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DOJ Discusses China's Efforts to Steal US IP

by Chris Brook on Tuesday August 25, 2020

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John Demers, the Justice Department's top national security official, said that 80% of state-connected espionage cases relate to China.

Over 80% of all cases charged as economic espionage by the Department of Justice involve China, an executive from the DOJ said earlier this month.

That’s just one statistic highlighted by John C. Demers, the Assistant Attorney General for the Department of Justice's National Security Division, in breaking down some numbers around Chinese espionage at an event in Washington D.C. on August 12.

Demers, who's been with the DOJ since 2003, has led the department's China Initiative since 2018; the campaign was created to look into and prosecute Chinese economic espionage.

In the event, “Countering Chinese Espionage” – a virtual discussion put on by the Center for Strategic and International Studies - Demers elaborated on some of the national security threats emanating from China, including the country's efforts to steal intellectual property and what the United States government is doing is doing to protect its interests.

The event was one of a handful to touch on the Chinese Communist Party's influence on the U.S. so far this summer; it came a month after the Federal Bureau of Investigation’s Director, Christopher Wray, discussed the same topic, in a talk at D.C.'s Hudson Institute.

In that session, Wray said the FBI is currently working on 2,500 counterintelligence cases that are related to China, a number that comprises half of its total active counterintelligence cases.

It sounds like an even larger chunk of the cases (80%) the DOJ is involved with link back to China; Demers specified that about 60% of all of its cases involving trade secrets can be traced back to China, too.

In the session, Demers recapped the purpose of the China Initiative and reiterated how the country largely follows a "rob-replicate-replace" campaign in which it steals U.S. intellectual property, replicates it, and then seeks to replace whatever company was selling it in China. This obviously has repercussions on the global market, too, if the Chinese companies are successful. Most of the cases prosecuted as part of this campaign this are insider cases, Demers pointed out.

A lot of what Demers discussed mirrored talking points made by Wray the week before. He highlighted the severity of China’s 2017's cyberattack against credit reporting bureau Equifax and the 2015 Office of Personnel Management hack. He also touched on China's behavior during the COVID-19 pandemic, acknowledging recent indictments against Chinese hackers working to steal IP around a coronavirus vaccine. While hackers in China have always been interested in biomedical information, the fact that information around any potential vaccines for COVID-19 is some of the most prized data in the world right now has motivated the hackers further.

What Demers got into that Wray didn't was about how an onslaught of actions against Chinese IP theft could lead to hysteria around China as a whole, suggesting there could be racist undertones a la a Red Scare. Instead of focusing on ethnicity, Demers said organizations should focus on behaviors that might signify IP theft or other crimes.

In the virtual session, Demers also discussed the DOJ's move to close China's consulate in Houston, national security concerns regarding TikTok 

Tags:  IP theft

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