Domestic intelligence chiefs from Australia and the United States have issued a scathing criticism of China, accusing it of intellectual property theft on an unprecedented scale. Photo: 123RF
Australia's domestic intelligence chief has revealed a Chinese national was removed from the country after a foiled attempt to infiltrate a prestigious research institution.
ASIO director-general Mike Burgess has revealed details of the alleged espionage last month, while meeting his Five Eyes counterparts in the United States this week.
Burgess says the spying plot against an unnamed Australian organisation was disrupted before any damage was done.
"The plot involved a visiting professor - a genuine academic who had also been recruited by Chinese intelligence," Burgess told reporters.
"Their spymaster gave them money and a shopping list of intelligence requirements and sent them to Australia."
The meeting in Silicon Valley is the first-ever public gathering of the Five Eyes intelligence partners, which includes Australia, the US, the United Kingdom, Canada and New Zealand.
At the meeting, the domestic intelligence chiefs of Australia and the United States issued a scathing criticism of China, accusing it of intellectual property theft on an unprecedented scale.
Burgess said the decision to step outside their normally secretive meetings reflected the nature of the threat they were facing.
"We recognise nations will spy, we recognise nations will seek strategic advantage," he said ahead of the summit.
"But what we're talking about here, this is behaviour that goes beyond traditional espionage.
"The Chinese government are engaged in the most sustained, sophisticated and scaled theft of intellectual property and expertise in human history.
"And this summit is about how we work with our partners together, and in the tech sector and innovation sector, so they can better be placed to identify and manage those risks effectively."
FBI director Christopher Wray labelled the Chinese Communist Party (CCP) the "number one threat to innovation", arguing it had made economic espionage "a central component of its national strategy".
"The FBI have, over the last several years, had about a 1300 percent increase in investigations that are, in one way or another, related to attempts to steal intellectual property or other secrets by some form of the Chinese government, or some arm of the Chinese government," he said.
"It wasn't that long ago, when I checked, we were opening a new investigation, again, specifically focused on China and its efforts to steal intellectual property and other secrets, about every 12 hours."
The UK, Canadian and New Zealand intelligence chiefs expressed similar concerns at the summit, which comes at a time when the Australian government is still trying to stabilise its relationship with Beijing.
The Chinese government has defended its conduct, arguing it has "always attached great importance and been actively committed to intellectual property protection".
A spokesman for the Chinese embassy in Washington, Liu Pengyu, said his country firmly opposed the "groundless accusations and smears" towards China and hoped "the relevant parties can view China's development objectively and fairly".
(left to right) Former US Secretary of State, Condoleezza Rice; FBI Director Christopher Wray; MI5 Director General Ken McCallum; NZSIS Director-General Andrew Hampton; Canadian Security Intelligence Service Director David Vigneault; Australian Security Intelligence Organisation Director-General Mike Burgess. At the Emerging Technology and Securing Innovation Summit in Palo Alto, California, on October 16, 2023. Photo: supplied
Duped with a malicious USB
Burgess referenced an unnamed Australian company that found global success making a product "similar to a motion detector" before their sales suddenly dropped.
"A little while later, their product started being returned to the factory because they were broken," he said.
"When they opened their branded products, they discovered they weren't their branded products, because the components were inferior, they were exact knock-offs."
The problem was eventually traced to an international conference, where someone had offered to share information with one of the company's employees by plugging a USB into their laptop.
"That USB downloaded malware onto that laptop, which later on, when they were connected back to their corporate network, was used to steal their intellectual property," he said.
"That intellectual property was passed from the intelligence services to state-owned enterprise that mass-produced the goods and sold them on the market that undercut them."
Wray pointed to a US example, where a wind turbine company entered a form of joint venture with a Chinese state-owned enterprise, which then recruited an insider from the company.
They stole the company's key intellectual property, causing its market cap to plummet and forcing it to slash "hundreds, maybe even thousands" of jobs, Wray said.
"So I think it's important for people to understand that these threats from the Chinese government don't just affect Wall Street," Wray said.
"You know, in US terms, they affect main street, they affect families and jobs and people's livelihoods."
American AI technology was a particular target for Chinese theft, the FBI director told the summit. He warned stolen AI could be used "to take what's already the largest hacking program in the world by a country mile and make it that much more effective".
A diplomatic tightrope
The relationship between Australia and China has begun to thaw after a period of tension in which Beijing imposed a diplomatic freeze and major trade sanctions on Australian exporters.
Anthony Albanese last month revealed that he would accept President Xi Jinping's invitation to travel to China at an undisclosed date, making him the first Australian prime minister to do so since 2016.
Asked whether the summit could affect efforts to improve ties between the two countries, Burgess referred to Albanese's position of "cooperate where we can, disagree where we must".
"I generally don't mention countries, but this is one where China is worthy of mentioning," Burgess said.
"Because it's the Chinese government - Chinese intelligence services are an instrument of the state that have actually sanctioned the wholesale intellectual property theft, over a good number of decades in fact, to our respective national disadvantage.
"And that behaviour must be called out and must be addressed."
- This article was originally published by the ABC.