8 July 2022

The Threat from China

IOM3 CEO Dr Colin Church FIMMM CEnv attends speeches from MI5 and the FBI.

 

On Wednesday 6 July, along with a number of other senior representatives from business and academia, I attended the unprecedented dual speeches from Ken McCallum (the DG of MI5, the UK Security Service)  and Chris Wray (the Director of the FBI, the US equivalent).

Whilst acknowledging the threats posed by other state and non-state actors, the main thrust of both was to highlight their assessment of the significant threat posed to UK, US and other western countries by the Chinese authorities. Both strongly also emphasised that this was not an attack on the Chinese people, whether in China or here, and should not be seen as a reason to discriminate against them individually or collectively.

“President Xi said that in areas of core technology where it would otherwise be impossible for China to catch up with the West by 2050, they “must research asymmetrical steps to catch up and overtake”. The scale of ambition is huge. And it’s not really a secret.  Any number of public strategic plans, such as Made in China 2025, show the intent plainly.” - Ken McCallum, 6 July 2022.

The starting point of their speeches was that the Chinese authorities have a clear objective to catch up with and then overtake the west technologically by whatever means possible, and to influence western thought to make that more feasible. McCallum described this as ‘acquiring advantage’ and ‘influence’ and gave six areas of activity for the former, each with concrete examples:

  • Covert theft of intellectual property from companies.
  • Technology transfer deals, where a Chinese partner (which can often be linked to the Chinese authorities openly or indirectly) buys access to a technology and then uses that to undercut its western partner, often walking away from contracts.
  • Exploiting research by involvement in sensitive research at key western universities.
  • Information advantage by collecting multiple bits of information and combining them to get a clearer picture (the so-called “thousand grains of sand” approach).
  • Cultivating contacts – enmeshing individuals in a network of favours and obligations that is then used to pressure them into sharing information or access with their Chinese handlers (knowingly or not).
  • Cyber and computer attacks in all guises.

Wray gave more details of the kinds of cyber activities the FBI attributes to the Chinese Government, such as mandating state tax software for companies operating in China that has inbuilt malware to compromise the host computer networks, or using a previously unidentified vulnerability in Microsoft Exchange Server to place thousands of ‘backdoors’ into US computer networks.

He also described some of the tactics used to gain intellectual property from western companies operating in China, such as forcing them to store their data in China and compelling them to report computer vulnerabilities to the Chinese authorities before they become publicly known. However, they both also stressed this was not a call to disengage from China entirely, which clearly had a substantial and growing role in the global economy. Rather, it was a call for those considering active engagement in China to take a clear-eyed view of the risks alongside expected benefits.

“…this spring, the Chinese government went so far as directly interfering in a Congressional election in New York, because they did not want the candidate—a Tiananmen Square protester and critic of the Chinese government—to be elected.”

“The Chinese government’s crackdown on dissidents crosses borders all over the world, including here in the U.K. In the U.S., they’ve gone after Chinese-national college students for participating in pro-democracy rallies at U.S. universities or even just for expressing themselves in class.” – Chris Wray, 6 July 2022.

Both emphasised that the scale and breadth of the challenge from the Chinese authorities is unprecedented. In particular, they warned businesses that spotting one attempt to compromise them should not blind them to the likelihood of other avenues being tried at the same time.

Both also described some of the activities undertaken by Chinese authorities to repress dissent and influence western thought to be more sympathetic to China. These included interference in democratic elections, attempts to influence parliaments and commercial organisations and to suppress dissent globally.

The main call to action from the speeches was therefore for academics and businesses to think hard and strategically about these threats and how to face them. But for all involved in generating innovation and safeguarding intellectual property, in the words of McCallum:

“…if you are involved in cutting-edge tech, AI, advanced research or product development, the chances are your know-how is of material interest to the CCP. And if you have, or are trying for, a presence in the Chinese market, you’ll be subject to more attention than you might think. It’s been described as “the biggest wealth transfer in human history”.”

To which IOM3 would add that materials science and engineering and the extraction and supply of critical materials feature very highly on the priority list for research and development in China, so these warnings must be taken very, very seriously by our members, wherever they work.

Dr Colin Church FIMMM CEnv