Espionage involving China


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Seems to be theft within the larger power generating turbines from GE. Don't know how useful this knowledge would be considering the domestic large turbines that are coming online already?

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WASHINGTON (Reuters) - A former engineer and a Chinese businessman have been charged with economic espionage and conspiring to steal trade secrets from General Electric Co to benefit China, according to an indictment unsealed by the U.S. Justice Department on Tuesday.

The indictment against the former GE engineer, Xiaoqing Zheng, and Chinese businessman Zhaoxi Zhang, comes after Zheng was initially charged in August in connection with the alleged theft. It marks the first time the U.S. government has formally said the scheme was carried out to benefit China and that the Chinese government provided “financial and other support.”

According to the indictment, Zheng stole the proprietary data on GE’s turbine technology by encrypting the files on his computer and secretly embedding them into a digital photograph of sunset before emailing the photograph to his personal email.

Zheng, 56, pleaded not guilty on Tuesday and was allowed to remain free on bond. His attorney Kevin Luibrand declined to comment.

The charges are the latest in a handful of cases brought by the Justice Department since last year as part of a broader crackdown by the Trump administration, which has vowed to fight Chinese theft of corporate secrets, cheating through intellectual property theft, illegal corporate subsidies and the use of rules that hamper U.S. corporations that want to sell their goods in China.

The FBI has said in the past that nearly every one of the agency’s 56 field offices have investigations into economic espionage tied to China.

The 14-count indictment against the pair charges that Zheng, who worked at GE Power & Water in Schenectady, New York, stole multiple electronic files containing details about design models, engineering drawings and other specifications related to the company’s gas and steam turbines.

Prosecutors say he emailed the files to Zhang, who was located in China.

GE said in a statement it has “been in close cooperation with the FBI and the U.S. Attorney’s Office for some time on this matter.”

The two men allegedly used the stolen information to advance their own business interests in two turbine research and development companies - Liaoning Tianyi Aviation Technology Co Ltd and Nanjing Tianyi Avi Tech Co Ltd.

The indictment adds that the pair received financial and other support from the Chinese government through those two companies, and they coordinated with Chinese government officials.

According to the indictment, Zheng told GE in February 2016 that he was operating an aviation parts supply company in China with his brothers, and asked permission to ensure it did not violate any rules about conflicts of interest. GE approved his proposal, asking that he protect the company’s intellectual property.

About a year later, around November or December 2017, GE discovered a large number of encrypted files saved on Zheng’s computer.

By July 2018, the company learned he had embedded the files in the seemingly innocuous photo of a sunset and emailed them to himself.

In interviews with the FBI in August 2018, prosecutors said he admitted to taking GE files. He also told agents his companies in China had received grant money from the Chinese government.

Zheng and Zhang, 46, were formally indicted on April 18. A jury trial has been set for June 24 in Albany, New York. Zhang was believed to be in China, the Justice Department said.


Just Hatched
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NSA anyone ... we have Edward Snowden to thank for showing how underhand America is .... it uses espionage to help US companies by stealing rivals tech and passing on to US companies , and stealing data to help using companies win contracts .... with allies like America the EU right to label the USA as the enemy
Some anti-China slant but a good read nonetheless, especially for any poster who quotes Hong Kong media over-zealously. Many embedded links to related articles on the original page:

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Hong Kong and the US-China New Cold War
Will Hong Kong be a “Free World outpost” or a bastion for “Red China”?

By Brian C.H. Fong
May 16, 2019

Over the past few months, Hong Kong, a former British colony and now a special administrative region under Chinese sovereignty, has emerged on the radar of the United States.

On February 27, 2019, the U.S. consul general in Hong Kong, Kurt Tong, delivered an unusual speech “cautioning” about the sustainability of Hong Kong’s autonomy under the “one country, two systems” (OCTS) model. In his speech, Tong highlighted the importance of maintaining Hong Kong’s autonomy in the “free and open Indo-Pacific” (FOIP) region. On March 21, 2019, the U.S. State Department published its annual report on Hong Kong, which found that the region’s autonomy has been “diminished” in consequence of China’s interventions, though it was still “sufficient” to justify continued differential treatment from the United States. On April 25, 2019, the State Department issued a high-profile statement expressing its concerns on the proposed Extradition Bill, which, when passed, will authorize the Hong Kong government to extradite people to China and put an end to Hong Kong’s 178 year-long separate legal jurisdiction. On May 4, 2019, Tong issued a more direct warning in a media interview, saying that “the concern of the U.S. is if the distinctions between Hong Kong and the mainland are blurred and the OCTS framework is less clear, then may be there would need to be adjustments in U.S. policy.”

