Two House Democrats press for action on China’s alleged cybertheft

The lawmakers argue that China’s government has not only failed to stop private firms from stealing U.S. trade secrets but, citing recent reports, the “government itself appears to be actively stealing the intellectual property of American businesses,” which they say is a violation of WTO rules.

“While the theft of trade secrets is not new, cyber theft is on the rise, and it allows trade secrets to be stolen on an unprecedented scale,” they wrote.

In February, Mandiant, an information security firm, published a report that linked cybertheft of trade secrets to China. The report found that it is quite possible that the Chinese government is stealing U.S. information and passing them along to their state-owned enterprises, such as China Telecom, and possibly other Chinese companies.

The report states that Mandiant’s “research and observations indicate that the Communist Party of China is tasking the Chinese People’s Liberation Army to commit systematic cyberespionage and data-theft against organizations around the world,” they wrote. 

“It is difficult enough for our companies to compete with the endless massive subsidies and other industrial policies of the Chinese government, but add trade secret theft into the mix, and it is miraculous that our companies are able to compete at all.” 

Within 30 days after a “priority foreign country” is designated, USTR generally must initiate an investigation. That can lead to the president taking action, including imposing additional duties on imports.

If USTR determines that the policy burdens or restricts U.S. commerce, or violates a U.S. trade agreement, the trade agency is required to take action, which may involve bringing a WTO case.

USTR is expected to produce an assessment on April 30 that examines global intellectual property practices.