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China Steps Up Trade Secret Theft from US Companies

265 pointsby spoiledtechieover 6 years ago

25 comments

watertomover 6 years ago
What&#x27;s worse is that International companies have been just giving their technology to the Chinese for years and years.<p>In order to do business in China, non-Chinese companies must partner with a Chinese company. The International company shares their IP with their Chinese counterpart, and the Chinese counterpart in turn shares the IP with the <i></i>their<i></i> partner, the Chinese government. The Chinese government takes the IP and shuffles the IP to the company or companies best suited to exploit the IP. This has been taking place as long as China has been open to International business.<p>International companies in a rush to get access to the largest single market in the world have freely given away their IP, because they didn&#x27;t think the Chinese could ever catch up. Companies are now moving partnerships away from China, and it&#x27;s forcing the Chinese to steal the IP in order to keep their edge.<p>I try very, very, hard to avoid buying products made in China. I&quot;m OK with every other country in the world, except China.
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shantanubalaover 6 years ago
This might be an unpopular opinion, but I&#x27;ll express a counterpoint - viewing the same situation through a different lens.<p>Put simply, the Chinese understand why American companies outsource their labor to China. Chinese labor is cheaper, and they are under no illusions - this outsourcing means that their own country experiences many of the negative externalities of Western consumption, including pollution.<p>It&#x27;s fair for American businesses to distrust Chinese companies and distrust the Chinese government, but can&#x27;t we all agree that they brought it on themselves?<p>Which multinational corporation reasonably expects that the Chinese government cares about their bottom line at all? And why do many ordinary Americans experience such outrage on behalf of these multinationals? Of course, I understand why their shareholders (and thus, many Americans) may be upset.<p>If anything, I&#x27;m angry they jumped at the opportunity to eradicate their domestic workforce to a point where China has the opportunity to steal in the first place.
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salimmadjdover 6 years ago
OT - anecdotally, I&#x27;m seeing an uptick in anti-China reporting. Are you feeling that too or is just me?<p>It almost feels like there is a concerted effort to confront China.<p>Now it could be that these articles are coming out organically from bottom to top. Meaning ordinary journalists are seeing the potential threat of China economically and technologically and are becoming more vocal about it.<p>Alternatively, it could be a top-down &quot;agenda&quot; to confront China and the media is gradually setting the zeitgeist to confront China.<p>What are your thoughts?
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tehlikeover 6 years ago
The idea behind trade war, among many other things, is this. We are giving out our competitive edge. Getting fair trade is important, as much as the short term pain is real, long term benefits are there. US companies have been at a disadvantage in China due to government incentives for Chinese companies. This cannot go on.
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freeflightover 6 years ago
Cached version to bypass GDPR block: <a href="http:&#x2F;&#x2F;web.archive.org&#x2F;web&#x2F;20181118233008&#x2F;http:&#x2F;&#x2F;www.latimes.com&#x2F;politics&#x2F;la-na-pol-china-economic-espionage-20181116-story.html?id=1231" rel="nofollow">http:&#x2F;&#x2F;web.archive.org&#x2F;web&#x2F;20181118233008&#x2F;http:&#x2F;&#x2F;www.latimes...</a>
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_cs2017_over 6 years ago
There are some obvious measures that the US industry and government can take: improved cyber security, limited access to information, sophisticated employee surveillance, stiff jail term for offenders, background checks on employees with privileged access, etc. However, those measures are already in place in every company that has valuable IP to steal (and in many more companies that do not have anything of value, but like to pretend that they do).<p>Of course, the US government can go all in, and require something similar to the &quot;Top Secret&quot; classification for all employees working in sensitive high-tech fields. This will certainly reduce trade theft, but that benefit is likely to be dwarved by the damage to the economy from the loss in efficiency, loss of access to foreign labor, and the change in culture: the smartest, most creative and most energetic people often shy away from working in organizations with military-grade security.<p>Foreign labor is often mentioned as the root cause. Removing all foreign workers from sensitive areas will certainly make state-sponsored industrial espionage more difficult. However, history and common sense suggests there are plenty of US citizens perfectly willing to sell their corporate data to outsiders. So the benefits are unlikely to be dramatic. On the other hand, the economic cost to the US economy would be very high. Moreover, there&#x27;s a chance this will backfire really badly. Today, it&#x27;s hard for many countries to keep their best students from leaving for the US. If we solve that problem for them, it may be the very thing they need to close the technological gap with the US.<p>In general, it seems that state-sponsored espionage can only be controlled with an agreement between states, which ultimately comes down to skillfully negotiating the terms.