People may be surprised by Washington’s attention to Hong Kong, a territory only 1,106 square kilometers in size. But if one looks closer at the United States’ extensive, but usually under-discussed, geopolitical interests in Hong Kong then we should not be surprising to see Washington step in — particularly as the U.S. and China move toward a new Cold War.

The U.S. presence in Hong Kong could be traced back to 1843, when it set up its first consulate;but U.S. interests in Hong Kong only became prominent during the Cold War period, when the United States replaced Britain as the dominant geopolitical power in Asia. During World War II, Washington originally took the view that Britain should return Hong Kong to China, then under Kuomintang control, but the rise of “Red China” in 1949 changed its position toward Hong Kong. Located along the “Bamboo Curtain” that demarcated communist governments and the “Free World” in Asia, Hong Kong was seen by the United States as a friendly outpost in the Cold War.

In its 1960 confidential report, the U.S. National Security Council stated that the overriding objective of the United States was “(c)ontinuation of Hong Kong’s status as a Free World outpost.” For this purpose, Washington adopted a two-pronged approach: On the one hand the United States supported the British Hong Kong government to consolidate its rule by improving its defense (providing a joint strategic deterrent with Britain against Chinese attack) and supporting its industrialization (improving the well-being of the Chinese refugee population). On the other hand, the United States made use of the status of British Hong Kong as a separate jurisdiction located in proximity to the People’s Republic of China to pursue its strategic aims, such as establishing the United States’ largest overseas intelligence apparatus in the U.S. consulate-general in Hong Kong (which housed a large-scale CIA station and FBI attaché) and conducting anti-communist propaganda via the U.S. Information Service (appealing to mainland Chinese, Hong Kongers, overseas Chinese, and Asian readers).

In the post-Cold War period, the general impression was that Hong Kong’s value to the United States had become economic — Hong Kong is now the United States’ 19th largest trade partner (and the single-largest contributor to the U.S. trade surplus) and a major business operation base for U.S. companies in Asia (U.S. companies ranked first among non-local companies, having 290 regional headquarters and 434 regional offices in Hong Kong in 2018). Nevertheless, a close examination will reveal that Hong Kong is still playing a considerable role in promoting U.S. strategic interests in Asia.

After the 1997 handover back to Chinese control, given the strategic location of Hong Kong, the U.S. consulate-general in the territory kept reporting directly to the State Department in Washington, rather than to the U.S. embassy in Beijing; The U.S. Navy still regularly makes port calls to Hong Kong because it is the “closest to deployment tracks” of U.S. vessels; U.S. C-17 military aircraft regularly operate in Hong Kong’s airport to deliver supplies to the U.S. consulate-general. Most notably, different U.S. administrations still implicitly treat Hong Kong as a “Free World outpost,” holding on to the expectation that after reverting to China Hong Kong would become a “change agent” driving China’s liberalization. For example, U.S. President Bill Clinton praised Hong Kong as “a catalyst of democratic values” when making a speech about U.S. policy toward China on May 28, 1993; the same theme has also been repeated in a recent speech made by Kurt Tong, who emphasized the “demonstration power” of Hong Kong in showing China global best practices.

The United States’ extensive geopolitical interests in Hong Kong were institutionalized by the 1992 U.S.-Hong Kong Policy Act (USHKPA). The USHKPA recognizes Hong Kong as a nonsovereign entity distinct from China under U.S. laws (in terms of trade, investment, immigration, transport, international agreements and membership, etc.) and indicates U.S. support for its democratization. The USHKPA also mandates the State Department to keep a close eye on the state of Hong Kong’s autonomy, with the president being authorized to suspend part or all of the differential treatment should it be deemed “not sufficiently autonomous.” The USHKPA therefore provides Washington with a policy tool to step into Hong Kong affairs after the handover, if necessary.
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Chinese Interests in Hong Kong

We can only have a full geopolitical picture if we also look at China’s interests in Hong Kong since the Cold War.

Hong Kong has always been seen by Beijing as crucial to the survival of the Chinese Communist Party (CCP) regime. In February 1949, before the founding of the People’s Republic of China, Mao Zedong had already decided not to retake Hong Kong and instead leave it to the British, a policy later formally termed by Zhou Enlai as “long-term planning, full utilization.” By keeping Hong Kong as a separate jurisdiction in the name of British Hong Kong, China successfully circumvented the blockade imposed by the United States since 1949. During the Cold War period, Hong Kong functioned as the single-largest contributor of foreign exchange to China (estimated at over 173 million pounds in 1966, about a third of the total); the only entrepôt for “smuggling” sanctioned Western technology, equipment, and medicines to China and exporting Chinese food products; a business operation base for Chinese enterprises; and an intelligence center for Chinese agents. Without Hong Kong, it is questionable whether the CCP could have survived the U.S. blockade and the Sino-Soviet split from the 1950s to ‘60s.

