White House: China has attempted to steal 'crown jewels' of U.S. technology

By Tony Bertuca / June 20, 2018 at 2:50 PM

China has for years sought to acquire access to key technologies and intellectual property from the United States and other countries as well as "capture" emerging technology industries likely to drive future economic growth and advancements in the defense industry, according to a new report from the White House.

"The Chinese State seeks to access the crown jewels of American technology and intellectual property," according to the report released Tuesday by the White House Office of Trade and Manufacturing Policy.

The report, titled "How China's Economic Aggression Threatens the Technologies and Intellectual Property of the United States and the World," comes as the Pentagon continues to assess the damage from an alleged Chinese hack into a Navy contractor's network that resulted in the theft of sensitive data on a supersonic, anti-ship missile program.

"China engages in widespread cyber-economic campaigns involving cyber-enabled espionage to infiltrate foreign companies for the purpose of stealing intellectual property, trade secrets, business processes, and technologies," the report states.

The report also follows a Trump administration threat to place tariffs on $200 billion more worth of imported Chinese goods, accompanying $50 billion in tariffs already enacted.

"Given the size of China's economy, the demonstrable extent of its market-distorting policies, and China's stated intent to dominate the industries of the future, China's acts, policies, and practices of economic aggression now targeting the technologies and IP of the world threaten not only the U.S. economy but also the global innovation system as a whole," the report states.

The White House document also includes information from a past report from the Pentagon's Defense Innovation Unit Experimental, which states "the scale of the [Chinese economic] espionage  . . . continues to increase."

The report does not directly mention Chinese telecommunications company ZTE or its breaking of sanctions laws, but the company is referenced in a footnote. The Trump administration's position that ZTE should be fined $1.4 billion and forced to enact management changes, but not banned from doing business with U.S. suppliers, has brought him into conflict with many in Congress, including members of his own party.

Both the House and Senate have passed versions of the fiscal year 2019 defense authorization bill that call for banning ZTE.

The administration has yet to threaten to veto either bill over their respective ZTE provisions, but Trump met with senior Republican leaders Wednesday at the White House to discuss a range of policy matters, including defense authorization legislation.

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