US Charges Two With Stealing Trade Secrets for China

Economic espionage involved theft of turbine technologies

Image Credits: Fu Tian/China News Service/VCG via Getty Images.

A Chinese businessman and an ex-General Electric (GE) engineer have been charged by the U.S. Justice Department with economic espionage and conspiring to steal GE’s trade secrets to benefit China.

Xiaoqing Zheng, 56, of Niskayuna, New York, is accused of exploiting his position in GE to steal and transmit propriety information on turbine technologies to Zhaoxi Zhang, 47, of Liaoning Province, China, according to the 14-count indictment unsealed Tuesday.

“The indictment alleges a textbook example of the Chinese government’s strategy to rob American companies of their intellectual property and to replicate their products in Chinese factories, enabling Chinese companies to replace the American company first in the Chinese market and later worldwide,” said Assistant Attorney General for National Security John C. Demers.  “We will not stand idly by while the world’s second-largest economy engages in state-sponsored theft.” 

“As part of the Attorney General’s China Initiative, we will partner with the private sector to hold responsible those who violate our laws, and we urge China’s leaders to join responsible nations and to act with honesty and integrity when competing in the global marketplace.”

The two planned to use the stolen secrets to boost the business interests of Chinese companies Liaoning Tianyi Aviation Technology Co., Ltd. (LTAT) and Nanjing Tianyi Avi Tech Co. Ltd. (NTAT).

The indictment also alleges the two defendants committed economic espionage because they knew the theft would aid the People’s Republic of China, who used LTAT and NTAT to provide them “financial and other support.”


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Interestingly, nearly all of the FBI’s 56 field offices are investigating economic espionage cases linked to China, according to Reuters.

“American businesses spend many hours and large amounts of money developing unique technology,” said FBI Counterintelligence Division Assistant Director John Brown.  “When such technology is stolen it can be devastating to U.S. businesses and can result in American workers losing jobs.”

“China continues to support behavior that violates the rule of law. This case demonstrates the FBI will continue to pursue China’s efforts to steal American technology.”

FBI Special Agent in Charge James N. Hendricks adds: “Economic espionage and the theft of trade secrets have a profound impact on our companies and communities. We view this as a grave threat to our economic and national security and the FBI will work tirelessly to prevent the loss of American technology and American jobs.”

Last month, America’s top military officer, Gen. Joseph Dunford, warned that companies who do business in China are effectively dealing with the country’s communist party.

“That will to lead to intellectual property from that company finding its way to the Chinese military,” said Dunford. “This is about us looking at the second and third-order effects of our business ventures in China, China’s form of government, and the impact that it’s going to have on the United States’ ability to maintain a competitive military advantage and all that goes with it.”


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