Congress is making inroads into the mammoth task of trying to determine how much of a threat Chinese Communist Party’s (CCP) theft of intellectual property is and what the nation can do to mitigate the problem.
The Subcommittee on Courts, Intellectual Property and the Internet, which falls under the auspices of House Committee on the Judiciary, on Wednesday opened the process with its “Intellectual Property and Strategic Competition with China: Part I” hearing, and one takeaway from the testimony is that the problem presents an “existential threat” to America and its way of life in that it’s costing the country approximately $600 billion a year. But it goes beyond the economic cost.
Rep. Kevin Kiley (R-CA) cited the testimony of William Evanina, who has decades of experience with the FBI and CIA and is now CEO of The Evanina Group. He testified about Xi Jinping, president of the People's Republic of China, that his “goal is to be the geopolitical, military and economic leader in the world,” and that Xi, along with the Chinese Ministry of State Security, People’s Liberation Army and United Front Work Department “drive a comprehensive and whole-country approach to their efforts to invest, leverage, infiltrate, influence and steal from every corner of the U.S.”
“This is a generational battle for Xi and the CCP,” Evanina said. “It drives their every battle.”
Kiley addressed the Biden Administration’s decision in February 2022 to end the Trump Administration’s China Initiative, an effort by the U.S. Department of Justice to prosecute those alleged to be Chinese spies in American research and industry.
He asked Evanina what kind of message that sent about how much our country tolerates the theft of intellectual property (IP).
Evanina said some aspects of the China Initiative are still in force, though it might not be called the China Initiative any more, and he said we’ve actually seen an uptick in cases and investigations. He said reports indicate that 80% of Americans have had all their data stolen by the CCP; the other 20% have had just some of their data stolen. “When you include intellectual property and data theft, it is an unequivocal existential threat that the Communist Party of China poses against the United States,” Evanina said.
The problem is one the U.S. has been tackling for a while. In January 2022, FBI Director Christopher Wray said the bureau opened a new China-related case every 12 hours, and had more than 2,000 China-related cases open at the time. "There is just no country that presents a broader threat to our ideas, our innovation and our economic security than China," Wray said in an NPR report.
Wray also made an unprecedented appearance last fall with Ken McCallum, chief of the security service known as M15, when they warned business leaders in London that the Chinese government poses a major economic and national security threat to the U.S., the U.K. and their allies, RealClear Policy reported. They described the Chinese government's efforts to steal intellectual property and use that information to surpass its competitors in fields like artificial intelligence and biotechnology.
Evanina was one of four people who testified before the subcommittee Wednesday, all of whom said action needs to be taken to protect America.
Jamieson Greer, a partner in the International Trade team at King & Spalding, headquartered in Atlanta, GA, said he discussed the economic toll and how it extends to military superiority. He has heard how CCP policies hurt Americans, and he sees “the seriousness of this challenge and the continuing and urgent need to take strong action.”
Mark Cohen, a distinguished senior fellow and director of the Asia IP Project at the California-based Berkeley Center for Law and Technology, said America can no longer sit idly by and let China get away with such activity.
“It’s time for Americans, for the United States, to leverage the full range of data that we have” on patents, manufacturing, investments, industrial policy and elsewhere “to better assess our competitiveness and China’s strategic goals,” Cohen said.
Charles Duan, a policy fellow and adjunct professor at American University in Washington, D.C., called for strengthening the U.S. patent system.
“If U.S. patents can be obtained too easily or can be asserted unfairly, then China could strategically use them to hamper American innovators and slow down our technological progress,” Duan said, calling on Congress to protect American entrepreneurs.
Subcommittee Chair Rep. Darrell Issa (R-CA) touched on the military angle as the two-hour hearing drew to a close, asking Evanina’s opinion about the threat to national security.
Evanina said IP theft is just part of that problem, adding that the surveillance and penetration of our critical infrastructure – ports, electrical grid, pipelines and more – compounds the matter.
“China’s Communist Party has spent a decade preparing for that battlefield,” Evanina said, adding that such intelligence-gathering allows China to undermine our ability to protect ourselves economically and militarily.
The main ingredient needed to keep China from benefiting from its IP theft is political will, Greer said.
“The underlying use of any of these tools is you have to have the political will, across parties and administrations, and importantly in the U.S. business community,” Greer said. “Absent the sustained will, it will be increasingly difficult to protect the U.S. economy and American workers from the negative impact of China’s policies and practices on IP.”
The bipartisan subcommittee is made up of 10 Republicans and eight Democrats. Its purview includes judicial ethics, trademark law, patents and copyrights, and information technology.