Hong Kong still functions as the single most important capital provider to China by serving as the largest source of inward direct investment (usually constituting 60 to 70 percent of China’s FDI), a major listing place for Chinese companies (a total of 1,146 H-shares, Red-chips and Mainland private enterprises have been listed in Hong Kong’s main board in 2018), and an important source of bank loans (in 2018 the total amount of Hong Kong banks’ net claims on bank and nonbank customers in China exceeded HK$713 billion).

The irreplaceable value of Hong Kong to China was clearly the reason behind Beijing’s decision in the 1980s to extend Hong Kong’s status as a separate jurisdiction beyond 1997 in the name of the “Hong Kong Special Administrative Region” (HKSAR). From the Deng Xiaoping regime to the Xi Jinping regime, Hong Kong has proven itself as indispensable to Beijing’s survival.

In recent years, as China has aggressively expanded its influence, Beijing leaders are trying to transform Hong Kong into a “Red China outpost” because its internationally-recognized status as a separate jurisdiction provides the best vehicle for offshore Chinese influence operations. For example, many Chinese companies have transformed themselves into “Hong Kong companies” for the purpose of exporting China’s outward direct investment (in 2017 HK$179 billion flowed from China to Hong Kong), including the infamous Nicaragua canal deal executed by Chinese businessman Wang Jing through a Hong Kong-registered company called HK Nicaragua Canal Development Investment in 2013.

Hong Kong’s status as a separate customs territory and an independent shipping registry also serves China’s interests well by allowing it to circumvent U.S. export controls (e.g. China purchased U.S.-made satellites via a Hong Kong-registered company called Asia Satellite Telecommunications) and sanctions imposed by the UN (e.g. oil smuggling by a Hong Kong-registered ship called Lighthouse Winmore to a North Korean vessel in December 2017). Even HKSAR passports and Hong Kong’s separate membership in international organizations have been found to be useful for China to expand its influence, as shown by the frequent use of HKSAR passports by mainland elites such as Huawei’s chief financial officer Meng Wanzhou (who was found to hold three HKSAR passports with different numbers). Hong Kong’s separate status also effectively gives China a second vote in international organizations, as shown in the vote to revoke Taichung’s hosting rights for the East Asian Youth Games in July 2018 (China and its two SARs, Hong Kong and Macau, all voted in favor of calling off the games).

Last but not the least, after the United States started to pressure ZTE and Huawei in April 2018, Beijing immediately announced in May 2018 its decision to make Hong Kong the national innovation hub. The open secret of this announcement is Beijing’s plan to make use of Hong Kong’s separate status to import Western technology; for this purpose Beijing also correspondingly expedited its plan to incorporate Hong Kong into its more direct jurisdiction through the Greater Bay Area (GBA) plan. According to China’s GBA Outline Development Plan, Hong Kong will be put under the leadership of a high-level GBA leading group chaired by Chinese Vice Premier Han Zheng, meaning that the territory’s autonomy could be more “fully utilized” by Beijing.

Clearly, in the process of transforming Hong Kong into a “Red China outpost,” China is trying to change the “inner content” of Hong Kong’s autonomy without breaking the “outer shell” of the OCTS model — to use the official line of Beijing, this means that “the central government exercises overall jurisdiction over the HKSAR,” as promulgated by PRC State Council’s 2014 White Paper. In other words, China does not intend to completely get rid of the OCTS model, but it is aiming to hollow out the autonomy of Hong Kong so that the OCTS model could be “fully utilized” for its own interests. This geopolitical background explains China’s heavy-handed approach to suppress Hong Kong’s democratic movement in recent years. Any move toward a greater degree of democratic self-government will disrupt Beijing’s plan to transform Hong Kong into a tool for PRC influence.

Hong Kong at the Forefront of U.S.-China Struggles

The major lesson that could be drawn from the above geopolitical history is that Hong Kong has always been at the forefront of U.S.-China struggles.

In the bipolar Cold War period, when the United States adopted a containment policy to check the spread of communism from the Soviet Union and its allies, including China, Washington positioned Hong Kong as a “Free World outpost” under this umbrella policy. Concurrently, China resisted U.S. containment policy by “fully utilizing” the status of Hong Kong to bypass the U.S. blockade.

