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US accuses China of vast industrial spying




US accuses China of vast industrial spying
US accuses China of vast industrial spying



http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/11/16/wchina116.xml 

By Richard Spencer in Beijing
16/11/2007

China is running an "aggressive and large-scale industrial espionage 
campaign" against American technology, a US congressional commission 
says, in a report that will exacerbate growing tensions between the two 
countries.

The hard-hitting report, by the US-China Economic and Security Review 
Commission, accused China of backsliding over free trade reforms and of 
using spies to enable its companies to get hold of technology without 
having to pay for the research.

"Chinese espionage activities in the United States are so extensive that 
they comprise the single greatest risk to the security of American 
technologies," it said, adding that scientists and engineers were 
enlisted to get hold of secrets "by whatever means possible - including 
theft".

At a time when China's growing industrial strength and its effects on 
manufacturing in America are becoming a major election issue, the report 
will worsen fears that two of the world's biggest economies are heading 
for a trade war as well as gearing up for a new arms race.

The report also chimes with increasingly loud voices from Brussels 
accusing China of unfair trade practices.

"China's interest in moving toward a free market economy is not just 
stalling but is actually now reversing course," Carolyn Bartholomew, the 
commission's chairman said.

While Europe's concern over China mainly relates to trade restrictions, 
voices in both the Democrat and Republican parties in the United States 
draw attention to both the economic and military threats they say the 
Asian giant's rising power poses.

The bipartisan report said that there were national security 
implications to the transfer of technology to Chinese companies. 
"Sophisticated weapon platforms are coming off production lines at an 
impressive pace and with impressive quality," it said.

It also reiterated previous concerns about the alleged sale by Chinese 
companies of technology that could be used for weapons of mass 
destruction.

The report follows the test shooting down of a satellite by a Chinese 
long-range missile, revealed by the Pentagon in January, and this week's 
admission that America was itself developing a new generation of 
space-based weaponry.

The report also referred to other common complaints about China's rise, 
such as widespread piracy of products, the "devastating environmental 
effects" of its coal-based and poorly-regulated economy, and what it 
called the manipulation of its currency to make it unfairly competitive.

Many of America's biggest firms profit from Chinese trade practices, 
using the country as a manufacturing centre or a source of products. But 
the report said that small and medium-size American firms "face the full 
brunt of China's unfair trade practices, including currency manipulation 
and illegal subsidies for Chinese exports".

There was no immediate comment from China, but before the report was 
published it denied allegations of spying.


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