China may be facing growing domestic economic and political issues, but it remains a major global concern to nations attempting to protect their intellectual property (IP) and state secrets. Academic institutions in advanced Western nations, such as Germany, are only recently beginning to recognize the extent of the threat and act, by suspending some Chinese government-funded researchers over concerns of industrial espionage and academic freedom. It may be too little, too late, according to military analysts in Washington. In June, one of Germany’s leading academic institutions, the Friedrich Alexander University of Erlangen-Nuremberg (FAU), announced the formal suspension of its Chinese government-funded researchers. Earlier this week the school admitted it “feared” these individuals were utilizing government funding supplied through the China Scholarship Council (CSC) for spying.
Joseph Fitsanakis, writing in IntelNews.org, says that the Swish-based Dagens Nyheter reported that, to receive a CSC scholarship, Chinese citizens are now required to pledge “support [to] the leadership of the Chinese Communist Party… and to have a correct world view, outlook on life, and values system.” This week the FAU sent an internal email to university officials expressing concerns that Beijing could force its CSC researchers to spy on FAU advanced scientific and industrial research and compromise its data security and IP practices as allowed under Chinese law. All Chinese citizens, whether residing inside China or working or studying abroad are compelled to spy under China’s nèibù (内部) regulations when asked by the government.
Bettina Stark-Watzinger, Germany’s Minister of Education, this week supported FAU’s decision saying that research organizations have “a responsibility to safeguard themselves against espionage activities conducted by students receiving scholarships from the Chinese government.” It appears other schools in Western Europe are considering similar actions with intelligence analysts in Washington calling it “long overdue” and “too late” in many cases. China often sends military officers to study Western advanced technologies without declaring their status. Their sheer numbers overwhelm the capabilities of foreign intelligence agencies to identify or track them. At the same time universities are often uncooperative as they vie for the money tied to these students and often overlook or minimize the threat they pose.
The Chinese have an extensive history of industrial spying in modern Germany. As early as 2009, the German Association for Security in Industry and Commerce (ASW), a corporate security group, echoed warnings from the German government over its concern in increases in foreign industrial and commercial espionage. At the time, the German newspaper Mitteldeutsche Zeitung reported that the General Manager of the ASW, Dr. Berthold Stoppelkamp, said the “targeting of German research and commercial enterprises by mainly Chinese and Russian agents is so extensive that it usually costs the German economy over €20 billion per year, and it may be costing as high as €50 billion per year since 2007.”
According to Dr. Stoppelkamp, although these covert activities are government-managed, they “aim to assist individual Chinese or Russian firms competing against German companies for international contracts.” ASW reports point out that most of the espionage activities involve “sensitive information […] siphoned from trade shows and business meetings”, or the covert utilization of Chinese and Russian students working in German universities and research firms.
China is known for planting of informants with extensive fabricated identities and advanced technological skills. The Germany Ministry of the Interior almost two decades ago warned that “science, engineering, renewable energy, materials research, pharmaceuticals and manufacturing businesses are becoming popular places to imbed foreign spies.”
Industrial espionage in Europe is not limited to Germany. In 2019, after the director of the Belgian intelligence and security agency, the Veiligheid van de Staat – Surete de L‘Etat (VSSE), accused the director of the Vrije Universiteit Brussel (VUB), one of Belgium’s leading higher-education institutions, of spying for Beijing, the university shut down the research institute. It had been in operation on the campus for over 13 years. Ian Allen, of IntelNews, says that Beijing tried to stifle Belgian research critical of China and that “In Europe alone, the University of Lyon in France, Stockholm University in Sweden, and Holland’s University of Leiden have all recently terminated their cooperation” with various Chinese government-linked organizations.
In the United States, Ivy League schools appear worried they may lose up to $14 billion in tuition and other fees spent annually by more than 350,000 Chinese nationals studying in the US. These prestigious institutions regularly share strategies to thwart plans by counter-intelligence officials in Washington to address the problem. Harvard University has in recent years explicitly refused to allow FBI Special Agents to train research professors in the advanced technologies how to recognize the Chinese threat.
It extends to the US commercial sector, too. It is becoming so blatant that this week investigative reporter Philip Lenczycki reported on a video depicting American employees at the Chinese parent company of US-based Gotion, Inc. (which intends to build two electric battery plants in Michigan), pledging Chinese Communist Party oaths and dressed as Red Army soldiers during company field trips. The footage is openly posted on the Chinese battery manufacturer’s website. If officials in Western governments, academia, and the corporate world fail to develop and implement stronger policies, Beijing will continue to make inroads and threaten the international rules-based system.
Daria Novak served in the U.S. State Dept.