US intelligence officials warn companies in critical sectors on China

US intelligence officials have launched a campaign to warn American companies about the risks of interacting with China in critical industries, in a push to make it harder for Beijing to obtain technology and data.

The National Counterintelligence and Security Center wants to raise awareness about the links that Chinese companies have with the government, military and intelligence services. The effort is targeted on five sectors: artificial intelligence, quantum computing, biotechnology, semiconductors and autonomous systems.

Michael Orlando, acting director of the NCSC, a branch of the US intelligence community that focuses on threats from China, said Beijing was “using an array of legal, illegal and quasi-legal” methods to obtain intellectual property and data on American citizens that it would use to try to dominate critical industries.

If you are going to do business and collaborate, be smart about it

As part of the push, Orlando and his team are contacting US companies about the risks, saying that many businesses were not aware of the direct and hidden links between Chinese companies and universities and state security, or that Beijing was using a “whole of government approach” to obtain technology.

China is, for example, using a “civil-military fusion” programme to force companies to share technology with the military and intelligence services. Beijing has also introduced laws that make it easier to secure access to private data.

“People are not digesting this,” said Orlando, who stressed that the US government was not telling companies not to do business with China. “If you are going to do business and collaborate, be smart about it.” 

American officials have increasingly voiced concerns about China as it closes the gap with the US in industries such as AI, and shows signs of pulling ahead in areas such as hypersonic weapons. Orlando said quantum computing was an example of where the US had to ensure American companies were not helping Chinese groups make gains that would help them break the security encryption codes used by US intelligence agencies.

The veteran counter-intelligence official, who previously served in the FBI and CIA, declined to name any companies he was meeting but said he would soon hold discussions with US financial institutions.

Edward You, national counter-intelligence officer for emerging and disruptive technologies, said biotechnology was an important area because of China’s push to obtain healthcare data on US citizens.

He pointed to businesses such as BGI, a Shenzhen-based genetic research group, and others that offer cheap services to US companies and hospitals. You added that there was a danger that China would obtain complete data sets on American citizens. “You cannot change [your DNA] like a pin code,” he said.

“They’re on a path to developing the world’s largest data set,” he added.

Orlando said another purpose of the campaign was to make sure that US companies were not helping to provide China with the technology that would allow their companies to dominate. “We cannot afford to lose supremacy in these areas [so] this warrants this level of outreach,” he said.

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