Trump says that his Treasury secretary wanted to keep negotiating. According to Trump: “I said, ‘No, you’re not staying. Get out. Leave.’ So we left.” The Chinese side then made several calls to restart negotiations. The president says, “They came back. And then I said, ‘What the hell? If they’re going to pay $250 billion worth of purchases, why shouldn’t I take it?’ But now, I don’t even care about that.… I feel much differently toward China than I used to.”
Trump adds: “They renegotiated me. I’ve been renegotiated all my life, so I understand that. But they renegotiated me, just like a Brooklyn real estate developer would do—and a Brooklyn smart, vicious real estate developer. I said, ‘Hey, this is no different than Brooklyn.’ ” All kidding aside, the president’s story carries a lesson about Beijing’s priorities. The Chinese government was willing to continue to accept U.S. tariffs on Chinese products rather than eliminate theft as a business model. What’s kind of scary is that as much as Xi has consolidated power like an old-fashioned communist dictator, Trump suspects that Xi still has to answer to other senior party officials who are even less willing to embrace reform. “I have a feeling that President Xi was overridden by his board of toughies, you know? I actually think that, because he knew everything in that deal. He was fine with it. But I think he was probably overridden by somebody in China,” says Trump.9
Senior Department of Justice officials say there has recently been an explosion in cases related to economic espionage and China, often exploiting academic and exchange programs to steal research or dupe U.S. professors into sharing valuable intellectual property.
After the order to close the Houston consulate, Justice and State Department officials described a network of People’s Liberation Army associates who concealed their military affiliation when applying for student visas here and are supported through Beijing’s consulates in the United States. According to U.S. law enforcement, Chinese officials at the Houston consulate have been directing confederates at a Texas research institution on the most valuable information to collect.
Last year the Justice Department convicted a Houston businessman, Shan Shi, of trade secret theft. He had been operating a subsidiary of a Chinese company in order to acquire a U.S. company’s technology used in offshore oil and gas drilling.10
FBI director Christopher Wray said in a speech at the Hudson Institute in July 2020, “The people of the United States are the victims of what amounts to Chinese theft on a scale so massive that it represents one of the largest transfers of wealth in human history.” This includes not just products Americans create but also information they create about themselves. “If you are an American adult, it is more likely than not that China has stolen your personal data,” said Wray. A federal grand jury in Atlanta this year indicted four members of the People’s Liberation Army for allegedly hacking into the computer systems of the credit reporting agency Equifax and stealing the personal data of 150 million Americans. The Chinese government denied the charges. In 2014, China’s hackers stole more than 21 million records from the U.S. Office of Personnel Management, the agency that manages the government’s civilian workforce. Among the sensitive digital documents stolen were forms containing highly personal information gathered in background checks for people seeking government security clearances, along with millions of fingerprint records. In 2015, the records of tens of millions of Anthem Insurance records were swiped by Chinese hackers.
As for the broader Chinese government effort to seize valuable information in the United States, Wray says, “We’ve reached a point where the FBI is opening a new China-related counterintelligence case approximately every ten hours.”11
Wray says that China’s government has “pioneered an expansive approach to stealing innovation through a wide range of actors—including not just Chinese intelligence services but state-owned enterprises, ostensibly private companies, certain kinds of graduate students and researchers, and a variety of other actors all working on their behalf.”12 The Department of Justice recently brought indictments against two Chinese nationals charged with hacking into American firms pursuing coronavirus research—one of numerous recent prosecutions aimed at thwarting Beijing’s attempts to steal U.S. inventions.13
In June 2020, Chinese national Hao Zhang was found guilty of economic espionage, theft of trade secrets, and conspiracy in federal court in California. Zhang was convicted of stealing from two separate companies in the semiconductor industry: Avago and Skyworks. The judge found that Zhang planned to steal secrets for the People’s Republic of China.14
Hongjin Tan, a Chinese national who stole trade secrets valued at more than $1 billion from his former employer, an Oklahoma petroleum company, was convicted and sent to prison earlier this year.
In January the U.S. government charged the chairman of Harvard’s chemistry department with fraud for allegedly concealing his involvement with China’s Thousand Talents Program, which develops relationships with U.S. academics who possess technical expertise. Charles Lieber pleaded not guilty and immediately went on administrative leave from Harvard. In June the Justice Department indicted him on two counts of making false statements to federal authorities, and in July a grand jury brought a superseding indictment on two counts of making and subscribing a false income tax return and two counts of failing to file reports of foreign bank and financial accounts with the Internal Revenue Service.15 Lieber, an expert on nanotechnology, has pleaded not guilty on all counts.
He’s not the only one facing charges, as the Justice Department has recently indicted academics at a range of American universities and research institutions for alleged crimes related to work with Chinese projects focused on acquiring U.S. technologies.16
The effort to get the Chinese government to play by civilized rules goes back through decades of U.S. administrations, although Donald Trump was the first to impose significant consequences for Beijing’s actions. Via higher tariffs and sanctions, Trump has been punishing the broken promises
