Trade Secret Theft, Industrial Espionage, and the China Threat: 1st Edition (Hardback) book cover

Trade Secret Theft, Industrial Espionage, and the China Threat

1st Edition

By Carl Roper

CRC Press

320 pages | 14 B/W Illus.

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Although every country seeks out information on other nations, China is the leading threat when it comes to the theft of intellectual assets, including inventions, patents, and R&D secrets. Trade Secret Theft, Industrial Espionage, and the China Threat provides an overview of economic espionage as practiced by a range of nations from around the world—focusing on the mass scale in which information is being taken for China's growth and development.

Supplying a current look at espionage, the book details the specific types of information China has targeted for its collection efforts in the past. It explains what China does to prepare for its massive collection efforts and describes what has been learned about China's efforts during various Congressional hearings, with expert advice and details from both the FBI and other government agencies.

This book is the product of hundreds of hours of research, with material, both primary and secondary, reviewed, studied, and gleaned from numerous sources, including White House documentation and various government agencies. Within the text, you will learn the rationale and techniques used to obtain information in the past. You will see a bit of history over centuries where espionage has played a role in the economy of various countries and view some cases that have come to light when individuals were caught.

The book supplies an understanding of how the economy of a nation can prosper or suffer, depending on whether that nation is protecting its intellectual property, or whether it is stealing such property for its own use. The text concludes by outlining specific measures that corporations and their employees can practice to protect their information and assets, both at home and abroad.

Table of Contents

China: The Red Dragon of Economic Espionage

Protecting US Intellectual Property Overseas

Background of the Problem

London Speaks Out

What Does China Desire to Be?

The US Stand on the Nation’s Economy

China’s Industrial Espionage

Project 863

Guidance Projects

National High-Tech R&D Program

Getting the Data

Economic Collection and Industrial Espionage

A US View—Background of the Problem


We Are Not Alone: Economic Espionage and the World

Examples of Attempts to Obtain Economic Information

Renewed Focus on China


The Background of Economic Espionage

Espionage as a Means of Nation Building



PRC Acquisition of US Technology: An Overview and Short History

The PRC Government Structure

COSTIND: The CCP’s Use of Corporations for Military Aims

CCP Supremacy over the State, the PLA, and the Economy

Development of the CCP’s Technology Policies

The 863 and Super 863 Programs: Importing Technologies for Military Use

The 16-Character Policy: "Give Priority to Military Products"

