Mi5 and FBI Issue Joint Warning over Chinese IP Theft

Jamie Kavanagh
Jamie Kavanagh
August 3rd, 2022
company-doing-work

The British MI5 and our own FBI have issued an unprecedented warning over the threat China and the Chinese State poses to businesses.

MI5 Director General Ken McCallum and FBI Director Chris Wray held a conference at the MI5 headquarters in London at the beginning of July warning about the risks of doing business with China. Specifically, the risks of Chinese mergers, acquisitions, and intellectual property theft across business.

Chinese IP Theft

The main messages were for businesses to be careful doing business with China and that working with Chinese companies also meant indirectly working with the Chinese government. As most Chinese firms have state overseers on staff, the state gets to see everything that goes on in all of their businesses. This results in providing a lot of knowledge and technology to the state that could be used against us in future conflicts.

The situation in Russia has brought Chinese state control and the potential flashpoint with Taiwan to the foreground.

Europe’s dependence on Russian oil and gas and Ukraine’s grain has shown weaknesses in doing business with countries with different values. In a press release, they stated that:

“Just as in Russia, Western investments built over years could become hostages, capital stranded, supply chains and relationships disrupted. Companies are caught between sanctions and Chinese law forbidding compliance with them,"

While nobody is saying not to do business with China at all, they are saying to exercise caution and avoid dependence.

The leaders of the two agencies said that doing business is fine, but western businesses need to ensure they are stable enough and secure enough to be able to survive should China become a pariah state like Russia.

They also said companies need to be aware of what technology would be exposed to Chinese interests through mergers and acquisitions.

That’s an often overlooked vulnerability that can allow technology otherwise restricted for use in China or being sold in China falling into their hands in legitimate ways.

Finally, both MI5 and the FBI stated a willingness to work with western businesses to provide guidance and checks to help protect them from harm or potential bad actors.