Chinese Espionage Poses Growing Threat, U.S. Officials Say

(Bloomberg) -- Chinese cyber espionage and theft of intellectual property from U.S. companies is increasing and poses a dire threat to the country’s security and economic competitiveness, Trump administration officials told senators on Wednesday.

Chinese Espionage Poses Growing Threat, U.S. Officials Say

“What hangs in the balance is not just the future of the United States, but the future of the world,” Bill Priestap, assistant director of the FBI’s counterintelligence division, told the Senate Judiciary Committee.

U.S. complaints that China is stealing intellectual property from American companies have been at the center of President Donald Trump’s trade war with Beijing. The Trump administration is planning to indict Chinese hackers and take other actions to call out China for intellectual property theft, according to people familiar with the matter.

Senator Dianne Feinstein, the senior Democrat on the committee, said that Chinese cyber theft costs the U.S. $300 billion in intellectual property annually, as well as $100 billion in lost sales and 2.1 million jobs. She cited 2013 research published by the private Commission on the Theft of American Intellectual Property.

John Demers, assistant attorney general for national security, said Chinese espionage against U.S. targets has steadily increased and China has stolen technology ranging from autonomous drones to chemical compounds.

“We cannot tolerate a nation that steals the fruits of our brain power,” Demers said, “and that is just what China is doing.”

The Chinese espionage campaign extends beond government agents to encompass tourists, technology workers, students and academic researchers, they said. For example, the Chinese government’s payment of students’ tuition provides leverage to pressure them to bring home intellectual property, Priestap said.

Last month, U.S. officials -- Rob Joyce of the National Security Agency and former Attorney General Jeff Sessions -- publicly claimed that China was violating a 2015 agreement that prohibits the electronic theft of intellectual property.

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