Since the visit of President Richard Nixon to China in 1972, different U.S. presidents from Jimmy Carter to Barack Obama have sought to “engage China in the hope that it would become better integrated into the international community.” In this light, Hong Kong’s role in U.S. policy evolved into some form of change agent helping to liberalize China under the American engagement policy; concurrently China is fully aware of the U.S. attempt to promote “peaceful evolution” of the CCP regime and that Hong Kong is a “Trojan Horse” of the whole U.S. strategy. Therefore in the early post-handover period, China adopted a defensive approach, trying to prevent the “well water” of Hong Kong from intruding into the “river water” of China. More than four decades after 1972, it is obvious that the U.S. engagement policy has failed to liberalize China and the U.S. expectation that Hong Kong could be its change agent proved to be a fantasy. Instead, China emerged as a new superpower under the unprecedented model of “authoritarian capitalism” and in recent years Beijing also gained ground by transforming Hong Kong into its own Trojan Horse.

The Trump administration, since taking office in January 2017, has altered the direction of U.S. policy toward China by abandoning the traditional engagement approach and exploring a competitive approach, confronting Beijing on various fronts from trade and technology to intelligence and military affairs. But one critical issue remains unanswered: What is the place of Hong Kong in the new China policy of the Trump administration?
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U.S. Options in Hong Kong

Conceptually, there are three broad options for the United States.

First, Washington can keep its existing “principled hands-off approach,” i.e. issuing warnings to China about the erosion of Hong Kong’s autonomy but taking no action under the USHKPA. This approach is understandable given that the United States recognizes Hong Kong as part of the sovereign territory of China and restrains from having any direct involvement in Hong Kong affairs. But the downside of this option is also obvious. The United States has adopted this option since the 2014 Umbrella Movement, but its repeated warnings so far have not helped prevent the continuous erosion of Hong Kong’s autonomy. In fact, Washington is now facing the risk of becoming a toothless tiger on the Hong Kong issue as China finds that its warnings are not backed by any action. Most importantly, under this option China will be able to easily transform Hong Kong into a “Red China outpost” and the territory’s differential treatment will become the biggest loophole of any U.S. sanctions imposed on China.

Second, the United States can impose territory-wide sanctions by suspending part or all of the differential treatment granted to Hong Kong under the USHKPA. This option could be quickly executed under the existing USHKPA by way of presidential executive orders. This would make sense if the United States sees the OCTS model as becoming a threat to its national interests and it does not have the leverage (or it is already too late) to stop China from transforming Hong Kong. This option, even if adopted partially (e.g. imposing a technology export ban), will greatly undermine Hong Kong’s role as an international financial center and therefore deal a severe blow to the Chinese economy, given China’s irreplaceable reliance on Hong Kong’s financial sector. However, this is a “nuclear option” because its territory-wide nature will not only hurt Beijing and its local collaborators in Hong Kong, but also all the citizens of Hong Kong who, for decades, have kept fighting for democratic self-government. Also, suspending part or all of the differential treatment for Hong Kong under the USHKPA will effectively mean that the United States is taking the lead to practice a “one country, one system” policy toward Hong Kong, which is a deviation from the longstanding policy to support Hong Kong’s autonomy under the OCTS model. That would also be contradictory to Washington’s attempt to incorporate Hong Kong into the FOIP framework as mentioned by Kurt Tong.

Third, the United States can impose individual/entity-targeted sanctions for infringement of Hong Kong’s autonomy under the USHKPA, such as freezing the assets and denying entry of those pro-CCP persons/entities who are seen by Washington as undermining Hong Kong’s autonomy. Procedurally, this could be done by incorporating relevant provisions into the existing USHKPA or adopting the pending Hong Kong Human Rights and Democracy Act. The rationale of this option is to distinguish pro-CCP persons/entities from the citizens of Hong Kong. This approach also recognizes that most of Beijing’s interventions — such as the disqualification of democrats by district officers, the rejection of Victor Mallet’s visa renewal by immigration officials, the ban on Hong Kong National Party by police officers and the passage of a co-location arrangement by pro-CCP legislators — were actually carried out by local collaborators in the HKSAR government and Legislative Council. This option would kill two birds with one stone: It would increase the cost for pro-CCP local collaborators to execute Beijing’s interventions, providing an effective check against further erosion of Hong Kong’s autonomy; it would also complement advocacy for democratic self-government by Hong Kong democrats, reviving Hong Kong’s position as a “Free World outpost” at the forefront of FOIP. But it is almost certain that China would have a strong response to this option, setting up Hong Kong a battlefield for a U.S.-China showdown. Unless the United States has a clear, feasible plan to sustain Hong Kong’s autonomy in the long run and has the determination to push ahead, adopting this option may only inject political instability into the territory.

