Intense Competition Between China and the United States in Intellectual Property Ownership

On June 28, China's state news agency, Xinhua, accused the United States of hindering China's economic growth, stating: "Rhetoric about intellectual property rights is just one of many covers that the United States uses to hide its true intention to suppress emerging economies like China..." However, the United States views these actions as legitimate efforts to combat economic espionage and a response to China's theft of intellectual property. 80% of all economic espionage cases pursued by the U.S. Department of Justice since 2021 have been linked to illegal economic activities by China. The FBI estimates that the theft of trade secrets, counterfeit goods, and software piracy costs the U.S. economy between $225 billion and $600 billion annually. The FBI claims that China uses its vast market to attract foreign companies and then saves time and costs on research and development by reverse-engineering foreign technology. The American Enterprise Institute, in a report published on June 8, states: "China's economic program is asymmetric like its military program and exploits the open and wealth-generating system of the United States. Conversely, within China, it supports large companies and their technology transfers while seeking to eliminate leading foreign competitors." Dan Blumenthal and Derek Scissors, the authors of this report, criticize the U.S. approach to China's "predation," stating: "If the most innovative American companies lose their intellectual property and market share without any penalties, China will control more sectors of the global economy." Recent examples of Chinese state actors' efforts to steal intellectual property from American companies include: GE Aviation Case - 2022 In November 2021, a U.S. federal jury indicted Shou Yanjun, a Chinese government intelligence officer, for conspiracy to commit economic espionage and attempting to steal trade secrets. He was sentenced to 20 years in prison in 2022. Shou approached an employee of GE Aviation in Cincinnati in March 2017 and asked him to provide "system specifications and design process" for the GE Aviation special engine fan module. General Electric is the only company in the world capable of producing this lightweight fan module. The FBI managed to track this GE Aviation employee, leading to Shou's arrest while he was paying cash for the transfer of trade secrets. John Demers, U.S. Attorney General, stated: "This case is not an isolated incident and is part of China's overall economic development policy at the expense of America." APT 41 Case - 2022 In 2022, Cybereason, a Boston-based cybersecurity firm, uncovered a year-long operation by APT 41, a state-sponsored Chinese espionage group. This successful operation extracted hundreds of gigabytes of intellectual property and sensitive data from 30 multinational companies. According to Cybereason, the theft of this sensitive technology information was conducted from manufacturing companies mainly in East Asia, Western Europe, and North America, focusing primarily on advanced technologies that are not yet patented, such as designs for fighter jets, helicopters, and missiles, diabetes, obesity, and depression treatment drugs, solar panel designs, and edge vacuum technology. Huawei Case - 2020 In 2020, the U.S. Department of Justice accused Chinese telecommunications company Huawei of stealing trade secrets from six American companies over two decades and "developing its company using deception and fraud and abusing advanced technology from its American counterparts." The indictment referenced Huawei's secret contracts with American companies and their violations by misusing intellectual property, as well as using professors employed at research institutions to obtain the technologies it needed. Huawei used these methods to acquire "router source code," "cellular antenna technology," and "robotics technology," and then marketed these products in the U.S. as cheaper versions of American products, creating a significant and unfair competitive advantage for itself as a Chinese telecommunications giant.