Spy trail paints dark picture in Pangang case

US prosecutors say Pangang Group aimed high. The Chinese state-owned company wanted a better process to make titanium dioxide, a white pigment used in paint, toothpaste and Oreo cookie fillings. So it paid spies to steal it from industry giant DuPont.

Pangang was indicted last year on United States charges of industrial spying and a retired DuPont scientist pleaded guilty to selling secrets. Prosecutors say another defendant was encouraged by a Chinese leader to "make contributions" to the country - rare evidence of high-level official involvement. Then the case stalled while prosecutors tried to force Pangang to answer the charges in a US court.

DuPont says it has asked Chinese authorities to block use of its stolen secrets. There is no indication they have acted.

The US chemical producer is far from alone. China's reputation as a global centre for industrial spying is well-established, but experts say the scale is growing. While more victims take action abroad, DuPont's experience illustrates the legal dead-ends and official inaction on the mainland that stymie even the biggest global companies and foreign prosecutors. Chinese companies accused of using stolen secrets face few consequences.

That is no accident, intelligence experts say. They say Beijing has carried on a quiet but relentless campaign since the 1970s to acquire technology through its spy agencies and Chinese companies, scientists and students abroad.

Possible losses due to intellectual property theft traced to China have multiplied since the 1990s. Then, companies complained about copying of movies, software and designer clothes. Today, thieves target technologies that form the heart of multibillion-dollar industries. In the case of titanium dioxide, the global market is worth US$17 billion a year.