In 2005 when he was leader of the Opposition, Stephen Harper quoted CSIS sources as saying Chinese industrial espionage was costing Canada $1 billion a month.
He blamed Paul Martin’s government for ignoring the problem.
Last year, around the time of the G8 and G20 meetings, CSIS Director Richard Fadden walked into hot water when he said the Chinese wielded undue influence with some Canadian politicians.
He quickly back-tracked, but damage was done. A spokesman for Stephen Harper, now PM, said he had “no knowledge” of possible Chinese spying or espionage.
That’s the way it is in politics. The higher the position, the worse the memory. So Chinese defectors claiming 1,000 “spies” (to use the word loosely) operate in both Canada and Australia are met with a shrug.
Still, the record shows there is considerable Chinese intimidation directed at Falun Gong supporters around the world – not because Falun Gong is a subversive organization, but because its popularity is a rebuke to the Chinese Communist Party.
Does China indulge in industrial espionage? Huh. Might as well ask if the Pope is Catholic.
Shades of James Bond, the British Telegraph recently delved into the French experience with Chinese espionage, including the use of “honey traps” (sexy women) to lure industrial secrets from select businessmen.
One case involved a French pharmaceutical company leaving a sample of a patented liquid unattended and a member of a Chinese delegation dipped his tie in the liquid, for analyzing and copying later.
Apparently there are some 30,000 Chinese students “interning” with French companies, and this poses a possible industrial espionage threat.
The Telegraph says a frequent ploy is the “lamprey technique” – Western companies encouraged to compete for contracts with the Chinese, and increasingly to reveal more of their technical expertise until the Chinese have learned enough and then inform the bidders that the project has been shelved. They then proceed to develop their own products.
When China sought a high-speed train system, France apparently offered a six-month training course for Chinese engineers – after which no contract was signed but China brought out its own high-speed train that was remarkably similar to France’s.
Another technique is the “mushroom factory” in which French companies enter into a joint venture with the Chinese – only to discover the shared French technology is used to create a rival Chinese company producing an identical product – run by the Chinese who headed the joint venture.
A French dairy drink company, Danone, was a victim when it teamed up with the Chinese company, Wahaha, which then produced an identical drink.
More sinister, is the case of a French company (Schneider Electric) collaborating with a Chinese company and finding an attachment it had patented in 1996 was being built by the Chinese company – which took Schneider to court, claiming it stole the idea. The Chinese court fined Schneider 330 million yuan.
Added to woes, is an espionage scandal of three top executives of France’s Renault car company allegedly being paid by the Chinese for car secrets.
And so it goes. The above is the tip of an iceberg that applies to all industrial countries, and is perhaps a reason why China has become so potentially powerful economically.
It’s also a country where the buyer (and seller) should beware. Conventional rules of business and ethical behavior have different meanings to the Beijing regime.