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Talk about an imbalance in trade.
China’s net from theft of intellectual property and trade secrets from U.S. companies amounts to a half trillion in value a year.
That’s according to William Evanina, the recently retired chief of the U.S. National Counterintelligence and Security Center.
In 2020, the total U.S. trade deficit with China was $310.8 billion (the lowest since 2011). If China had purchased that value outright (which American companies quite arguably would not be open to selling), the trade imbalance would invert to America’s favor in an instant.
Looked at another way, Evanina calculated that the loss from China’s theft amounted to $4000 for every American family of four after taxes.
In a podcast interview with Spytalk.co, an intelligence focused online news outlet, Evanina said China uses a wide array of hacking and espionage methods to accumulate valuable information. The CCP’s growing smartphone market share represented one vector:
“China currently has 55 percent ownership of the global smartphone [market], soon to have 65 percent in three years. That means they can listen and take data from every one of those phones around the globe.”
Though China’s overall economy has become a behemoth challenging for world dominance, the U.S. maintains an advantage in many advanced technology areas.
China aggressively counters that advantage via a very lucrative business of spying.
Business Espionage Advantage: China
U.S. intelligence are hardly choir boys when it comes to spying, on their own citizens or anyone else. But several factors add up to the fact that China has had more “business success” than the U.S. on that battleground.
For one thing, China has less advanced technology to steal. They lag the U.S. in creating technology at the edges of innovation. And secondly, they have been more closed to access from U.S. businesses, while the states have been a relative open door for Chinese goods, businesses and people.
According to Statistica.com, the number of Chinese students at American universities more than doubled in the past decade, from 127,628 in 2009, to 375,532 in 2019. They easily account for more than 30 percent of all foreign students.
Though the majority of the aforementioned are surely well-meaning and not connected with Chinese spying, the sheer numbers present opportunities with no parallels for U.S. intelligence.
Evanina explained that thanks to a 2015 cyber exploit of the Office of Personnel Management, China also has enormous volumes of data on 21 million U.S. government employees with varied levels of security clearance. It also obtained 143 million Equifax data and 500 million Marriott hotel customers’ personal information in the breach. And all of it could’ve been leveraged in various ways.
A 2020 New York Times story focused on how China was likely exploiting stolen info to gain business secrets and other intelligence:
“The information obtained from Atlanta-based Equifax might disclose whether any American leaders are under financial stress and hence vulnerable to bribery or blackmail.”
Evanina said in the podcast that he agreed with those concerns:
“So now you have someone who has a security clearance or maybe applied for one, then you add in their travel Marriott data, then you add in their Equifax financial data, and they might have some financial issues, right? (And) he has his top secret security clearance, but he’s got some financial hardship, he’s filed for bankruptcy. Oh, and we also [know] he’s got a child with special needs. He is really vulnerable.”