Cybersecurity

2020 Democrats raise alarm about China's intellectual property theft

Democratic presidential candidates raised concerns about China's theft of U.S. intellectual property at Thursday's debate, shining attention on an ongoing source of tension between the two countries. 

Former Vice President Joe Biden, Sen. Kamala Harris (D-Calif.) and former tech entrepreneur Andrew Yang all highlighted their worries about whether China is stealing U.S. intellectual property as they discussed the ongoing trade war between the two countries while promising to tackle the issue if elected president.

"The problem isn't the trade deficit. The problem is they are stealing our intellectual property," Biden said about China.

Suspicions that hackers from the country are stealing innovation, trade and military secrets have contributed to tensions between the two countries.

According to the findings of a 2018 investigation by the Office of the U.S. Trade Representative, Chinese intellectual property theft costs the U.S. between $225 billion and $600 billion annually.

Multiple intelligence agencies have identified Chinese theft of intellectual property as a national security threat.

2018 report on foreign economic espionage from the National Counterintelligence and Security Center noted that China "could erode U.S. America's long-term economic advantage" if its cyber-enabled theft of intellectual property continues. 

The annual Worldwide Threat Assessment published by the Office of the Director of National Intelligence in January expanded on the Chinese threat, with former Director of National Intelligence Dan Coats emphasizing in the report that "China presents a persistent cyber espionage threat and a growing attack threat to our core military and critical infrastructure systems." 

And a report from CNBC's Global CFO Council, which represents around $5 trillion in market value across various sectors, found in March that 1 in 5 North American-based companies had been a victim of Chinese intellectual property theft in the past decade. 

The reported intellectual theft was cited by President Trump as a reason to continue the ongoing trade war between the two countries, and the need to reduce Chinese theft of intellectual property is one of the few bipartisan areas of agreement on Capitol Hill. 

On Thursday, a group of lawmakers from both parties took steps to encourage the Department of Defense to shine a light on Chinese operations within the U.S., particularly cyber-espionage issues linked to military operations.

Senate Minority Leader Charles Schumer (D-N.Y.), Sen. Tom Cotton (R-Ark.), and Reps. Mike Gallagher (R-Wis.) and Ruben Gallego (D-Ariz.) sent a letter to Defense Secretary Mark Esper requesting he take steps to address Chinese threats.

They also specifically requested that the Defense Department publish a list of companies in the U.S. that are owned or operated by the Chinese military.

"The CCP [Chinese Communist Party] has adopted a strategy of 'Military-Civilian fusion' to achieve its national objectives, enlisting Chinese corporations and universities to harness emerging civilian technologies for military purposes," the lawmakers wrote. 

"If Beijing cannot develop technology on its own, it attempts to steal it from the United States using cyber espionage, intelligence assets operating in the United States, and state-directed companies that acquire American firms to transfer proprietary information," they added.

Other legislation in both the House and Senate introduced this year seeks to limit Chinese theft of intellectual property, most notably the House and Senate versions of the annual National Defense Authorization Act. 

Bills have also been separately introduced, such as the MICROCHIPS Act, which would assist in protecting the supply chain for critical technologies against Chinese threats. The bill, introduced in July by Sens. Mike Crapo (R-Idaho) and Mark Warner (D-Va.), has not seen action. 

Now 2020 Democrats are joining the fray.

Yang, who has made tech issues a major part of his presidential campaign, recalled at the debate how a CEO friend of his had seen "pirated U.S. intellectual property" being used by workers "to the tune of thousands of dollars per head."

Yang argued that he would make sure to pursue a deal with China "that addresses the concerns of American companies and producers."

Harris, meanwhile, promised to hold China accountable.

"They steal our products, including our intellectual property. They dump substandard products into our economy. They need to be held accountable," she said. 

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