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Stealing Our Innovation Wholesale

Updated: Feb 22, 2020

U.S. Customs authorities caught a Chinese researcher at Boston’s Logan Airport trying to sneak eight vials of stolen biological material out of the country, the Washington Examiner reported. Zaosong Zheng had another Chinese national’s laptop computer in his luggage.

The biomedical research material is said to have been taken from Beth Israel Hospital’s laboratory. U.S. officers found the vials hidden in a sock. The arrested researcher admitted his intent to continue research and development on the biomaterial in China.

This instance of China’s campaign to cheat its way to industrial and technological superiority follows similar examples coming to light thanks to a U.S. crackdown on Chinese theft of American intellectual property. The Boston incident is similar to the theft of “a dozen tubes of frozen DNA” from M.D. Anderson Cancer Center in Texas, which the New York Times described in a larger story on widespread Chinese efforts to place operatives in American biomedical, university and other leading R&D institutions.

In his IPWatchdog column, Joe Allen reported that two top leaders and four researchers at the Tampa-based Moffitt Cancer Center resigned when the Chinese researchers’ untoward ties with Chinese institutions were discovered.

Such incidents stem from China’s multifaceted schemes to insert agents into all aspects of American R&D and IP. There they can copy data, files and specs, pilfer trade secrets and proprietary materials, appropriate know-how and acquire talent for sale for the right price.

Once such American talent who secretly hired onto our nation’s competitor is Charles Lieber, head of Harvard’s chemistry department, a leader in nanoscience, and now under arrest and on “indefinite leave.”

China and other foreign countries have for years forced technology transfers to their domestic champions and used other means to obtain American innovation (see examples on the table titled “Foreign Expropriation of IP” on page 20 of “Property Rights: The Key to National Wealth and National Security”). China aims to take the global lead in such critically important, high-value sectors as biomedicine, quantum computing, telecommunication, self-driving vehicles and artificial intelligence.

The difference in these instances is China’s pursuing the same ends on our soil on multiple fronts by thousands of its nationals and agents in every nook and cranny of the United States. Best known is its notorious Thousand Talents program. Lieber joined this program.

All this threatens America’s most important innovation industries. For example, the biophamaceuticals sector provides 800,000 direct jobs, paying better than twice the national salary, supports 3.9 million additional U.S. jobs and generates $1.3 trillion in economic output. That would be a tremendous loss — economically alone, aside from the profound medical progress the sector produces — were China to succeed in its displacement.

U.S. Sen. James Inhofe (R-Okla.) has discussed the U.S.-China relationship, warning that “when it comes to China . . . you can’t separate their trade behavior from their military, like you can in a democratic government.”

Regarding Chinese theft of American secrets, Sen. Inhofe, who chairs the Armed Services Committee, noted: “China is still actively pursuing and stealing some of our most valuable military secrets. Just last year [2018], China hacked a Navy contractor and stole massive amounts of classified data.”

About efforts on the private sector side, he added, “We’re seeing an alarming rise in how China steals industrial secrets. They do it out in the open — for example, by forcing any American business who wants to operate in China to form a ‘partnership’ with a Chinese business. Sadly, these partnerships are nothing more than a way for the Chinese Communist Party to access and steal proprietary ideas and technology.

“They also do it in nefarious ways — through exploiting educational relationships on college campuses or stealing biomedical research during the peer-review process. This is no small thing. One in five American companies have been victims of Chinese intellectual property theft. That matters because nearly 80 percent of our economy is based on intangibles — the very things the Chinese are stealing.”

We should expect to learn of more instances of arrests and measures against Chinese operatives infiltrating American innovators and engaged in IP theft, particularly if President Trump wins reelection, because as Sen. Inhofe noted, previous administrations lacked the focus on this existential threat to our property rights-based economy.

Sen. Inhofe warned, “Future parts of any [trade] agreement need to be sure to address the concerns presidents of both parties neglected for decades — including theft of intellectual property and industrial secrets, forced technology transfer, reciprocal access to markets, and subsidies to China’s state-owned enterprises.”

The consequences entail American leadership in critical industrial sectors, millions of American jobs and much of our economic output, our competitive status vis a vis China, and the pace of progress in science, medicine, industrial arts, technology and other areas.

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