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Senators Reveal Huge Financial Losses From US Tech Stolen by Chinese

August 5, 2021 by Tom Ramstack
Sen. Mark Warner, chairman of the Senate Intelligence Committee.

WASHINGTON — A Senate committee went public Wednesday with the kind of information about China’s use of U.S. technology that normally would stay behind the closed doors where clandestine issues are discussed.

Select Committee on Intelligence leaders revealed that China’s unauthorized use of technology is costing Americans $300 billion to $600 billion a year, or the equivalent of $4,000 to $6,000 for each U.S. family of four.

Committee Chairman Mark Warner, D-Va., explained that U.S. government efforts to halt what he described as technology thefts have largely failed, meaning it is time to enlist support from other sectors of the economy.

“The government cannot counter the CCP’s efforts by itself,” Warner said in reference to the Chinese Communist Party.

In some cases, Chinese agents turn over stolen U.S. technology information to their own companies to produce consumer products they sell back to Americans, Warner said.

Examples mentioned during a Senate Intelligence Committee hearing included 5G telecommunications, artificial intelligence and genomic information used by pharmaceutical companies.

A primary tool the Justice Department uses against foreign agents to control what sometimes turns into corporate spying is the Foreign Agents Registration Act. It is a 1938 federal law requiring that agents of foreign countries who act in a “political or quasi-political capacity” disclose their relationship with the foreign governments and information about related activities and finances.

The Justice Department keeps track of about 1,700 lobbyists representing more than 100 countries who have registered under the law.

Congress has considered increasing the penalties against foreign agents who fail to register. Another proposal would require American companies to report all intellectual property transfers to Chinese business partners.

Even as they discussed legislative options, senators acknowledged huge gaps in their ability to stop the hemorrhaging of technology to Chinese competitors who exploit it to great economic advantage.

Many of them don’t need to act as lobbyists as they take information from U.S. corporate computer systems without leaving China, according to Sen. Marco Rubio, R-Fla.

“They hack into networks and they take it,” Rubio said.

Other times, they partner with American universities under the guise of academic collaboration but steal their technology for commercial development, he said.

Unlike American companies and universities, there is little difference in China between business, academia and the military, several lawmakers said. They mentioned consumer electronics firm Huawei Technologies Co. as one of the worst offenders.

“They have weaponized our openness,” Rubio said.

He also complained about China’s political influence over Americans.

In one 2018 example he mentioned, clothing retailer The Gap, Inc., endured complaints from the Chinese government about a shirt it sold that featured a map of China but did not include Taiwan. The Gap officials removed the shirt from their product line and apologized to the Chinese government.

In another case in 2019, computer company Apple, Inc. stopped selling a communications app under pressure from China’s government because it was being used by political protesters.

Bill Evanina, former director for the U.S. National Counterintelligence and Security Center, told the Senate committee that if the United States does not figure out a way to compete better against China, “We will not sustain our position as world leaders.”

He added that 8% of American adults have had all of their personal data stolen by the Chinese Communist Party and 20% have had some of it taken.

Matt Pottinger, a former White House national security advisor, said current laws that require Chinese companies that sell in the United States to disclose how they operate hide ties to their government and military.

“The risk factors are not even remotely adequately addressed” under current laws, Pottinger said.

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