China syndromeU.S. responds to China’s cyberattacks with anti-theft trade strategy

The Obama administration yesterday (Wednesday) unveiled the details of a broad strategy to counter the systemic theft by Chinese government agencies of U.S. trade and technology and trade secrets.

“We will continue to act vigorously to combat the theft of U.S. trade secrets that could be used by foreign companies or foreign governments to gain an unfair economic edge,” said the strategy document.

“Trade secret theft threatens American businesses, undermines national security, and places the security of the U.S. economy in jeopardy”. Such actions, the document said, “put American jobs at risk.”

Earlier this week, a 60-page report by cyber experts offered incontrovertible evidence to support what everybody already knew: China has been using its vast network if intelligence services in a relentless, systemic campaign of stealing U.S. trade secrets and providing them to Chinese companies.

The goals of China’s government cybertheft campaign: help Chinese companies compete in world’s markets; strengthen China’s economy by employing advanced Western technology without paying for that technology;  weaken, even destroy, Western technology companies; and, more generally, undermine the technology sectors of Western economies.

The Obama administration has decided that the time for U.S. pushback has come. Fox News reports that the administration’s plan calls for new diplomatic push to discourage intellectual property theft abroad and better coordination at home to help U.S. companies protect themselves. The administration says the evidence shows that economic espionage is increasing, not only by means of electronic intrusion over the Internet, but also through the recruitment of former employees of U.S. companies with knowledge of inside trade information.

“Trade secret theft threatens American businesses, undermines national security and places the security of the U.S. economy in jeopardy,” said a report from the White House. “These acts also diminish U.S. export prospects around the globe and put American jobs at risk.”

The BBC reports that that Wednesday’s administration report did not specifically target any one violator, but the fact that China was the focus of the policy was evident in the case studies the administration’s report cited. Those examples did not involve cyberattacks, but rather the theft of hundreds of millions of dollars in trade secrets by former employees of U.S. corporations including Ford Motor Co., DuPont Co., General Motors Corp., Cargill, Dow Chemical Co., Valspar, and Motorola.

The new report did not offer details if what would be the consequences for trade secret theft. Instead, it outlined five broad categories of actions to protect American innovation:

• Applying diplomatic pressure by senior officials to foreign leaders to discourage theft.
• Promoting best practices to help industries protect against theft.
• Enhancing U.S. law enforcement operations to increase investigations and prosecutions.
• Reviewing U.S. laws to determine if they need to be strengthened to protect against theft.
• Beginning a public awareness campaign.

Representative Dutch Ruppersberger (D-Maryland), the top Democrat on the House Intelligence Committee, estimated losses to the U.S. economy from Chinese cyber-espionage and theft of trade secrets totaled more than $300 billion in 2012.