Is Biden interested in stealing American technology from China?

Depending on the bias, the Biden administration has done either too much of one thing or too little of another. One area in which it has done nothing is to protect US interests in trade with China. Although President Joe Biden kept Donald Trump’s dubious tariffs in place, he did not move a finger to stop the continuing theft of American technology and intellectual property from China. In fact, the administration has indirectly, albeit unintentionally, encouraged China to continue such practices.

Every nation and every business is trying to get the trade secrets and technological advantages of its competitors. That is why governments and international agreements impose patents and copyrights, as well as recognized trademarks. Because Beijing largely ignores these international norms and laws, businesses have turned to Washington for help instead of courts and international agencies. Washington’s past efforts have failed to provide that protection, but at least previous administrations have tried. Biden’s White House can’t even make that claim.

Beijing relies on a number of techniques to reap the benefits of American innovation. Chief among these is China’s insistence that every American company operating in China have a Chinese partner to whom it must transfer all its technology and trade secrets. Although not strictly illegal, Beijing’s insistence runs counter to international norms. It is less legal for Chinese companies to buy high-tech American equipment and, despite patent protection, reproduce it for use in China and elsewhere outside the United States. American companies complain that counterfeits of their designs appear under Chinese labels around the world.

Cyber ​​theft is also common. A long list of US companies documents cyberattacks by Chinese agents, usually linked to the government. The so-called “Aurora” operation controls what Google’s technical executives describe as a “very complex and targeted attack on its corporate infrastructure,” as well as an invasion of Gmail accounts by Chinese human rights defenders. At least thirty-four U.S. companies have reported similar attacks on Operation Aurora, including Yahoo, Adobe, Northrup Grumman, Dow Chemical and McAfee. Another operation, led by China’s Ministry of State Security and called Cloudhopper, compromised IBM and Hewlett Packard, among others, and through them, their customers, including the federal bureaucracy. AFL-CIO suffered a separate attack.

Beijing has lured people into the United States into more old-fashioned espionage efforts. The Bureau of Immigration and Naturalization registered numerous cases of Chinese traveling to the United States as students, when in fact they held commissions in the People’s Liberation Army and were tasked with spying on academic research. China’s Plan of a Thousand Talents uses every incentive to encourage people working in the country to give Beijing their employer’s technology and other valuable pieces of intellectual property, sometimes even when those people work on grants from the US government. , as was true in the famous case of Harvard professor Charles Lieber.

FBI documents clearly show that the many reports and complaints coming out of business are neither fabricated nor exaggerated. The Ministry of Justice stated directly that about 80 percent of all its persecution of economic espionage is related to China. Just a few months ago, FBI Director Christopher Ray revealed that his bureau had more than 2,000 open cases of Chinese espionage and opened a new case every 12 hours. “There is simply no country,” Ray said, “which poses a greater threat to our ideas, innovation and economic security than China.” Effectively quoting the damage Wray hints at, Michael Orlando, director of the National Center for Counterintelligence and Security (NCSC), estimates that the theft of technology and other intellectual property in China costs U.S. businesses at least $ 200 billion a year. This is simply the market value of what is lost. Adding in sales losses, the Center’s valuation rises to $ 600 billion a year.

As already mentioned, this is an old story. For almost forty years, every president has responded to business complaints and tried to force Beijing to change its mind. No one has had much success. Ronald Reagan made the first attempt in 1986. He put his efforts to stop Chinese theft of patents and copyrights under the auspices of the World Trade Organization’s (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). It failed so badly that Bill Clinton had to reconsider the issue in 1995. Evidence of Clinton’s failure was the need for George W. Bush to reconsider the issue in 2006. Bush withdrew from the WTO to find out what he and the Chinese president Hu Jintao called “Strategic Economic Dialogue.” When it too failed to stop Chinese theft and harassment, Barack Obama had to reconsider the issue in 2015. That effort also failed. Partly because of ongoing Chinese harassment and outright theft, Trump has controversially imposed a wide range of tariffs on Chinese imports. Under the so-called “Phase 1” of the subsequent Washington-Beijing agreement, China has promised, among other things, to streamline procedures for Americans to protect their patent rights from Chinese infringements.

By the time Biden took office, it was once again clear that despite the Phase 1 agreement, China had continued as it had for years. US Deputy Trade Representative (USTR) Sarah Bianchi said bluntly that China had not kept its promises in the Phase 1 agreement. That is why she announced that Trump’s tariffs would remain in force.

But the administration did nothing more. On the contrary, Bianchi, even when documenting China’s failure to deliver on its promises, also made it clear that USTR and Biden’s White House were unwilling to “escalate,” a comment that effectively told Beijing it had nothing to worry about. No new initiatives appear on either the White House websites or the USTR, where they would appear, if any. In other respects, the administration has actually eased the pressure on Beijing. The Ministry of Justice has decided to close its so-called “Chinese initiative”, which is aimed specifically at combating Chinese espionage and cyber threats. Most recently, the White House proposed the idea of ​​eliminating tariffs on Chinese goods. This action aims to ease inflation, but would also remove any pressure on Beijing to comply with US demands. More telling is how the White House did not comment when a Chinese court recently declared, in clear violation of international norms, that no Chinese company is defaming technology theft anywhere in the world.

After so many years of bipartisan failure on this issue, it was never realistic to expect much from any new administration. The strange thing, however, is how this administration has not even tried to ease this burden on American business. When new evidence of theft arrives – perhaps from some of the thousands of cases Director Ray has hinted at – the president can deflect blame by pointing to the failures of his predecessors, but at least they tried.

Milton Ezrati is an associate editor at National interest, a subsidiary of the Center for Human Capital Studies at the University of Buffalo (SUNY) and chief economist at Vested, a New York-based communications firm. His latest books are Thirty tomorrow: the next three decades of globalization, demography and how we will live and Large investment.

Image: Reuters.

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