This interview is an outgrowth from Secretary Work’s 2018 Center for a New American Security annual conference presentation detailing the five-step Chinese competitive strategy against the United States. China’s strategy is designed to overcome technological inferiority, move to technological parity, and achieve technological superiority.
SSQ: The first step you mention in China’s strategy is industrial and technical espionage (ITE). Did the United States miss or simply ignore this threat?
ROW: We have become increasingly aware of the nature of the threat, which is unlike any we have faced before. During the Cold War, espionage was more about turning agents and getting intelligence agents to turn over documents and reveal adversary agents. However, in the case of China, it is more a cyber-intellectual property threat—getting into systems and exfiltrating data. We were therefore unprepared for the Chinese approach—especially on the industrial wide-scale the Chinese use. Consequently, our response lagged. Lately, we have been successful in implementing different types of measures to counter their strategy, but the Chinese still pursue industrial espionage in a very big way. Let me give you an example of why this is important. Frank Kendall, the former Office of the Secretary of Defense acquisition executive, did a study and found that once the United States or the Chinese decides to build a new fighter, the time spent in development and production engineering was roughly equal. However, through intellectual property theft and data exfiltration, the Chinese are able to reduce significantly the time spent doing research and prototype engineering. This is why they have been able to field capabilities consistently quicker than we expected. From a historical perspective, the Chinese have been making a concerted effort to acquire US technological capabilities since the late 1990s. What they have been able to accomplish in the past 20 years is quite remarkable.
Read the full conversation in Strategic Studies Quarterly 13, no. 1.