Global intelligence chiefs lash China’s ‘sanctioned’ theft of intellectual property

Palo Alto, California: Intelligence chiefs from Australia and around the world have lashed out at China for what they say is the most sophisticated program of intellectual property theft in history, warning that Beijing’s espionage is so widespread it requires an unprecedented global response.

Appearing publicly for the first time with other nations from the Five Eyes intelligence alliance, Australian Security Intelligence Organisation director-general Mike Burgess also took the rare step of rebuking China even as Prime Minister Anthony Albanese prepares to visit Beijing later this year in a bid to ease friction with the nation’s biggest trading partner.

ASIO Director-General of Security Mike Burgess says Beijing is engaged in “the most sustained, sophisticated and scaled theft of intellectual property and expertise in human history”.Credit: Alex Ellinghausen

Citing Albanese’s own remarks when it comes to Beijing – that Australia would “cooperate where we can; disagree where we must” – Burgess said China’s economic espionage went far beyond “traditional” spying because it had been sanctioned by the state over many years to the detriment of other democratic countries.

“The Chinese government are engaged in the most sustained, sophisticated and scaled theft of intellectual property and expertise in human history,” Burgess said.

“I’ve been talking about espionage and foreign threats in Australia for a long time; I generally don’t mention countries but this is one where China is worthy of mentioning because Chinese government, Chinese intelligence services are an instrument of the state that have actually sanctioned the wholesale intellectual property theft over a good number of decades.

“That behaviour must be called out and must be addressed.”

Burgess’ comments came during a major Five Eyes summit in California designed to tackle the problem, which he described as “an unprecedented event in response to an unprecedented threat”.

He also warned that China could seek to exploit the wars in Gaza and Ukraine to assert its dominance in the Indo-Pacific, potentially bringing the nation closer to an invasion of Taiwan.

The allies’ meeting comes at an extraordinary time in geopolitics, with protests igniting the Middle East after an explosion killed hundreds at a Gaza hospital, and as US President Joe Biden heads to a high-stakes gamble to visit Israel during the conflict.

Asked by this masthead about the potential for China to exploit the wars, and whether it could result in Beijing edging closer to an invasion of Taiwan, Burgess replied: “Would China exploit an opportunity out of Russia-Ukraine and what’s happening in the Middle East? It may well.

“Our job is to continue to defend our nation from any nation that would try to exploit the situation anywhere – and we’ll just continue to do our job.”

The Five Eyes alliance – involving the US, the UK, Canada, New Zealand and Australia – was created in the aftermath of World War II to share intelligence and coordinate security efforts. But this was the first-ever joint public appearance of intelligence leaders from the alliance, who travelled to Palo Alto, the so-called “Birthplace of Silicon Valley” at the invitation of FBI Director Christopher Wray.

“That tells you what you need to know about how unprecedented the threat itself is,” Wray said.

“The scale of the threat from China is so unprecedented that not only is no single solution going to be enough; no single country can be enough to try to adequately safeguard against them.”

The FBI has seen a 1300 per cent increase over the last several years in investigations related to China’s attempts to steal intellectual property or other secrets.

In one example, a US wind turbine company entered into a joint venture with a Chinese state-owned enterprise, which recruited an insider to steal the company’s trade secrets. Company shares plummeted, resulting in scores of employees being laid off.

In another case closer to home, China was able to steal the intellectual property of a successful Australian company by downloading malware into a staff member’s laptop at an overseas conference.

Counter-intelligence agencies say the areas being targeted by Beijing align with the “Made in China 2025” initiative announced in 2015. This plan seeks to make China the world’s top manufacturer in 10 areas, such as robotics, artificial intelligence, new synthetic materials and aerospace.

In a bid to address the issue, the Five Eyes alliance launched its first ever Emerging Technology and Securing Innovation Security Summit on Tuesday (US time) to discuss how to mitigate the threat with industry leaders.

The summit kicked off with a fireside chat hosted by former US Secretary of State Condoleezza Rice involving all five members: Burgess, Wray, Canadian Security Intelligence Service Director David Vigneault, UK’s MI5 Director General Ken McCallum and New Zealand Security Intelligence Service Andrew Hampton.

More than 400 businesses also took part, including a handful of Australian firms and start-ups.

But the conference at Stanford University’s Hoover Institution comes at a delicate time for some of the allied countries, with Albanese expected to go to Beijing within months, in the first visit for an Australian Prime Minister in seven years.

It is understood that the Prime Minister was aware Burgess was attending the event, which was in the pipeline for some time, but did not know what he was planning to say.

The White House has also begun making plans for a November meeting in San Francisco between US president Joe Biden and Chinese leader Xi Jinping in a bid to stabilise the relationship between the world’s two most powerful countries.

But the intelligence chiefs warned that the stakes were high and greater awareness was needed to ensure emerging technologies were protected.

“We all need to be aware, and respond, before it’s too late,” McCallum said.

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