China and Russia will just steal US tech – patents don’t solve

China and Russia employ cyberattacks and other illegal means to steal U.S. intellectual property.

China’s aspiration to achieve technological dominance is understandable. Many of the market-distorting measures Beijing undertakes to build up its domestic technology sector, such as subsidies and tariffs, are employed by other industrial nations even though they are in conflict with trade commitments. What puts China in a class by itself, however, is the extensive, state-supported use of illegal means to secure access to the intellectual property and trade secrets of U.S. technology companies. As of mid-2020, the U.S. Federal Bureau of Investigation (FBI) had over a thousand cases of technology theft by China under investigation.

FBI Director Christopher Wray told a Washington audience in July of 2020 that Beijing’s heavy use of espionage and cyber intrusions targeting U.S. companies has resulted in “one of the largest transfers of wealth in human history.” Wray said the value of the property stolen “almost defies calculation,” but most experts estimate its long-term worth in the hundreds of billions of dollars, with a corresponding loss in U.S. jobs. Some of these jobs are in the defense industry, but China targets intellectual property across every segment of the U.S. technology sector. Its goal clearly is to compress the amount of time required for China’s own tech sector to catch up with and surpass America’s.

For example, Chinese agents targeted the business secrets of U.S. aerospace suppliers even as those suppliers were contributing content to its first indigenous commercial jet, with the apparent intent of displacing such companies with domestic sources. Google disclosed in 2010 that it had suffered “a highly sophisticated and targeted attack” on its corporate infrastructure originating in China “that resulted in the theft of intellectual property”—at the same time Google was providing the operating system for most of China’s cell phones.

These attacks follow a pattern in Chinese behavior of gaining access to U.S. technology by fair means or foul, and then working to undermine the business interests of the enterprises that developed the technology. The pattern repeats so frequently that it must be a reflection of official policy, supported by government funding. The number of hackers employed by the Chinese government is estimated at 50,000-100,000, making Beijing by far the biggest source of intellectual property theft in the world.

While cyber theft seems to be the most common tool employed by Beijing for illegally appropriating foreign technology, its espionage efforts are diverse and multifaceted, including recruiting trusted insiders at technology companies, surreptitious copying of patented innovations, and the subversion of academic research. In 2020 the chair of Harvard University’s chemistry and chemical biology department was charged with attempting to conceal cooperation with a Chinese program aimed at securing technical information. Similar charges were leveled in 2019 against a biological engineering professor at Virginia Tech.

However, China is by no means the only country whose cyber and espionage activities pose a threat to U.S. security. Russian espionage in the United States predates World War Two, and appears to have gotten a major boost from the advent of the internet. In September of 2020 Microsoft disclosed that Russia is the biggest source of state-sponsored attacks on its customers. That same month, the U.S. government revealed that hackers apparently working in support of Russian military intelligence used novel malware to penetrate the networks of a federal agency and steal sensitive information. The targeted agency was not identified, but undoubtedly is just the latest in a lengthy roster of public and private organizations against which Russian operatives have perpetrated cyberattacks.

Moscow has multiple reasons for mounting such efforts. First, it wants to appropriate U.S. intellectual property for application to its own military capabilities. Second, it wants insight into U.S. military plans and vulnerabilities. Third, it seeks to learn information about Americans in sensitive positions who might be targets for other types of espionage activity. Fourth, it seeks to disrupt operations of the U.S. political system including its electoral processes, and sow distrust within U.S. society. As in the case of Beijing, Moscow does not rely solely on information technologies to perpetrate its attacks, but there is little doubt that the information revolution has given Russian operatives increased options for penetrating and disrupting the U.S. government and technology sector.