Sec. 501. Findings
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Congress find the following: The People’s Republic of China (referred to in this subsection as the PRC or China ) poses an existential threat to the economic interests and national security of the United States, in part due to the continued efforts of the PRC to steal sensitive technology and proprietary information from companies, academic institutions, and other organizations of the United States through economic espionage and other forms of nontraditional espionage. The PRC, through the Chinese Communist Party (referred to in this subsection as the CCP ), has long had an interest in replacing the United States as the world’s foremost superpower.
China takes a holistic approach towards achieving its long-term goals, which are rooted in the concept of a comprehensive national power, including achieving dominance in economics, military affairs, science and technology, education, and global influence. Nontraditional forms of espionage serve as primary tools to further the goals of the CCP. Those tools include talent recruitment programs designed to recruit Chinese nationals to acquire knowledge about—and, often, steal—valuable and sensitive research at universities and research institutions abroad, and to lure foreign experts to China to work on key strategic programs.
More broadly, the PRC uses mergers and acquisitions or joint ventures as a means to gain access to high-level technology, uses cyber intrusions to steal information, and uses front companies for PRC-related entities to acquire export-controlled technology. In 2015, President Xi Jinping of the PRC released the Made in China 2025 initiative, a 10-year plan to update the manufacturing base of China by developing the following 10 high-tech industries: Electric cars and other new energy vehicles.
Next-generation information technology and telecommunications. Advanced robotics and artificial intelligence. Aerospace equipment. Bio-medicine and high-end medical equipment. Ocean engineering equipment and high-end vessels. High-end rail transportation equipment. Electrical equipment. Farming machines. New materials, such as polymers. In attempting to overtake the United States and achieve its Made in China 2025 goals, China has systematically sought to identify areas of American innovation, education, and technology that could be replicated, stolen, or appropriated.
The very nature of the open society of the United States—a free market economy that incentivizes creativity and ingenuity and promotes the free flow of capital and ideas, a higher education system and scientific research community that encourages collaboration domestically and internationally, and a liberal democratic government that lacks a top-down, authoritarian structure—creates opportunities for the PRC to target the United States in ways that are either not adequately protected or not even anticipated as possible threats.
The Director of the Federal Bureau of Investigation has assessed that there’s no country that’s even close to the PRC when it comes to foreign espionage, in traditional or nontraditional forms. As the 2018 Foreign Economic Espionage in Cyberspace report of the National Counterintelligence and Security Center (commonly known as the NCSC ) stated, China has expansive efforts in place to acquire United States technology, including sensitive trade secrets and proprietary information.
China continues to use cyber espionage to support its strategic development goals—science and technology advancement, military modernization, and economic policy objectives. Chinese companies and individuals often acquire United States technology for commercial and scientific purposes. In April 2020, the Office of the United States Trade Representative (referred to in this subsection as the USTR ) issued its annual Special 301 Report, in which the USTR reviews the state of intellectual property protection and enforcement in trading partners of the United States around the world.
The USTR continues to place China on the Priority Watch List, which reflects United States concerns with China’s system of pressuring and coercing technology transfer, and the continued need for fundamental structural changes to strengthen IP protection and enforcement, including as to trade secret theft, obstacles to protecting trademarks, online piracy and counterfeiting, the high-volume manufacturing and export of counterfeit goods, and impediments to pharmaceutical innovation. .
The theft of intellectual property, trade secrets, sensitive technology, and scientific and other academic research all contribute to China’s goal of achieving preeminent superpower status. China’s failure to respect intellectual property rights, failure to adhere to the rule of law, and efforts to obtain intellectual property, trade secrets, technology, and research through improper or illicit means all pose a significant economic and national security threat to the United States.
In recent years, China has increased its use of nontraditional espionage to target colleges and universities in the United States, particularly with respect to cutting edge research and technologies being developed by such universities, including technology that has military applications. The universities of the United States provide fertile ground for nontraditional espionage given the open, international, and collaborative nature of most university research and the legitimate interest of universities in encouraging international collaboration.
While the United States benefits from attracting the top research talent from around the world, universities nevertheless must take appropriate measures to ensure that China is not able to use academic collaboration to steal United States intellectual property or engage in other activities that might harm the national security of the United States. In response to the increased wave of nontraditional espionage over recent years, the Department of Justice launched a China Initiative in 2018.
The goal of the China Initiative is to identify and prosecute individuals and entities engaged in economic and other nontraditional espionage, trade secret theft, hacking, and other crimes, while protecting critical infrastructure against external threats and combating covert efforts to influence the American public. Several recent criminal and civil enforcement actions taken by the Department of Justice highlight China’s pervasive and illegal targeting of intellectual property and valuable research from United States universities, including the following:
Dr. Qing Wang was a former employee of the Cleveland Clinic Foundation. He had received more than $3,000,000 in grant funding from the National Institutes of Health (commonly known as NIH ). Dr. Wang was charged in a criminal complaint with knowingly failing to disclose to NIH that he was Dean of the College of Life Sciences and Technology at the Huazhong University of Science and Technology (referred to in this subparagraph as HUST ) and received grant funds from the National Natural Science Foundation of China for some of the same scientific research funded by NIH.
Dr. Wang also allegedly participated in the Thousand Talents Program, for which China provided $3,000,000 in research support to enhance the facilities and operations at HUST. Federal law enforcement agencies arrested Dr. Wang in May 2020. Dr. James Patrick Lewis was a tenured professor at West Virginia University in the physics department from 2006 to 2019. In July 2017, Dr. Lewis entered into a contract of employment with the PRC through its Global Experts Thousand Talents Plan.
