China, cyber-security, Defense Department, Following Up, forced technology transfer, hacking, IBM, Obama, technology, The New York Times
It’s great to report that at least some of the Mainstream Media’s biggest guns are finally waking up to the dangers posed to U.S. national security by decades of the nation’s most advanced and militarily-relevant know-how being transferred to China by many of America’s leading technology companies. (The main examples can be seen here, here, and here.) Less great is having to report that the Obama administration still too often seems asleep at the switch.
Let me start with a little personal story. Thirteen years ago, while visiting IBM’s software-research lab in Beijing, I observed dozens of Chinese employees moving about seemingly free of any security-related limitations. I asked the lab’s manager two questions – and told him his answers would be on the record, for attribution for an article I was thinking of writing. He confidently assured me that would be OK.
The questions were: “Do you have any way of knowing whether any of your Chinese staff is also working for the Chinese government?” and “Do you have any way of knowing whether any of your Chinese staff is a spy?” The manager unhesitatingly answered “No” to both. He hastily added, “But you can be sure that we at IBM work very hard to protect our core intellectual property.” I responded, “I think you at IBM would turn cartwheels trying to make the Chinese government happy and keep it as a customer,” and he declined to comment.
But the story didn’t quite end there. The next day, the lab manager called me and let me know that he had changed his mind about his answers being on the record. I told him that’s not the way it works in journalism when the ground rules have been set in advance, but offered to negotiate with him in exchange for further info from him. When he waxed indignant about ungentlemanly behavior, I wished him a good day – but never felt compelled to use his name, and possibly ruin his career.
And a few weeks later, when I mentioned this incident to U.S. officials in China, they noted that the resources at their disposal for monitoring the tech transfer situation in the People’s Republic were hopelessly inadequate.
Thirteen years later, the situation looks far worse. As I detailed in a 2013 Bloomberg article, U.S. tech companies spent much of the decade showering Chinese entities – all of whom have relations of some kind or another with the Chinese government – with all the knowledge they would need to set up world-class cyber-hacking operations. And more generally, China’s overall high tech prowess has burgeoned as Beijing repeatedly has extorted advanced knowhow, along with capital, from American-owned and other firms all too eager to serve their crown jewels in exchange for market access. I can’t think of any remotely comparable historical precedent for one great power so energetically strengthening the defense-related capabilities of a likely rival.
And if you think about it, U.S. tech transfer policy these days has become worse still. For during most of the time since I was in China, China was acting only like a “likely rival.” Between its recent hacking offensive and expansionism in the South China Sea, it’s now acting like an unmistakable rival.
But according to the two recent New York Times reports cited above, the Defense Department is staying mum on a new report – from a firm that government agencies rely on for “classified military analysis and intelligence” – charging that IBM’s tech partnerships with China are “endangering the national and economic security of the United States, risking the cyber-security of their customers globally, and undermining decades of U.S. nonproliferation policies regarding high-performance computing.”
Just as disturbing: The Times is no doubt right in observing that “There is nothing to suggest that the partnerships have broken American laws,” and that many aspects of IBM’s operations in China “have been vetted and approved by the United States government, which is empowered through a review process to decide whether American tech companies are giving away too much advantage to military rivals.” As one wag once cracked, what doesn’t violate the law in Washington is often more disturbing than what does.
Meanwhile, back on the hacking front specifically, the Obama administration has both been deferring to the export-happy tech industry in developing new rules for controlling the sale overseas of hardware and software for on-line surveillance, and apparently doesn’t realize that these eavesdropping-focused products are indistinguishable from those that can penetrate a wide range of critical computer and internet systems. Moreover, the focus of the administration’s new efforts seems to be out-and-out rogue states like Iran, North Korea, and Syria. Super-hacker China apparently isn’t even on the screen. (That particular Times piece didn’t give it much attention, either).
Because the Mainstream Media plays such a big role in setting official Washington’s agenda, its improved coverage of China and other tech transfer-related security issues is genuinely good news. But it’s no substitute for a government that’s genuinely, or even minimally, vigilant.
Federal authority over trade and tech transfer policies have become moribund, thereby hindering effective action on these two fronts.
Alan Tonelson said:
Thanks as always for the comment, which sums up this disgraceful situation quite nicely!