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Chinese telecommunications company Huawei recently unveiled its new P9 smartphone, and as a recent Wired headline states, “Huawei just copied the iPhone—down to the last screw.”
Incidents like this aren’t anything new when it comes to Chinese tech companies. Epoch Times noted back in 2014 that Chinese company Xiaomi had built its entire brand around copying Apple, right down to its CEO dressing like Steve Jobs during product events.
The recent development does, however, highlight an important issue.
Just a few months ago, U.S. leaders were adamant about stopping the Chinese regime’s use of cyberattacks to steal information from U.S. companies. This led to the agreement, announced by President Barack Obama and Chinese leader Xi Jinping, on Sept. 25, 2015, to end the use of cyberattacks for economic theft.
Obama stated, at the time, “We’ve agreed that neither the U.S. or the Chinese government will conduct or knowingly support cyber-enabled theft of intellectual property, including trade secrets or other confidential business information for commercial advantage.”
There is mixed reporting on how effective the agreement was. A “60 Minutes” segment on Jan. 17 noted that the day after the announcement, Chinese cyberattacks on U.S. businesses continued as usual. Cybersecurity company FireEye claimed the agreement did reduce the number of Chinese cyberattacks on U.S. companies, but its claims are also contested by other cyber researchers.
As I mentioned in an article around that time, however, the key problem with the cyber agreement is that it only addressed cyberattacks used for economic theft, and it only addressed economic theft conducted through cyber.
In other words, the agreement does nothing to stop cyberattacks used for intelligence gathering. This means the Chinese cyberattacks on the Office of Personnel Management, which stole 21.5 million records on current and former U.S. federal employees, falls outside the program.
And just as importantly, the agreement does nothing to stop Chinese economic theft using methods other than cyberespionage.
That last part is important. The part that’s often overlooked in China’s use of cyberattacks for economic theft, is that cyber is merely one of many tools the Chinese regime uses for theft of information, and all its tools are in turn just extensions of a system being directed by Chinese policy.
The Chinese regime still has a large focus on using conventional spies to steal information. Over the course of just three weeks in April, there were four cases of alleged Chinese spies targeting the United States.
Even this month, there has already been one case of an individual conducting what resembles espionage on behalf of the Chinese regime. A former U.S. Army contractor was sentenced to six months in home confinement for lying on his security clearance form by concealing that he formerly served in the Chinese People’s Liberation Army. The individual had also violated security protocols by connecting a USB drive to a computer on the Army network, then trying to cover his tracks.
MORE:Canada Says Huawei Employees May Be Spies, Rejects Immigration Applications
The fact is, the Chinese Communist Party has a vast system for stealing information from the United States and from U.S. businesses.
Its other methods include its use of vast networks of student spies, its use of academic research partnerships, its use of front organizations including Chinese hometown associations, its use of business partnerships around research, and its use of inviting foreign experts on key topics to visit China and either present or cooperate on research around their expertise.
Then, there are Chinese “grey markets,” where Chinese factories that manufacture foreign goods simply do additional production runs, so they can make and sell the products themselves.
Stopping the cyberattacks won’t stop the problem. Cyber certainly makes it easier for the Chinese regime to steal products and designs, but again, they have plenty of other tools at their disposal.
Think of cyber as just one head of a hydra. You can cut off the head, but two heads will grow back in its place. With the Chinese regime, if cyber is removed from the equation of economic theft, it will simply find other, more effective means.
Yet, just like the mythical hydra, the way to stop this system is to stop swinging at the appendages, and go straight for the heart—and for the Chinese regime, the heart of these programs are its internal policies and facilities for stealing and copying foreign technology.
MORE:Faced With Barrage of Chinese Spies, US Expands Rules for National Security Cases
Its policies for economic theft include Project 863, the Torch Program, the 973 Program, and the 211 Program. It also has a vast system of centers designed to reverse-engineer stolen technology, known as China’s National Technology Transfer Centers or National Demonstration Organizations.
With recent U.S. efforts to stop the Chinese regime’s use of economic theft, the question shouldn’t be whether the cyberattacks stopped. The questions should be whether the Chinese regime ended its policies that guide economic theft, and whether it closed its facilities dedicated to copying stolen technology. The answer so far to both of these questions is a simple “no.”

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A Chinese citizen claiming to work on China’s missile programs was arrested in New York on April 13 for his alleged part in a scheme to obtain sensitive carbon fiber and sell it to the Chinese military.
This marks the second Chinese espionage case in the United States in the past week—following the case of a U.S. Navy officer accused of spying on the U.S. military for China.
The latest alleged spy is Fuyi “Frank” Sun, 52, who “allegedly attempted to procure high grade carbon fiber for a source he repeatedly identified as the Chinese military,” said Assistant Attorney General John P. Carlin, in an April 14 press release.
Sun allegedly claimed to have worked personally in the Chinese regime’s missile program and “asserted that he maintained a close relationship with the Chinese military,” according to the release.
Sun also claimed to have a “sophisticated understanding of the Chinese military’s need for carbon fiber,” and “suggested” he would supply the material to the Chinese military or “institutions closely associated with it.”
Carlin said the carbon fiber has many uses in aerospace and defense, and is strictly controlled from export.
Sun has allegedly attempted for years to acquire the high-grade carbon fiber and illegally export it to China, said U.S. Attorney Preet Bharara, in the press release
Early on the week of his arrest Sun traveled from China to New York to finalize a deal to obtain the sensitive materials, Bharara said, but the men he met with turned out to be undercover U.S. agents.
“Sun allegedly told undercover agents that the carbon fiber he sought was headed for the Chinese military, and then paid tens of thousands of dollars in cash to purchase two cases of it,” Bharara said.
Sun also allegedly told the undercover agents to ship the material in unmarked boxes and to falsify the shipping documents so the shipment would slip past law enforcement.
The press release says that Sun had been trying to get his hands on sensitive carbon fiber since around 2011.
MORE:Navy Officer Who Allegedly Spied for China Had Nuclear Training
It states that he met with undercover agents around April 11 and 12, and “repeatedly suggested that the Chinese military was the ultimate end-user for the M60 Carbon Fiber he sought to acquire.”
The carbon fiber would fall under the category of “new materials,” which the Chinese Communist Party has identified as a priority to steal from other nations under its Project 863 program.
Sun faces up to 20 years in prison for attempting to violate the International Emergency Economic Powers Act (IEEPA) and conspiracy to violate it. He also faces up to 10 years in prison for trying to smuggle goods from the United States.

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