China Is Stealing Our Tech. And It's Partly Our Fault.

In recent years, there has been growing concern that the United States and China might find themselves in a war over Taiwan. Such worries overlook an important fact: Washington and Beijing are already at war. But as David Shedd and Andrew Badger document in their new book, The Great Heist: China's Epic Campaign to Steal America's Secrets, only one side has been acting like it.

For decades, the Chinese Communist Party has been robbing the United States blind, stealing valuable intellectual property. Indeed, the so-called China miracle, in which the Middle Kingdom quickly went from impoverished to one of two superpowers, was made possible by thievery whose scope and scale are nothing short of breathtaking.

Shedd, a former acting director for the Defense Intelligence Agency, and Badger, a former DIA case officer, are well positioned to tell the whole sordid story. Both men spent years fighting Chinese industrial espionage. What emerges is both a cautionary tale and a stark warning to policymakers and business leaders alike: The cost of doing business with China is high. Indeed, we probably haven't even begun to feel the true consequences.

China seeks to supplant the United States and become the world's sole superpower. The largest police state known to man is actively shaping both the present and the future. And its ascent to global dominance is paved by the American technology it wantonly steals. Worse still, a naïve and complacent West has made it tragically easy for them.

In 1986, the Chinese Communist Party created the national High-Tech R&D Program, also known as the 863 Program. This marked China's first formalized, state-sponsored initiative to compete with the West in emerging technologies. The Chinese government identified several targeted areas: space, biotech, lasers, automation, energy, information technology, and advanced materials. This wasn't just bureaucratic jargon or far-fetched dreaming. Rather, as Shedd and Badger note, "it was the foundation of an industrial policy with global ambition."

Nor did China attempt to mask its objectives. The program's goal was explicitly stated: to "enable China to approach or catch up with international pioneers by the year 2005." By all accounts, the Chinese Communist Party has succeeded beyond its wildest dreams.

China's economic "miracle," Shedd and Badger point out, "is nothing less than a mirage—one that has been built not on ingenuity but rather grand larceny." China's spies played a starring role.

For years, China's Ministry of State Security (MSS), the CCP's lead spy agency, was regarded as third-rate. Western intelligence experts dismissed the MSS and its methods as sloppy and subpar. But just like the party it serves, the power and capabilities of the MSS have grown exponentially. The ministry has become a force unto its own, aided in no small measure by the current generation of China's rulers. From 2013 to 2015, Chinese leader Xi Jinping and his allies more than doubled the size of the MSS, viewing it as the chief means of securing China's rise. But its manpower extends beyond the conventional.

In Communist China, there is no separation between civilians and the military. The regime employs a "whole of society" approach to its foreign policy objectives. In 2017, China enacted a National Intelligence Law that requires citizens to aid the MSS when asked to do so. This turns every citizen, irrespective of where he or she resides, into a potential spy. Those who do so can look forward to rewards, monetary and otherwise. Those who decline face the specter of the gulag—or worse—for themselves or their loved ones. What the MSS wants, it gets.

For Chinese spies, "there were no rules—just results," Shedd and Badger note. Unrestrained by laws or regulations, the MSS has reach that its opponents can never achieve. "No other spy agency in history has such a mandate and the resources at its disposal," the authors grimly observe.

But this doesn't fully explain the success of the CCP and its spies. There's another essential ingredient: hope. Too often, China's spies have been pushing on an open door.

To a certain extent, Sino-American relations have always been colored by a Western desire to proselytize and convert. Initially, the United States wanted to spread Christianity and gain access to a wide, and largely uncaptured, market. After the fall of the Soviet Union, the United States believed that history had ended and Western capitalism was triumphant. It was thought that it was only a matter of time before the Chinese discarded communism. Economic liberalization would lead to political liberalization and the potential problem of a powerful and threatening adversary would solve itself.

This dogma was widely shared, from Washington to Wall Street and beyond. It didn't hurt that many Western business leaders stood to get rich in the process. For many, it seemed to be a "win-win"—corporations could expect higher quarterly earnings while winning the Chinese over to our way of life. Chinese communist rulers milked these ambitions to their advantage, using the hope of untold profits to lure investors and businesses to their shores, only to pirate their designs wholesale, often destroying these very same companies. As The Great Heist makes clear: Cutting deals with China is akin to doing business with the devil.

The destruction is incalculable. As Shedd and Badger note, it isn't uncommon for many companies to try to keep their losses quiet; sharing that precious R&D has been stolen could only lead to greater losses and panic. It is also hard to calculate the losses from projects killed in their infancy or before they even get off the ground. The damage to the United States has been both severe and widespread, eroding American competitiveness and destroying thousands of jobs. From lasers and automated vehicles in Silicon Valley to billions of dollars in groundbreaking agricultural innovations in the heartland, the CCP means to steal what it can't create—and then wield its newfound powers against America itself.

The Great Heist is a well-written story of the largest theft in history, one that, spies and subterfuge aside, has largely been happening before our very eyes. Despite billions of losses and thousands of lives ruined, Americans have yet to reckon with the final costs. We have armed and equipped the worst adversary that we have faced in our history. At present, the balance sheet isn't in our favor.

The Great Heist: China's Epic Campaign to Steal America's Secrets
by David R. Shedd and Andrew Badger
Harper, 368 pp., $32.50

Sean Durns is a Washington, D.C.-based foreign affairs analyst. His views are his own.

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