The U.S. Department of Justice is warning companies that trade secret theft cases are on the rise.
Deputy Assistant Attorney General Adam Hickey explained in an interview with CNBC in Singapore on Saturday, Sept. 21, that more than 80% of the economic espionage cases filed by the department’s National Security Division involve China.
He also warned that the frequency of cases has increased in recent years and recommends companies strengthen their defenses.
“That [the increase] may be because victims are more attentive to what’s happening, which is a good thing,” Hickey told CNBC.
“They may be more comfortable reporting to law enforcement, which is a good thing. They may be fed up, which is also a good thing,” the prosecutor continued.
The official denied statements by the Chinese Communist Party (CCP) that the United States is trying to block China’s development and protect its businesses.
“We expect other nations will want to become self-sufficient in critical technologies. That’s what we’d expect of a responsible government,” Hickey said.
“The issue isn’t that China has set out to do that. It’s that part of their industrial policy, part of the way they try to accomplish that, is state-sponsored theft or creating an environment that rewards or turns a blind eye to it,” he added.
In fact, the prosecutor assured that the strategic plan presented by the Chinese communist regime in 2015 named Made in China 2025—designed to reduce dependence on imported technology in 10 priority industries such as robotics, information technology, aviation, rail transportation, and biopharmaceuticals—is based on this behavior he called ‘industrial espionage.’
This is the term for the theft of trade secrets perpetrated or backed by a state, which the prosecutor claims is the case in China.
The official refused to make any statements about Huawei because there are currently two open cases against the technology company.
However, he did express concern about the threat this and other Chinese telecommunications companies may pose to national security.
“It’s going to matter where that company is located and whether they can be leveraged to comply with an intelligence service without regard to the rule of law that has to be relevant,” the prosecutor said.
Stephen Schwarzman, co-founder of Blackstone, told CNBC that China’s spectacular economic growth over the past 40 years has been achieved at the expense of the United States and the West.
“China in the last 40 years had more growth, I think, than any country in history. It’s an astonishing miracle what they did. But they did it behind tariff walls. They did it behind markets that are not accessible. They did it with other approaches to intellectual property than are shared in the developed world,” Schwarzman said.
“That leads the developed world to say to China: ‘We’ve got to rebalance this. It’s working for you. It’s not working for us,'” the billionaire added.
Trade deficit with China
President Donald Trump has dealt with the situation of imbalance in trade relations between the two countries, denouncing the loss of jobs and the closure of U.S. companies since the beginning of his mandate and imposing substantial tariffs on imports from China.
Vice President Mike Pence said in a Sept. 20 CNBC interview that not only does the United States have a “$500 billion trade deficit” with China, but the United States also loses nearly as much in intellectual property theft each year.
“For too long one administration after another, Republican and Democrat administrations, were willing to accept extraordinary disadvantages to American workers and American jobs in the name of trade with China,” Pence said.
“Those days are over … we’re going to continue to stand strong,” he added.