Attorney General Jeff Sessions speaks during a news conference to announce a criminal law enforcement action involving China, at the Department of Justice in Washington, Thursday, Nov. 1, 2018. Justice Department and FBI leaders announced criminal charges and an operation to thwart Chinese economic espionage. (AP Photo/Pablo Martinez Monsivais)
The United States has charged a government-controlled company in China with stealing trade secrets from an American semiconductor company, the Justice Department said Thursday as it outlined an initiative focused on what officials said was the growing threat of Chinese economic espionage.
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The prosecution comes amid heightened trade tensions between China and the U.S. and as the Trump administration raises alarms that Beijing remains intent on stealing technology and inventions to gain an economic upper hand. The two nations have each imposed billions of dollars in tariffs on each other in a reflection of a confrontation relationship with national security as well as economic ramifications.
The case involves trade secrets worth up to $8.75 billion and allegedly stolen from Idaho-based Micron Technology Inc., and is the latest in a series of prosecutions targeting Chinese corporate espionage. On Tuesday, prosecutors in California announced charges against Chinese intelligence officers for trying to steal information on commercial jet engines.
Other cases have involved stolen wind turbine technology and software source code.
“China — like any advanced nation — must decide whether it wants to be a trusted partner on the world stage, or whether it wants to be known around the world as a dishonest regime running a corrupt economy founded on fraud, theft and strong-arm tactics,” Attorney General Jeff Sessions said at a news conference.
The charges name two companies, one in China and one in Taiwan, and three Taiwanese defendants. A Justice Department spokesman said the defendants were served summonses in Taiwan and that none is in custody.
The Chinese Embassy did not immediately respond to a request seeking comment.
One of the charged individuals had been president of a company that Micron acquired in 2013 and then went to work for the Taiwan semiconductor company, United Microelectronics Corporation, where prosecutors say he orchestrated the theft.
That man, identified by prosecutors as Chen Zhengkun, recruited both of his co-defendants to join him at UMC. One, according to the Justice Department, downloaded more than 900 confidential and proprietary Micron files before he left and stored them in ways that he could access them at his new job.
That company partnered with a Chinese-controlled business, Fujian Jinhua Integrated Circuit Co., to mass-produce technology memory storage products used in computer electronics.
The technology at issue, known as dynamic random-access memory, is something that the Chinese government had identified as an important priority because its own companies could not develop such advanced capabilities and had to rely on companies outside of China.
The indictment was announced one day after the Trump administration imposed restricts on technology exports to the Chinese company that was charged, citing national security concerns. Beijing has spent heavily to build up Jinhua and other chipmakers as part of efforts to transform China into a global leader in robotics, artificial intelligence and other technology industries.
The United States also Thursday sued to block the transfer of trade secrets and to prevent the companies from exporting to the U.S. any products that they manufacturing by exploiting stolen information.
In addition, the Justice Department announced an initiative to target Chinese economic espionage by identifying priority cases and ensuring there are enough resources available.
The administration has characterized China, along with Russia, as a strategic competitor of the United States. The U.S. has taken an increasingly confrontational stance toward what it characterizes as China’s “predatory” economic policies. Secretary of State Mike Pompeo set the tone in a June speech where he accused China of an “unprecedented level of larceny” of intellectual property.
Tensions over trade in particular have exacerbated relations between the two world powers. President Donald Trump has imposed tariffs on $250 billion in Chinese products in an effort to narrow the U.S. trade deficit with China. China has retaliated with tariff increases on $110 billion of American products.
The tensions have extended into security issues. China has criticized U.S. arms sales to Taiwan, which Beijing considers a renegade province, and the U.S. has renewed its criticism of China’s island-building in the disputed South China Sea. In recent weeks, Trump has accused China of meddling in U.S. elections but hasn’t presented substantive evidence of such interference.
In a tweet Thursday, Trump said he had spoken with China President Xi Jinping and that they had talked about many topics, but mostly trade.
He said U.S.-China discussions on trade are “moving along nicely” with a meeting being scheduled at the G-20 summit in Argentina, which begins late this month.
Associated Press writers Matthew Pennington and Deb Riechmann contributed to this story.
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