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US charges alleged Chinese government spy with stealing aviation secrets

GE Aviation exhibited equipment at the Zhuhai Airshow in 2010. Photo: AP

The US Justice Department said on Wednesday that it had arrested and indicted a spy for China's Ministry of State Security on charges of economic espionage and attempting to steal trade secrets from several US aviation and aerospace companies.

Chinese operative Yanjun Xu was detained in Belgium in April after a Federal Bureau of Investigation probe and extradited to the United States on Tuesday. The Washington Post reported that he was lured to Belgium by US agents.

His extradition marks what appears to be the first time that a Chinese spy has been brought to the United States to face prosecution, according to US officials.

The FBI called it an unprecedented extradition and said that the indictment showed the direct oversight of China's government in economic espionage against the United States.

"This unprecedented extradition of a Chinese intelligence officer exposes the Chinese government's direct oversight of economic espionage against the United States," the statement quoted Bill Priestap, the FBI's assistant director for counterintelligence, as saying.

John Demers, the assistant US attorney general for national security, said that the case was not an isolated incident.

"It is part of an overall economic policy of developing China at American expense," he said. 'We cannot tolerate a nation stealing our firepower and the fruits of our brainpower."

The United States is trying combat what American officials describe as a relentless effort by the Chinese government to plunder American industry of its innovative ideas and technologies.

Senior US national security officials, including Director of National Intelligence Dan Coats, have repeatedly warned that China is aggressively trying to acquire new and emerging technologies in everything from agriculture to artificial intelligence to try to surpass the United States as the world's preeminent power.

Last week, US Vice President Pence accused the Chinese of trying to orchestrate "the wholesale theft of American technology".

The charges come as Washington increases pressure on Beijing over its trade policies and alleged theft of US intellectual property.

A US Department of Justice statement said that Xu, a deputy division director for the State Security Department of China's Jiangsu province, targeted several US aerospace companies, including GE Aviation, a subsidiary of General Electric Co.

GE Aviation has supplied engines for large Boeing Co and Airbus SE aircraft, and is working on a new generation of engines for commercial planes and heavy-lift military helicopters.

Posing as a technology association official, Xu invited a GE Aviation employee to travel to China to give a presentation — a trip paid for by Xu.

Xu remained in contact with the employee, and in February requested that the employee send specific proprietary information as well as a list of technical topics regarding composite materials in engine fan blades developed by GE Aviation, according to the statement.

Xu proposed meeting the employee during a trip to Europe. He was then arrested by Belgian authorities, acting at the behest of the United States, in April.

This is the latest in a long line of Department of Justice prosecutions against individuals allegedly working on behalf of the Chinese government. Some of those defendants were charged with trying to steal everything from wind turbine technology to engineered rice and corn, which provides a sense of the breadth of what US officials say Beijing is looking to acquire.

The maximum penalty for conspiracy and attempt to commit economic espionage is 15 years, while that for conspiracy and attempt to steal trade secrets is 10 years.

The Ministry of State Security is China's intelligence and security agency and is responsible for counterintelligence, foreign intelligence and political security.

Cybersecurity experts said former US President Barack Obama and Chinese President Xi Jinping had reached an understanding in 2015 on cyber espionage, but the agreement appeared be withering away.

Chris Painter, the former US State Department official who negotiated the agreement, said in a Twitter post that it was "not surprising that now the relationship has deteriorated, so has the agreement."

Concerns about Chinese espionage were echoed in the US Treasury Department's announcement on Wednesday that the federal government will tighten rules on foreign investment in high tech industries including aviation next month.

The move is in line with a new law passed in August – the Foreign Investment Risk Review Modernization Act of 2018 (or FIRRMA) – in response to warnings from intelligence officials that advanced US technology transferred to Chinese companies through acquisitions and other means may have undercut the American military's advantages over China.

Xu's case is linked to the arrest last month of Ji Chaoqun, 27, a Chinese citizen living in Chicago, according to individuals familiar with the matter. Ji was accused of passing information on eight Americans to Chinese intelligence officers for possible recruitment.

Ji targeted individuals in science and tech industries, seven of whom worked for or recently retired from US defense contractors. All were naturalized US citizens born either in the Chinese mainland or the self-governed island of Taiwan.

According to a criminal complaint, Ji began communicating with Chinese intelligence officers in late 2013. He travelled to and from China three times between 2013 and 2015.

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