Where Are the Voices of Hong Kongers?

In this emerging U.S.-China new Cold War, where are the voices of Hong Kongers? Should Hong Kong’s people align with the United States or China, or adopt some form of nonalignment? Room for small entities is always limited under the geopolitical games of the big powers, but there are also numerous historical examples of the “leverages of the weak” like Austria and British Hong Kong in the Cold War.

In any case, Hong Kongers should not be mere spectators, otherwise they will become pawns on the geopolitical chessboard; they must get their voices heard and defend Hong Kong as an internationalized autonomous region open to the whole world. Of course, the HKSAR today is not British Hong Kong and the regional context has changed quite significantly. But no matter how narrow the bridge is, Hong Kongers must try to cross it.

Brian C.H. Fong is a comparative political scientist from The Education University of Hong Kong. He is now editing a book volume entitled China’s Influence: Centre-Periphery Tug of War Across the Indo-Pacific (with Andrew J. Nathan and Wu Jiehmin).
I really thought that the US was systemically finding and targeting Chinese scientists helping the rise of China until I read this. Now I see the US has gone crazy and is implementing Cultural Revolution USA edition because it doesn't know what else to do. I knew both of these Emory professors. They did absolutely nothing to help China or harm the US. They took Chinese money and used it to research Huntington's Disease, an ailment that does not affect Chinese people but is present mostly in the Caucasian population. This is against Chinese interests, for US interests. They were not even pro-China in spirit. I attended a dinner party with them and this schmuck was bad-mouthing China the whole time, saying it needs to be more like the US. His wife had only bad things to say about the quality of things made in China. Chinese people immediately argued with them and shut their mouths. Their latest request for resources and position was rejected by China because all they wanted to do was waste Chinese money to publish papers that lacked any substance to clinical relevance but could bolster their names. The only thing they did that benefited China was that they took many Chinese students to their Emory lab to teach them basic (really basic) genetic techniques before working them to death then sending them home and that's not because they wanted to help China; it's because he wanted to hire for cheap and have absolute power over them. Emory students cost full US stipend and are protected by the University in case of excessive demands so they took as few as possible while still satisfying school requirements. They are not even impressive scientists; they vaulted to fame from a 1995 discovery of a protein and now, 25 years later, they still can't figure out what it does! For the FBI to shut down their lab is a big mistake; they saw Chinese face, Chinese name, works with Chinese labs, and they jumped on him without figuring out exactly what was going on. (Yes, the FBI raided his lab and shut it down; it was not just a university action.) The Chinese should be taking away his lab, not the Americans.

Most ironically, perhaps, is that this couple talked about embracing America when coming to the US, and now, they see how much America embraced fake Americans back! Now I truly feel like the US has lost its mind and we are in the ramp-up of the American Cultural Revolution.

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Professors fired from Emory University for hiding grants from China

Two Chinese American professors at Emory University have been fired for failing to disclose research fundings from China and their work for Chinese universities while receiving federal grants from the U.S. government, the latest example of how the U.S. is battling with Beijing’s growing influence on academic activities and addressing intellectual property protection in the science field.

Xiao-Jiang Li and his wife Shihua Li, both professors of human genetics at Emory University School of Medicine, have been dismissed this week, Yahoo Finance learned. The investigation on Li was prompted by a letter that the National Institutes of Health (NIH) sent to over 10,000 academic research universities last August. The letter urged institutions to work with NIH and other agencies including the FBI to crack down on foreign influence, particularly from China. Recipients of U.S. federal funds have to disclose if they are receiving funds from other countries and are not allowed to share their grant applications with foreign governments.

The dismissal of Xiao-Jiang Li, a tenured Emory professor since 2005, came as a surprise to many. He is a distinguished professor, who also runs Emory’s Li Laboratory, which has 11 researchers. Information about the couple and the lab has been removed from Emory’s website.
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They can now go back to China full time.
They are active in China now but they aren't getting what they want. They want power and resources and while they do have their lab that they were given during the thousand talents recruitment, they are being denied the massive expansion they requested because they want to use Chinese resources to work on a disease without implications for Chinese people and they are going about it in a way that emphasizes their own name-building over truly contributing to the cure of the disease. They can continue small time in China.