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Following in the wake of a survey by the American Chamber of Commerce in China reporting at least twenty six percent of member companies having had proprietary data stolen from their China operations, two senior Democrats in the House want China declared as “Priority Nation.”
Representatives Sander Levin and Charles Rangel wrote to the United States Trade Representative’s office, “As evidence mounts that the Government of China actively engages in the cyber theft of the trade secrets of American businesses, we write to request that you consider designating China as a Priority Foreign Country under Section 182 of the Trade Act of 1974.”
What good that will do, of course nobody knows.
Even if USTR acts seriously on the complaint and initiates a “Special 301” investigation after designating China a priority foreign country, and finds allegations to be true. The maximum the government can do is imposing import duties on Chinese goods, thus hurting its own economic base.
Beyond that, of course, the government can file a case at the World Trade Organization, which again would be quite arduous, and concrete proof of the involvement of the Chinese government would be extremely difficult, if not impossible, to gather.
However, the frustration of the Congressmen showed up in the text of the letter: “It is difficult enough for out companies to compete with endless massive subsidies and other industrial policies of the Chinese government, but add trade secret theft into the mix and it is miraculous that our companies are able to compete at all.”
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In February, Mandiant, a U.S. security company had revealed that a secret Chinese military unit was the probable initiator behind a series of hacking attacks targeting the United States and that stole data from more than a hundred companies.
Last month, U.S. Representative Dutch Ruppersberger said that in 2012, U.S. companies lost more than $300 billion due to trade secret theft, a major part of which was a result of hacking from China.
In response, to Friday’s survey report, Chinese Foreign Ministry spokesman Hong Lei said, “We hope the relevant side doesn’t politicize financial and trade problems, does not exaggerate the so-called issue of online leaks and does more conducive things for China and the United States.”
