Price of corporate espionage: Chinese intel officer sentenced to 20 years in Ohio

A Chinese government intelligence officer, the first to be extradited to the United States for trial, was sentenced to 20 years in prison Wednesday in a case that demonstrated Beijing’s wide-reaching efforts to target American companies.

Yanjun Xu, sentenced in federal court in Cincinnati, was convicted last year of multiple charges, including conspiracy to commit corporate espionage and attempted theft of trade secrets.

According to court documents, Xu, 42, targeted American aviation companies, recruited employees to travel to China, and attempted to steal sensitive US military information and aviation trade secrets – all on behalf of the Chinese government.

Coordination with Chinese intelligence

“This case is just the latest example of the Chinese government’s continued attacks on American economic security – and, by extension, our national security,” Christopher Wray, the Director of the Federal Bureau of Investigation, said.

“The Chinese government tasked an officer of its spy service to steal U.S. trade secrets so it could advance its own commercial and military aviation efforts, at the expense of an American company.”

GE Aviation, a company in Ohio, was specifically targeted by Xu. He would provide employees of the firm – who worked with the FBI in its case – with trips to China to give presentations to a university and then ask them for detailed information on designs and “systems specifications,” according to the Justice Department.

Xu, who worked as the Deputy Division Director at the Chinese Ministry of State Security (MSS), the intelligence and security agency, and other agents even paid the individuals stipends on top of covering travel costs.

Moreover, the scheme was executed with full coordination between the MSS and China’s aviation entities. Xu worked with others in the MSS to hack or copy computers in hotel rooms while the aviation employees – his “guests” – were taken to dinner by the MSS.

In 2018, Xu was arrested in Belgium, where he had arranged a meeting with an employee of GE Aviation. The Justice Department, which actually lured Xu out to Belgium, eventually secured the Chinese official’s extradition to the US.

Another Chinese spy was convicted in September of working with Xu and the Chinese Ministry of State Security while attending school in Chicago. Xu had directed that spy, Ji Chaoqun, “to collect biographical information on people to potentially recruit to work with them,” prosecutors said.

Hundreds of people charged

The issue of Chinese industrial espionage is a long-running topic in Washington. Back in 2018, Jeff Sessions, then the President Donald Trump administration’s Attorney General, announced a program called The China Initiative.

The program was intended to combat “the deliberate, systematic, and calculated threats” from Chinese-government-directed intellectual property theft. However, it ended up targeting largely academics – and not even for stealing secrets, but for failing to report affiliations with Chinese research institutions.

In February, amid concerns over ethnic profiling and the criminalization of scientific collaboration, the Biden administration shut the China Initiative down – even though experts have no doubt that the remit of Chinese intelligence services does cover industrial secrets.

“We consistently see that it’s the Chinese government that poses the biggest long-term threat to our economic and national security,” FBI Director Wray said in a speech in July.

Just this week, at the annual hearing on worldwide threats in the House Homeland Security Committee, Wray reiterated that China has stolen more American data “than every other nation combined” and that its “vast hacking program is the world’s largest.”

Since the 1990s, US prosecutors have charged almost 700 people with espionage, IP theft, illegally exporting military technology, and other crimes linked to China. Two-thirds of the cases have led to convictions.

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