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China’s Vast Amateur Spy Network: Kiss Patents Goodbye

Written by Gary North on September 23, 2014

The patent system is hopeless. China can violate it daily, and does. China can violate it systematically, and does.

The FBI cannot stop this. Nothing can stop this.

But if the Chinese can get away with this, it means that NSA and the entire domestic spying network is hopeless, too.

The American public is oblivious to the following. The U.S. government covers it up, because it points to the overwhelming incompetence and vulnerability of the U.S. government’s own spy network, used mainly to spy on Americans.

Intelligence agencies around the world typically regard China’s approach to spying as sloppy and unprofessional. While many other countries focus on stealth and finesse for espionage, China’s focus is on mass numbers.

“Our nation is overwhelmed. The problem is too big,” said Paul Williams in a phone interview. Williams is chief information officer at BlackOps Partners Corporation, which does counterintelligence and protection of trade secrets and competitive advantage for Fortune 500 companies.

Student spies–often college kids–play a fundamental role in this system. They help bolster a system of espionage where each person does a small share of the work. It’s based on the idea that you could have one spy steal 10,000 documents, or you could have 10,000 spies each steal one document.

By taking the approach of mass numbers for espionage, the Chinese regime has U.S. intelligence agencies outnumbered. In terms of both keeping tabs on their activities, and prosecuting Chinese spies, the United States can’t keep up.

The idea behind recruiting students as spies, according to Williams, is “if you can groom them in college” then they can be used to gain access to research at universities. After college, he added, “You can pick those students then follow their careers into corporate America.”

Corporate secrets? Yes. Corporations can keep secrets from each other, but not from the Chinese.

Patent protection? Sure, you’re joking.

But China is in the World Trade Organization. So what? It is a paper tiger — bureaucrats with high salaries in Europe. It is glacier slow.

The patent system as we have known it is pretty much finished. It is unenforceable.

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6 thoughts on “China’s Vast Amateur Spy Network: Kiss Patents Goodbye

  1. Interesting story, but I'm certain this is not the entire extent of the spying. Think of all the laptops we have now, which are mostly built in China, in Chinese factories, using Chinese labor. What's to keep them from hardcoding spyware right onto the chipset itself? Who is checking? Who would know? There is even one brand that is a Chinese brand – and you see them in government, business, and personal environments. What is to say it doesn't, for example, open a tunnel every time it shuts down and send copies of every file updated since the last shut-down?

  2. This has been going on for a very long time…
    Back in the 1980's, my brother worked for a security company that provided services for the Consumer Electronics Show at McCormick Place in downtown Chicago. They had strict orders not to put their hands on anyone unless they first initiated aggressive contact, and the Chinese attendees knew it. My brother witnessed a group of these guys gathered around an unattended booth, and upon further investigation, he discovered them dismantling the electronics, taking pictures, and detailed notes of what they'd discovered inside. When my brother confronted them, they formed a human barrier to allow the two guys with the notes, and camera, to disappear into the crowd. It was clearly pre-planned, and well rehearsed, industrial espionage. but there was little he could do, and they knew it.
    This kind of thing has been a really big problem for decades, and little has been done to combat it.

  3. "Phone Home" malware is on nearly every device, and it's built right into every copy of Windows. They run in the background, and are constantly trying to make connections uninitiated by the user. Exactly what information they are sending might be open for debate, but the fact they are doing, what they're doing, is certainly not a confidence builder, and I don't trust programs that try to establish connections clandestinely, regardless the information being exchanged.

  4. Why bash China? We surrendered all US manufacturing to them years ago. Besides, the NSA and FBI do plenty of industrial espionage: that came out of the APEC conference in Seattle a few years back where the FBI was spying on delegates & stealing business secrets to give to cronies and do insider trading.

  5. John Yossarian says:

    You say the patent system as we have known it is pretty much finished but isn't that a good thing. Murray Rothbard was against giving out patents and that is enough for me.

  6. China has little respect for IP, even in their own country. A patent means nothing to them. They will copy any design they think they can turn a profit with. They have no problem even violating Chinese patents. This is also a big problem for entrepreneurs in China that they don't seem to be able to fix.