China-Based Industrial Espionage

On Oct 8, 2014 China has surpassed the United States as the world’s largest economy in terms of Purchasing Power Parity (PPP)” (IMF). My paper explores one of the instances of unlawful business practices that have contributed to China’s new world position. China based espionage undercuts American businesses and U.S. foreign policy directly, causing catastrophic economic implications for America, its businesses, and its allies. The U.S. government is grappling with the means and methods China uses to disseminate information stolen from U.S. businesses to support China based industries. Due to the lack of transparency in China, it has been difficult to gather this information. However, my research finds important similarities in both the factors influencing China-based espionage and the types of U.S. industries that are targeted. This research shows a positive relationship between the number of cyber-attacks and industry growth. The results in this paper highlight the importance of recognizing industrial espionage as a major issue of national security. In order to address this issue, new financial policies, regulatory amendments, and mandatory self-reporting of espionage activity is needed to better study, respond, and abate the long lasting negative effects of these attacks