Monday, 17 December, 2018

China challenges United States to provide 'evidence' in trade secrets case

US-CHINA-POLITICS-THEFT-COMPUTERS-MICRON Chinese company charged with stealing trade secrets from US chipmaker
Kenny Thornton | 03 November, 2018, 23:47

The indictments come in the midst of an American-initiative trade war that has led so far to the Trump administration imposing import tariffs on $250 billion of Chinese goods, based on previous year's imports.

"China - like any advanced nation - must decide whether it wants to be a trusted partner on the world stage, or whether it wants to be known around the world as a dishonest regime running a corrupt economy founded on fraud, theft and strong-arm tactics", Attorney General Jeff Sessions said at a news conference announcing the criminal case and a new China Initiative.

Sessions is ordering the Federal Bureau of Investigation and the department's National Security Division, led by John Demers, to step up enforcement, the official said.

"The Chinese government's complicity in intellectual property theft hurts American manufacturers, workers, and consumers, and undermines the ability of US businesses to operate in China", Senator Mark Warner of Virginia, the vice chairman of the Senate Select Committee on Intelligence, said in an emailed statement. "The Administration has powerful, targeted tools at its disposal to hold bad actors accountable for theft of US companies' IP and trade secrets, even when the theft takes place overseas".

In August 2017, Taiwan authorities filed criminal indictments against UMC and three of its employees for the alleged theft and use of trade secrets from Micron, for the goal of developing DRAM chip manufacturing technologies in cooperation with Jinhua. "This Department of Justice-and the Trump administration-have already made our decision: we will not allow our sovereignty to be disrespected, our intellectual property to be stolen, or our people to be robbed of their hard-earned prosperity".

"The department will aggressively pursue trade-secret theft cases, and develop a strategy to identify researchers and defence industry employees who've been "co-opted" by Chinese agents to transfer technology to China", said Sessions.

The charges name two companies, one in China and one in Taiwan, and three Taiwanese defendants.

The companies are Fujian Jinhua, a state-owned chip maker, United Microelectronics Corporation, a Taiwan semi-conductor foundry, and three Taiwanese nationals named Stephen Chen, 55, J.T. Ho, 42 and Kenny Wang, 44. While the focus has been on hackers from Russian Federation and Iran, the USA also views China as a major cybersecurity threat.

'I Think We'll Make a Deal With China' on Trade
A key point of contention for the USA has been its allegations that China has engaged in widespread intellectual property theft. It was unclear if Trump was easing up on United States demands that China has resisted.

The state-owned firm named in the indictment, Fujian Jianhua, is a Chinese semiconductor manufacturer that was already targeted by the U.S. earlier this week when authorities slapped a ban on USA exports to the company.

Sessions said the charged parties engaged in a "brazen scheme" to steal DRAM technology on behalf of the Chinese government. Other cases have involved stolen wind turbine technology and software source code. Fujian Jinhua was founded in 2016 for the sole goal of developing DRAM technology.

Congress in August passed laws to expand the government's power to review foreign investments in the country. Without equipment sold only in the United States, Jinhua can not build the DRAM chips.

"Today, we see Chinese espionage not just taking place against traditional targets like our defense and intelligence agencies, but against targets like research labs and universities, and we see Chinese propaganda disseminated on our campuses, he said". "It's bigger than intellectual property theft".

"No country presents a broader, more severe threat to our ideas, our innovation, and our economic security than China", FBI Director Christopher Wray said in a statement Thursday.

The department has filed a civil suit against the two companies as well.

Full details on the case are available from the indictment (PDF warning).

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