In March 2020, Dr. Lewis pled guilty to 1 count of Federal program fraud. Anming Hu, an Associate Professor in the Department of Mechanical, Aerospace, and Biomedical Engineering at the University of Tennessee, Knoxville (commonly known as UT ), allegedly engaged in a scheme to defraud the National Aeronautics and Space Administration (commonly known as NASA ) by concealing his affiliation with Beijing University of Technology (referred to in this subparagraph as BJUT ). Hu’s false representations to UT about his affiliation with BJUT caused UT to falsely certify to NASA that UT was in compliance with Federal law.
In February 2020, Mr. Hu was indicted on Federal charges of wire fraud and false statements. Dr. Charles Lieber served as the Principal Investigator of the Lieber Research Group at Harvard University, which specialized in the area of nanoscience. Dr. Lieber had received more than $15,000,000 in grant funding from NIH and the Department of Defense since 2008. Unbeknownst to Harvard University, beginning in 2011, Lieber allegedly became a Strategic Scientist at Wuhan University of Technology in China (referred to in this subparagraph as WUT ) and was a contractual participant in the Thousand Talents Plan from 2012 to 2017.
Under the terms of the Thousand Talents contract, WUT paid Lieber $50,000 per month, paid him living expenses of up to approximately $158,000, and awarded him more than $1,500,000 to establish a research lab at WUT. In return, Lieber was obligated to work for WUT for 9 months per year. Lieber lied about his involvement with WUT to both Harvard University and Federal investigators. In January 2020, Lieber was arrested and charged with making a materially false, fictitious and fraudulent statement.
In January 2020, Yanqing Ye, a Chinese national, Lieutenant of the People’s Liberation Army (referred to in this subparagraph as the PLA ), and member of the CCP, was indicted on visa fraud, false statements, and acting as an agent of a foreign power without prior notification. Ye allegedly falsely identified as a student and lied about her ongoing military service at the National University of Defense Technology. While studying at Boston University’s Department of Physics, Chemistry, and Biomedical Engineering, Ye continued to work as a PLA Lieutenant and completed assignments from PLA officers, including conducting research, assessing United States military websites, and sending United States documents and information to China.
In January 2020, Zaoson Zheng, a Chinese national, was arrested at Logan Airport in Boston and charged with attempting to smuggle 21 vials of biological research to China. Zheng had allegedly entered the United States in 2018 on a J–1 visa and conducted cancer cell research at Beth Israel Deaconess Medical Center in Boston. Zheng admitted he stole the vials from a lab at Beth Israel, and that he intended to bring the vials to China, use them to conduct research in his own laboratory, and publish the results under his own name.
In December 2019, the Van Andel Research Institute (referred to in this subparagraph as VARI ) reached a settlement with the Department of Justice to pay $5,500,000 to resolve allegations that it violated the law commonly known as the False Claims Act (section 3729 through 3733 of title 31, United States Code) by failing to disclose, in Federal grant applications and progress reports submitted to NIH, that the Chinese government funded 2 VARI researchers through grants. The VARI researchers were receiving research funding from Chinese sources while VARI was applying for and receiving NIH funding on their behalf.
In September 2019, Yu Zhou and Li Chen were charged with crimes related to stealing exosome-related trade secrets. Zhou and Chen, spouses who worked in separate medical research labs at the Nationwide Children’s Hospital Research Institute, conspired to steal scientific trade secrets related to exosomes and exosome isolation from the Research Institute. The couple allegedly founded a company in China without the hospital’s knowledge. While employed at the Research Institute, they marketed products and services related to exosome isolation through their Chinese company.
They also founded an American biotechnology company advertising products and services related to exosomes isolation, including a kit developed from a trade secret created at a Nationwide Children’s research lab. They eventually received more than $876,000 and stock related to an asset purchase agreement involving the American company. In August 2019, Feng Tao, an associate professor at Kansas University, was indicted on Federal charges for concealing the fact that he was a full-time employee for Fuzhou University in China while doing research at Kansas University funded by the United States Government.
Tao allegedly defrauded the United States Government by unlawfully receiving Federal grant money at the same time that he was employed and paid by a Chinese research university. Weiqiang Zhang, a Chinese national and United States legal permanent resident, acquired, without authorization, hundreds of rice seeds produced by his employer, Ventria Bioscience. Ventria is a Kansas biopharmaceutical research facility that develops genetically programmed rice to express recombinant human proteins, which are then extracted for use in the therapeutic and medical fields.
Ventria spent millions of dollars and years of research developing its seeds and cost-effective methods to extract the proteins. Ventria used locked doors with magnetic card readers to restrict access to the temperature-controlled environment where the seeds were stored and processed. Zhang worked as a rice breeder for Ventria. In 2013, personnel from a crop research institute in China visited Zhang at his home in Kansas. Zhang drove the visitors to tour facilities in several States.
United States Customs and Border Protection officers found seeds belonging to Ventria in the luggage of Zhang’s visitors as they prepared to leave the United States for China. In April 2018, Zhang was sentenced to 121 months in a Federal prison after having been convicted in February 2017 of 1 count of conspiracy to steal trade secrets, 1 count of conspiracy to commit interstate transportation of stolen property, and 1 count of interstate transportation of stolen property. It remains a national security priority for the United States to protect the research and innovation developed in United States colleges and universities from misappropriation by any country, including the PRC.