The U.S. has charged a Chinese woman with conspiring to illegally export U.S. technology used in underwater drones to a state-owned entity in China. According to the indictment unsealed on Thursday, Amin Yu was a citizen of China and a legal permanent resident of the U.S. from 2002 to 2014 – during which she is accused of obtaining submersible parts from firms in the U.S., Canada, and Europe and illegally passing them on to the Harbin Engineering University in China.
While alarming, this is hardly an isolated occurrence. According to an F.B.I. official, the number of international economic espionage cases is rising, up 15% each year between 2009 and 2014 and up 53% in 2015. Chinese nationals are involved in the majority of the reported cases, and the theft of trade secrets extends well beyond the defense industry. For example, in the agriculture sector, organic insecticide, irrigation equipment, rice, and corn are all suspected to have been targeted.
The issue of intellectual property theft and product knockoffs also came up in the 2015 BCLS panel Regional Focus: China. Junheng Li, the founder of JL Warren Capital, asked why would a Chinese firm invest in R&D when a knockoff can do a similar product to theirs at 10% of the cost and at 10% of the price, in a weak rule-of-law environment?
President Xi Jinping has stressed that China needs to focus on innovation to develop its economy. But stealing advances from elsewhere and copying them is not the way forward.