Economic Espionage—China

We have talked, from time to time, about the perceived threat that China poses from a counterintelligence and technological standpoint. For example, there was controversy surrounding the State Departments planned use of Lenovo-brand computers, even though most computer components are manufactured outside the United States. And there was the story about the Mak brothers who apparently attempted to smuggle defense information out of the country.

Now comes news that “investigators are asking the Department of Justice to charge [Lan} Lee, and American citizen, and [Yuefei] Ge, a Chinese national, with … economic espionage to benefit China,” in addition to the theft of trade secrets charges already being considered against the two individuals.^[1] Economic espionage requires the government to prove beyond a reasonable doubt that the defendant stole, duplicated, communicated, or otherwise provided access to trade secrets without authorization, and that the defendant intended for the acts to benefit any foreign government.^[2] The punishment for economic espionage is very steep: a fine of up to $500,000 ($10,000,000 if committed by an organization), imprisonment for up to 15 years, or both.^[3]

According to the head of an FBI counterintelligence unit in San Jose, “’Silicon Valley is a hotbed’ of economic espionage”; the “valley is home to many of the estimated 3,000 Chinese front companies nationwide set up to steal secrets and acquire technology, according to the FBI.”^[4] While China is by no means the only country to attempt to gather technology from the United States (France and Israel, for example, also do it), most analysts agree that “China is ‘the No. 1 counterintelligence threat that the US faces.’”^[5]

To address this issue, the FBI recently established an economic espionage counterintelligence unit in San Jose, to go along with the one already functioning in Palo Alto.^[6] According to FBI director Robert Mueller, “espionage [is] the FBI’s number two priority—second only to terrorism.”^[7]

China, for its part, dismisses the accusations, with Chinese Embassy official Jianhua Li saying that there is no “evidence that the Chinese government is sending people to the United States to do this”^[8]

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[1] K. Oanh Ha, Stealing a Head Start, San Jose Mercury News, Sep. 28, 2006.
[2] 18 U.S.C. § 13831.
[3] Id.
[4] Ha, supra note 1.
[5] Id.
[6] Id.
[7] FBI, Investigative Programs—Counterintelligence Division, last visited Sep. 28, 2006.
[8] Ha, supra note 1.