The U.S. Economy Is Losing as Much as $600 Billion a Year in Intellectual Property from Chinese Espionage

The U.S. Economy Is Losing as Much as $600 Billion a Year in Intellectual Property from Chinese Espionage

The U.S. economy alone is losing between $200 billion and $600 billion a year in intellectual property from Chinese espionage.

 

Here you are, sitting at your desk, walking to the metro, strolling through the airport, and waiting for your flight. Look around you. Do you see all those people walking busily, scrolling on their phones, chatting away? How would you feel if you knew that some of their most intimate data is in the hands of a foreign state? Indeed, some of your data is likely there, too.

As for the culprit, China is the name, and cyber espionage is the game.

 

Chinese Cyber Espionage 

In 2015, U.S. officials at the Office of Personnel Management discovered that Chinese hackers had broken into their databases and stolen millions of records of highly sensitive records, including the security background forms, fingerprints, health data, and financial records from millions of current and former U.S. officials and applicants for federal jobs.

But that wasn’t the only hack. Through steady computer network espionage, Beijing has stolen more than 500 million travel and personal records from the Marriott hotel chain, 145 million financial and personal records from Equifax, and 78 million financial, healthcare, and personal records from Anthem. Beijing is even targeting the DNA data of Americans in an effort to become a global leader in biotechnology and medicine. 

Alarmingly, China uses a whole-of-nation approach to war that incorporates traditional and non-traditional policy tools in the economic, diplomatic, military, intelligence, and law enforcement domains. Beijing is especially active in the cyber domain, using computer network attacks and computer network espionage to pressure adversaries and steal their data. 

“In more ways than one, the broad remit of the Chinese Intelligence Services poses a significant challenge to Western attempts to counter their activity,” the British intelligence services stated in a report to the U.K. Parliament. “To compound the problem, it is not just the Chinese Intelligence Services: the Chinese Communist Party co-opts every state institution, company and citizen. This ’whole-of-state’ approach means China can aggressively target the UK, yet the scale of the activity makes it more difficult to detect.”

In recent years, the FBI has seen counterintelligence investigations related to Chinese activities skyrocket. The bureau’s leadership recently revealed that it was opening a new investigation related to China every ten hours and had more than 2,000 active cases on its hands. Most of the cases concern economic espionage, with a 1,300 percent increase in recent years.

The U.S. economy alone is losing between $200 billion and $600 billion a year in intellectual property from Chinese espionage. 

Even in physical terms, Beijing has an advantage. The Chinese military, without adding the country’s intelligence services, fields about 40,000 cyber operators. In contrast, U.S. Cyber Command numbers about 6,000 cyber troops.

Concerning intelligence operations, China’s Ministry of State Security is responsible for the majority of Beijing’s operations, with some support from the Chinese military

About the Author: 

Stavros Atlamazoglou is a seasoned defense journalist specializing in special operations and a Hellenic Army veteran (national service with the 575th Marine Battalion and Army HQ). He holds a BA from Johns Hopkins University and an MA from the Johns Hopkins School of Advanced International Studies (SAIS). His work has been featured in Business Insider, Sandboxx, and SOFREP.

Image Credit: Shutterstock.