The PRC’s Use of Intelligence Services to Acquire US Military Technology

Overview of Methods Used by the PRC to Acquire Advanced US Military Technology

Acquisition of Military Technology from Other Governments

Joint Ventures with US Companies

Acquisition and Exploitation of Dual-Use Technologies

Front Companies

Direct Collection of Technology by Non-Intelligence Agencies and Individuals

Illegal Export of Military Technology Purchased in the United States

PRC Incentives for US Companies to Advocate Relaxation of Export Controls

China’s Efforts to Assimilate Advanced US Military Technology

Chinese Product Piracy and Counterfeiting

The Film Industry and Pirated DVDs

China’s Loose IP Protection Concerns

IP Theft

IP Rights

The Plight of the Copyright Industries Due to Piracy in China

The Business Software Industry

The Motion Picture Industry

The Entertainment Software Industry

The Book Publishing Industry

The Recording Industry

Congressional Hearings on Chinese Piracy

Breadth of the Counterfeiting Problem

Who, What, and How China Targets

Targeted Information and Technologies

Methods Used to Conduct Such Espionage

Other Economic Collection Methods

Other Economic Collection Efforts

Case Study of a Chinese Collector

Other Interesting Cases of Chinese Espionage

Case 1

Case 2

Case 3

Case 4

Case 5


The China Spy Guide and Open-Source Information

Chinese Intelligence Operations

Chinese Intelligence Collection Organizations

Chinese Collection Operations

Chinese Intelligence Collection Trends

Open-Source Collection

Benefits of Open-Source Information Collection

The Changing Nature of Open-Source Information

Traditional Open-Source Assets

Electronic Databases

Commercial Imagery

Closing Comments


The Intelligence Cycle and Collection Effort

Defining Intelligence

Collection Disciplines






Computer Intrusion for Collection Operations


Corporate Rivals

Nature of the Information


Sources of Information

Open Sources of Information

Classified Government Information

Paper Shredding

The Direction of the Collection Effort


The Economic Espionage Act

Overview of the EEA of 1996

Elements Common to 18 U.S.C. §§ 1831, 1832

Specification of Trade Secrets

Disclosure Effects of a Trade Secret

Common Issues and Challenges in Trade Secret and EEA Cases

Primary Objectives

Three Parts to Trade Secrets

Intellectual Property Cases


The U.S. Response to Economic Espionage

US Government Awareness

NACIC Background and the Change to the Office of the NCIX

An Expanded Outreach to the Private Sector

No Electronic Theft Act

Militarily Critical Technologies List

Espionage and Illicit Acquisition of Proprietary Information

Policy Functions and Operational Roles

US Government Support to Private Industry

Options for Consideration

CI Community Efforts to Protect Technology


The DOD View of IP Theft: A Trend Analysis of Reporting on Foreign

Targeting of US Technologies


Threat Entities

DSS Key Findings

Targeted Technology Concerns

Overall DOD Concerns—A Summary


Intellectual Property Rights: Patents, Copyrights, and Trade Secrets


Types of Patents

Trademark and Service Marks

US Trademark Act and Trade Dress


What Does a Copyright Protect?

Trade Secrets

Trade Secret Protection

China’s IPR Enforcement System


Internet Exploitation: The Web, Your Computer, Your IT System

Federal Information Security Management Act

Sensitive US Internet Traffic Sent to Chinese Servers

China’s Thinking and Capabilities in Cyberspace

The Deterrence Effect on the United States


Protecting Your Data

Espionage and Foreign Travel

Elicitation: What Is It?

Why Elicitation and What Is Its Appeal to Today’s Spy?

Elicitation Response

Your Response

Tips on Deflecting Elicitation Attempts

Elicitation: An Intelligence Collector’s Viewpoint

Hosting Foreign Visitors

Host Responsibilities

Long-Term Foreign Visitors

The Technology Control Plan

Security Reporting Responsibilities

Espionage Indicators

Protecting Your IP Rights (IPR) in China

China’s Current IPR Environment

The Best Protection Is Prevention

China’s IPR Enforcement System

What the US Government Can Do in IPR Infringement Cases

About Trade Secrets in China

Strategy Targeting Organized Piracy

Getting Help to Protect Your Rights

Your Knowledge of Methods Used in Economic Espionage

Unsolicited Requests for Proprietary Information

Espionage Indicators

Inappropriate Conduct during Visits

Suspicious Work Offers

Exploitation of Joint Ventures and Joint Research

Acquisitions of Technology and Companies

Co-opting of Former Employees

Targeting Cultural Commonalities

The Bottom Line for Protecting against Threats

Security Precautions as a Business Enabler


Source Documents and Other Resources

Appendix A: The Dongfan "Gregg" Chung and Chi Mak Economic Espionage Cases

Appendix B: Economic Espionage Killed the Company, The Four Pillars Enterprise Case

Appendix C: Summary of Major US Export Enforcement, Economic Espionage, Trade Secret, and Embargo-Related Criminal Cases, 2007 to the Present

Appendix D: Special 301 Report, China


About the Author

Carl A. Roper is a retired government official who—as a Security Specialist with the Department of Defense Security Institute (DoDSI)—was a lead instructor providing general and specialized security training across the spectrum of government agencies and industry. He developed the DoDSI Risk Management course and was instrumental in enhancing other courses. Mr. Roper is also a retired U.S. Army Counterintelligence Special Agent. As a professional author, he has written numerous magazine articles and security books. He holds a BA from The American University, Washington, D.C., and an MSA from Central Michigan University, and is currently a Security Consultant and Trainer.

Subject Categories

BISAC Subject Codes/Headings:
COMPUTERS / Security / General
HISTORY / Military / General
POLITICAL SCIENCE / Political Freedom & Security / International Security