China-US relations

Beijing tells Washington to provide ‘concrete evidence’ China is stealing trade secrets

  • Foreign ministry responds to US attorney general’s announcement he is setting up a task force to ‘combat Chinese economic espionage’
  • It also says two sides should ‘strictly follow their leaders’ directives’ and try to resolve differences
PUBLISHED : Friday, 02 November, 2018, 11:02pm
UPDATED : Saturday, 03 November, 2018, 1:47am

Beijing has challenged Washington to provide evidence for its new Justice Department initiative targeting China’s alleged state-backed theft of trade secrets.

Chinese Foreign Ministry spokesman Lu Kang also said cabinet members from both countries should “strictly follow their leaders’ directives” and work on resolving differences, which President Xi Jinping and his US counterpart Donald Trump agreed to do during a phone call on Thursday.

“If the Americans are really concerned about this issue [economic espionage], they should provide concrete and fact-based evidence that can be examined,” Lu told a regular press briefing on Friday.

It came after US Attorney General Jeff Sessions on Thursday announced that he was setting up a task force to “combat Chinese economic espionage”.

“This initiative will identify priority Chinese trade theft cases, ensure that we have enough resources dedicated to them, and make sure that we bring them to an appropriate conclusion quickly and effectively,” Sessions said.

Chinese economic espionage in the area of intellectual property had been “increasing rapidly” and posed “a grave threat” to American national security, he said. “Enough is enough. We’re not going to take it any more.”

The task force will be led by Assistant Attorney for National Security John Demers and will include a senior FBI official, five prosecutors and several Justice Department officials.

Sessions said the initiative would also look into China’s attempted espionage activities at research labs and universities, and “covert efforts to influence our leaders and the general public”.

US secretary of state warns China to ‘behave like a normal nation on commerce’

Tensions between the world’s two largest economies have been rising since Trump imposed a first round of tariffs on Chinese goods in July, starting a trade war that has targeted more than half of the goods shipped between the two countries.

In addition to complaints over the trade gap, the US has accused China of intellectual property theft and complained about restricted market access and state subsidies in key industries, especially the hi-tech sectors, pressuring Beijing to overhaul its industrial policy, which it refuses to do.

Zhang Baohui, a professor of political science and director of the Centre for Asian Pacific Studies at Lingnan University in Hong Kong, said US officials saw China’s behaviour as “increasingly revisionist” and had taken a tougher line on Beijing as a result.

According to an indictment unsealed on Thursday, the Justice Department has accused state-owned Chinese memory chip maker Fujian Jinhua Integrated Circuit, its Taiwanese partner United Microelectronics and three individuals of stealing trade secrets from Micron Technology, America’s largest memory-chip maker.

If convicted, the three individual defendants face up to 15 years in jail and US$5 million fines, while the two companies face forfeiture and a fine of more than US$20 billion.

That came after the US Commerce Department on Monday said it would block Jinhua from buying American components and services because it posed a risk to national security.

In response, China’s Ministry of Commerce said the unilateral action had “over magnified” the concept of national security and abused export restrictions, which China opposed.

“We urge the American side to take measures to immediately cease this wrongdoing,” the ministry said in a statement on Tuesday.

A similar trade ban crippled the operations of ZTE Corp for three months this year before the telecoms equipment maker agreed to a settlement with Washington in July.