wangiiover 6 years ago
It&#x27;s going to be unpopular.<p>I&#x27;d say it&#x27;s the arrogance of American leads to the situation.<p>&gt;&gt; The Yinhe incident (Chinese: 银河号事件) was a false claim made in 1993 by the United States government that the China-based regular container ship Yinhe (银河; &quot;Milky Way&quot;) was carrying chemical weapon materials to Iran. The US Navy forced the Yinhe to stop in the international waters of the Indian Ocean for a month. The final inspection report signed by the U.S., concluded that there was no chemical weapon materials at all. However, the U.S. government refused to apologize &quot;because the United States had acted in good faith on intelligence&quot;, even though the Chinese were proven innocent.<p>What&#x27;s not mentioned in the wikipedia page, is that US cut off the GPS of Yinhe container ship to force the search. It has been a wake up call for Chinese government.
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0x262dover 6 years ago
This forum only has a few kinds of purely political topics and one of them, oddly, is anti-China stuff. I don&#x27;t understand it at all.<p>About the headline... the US and its allies have stolen from and taken advantage of colonial countries like China for hundreds of years, and that is directly responsible for the technological and economic advantage currently enjoyed by the US - not western rationalism, &quot;democracy&quot; or some other warmed-over, quietly racist answer like that. American companies can pay Chinese people shit for grueling tasks and bring home superprofits from their labor and have been doing exactly that for decades and decades. The Chinese state sometimes goes along with this and sometimes does not and &quot;steals&quot; technology back.<p>Stop buying into this nationalistic nonsense of us vs them. You are all going to get us sucked into a world war. Instead, consider asking if the interests of the billionaires who &quot;own&quot; these technologies that are being &quot;stolen&quot; align with yours. Spoiler alert: if you&#x27;re not a billionaire, you have less interests in common with US billionaires than with Chinese workers.<p>Class struggle is heating up in the United States and in China and competing companies have less room to continue exploiting people without violent resistance, so they need to distract people by telling them to go to war with Eastasia again. Please don&#x27;t fall for it.
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jbay808over 6 years ago
By definition, trade secrets are not patented, as patenting requires disclosure.<p>What do they mean by an &quot;effort that pilfered as much as $8.75 billion in patented American technology&quot;?
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throwaway487548over 6 years ago
This is what globalization is all about. Someone, lets say US and EU, do very costly and high skilled labour intensive R&amp;D and then sell the results all around the world (just take a look at what is going on in genetic engineering and pharma - billions and billions are being paid in salaries and other expenses every year, look at Uber, which develops its own AI software, while losing billions, etc).<p>Of course, the soviets and chinese are unhappy, because they are self-proclaim themselves as being no less &quot;great&quot; and capable, while, in fact, they have nothing even vaguely comparable with the US R&amp;D machine, fueled with top talent and endless investment bank&#x27;s money from all over the world (Saudis, Softbank, Norwegian sovereign fund, etc).<p>And, of course, being an R&amp;D hub of the world is absolute win in the long run.<p>The tiny Swiss being the world leaders of R&amp;D in industrial robotics is another great example. And soviets and chinese have nothing but propaganda, false claims and unsupported imperial ambitions.
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baybal2over 6 years ago
They twist the facts quite a bit.<p>The alleged &quot;stealing&quot; of 900 files on premises of Micron Taiwan was the famed incident with loss of USB flash with &quot;keys to the kingdom.&quot;<p>The biggest counterargument to US version is the fact that the alleged spy was the very person who sounded the alarm that he lost the USB flash. The only uncertainty here is about whether it was USB flash or a phone. News sources differ on that.<p><a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=17375406" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=17375406</a><p>&gt;An employee from mainland who previously worked at a competitor company accidentally put coworker&#x27;s phone into her bag along with papers on the table. They guy thought that his phone was stolen and called police, police found his phone in a locker of a coworker.<p>&gt;During investigation of that theft, they stumbled on some company docs on the phone, and opened an espionage case based on that. Why a defector would file a police report on his accomplice?
shrewduserover 6 years ago
Kick them back out of the wto
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georgeburdellover 6 years ago
I’d be interested to know more about what the Obama administration threatened in 2015 that caused such a dropoff in corporate hacking, when attacks have dramatically increased in the face of a full-on trade war.<p>The Micron story makes me think when the other shoe will drop for another company: AMD. They are (possibly, debatably) laundering X86 IP to China through a joint venture. I guess it’s hard to steal what’s being given away?
