Chinese cyberespionage costs U.S. companies an estimated $300 billion annually and comprises the “single greatest threat to U.S. technology,” according to a new report by the Washington, D.C-based think tank Foundation for Defense of Democracies.
China is using its vast cyberespionage capabilities to steal intellectual property from U.S. businesses, gain the upper hand in economic negotiations, and put pressure on foreign governments, according to the report. These activities have allowed China to advance rapidly, overtake the U.S. in certain key industries and even gain some military advantages.
“For years, the Chinese government has engaged in cyber-enabled economic espionage and other covert and clandestine activities to strengthen China’s economic competitiveness and strategic position. China is estimated to be responsible for 50 to 80 percent of cross-border intellectual property theft worldwide, and over 90 percent of cyber-enabled economic espionage in the United States,” the report noted.
China employs around 30,000 military cyber spies and around 150,000 private sector cyber experts who aim to steal U.S. military and technological secrets, according to FBI estimates. In June, for example, it was revealed that Chinese hackers had successfully breached a private military contractor and stole large quantities of data that revealed details of U.S. plans for underwater warfare.
Another recent example was the case of Chinese hackers based in China’s Tsinghua University who probed U.S companies and the Alaskan state government for vulnerabilities in the wake of a visit to China by a U.S. trade delegation. Researchers claimed the hackers were looking for ways to gain inside information that would give China an advantage in trade negotiations.
“For China, there are levels of economic and industrial espionage. There’s also the technique of gaining access to non-public knowledge and using that to their benefit in trade negotiations. We’ve seen this in Alaska,” Priscilla Moriuchi, director of strategic threat development at Massachusetts-based tech company Recorded Future and former threat manager for East Asia and Pacific at the National Security Agency (NSA), told Newsweek. “After a company makes overtures to China, about a joint venture or investment, you would see hackers targeting the server or executive to see what they thought of the meeting.”
The report began by noting that the U.S. and China are currently locked in intense political, economic and military competition, and that Beijing’s cyber capabilities are helping the country gain a strategic advantage. China is rapidly developing technologies that can be used for both commercial and military purposes, like artificial intelligence, facial recognition software, robotics and virtual reality. In August, China also conducted its first successful test of a hypersonic aircraft, which U.S. military experts warn could be used to penetrate U.S. missile defense systems.
Despite all that, economist and Columbia University Professor Jeffrey Sachs argued that the U.S. foreign policy establishment is too preoccupied with competition and is missing important opportunities for cooperation.
“China is, in my view, a highly successful, highly productive, highly creative society and we should be working together to have strong mutual economic relations,” Sachs told Newsweek. “We have tremendous opportunities. We’re going to buy a lot of good products from China. We can build infrastructure and help each other. My view is that is what China wants. But the foreign policy establishment says China wants dominance. As an economist, I stand back and say, neither country will be dominant.”