 2017 report, the United States suffers an estimated $600 billion a year in IP theft, with the principal thief being China. Higher estimates put the losses to China due to IP theft in the trillions.

Any actions to end the CCP’s economic theft and trade imbalances will need to take into consideration the full picture of the regime and its actions. (See the Epoch Times infographic on how the CCP’s broader systems and strategies work.)

One complicating factor is the CCP’s nationalization of otherwise benign institutions to carry out its operations. In China, the lines between private companies, the CCP, and its military are blurred. Any company with more than 50 employees is required to have a Communist Party liaison, and the regime uses tight regulations and data policies to ensure it maintains access and control.

Also, unlike the CCP’s military hackers, who were illegally breaching company networks and stealing technology, the CCP in many cases uses legal loopholes to take advantage of the open system of the United States.

In its latest push, the CCP has mobilized investors, regulating where their money can or cannot go so as to fulfill the regime’s broader interests. It is targeting startup companies, establishing and funding research conferences in order to gain access to frontier findings, and partnering with or leveraging existing ties with universities to access cutting-edge research.

The goal of the CCP today remains the same as when it began Project 863: It aims to replace the United States as the world’s leading power and to spread globally its “China model.” Based on communist totalitarianism, the China model lacks the basic principles of human rights and freedom of belief that are at the foundations of the West.

Follow Joshua on Twitter: @JoshJPhilipp