The Spy Hunter #71
US indicts Chinese national for attempted theft of aerospace technologies. US pharmaceutical firm sues China-based rival over trade secret theft.
September 17, 2024
Welcome to The Spy Hunter newsletter!
In this week’s edition:
A US court indicts a Chinese national for attempting to steal restricted software and source code from NASA, U.S. research universities, and private companies.
A US pharmaceutical firm files a lawsuit against a China-based rival accused of stealing trade secrets to develop a competing cancer treatment.
The US House of Representatives passes 25 China-related bills—including proposals that will impact the US response to economic espionage.
🔎Economic Espionage Cases of the Week
Case #1: Spear phishing for aerospace secrets
What happened?
A federal court in the US has charged Chinese national Song Wu with wire fraud and aggravated identity theft for allegedly conducting a spear phishing* campaign to fraudulently obtain restricted software and source code from NASA, U.S. research universities, and private companies. Song, who remains at large, impersonated U.S.-based researchers and engineers to acquire aerospace engineering software with potential military applications. Employed by Aviation Industry Corporation of China, Song faces up to 20 years in prison per count of wire fraud, alongside additional penalties for identity theft.
Why does it matter?
This case exemplifies the ongoing concerns over Chinese state-sponsored cyber espionage targeting critical U.S. technologies with potential military applications. The theft of this software could give China an advantage in “the development of advanced tactical missiles and aerodynamic design and assessment of weapons.” It underscores the broader tensions between the U.S. and China, where intellectual property theft and cyber espionage play central roles in the competition for technological and military supremacy.
*Spear phishing refers to a targeted attack in which cybercriminals send deceptive emails to specific individuals or organizations, often impersonating a trusted source like a colleague, friend, or institution in order to gain access to sensitive information.
Case #2: Industrial espionage of cancer treatment secrets
What happened?
Pharmaceutical firm AbbVie has filed a lawsuit against China-based rival BeiGene in a Chicago federal court, accusing the company of stealing trade secrets to develop a competing cancer treatment. The dispute centers around the development of BTK degrader drugs, which target and destroy molecules involved in the growth of B cells, important in certain blood and bone marrow cancers. AbbVie claims that BeiGene recruited Huaqing Liu, a former senior AbbVie scientist, encouraging him to share proprietary information about AbbVie's BTK degrader research to accelerate BeiGene's development of a similar drug. BeiGene denies the allegations.
Why does it matter?
China's biotech market has evolved rapidly over the past decade, shifting from low-quality generics to a focus on innovation. Improving the biotech and pharma sectors is one of the key components of the "Made in China 2025" strategy, which aims to turn China into a leader in critical high tech industries. Companies like BeiGene are leading this transformation. BeiGene was founded by Wang Xiaodong and John V. Oyler in 2010 and quickly attracted China-born, U.S.-educated scientists with the goal to “launch a world-class biotech industry in Beijing focusing on cancer drugs.”
🌏Around the region
China
The U.S. House of Representatives passed 25 China-related bills, including legislation that revives the Justice Department’s “China Initiative”, increases scrutiny of Chinese property purchases, and strengthens economic espionage prevention strategies.
While many of the bills have bipartisan support, others, including the bill to revive the China Initiative, have faced criticism over potential racial profiling and harm to Asian-American communities.
📖Best reads of the week
Which countries have the critical minerals needed for the energy transition? - Our World in Data
The world’s energy system today is mainly powered by fossil fuels. The transition to a low-carbon one will shift its underpinnings away from coal, oil, and gas to the minerals needed for solar, wind, nuclear, batteries, and other technologies. The dynamics of the energy system will shift dramatically.
Who currently produces critical minerals such as cobalt, lithium, nickel, and copper? Which countries have reserves that can be mined in the future?
These questions are crucial to deploying low-carbon energy at speed and scale and managing geopolitical and energy security risks along the way.
📣Upcoming Events
17 September. Strategy, Security, and Diplomacy in the Indo-Pacific - Stimson Center. 9:00 AM ET [in person and online]
Explore power, engagement, and competition in the Indo-Pacific ahead of the U.S. elections. Join us on September 17 as experts assess the greatest opportunities and risks in the region.
18 September. Can China Innovate in Advanced Industries? - Information Technology & Innovation Foundation. 9:00 AM ET [online]
Join ITIF for an important briefing event to discuss the findings of a 20-month ITIF investigation into Chinese firms’ innovative performance in key advanced industries, including robotics, chemicals, nuclear power, electric vehicles and batteries, biotechnology, semiconductors, AI, quantum computing, and display technologies.
19 September. The Cyber Landscape in the Indo-Pacific - CNAS. 10:30AM ET [online]
CNAS will host a public panel discussion featuring Indo-Pacific cybersecurity experts, to explore how the cybersecurity industry, the U.S., and Indo-Pacific countries can collaboratively respond to emerging cyber threats.
🗣️Job Opportunities
Economist - Department of State (Washington DC, USA)
Senior Associate – South Asia - The Asia Group (New Delhi, India)
Analyst (Account Executive) - Edelman Global Advisory (London, UK)
📰In Other News
Economic Espionage
House Report Shows Chinese Cranes a Security Risk to US Ports - Security Week
What can businesses learn from the rise of cyber espionage? - Security Intelligence
Chinese Cargo Cranes at U.S. Ports Pose Espionage Risk, Probe Finds - The Wall Street Journal
Geopolitical risk
How Can Companies Manage Geopolitical Threats? - The Diplomat
Global Jump Scares Have Spooked Markets, But the Biggest Risks Are Harder to Spot - Barron’s
Economic Security
Korea, US discuss enhanced cooperation on economic security - Korea Times
Blocking the Nippon Steel Acquisition: Politics Versus Policy - Council on Foreign Relations
Technology
Washington must go to bat for American tech - The Hill
Are new US export controls rules on chips and other critical tech good enough? - Bulletin of Atomic Scientists
US-China relations
US-China rivalry in the Middle East and Pacific as 5G Competition Intensifies - Atlantic Council
The Chinese Chipmaker at the Heart of the U.S.-China Tech War - The New York Times
Pan-Asia news
Asia Has No Hegemon - Foreign Affairs
India seeks investments from South Korea & Japan for shipbuilding clusters - Business Standard
ASEAN’s economic diplomacy as the crucial lynchpin in East Asian security - East Asia Forum
🛜Around the Web
Thank you for reading!
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The Spy Hunter is the personal opinion of the author and is not legal advice. Any individual or organization mentioned is presumed innocent until proven guilty. Articles or other media featured on The Spy Hunter should not be taken as an endorsement by the author.
Cover image by DALL-E