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jorblumeseaover 6 years ago
If we really want China to play nice, there need to be consequences for their actions. For example, despite all of this, they&#x27;re still in the WTO. Despite all of this, we will feed them trade secrets and establish Chinese offices.<p>Bad behavior goes unpunished, and good behavior isn&#x27;t rewarded. What incentive do they have <i>not</i> to steal from us? Our handling of their transgressions is naive to a fault.
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booleandilemmaover 6 years ago
We should boycott China and refuse to buy their stolen technology.
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spoiledtechieover 6 years ago
This article reads like a top-secret spy story. Its very worrying how deep their intellectual theft goes.
balls187over 6 years ago
I imagine the anger here is the frustration that the Chinese seem to be so brazen about their IP theft, but IP theft isn&#x27;t just relegated to the Chinese government and Chinese companies.<p>In light of <i>all</i> the &quot;bad&quot; things the US does with little oversight, ensuring US Technology is still top must be a major priority, and probably has droves of covert operations to help US companies be competitive if needed. It&#x27;s just likely that the US doesn&#x27;t have many sources to steal from.<p>I also have to believe this anger is cultural as well. As Americans, we&#x27;re brainwashed into black and white thinking, and to attach very high weight to moral and ethical implications of decisions. &quot;Always pay back your debts. If you take out a mortgage, if you go bankrupt, you are a bad American.&quot;<p>I expect that Chinese culture has a different take regarding what we consider &quot;cheating.&quot;
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hiiqover 6 years ago
&quot;a stunning Chinese-backed effort that pilfered … patented American technology.&quot;<p>Why, pray tell, if its patented did they have to steal it?<p>Surely they just had to download and read the patent from the chinese patent office, in Chinese no less?
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xmlyover 6 years ago
Is it because China stopped importing garbage from the western world?<p>Once stopped acting as the trash can and labor cost becomes higher, China becomes useless and a threat?
csenseover 6 years ago
Idea: Every time the Chinese (or any other nation) steals technology, calculate its economic value, multiply it by a factor of 4 or something for punitive effect, and send the Chinese government a bill. If they ignore it, just raise some tariffs and tax their goods until the fine&#x27;s paid.
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gerdesjover 6 years ago
&quot;Unfortunately, our website is currently unavailable in most European countries. We are engaged on the issue and committed to looking at options that support our full range of digital offerings to the EU market. We continue to identify technical compliance solutions that will provide all readers with our award-winning journalism.&quot;<p>Wot? Surely a reasonably decent bunch of journos should have got to grips with GDPR by now.
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addictedover 6 years ago
How does complaining about Chinese IP theft square with HN complaints about IP protections in TPP? Because pretty much the whole point of the IP protecrions in TPP was to avoid the situation we see in China.
scarejunbaover 6 years ago
Information wants to be free, I suppose.
prolikewh0aover 6 years ago
So?<p>This is just rich people whining about someone else being able to make their products much cheaper. The whole world benefits from this, just not already super rich patent &amp; trademark holders who are anti-competitive &amp; hurt consumers.<p>Can anyone even tell me a negative that isn&#x27;t just capital?
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ngcc_hkover 6 years ago
It is not a pros and cons style of argument that is call for. It is about dynamics.<p>China has learnt from japan and india that just open up and even prosper is not a oath to independence. It cunning do what it does, so when the population age and the money war started it still goes a substantiable “empire”. After all it is a Hans empire of the Middle Kingdom.<p>Now, the partnership and getting ip is not new. Look at the airplane espeically military one you sense they have a long plan. Just America does not. And it is just awaking.<p>To be honest if china is a democracy and basic human rights (which may destroy the communist but may be a even greater power), it is another japan and Eu raise up vs American scenario. And china learn those two lessons. And hence it may win. It Open to get and close up key part so that yours are mine and Mine mine. Some part like e-wall, e-market etc. are closed. They have certain market segment (antibiotics, rare metal) and some weakness like argiculture (too many mouth - 1&#x2F;4 population ; not sure how this play out) and oil (but shift to electricity like car and if wind&#x2F;solar&#x2F;nuclear&#x2F;... work it can be mediated)<p>But it does not have democracy and human rights. Cannot be on its side. But what if it has.<p>We are all Hans or we can have a Tripolar world - right wing America, middle Eu and left wing china for anyone to choose. But we are not. And the Hans may want a empire of the world. We live in a sphere and middle meant nothing and a Middle Kingdom means conquering the world.
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