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Chinese Espionage Cited As Top Risk To U.S. Technology Industry

The U.S.-China Economic and Security Review Commission claims espionage is used to save China the time and cost of researching and developing its own advanced technologies.

In its 2007 Report to Congress, the U.S.-China Economic and Security Review Commission (USCC) calls Chinese espionage the top threat to U.S. technology.

"Chinese espionage activities in the United States are so extensive that they comprise the single greatest risk to the security of American technologies," states a USCC summary of the report.

Espionage, the report suggests, saves China the time and cost of researching and developing advanced technologies.

The final report is being printed and should be available online and in paper later this week, according to a USCC spokesperson. It elaborates on both positive and negative aspects of the United States' relationship with China.

In draft remarks prepared for the report's presentation to Congress, Carolyn Bartholomew, chairman of the USCC, cited good news in China's constructive engagement with North Korea, its assistance to U.N. peacekeeping forces in Sudan, and its leaders' acknowledgement of environmental problems.

But Bartholomew also pointed to problems in the Chinese government's control of the IT, telecommunications, shipping, civil aviation, and steel industries; its failure to live up to its WTO obligations; its investments in countries that violate human rights; and its control of media and information distribution.

Some U.S. companies, according to Bartholomew, are contributing to these issues. "Unfortunately, some U.S. technology companies have cooperated with and contributed to the Chinese government's censorship and propaganda systems by supplying hardware and software," said Bartholomew.

The Commission also expressed concern about China's increasingly capable military and its ability to destroy satellites and to wage cyber attacks against U.S. computer networks. Organized attacks on U.S. networks have been widely reported since 2005, following a coordinated assault that appears to have started in 2003, dubbed "Titan Rain." American security experts blame the campaign on hackers backed by the Chinese military.

The report recommends, among other steps, that Congress assess U.S. anti-espionage efforts and that additional funding is made available, if necessary, to support export control enforcement and counterintelligence efforts, "specifically those tasked with detecting and preventing illicit technology transfers to China and Chinese state-sponsored industrial espionage operations."

It also calls for more money, if deemed necessary by Congress, to support military, intelligence, and homeland security programs that monitor and protect critical U.S. computer networks and cyber-defense systems.

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