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Taiwan cracks down on China spying on tech firms

Taiwan’s Parliament, the Executive Yuan, yesterday revealed draft amendments to national security laws aimed at deterring and punishing Chinese economic espionage efforts directed at stealing tech industry secrets.

Premier Su Tseng-chang said Taiwanese authorities have observed Chinese interests infiltrating local operations and “utilizing various methods to lure high-tech talent from Taiwan and steal Taiwanese core technologies.”

Perpetrators are said to hide their Chinese origins, sometimes investing in Taiwanese companies using third parties. The result is “considerable harm to the cyber security, economic interests, industry competitiveness and national security of Taiwan.”

Taiwan’s response is to establish two new crimes: one of “economic espionage” and another of “extraterritorial use of national core technology trade secrets.” The new crimes come with jail sentences of 12 years and 10 years respectively.

Another effect of the new laws will be to require workers involved with national core technology businesses to seek Taiwanese government approval before travelling to mainland China, with substantial fines for non-compliance.

Businesses will also be required to reveal when Chinese companies use proxies to invest in Taiwanese companies.

The amendments were introduced because Taiwan’s leaders feel current laws aren’t enough to deter participation in espionage activities, and in recognition of persistent attempts by Chinese entities to lift information about high tech intellectual property. Such technologies, Taiwanese leaders feel, are key to the nation’s future economic prosperity.

However, just which technologies will be covered has not yet been revealed. The Executive Yuan has promised to publish it soon.

The Register understands that Taiwanese silicon titan TSMC’s advanced manufacturing processes are likely to make the list, as the company’s 2nm process leads the world and would be a colossal prize for China (or any other nation for that matter).

China insists its businesses are magnificently ingenious and never cease earnest efforts to innovate. The United States’ Federal Bureau of Investigations, however, recently claimed that it has 2,000 open files concerning Chinese attacks on US businesses, and opens a new file every 12 hours. And just last week the world’s top lithography company and a key supplier to many advanced chipmaking efforts, Dutch outfit ASML, accused a Chinese rival of illegally using its IP.

Taiwan is therefore far from alone in fearing that China “innovates” after first “appropriating” technology developed elsewhere. ®