China’s Targeted Espionage Continues Apace

With all that’s going on, it’s easy to forget that China’s “Thousand Talents” program of systematic industrial espionage continues apace.

While China has attempted to steal trade secrets in semiconductors, aerospace and biotech, their espionage also has far more prosaic targets. Here’s the interrogation of a woman who stole the secret formula for the chemical lining inside a Coke can:

Dr. Xiaorong You, aka Shannon You, was just sentenced to serve 168 months in prison.

According to court documents and evidence presented at trial, You stole valuable trade secrets related to formulations for bisphenol-A-free (BPA-free) coatings for the inside of beverage cans. You was granted access to the trade secrets while working at The Coca-Cola Company in Atlanta, Georgia, and Eastman Chemical Company in Kingsport, Tennessee. The stolen trade secrets belonged to major chemical and coating companies, including Akzo-Nobel, BASF, Dow Chemical, PPG, Toyochem, Sherwin Williams, and Eastman Chemical Company, and cost nearly $120,000,000 to develop.

You stole the trade secrets to set up a new BPA-free coating company in China. You and her Chinese corporate partner, Weihai Jinhong Group received millions of dollars in Chinese government grants to support the new company. Documents and other evidence presented at trial, showed You’s intent to benefit not only Weihai Jinhong Group, but also the governments of China, the Chinese province of Shandong, and the Chinese city of Weihai, as well as her intent to benefit the Chinese Communist Party.

If China can steal something, they will steal something. Design your corporate security appropriately.

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9 Responses to “China’s Targeted Espionage Continues Apace”

  1. PBAR says:

    If the CCP caused that much damage physically (i.e. bombing a number of Coke bottling plants), then we would be a war at once. But cause that much damage via theft and people just shrug.

  2. 370H55V I/me/mine says:

    Eh, when they steal the formula for Classic Coke then I’ll worry.

  3. The Gaffer says:

    We are naked to the Chicoms. The heads of our service R+D labs said the Chinese penetration of their labs was “total” in the late 90s. How much worse now?
    And even the few military secrets we do manage to keep, Israel sells to China in a heartbeat when they get their hands on ’em.
    So, wonder why the Battle of Midway is a big topic of study in the PLAN?
    Our antimissile jammers are probably only good as beacons – and they have our codes (or have defeated the encryption algorithms).

  4. Kirk says:

    Anyone in a US industry dealing with China should have known this back in the 1980s. The whole thing is entirely of a piece with industrial-age development, and is performed by each and every newly-industrialized nation. You don’t want to go back and review the history of US industrial development with an eye towards what we quite literally stole from Europeans. So, it shouldn’t come as a surprise, ‘cos we did it ourselves on the way up.

    As well, good ‘effing Christ… Just about everything taken to China for cheaper production wound up coming back as competition. Same as when we did it in Japan, Taiwan, or South Korea. You can’t run production in a country other than yours, with people other than yours, and expect to maintain “intellectual property” rights. That’s just… Insane. Doesn’t work. You don’t want to know what I’d find in Korean markets back in the early 1990s, in terms of proprietary stuff being sold openly by the Korean contract manufacturers. They were damned bold with it, too–You’d see them run one shift for their American sponsors, and then a second shift with their own logos for domestic and regional consumption.

    This ain’t new. It ain’t “unexpected”, and any f*cking idiot in American industry that tells you “We wuz robbed! Robbed, I tell you…” is at best, disingenuous. At worst, they’re mendacious liars who did it deliberately, with malice aforethought. Some of those f*cking contracts were written with an eye towards getting around US patents and licensing agreements in the first damn place, so they wouldn’t have to pay the patent holders their due. A lot of this has been done deliberately.

  5. Garrett Stasse says:

    Start a blog, Kirk.

  6. Kirk says:

    Worth a look, and an eye-opener. I recently found this woman, and I’ve been unable to refute a lot of what she has to say…

    https://www.youtube.com/live/lTWh9rzW-Do?feature=share

  7. […] WAR II: China’s Targeted Espionage Continues Apace. “While China has attempted to steal trade secrets in semiconductors, aerospace and biotech, […]

  8. jcp says:

    As an engineering manager in the early 90s I hired a Chinese national. He had gone to uni in USA, and waited until his work visa was in progress to return to visit family. That was something he had asked about during initial interview. (My company did not pay for his work visa.) So he was new at company and went to China. When he returned he thanked me for allowing the leave of absence and said he needed to talk to me.

    We were a high tech firm, with export limitations. He said that at Chinese customs he was interviewed and required to return again to meet with “experts in his field.” The experts asked him to agree to consult for any Chinese companies that might need some help. He told me he felt he had no choice, and if he did not cooperate his relatives would lose their housing in Beijing or have other problems. He was not a party member, and was essentially a refuge who used the foreign college route to escape.

    I thought he was telling me because he knew this was a not acceptable and he did not want to get in trouble with the company. He showed me his Chinese business card, but said that for now he is only a name on a list somewhere and was not being paid, nor did he expect any further contact. This was pre-internet so for him to help in any way would have been very difficult. Also, he was working on very old tech, and nothing that had any security concerns. I made sure that never changed.

    Later I went to work at another firm outside DC, and came to understand that many Chinese immigrants had their “Chinese business cards” and were essentially on-call for China. This was the 90s. China had a system of interviewing, processing, essentially blackmailing, and making all Chinese expats available to any CCP company in China that needed trade secrets.

    The 90s. With the internet their job has only gotten much much easier.

    The greatest wealth transfer in the history of mankind.

  9. jcp says:

    Kirk,

    Much of the technology brought to the US was before international patent agreements.

    The Japanese *copied* a lot of things, but they were very wary of stealing technology and while there was outsourcing in the sense that US companies were buying Japanese components and materials, there was very little outsourcing of production lines to Japan, nor where there Japanese expats working in Western industry or high tech firms. The Japanese excelled at manufacturing and had artificially low costs (and not-so artificially low due to low regulation and different labor structure.)

    Most of the copying (stuff like frademarks and designs) was sold in Japan, and not exported as competition. When the US became a major market for Japan even that stopped with the Japanese gov. cracking down hard, as well as companies being very lawsuit adverse.

    What China has done is a vastly different thing, and orders of magnitude larger than anything done in the past.

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