US-China relations

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

  • Mike Pompeo cites aviation spy case and sanctions against chip maker as ‘part of a mosaic of our strategic effort to push back’ against Beijing
  • Pompeo said theft of US intellectual property by China ‘is a story that’s been going on for years’
PUBLISHED : Thursday, 01 November, 2018, 4:54am
UPDATED : Thursday, 01 November, 2018, 11:31pm

US Secretary of State Mike Pompeo warned China to “behave like a normal nation” following the federal indictment of 10 alleged Chinese spies for trying to steal American aviation technology and the sanctioning of a chip maker suspected of threatening US national security.

Reiterating a list of complaints against Beijing that the administration of President Donald Trump has made public, Pompeo said the recent legal action against Chinese agents for purportedly trying to acquire aviation technology was “part of a mosaic of our strategic effort to push back against” China.

Zhang Zhexin, a US affairs expert at the Shanghai Institutes for International Studies, said Pompeo’s remark signalled the Trump administration’s urgent need to push China.

“Pompeo’s words represent nothing but the hardline stance of Donald Trump. It may represent Trump’s intention to reach an early solution with China, possibly in November, by pressuring Beijing,” Zhang said.

“This may mean the US also feels some sense of urgency, just like China … But no party is likely to completely give in. Compromise may be made between two great powers.”

Yuan Zheng, a Sino-US affairs expert from the Chinese Academy of Social Sciences, said the US government was hardening its position on China, and Beijing would respond.

“China is observing what the US is doing,” he said. “China will react if it feels it is bullied by the US. There are many challenges that the US cannot resolve alone and needs China’s cooperation.”

US indicts 10 Chinese intelligence agents following ‘hack on US and European aviation companies’

Zhang Baohui, a professor of political science and director of the Centre for Asian Pacific Studies at Lingnan University in Hong Kong, said: “Recent evidence suggests that Pompeo is not a dove. However, he used to be seen as one of the ‘adults’ of the Trump administration. However, his views on China are very tough and he is obviously championing a hardline China policy. This is why he said recently that the US intends to oppose them [China] at every turn.”

On Wednesday, Pompeo connected the indictments to a broader effort to pressure Beijing to address the trade surplus China enjoys over the US. That hit a record US$375 billion last year and amounted to US$261 billion in the first eight months of 2018, according to US government data.

Theft of US intellectual property by China “is a story that’s been going on for years”, Pompeo, America’s most senior diplomat, said in an interview with Fox News cable television host Laura Ingraham.

Watch: China denies spying on Trump’s iPhone, suggests he gets a Huawei

“This is the first administration that has been prepared to push back against China, and we’re doing so on all fronts. So where the semiconductor piece fits in is, it’s part of a mosaic of our strategic effort to push back against this continued Chinese effort.”

Pompeo added: “The president has demanded fair and reciprocal trade with China. We’ve demanded that they not steal our intellectual property … It is a multi-pronged effort on behalf of all of the United States government, at the president’s direction, to convince China to behave like a normal nation on commerce and with respect to the rules of international law.”

Suspected Chinese spy brings former US government official onto legal team

The US Justice Department’s indictment against agents working for and associated with the Jiangsu provincial arm of the Chinese Ministry of State Security suggested that the alleged hacking conspiracy was launched to produce an advanced jet engine without having to pay for the technology.

“Members of the conspiracy hacked [an unnamed French aerospace firm] and other companies that manufactured parts for the turbofan engine … to steal sensitive data from these companies that could be used by Chinese entities to build the same or similar engine without incurring substantial research and development expenses,” the charges said.

Watch: Semiconductors were targeted in US tariff list in August

On Monday, the US Commerce Department imposed export restrictions on companies working with the Chinese memory chip maker Fujian Jinhua Integrated Circuit, cutting the company off from its suppliers in the US.

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

China’s semiconductor catch-up efforts dealt blow by US sanction against mainland chip maker

“Jinhua is nearing completion of substantial production capacity for dynamic random access memory integrated circuits,” the Commerce Department said on Monday.

“The additional production, in light of the likely US-origin technology, threatens the long-term economic viability of US suppliers of these essential components of US military systems.”

The US Treasury Department announced last month that the federal government would tighten rules on foreign investment in hi-tech industries including aviation.

The move is in line with bipartisan legislation passed in August – the Foreign Investment Risk Review Modernisation Act of 2018 (or FIRRMA) – in response to warnings from intelligence officials that advanced US technology transferred to Chinese companies through acquisitions and other means may have undercut the American military’s advantages over China.

The temporary regulations, intended as a stopgap until FIRRMA is fully implemented in 2020, give the Committee on Foreign Investment in the United States the authority to review any transactions that give a foreign entity access to nonpublic proprietary information of companies developing “critical technology”.

Additional reporting by Lee Jeong-ho and Kristin Huang