Chinese Whispers Fuel Espionage Fear

These firms, unlike Huawei, are nearly all state-owned, and presumably acting with the connivance of the Chinese government. 'Any company where China Inc could get its hands on things of value, I'm sure they will,' says one senior security consultant, based in Shanghai. 'I would assume it is going on in the UK too, even if it hasn't been detected or made public yet.' China insists such allegations are baseless, but in the US, Japan, France and eastern Europe companies have accused Chinese-born employees or students working on internships of stealing their research and development. 'This could be the next hot issue,' says Hitesh Patel, a forensic investigator at KPMG. Among recent cases is that of California-based 3DGeo, a seismic imaging software company, where a visiting employee from China was given a two-year jail sentence for downloading its proprietary source code. Separately, a Chinese-owned firm has pleaded guilty in New Jersey to stealing trade secrets from Lucent Technologies, the telecoms equipment maker. And in another unrelated case, two Chinese Americans are awaiting trial after being arrested allegedly trying to fly out of the US with technology stolen from leading firms. They are expected to deny wrongdoing. It is thought there may be defrauded companies who have not gone public for fear of revealing their security weaknesses or hurting their share price. The FBI warned recently that US companies, particularly hi-tech firms in Silicon Valley, were being targeted by (unspecified) foreigners bent on industrial espionage. And earlier this year two former Chinese officials who defected claimed their country had 1,000 spies in Canada alone, some with commercial targets. http://observer.guardian.co.uk/business/story/0,6903,1548594,00.html

Note: http://observer.guardia...