WASHINGTON, Oct 3 (Reuters) - Chinese theft of valuable U.S.
trade secrets, often obtained by sophisticated cyber-attacks,
is becoming a more serious problem, U.S. industry officials said
on Wednesday.
"This matter requires more attention," Jeremie Waterman,
head of the U.S. Chamber of Commerce's China division, told a
U.S. government panel hosted by the U.S. Trade Representative's
office.
It "has risen substantially in importance over the last
year, year and a half," Waterman said at an annual hearing on
China's compliance with World Trade Organization rules.
In one recent case, two Chinese citizens in Kansas City,
Mi ssouri, w ere charged with a ttempting to pay $100,000 for
stolen trade secrets from Pittsburgh Corning Corp, an affiliate
of PPG Industries Inc
Sedalia, Mo. facility. The Justice Department said the pair were
trying to purchase the trade secrets so a rival plant could be
opened in China.
U.S. chemicals giant Dupont also is in the midst of a
legal battle over allegations that China-based Pangang Group
Steel Vanadium & Titanium Co Ltd c onspired to steal
its trade secrets.
Earlier this year, T he New York Times reported that an
Austrian-based employee of the Massachusetts wind-energy company
American Superconductor s t ole intellectual property
from the firm and sold it to Chinese wind turbine manufacturer
Sinovel for $1.5 million.
Peter Dent, a vice president at Electron Energy Corp, told
t he government panel t hat both large and small U.S. companies
face "persistent and increasingly complex cyber-attacks (from
China) in an effort to steal intellectual property from company
computer networks."
Defending trade secrets against the attacks was "very
difficult" and a costly drain on resources, he said.
Companies need the U.S. government to take action, which
could include suspending "trade benefits to countries sponsoring
these actions," Dent said.
The DuPont, Pittsburgh Corning and American Superconductor
c ases a re "just the tip of the iceberg," a U.S. industry
official said. U. S. companies are dealing with rampant
"state-supported theft of trade secrets," he said.
T he hearing on Wednesday was part of USTR's annual evaluation
of how well China is meeting the commitments it made to join the
World Trade Organization in 2001. A r eport is usually released
on Dec . 11, the anniversary of Beijing's accession to the WTO.
U.S. exports to China have soared since China joined the WTO
in 2001 and the country is now the third-largest foreign market
for U.S. goods. But business groups told the USTR-led panel
China maintains a extensive web of discriminatory policies that
prevent U.S. companies from making additional sales and
investments in the world's second-largest economy.
Both the U.S. Chamber of Commerce and the U.S.-China
Business Council called on Wednesday for a "bilateral investment
treaty" that would open up ar e as of the Chinese economy to
inv estments by U.S . com panies.
China maintains foreign ownership restrictions in nearly 100
business sectors, the business groups said.
Industry officials also complained about continuing Chinese
piracy and counterfeiting of U.S. goods, and urged the U.S.
government to aggressively challenge Chinese government
subsidies that undermine U.S. competitiveness.