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US senators voice concern over Chinese access to intellectual property

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(Reuters) — China is trying to gain access to sensitive U.S. technologies and intellectual properties through telecommunications companies, academia and joint business ventures, U.S. senators and spy chiefs warned Tuesday at a Senate hearing.

Sen. Richard Burr, the Republican chairman of the Senate Intelligence Committee, said he worried about the spread in the United States of what he called "counterintelligence and information security risks that come prepackaged with the goods and services of certain overseas vendors."

"The focus of my concern today is China, and specifically Chinese telecoms (companies) like Huawei and ZTE that are widely understood to have extraordinary ties to the Chinese government," Sen. Burr said.

Chinese technology firms have come under greater government scrutiny in the United States in recent years over fears they may be conduits for spying, something they have consistently denied.

Sen. Burr said he worried that foreign commercial investment and acquisitions might jeopardize sensitive technologies and that U.S. academic research and laboratories may be at risk of infiltration by China's spies.

Several of the U.S. spy agency chiefs who testified at the committee's annual worldwide threats hearing cited concerns raised by what they called China's "all of society" approach toward gaining access to technology and intellectual property.

"The reality is that the Chinese have turned more and more to more creative avenues using non-traditional collectors," said FBI Director Christopher Wray in response to a question about student spies.

Sen. Mark Warner, the committee's Democratic vice chairman, said he worried about commercialization of surveillance technologies as well as the close relationship between the Chinese government and Chinese technology firms.

"Some of these Chinese tech companies may not even have to acquire an American company before they become pervasive in our markets," Sen. Warner said.

Mr. Wray said the United States needed a more "strategic perspective on China's efforts to use acquisitions and other types of business ventures" rather than just evaluating one transaction at a time.

Under questioning from Republican Sen. Tom Cotton, none of the Intelligence officials said they would use a Huawei or ZTE product.

Last week, Sen. Cotton and Republican Sen. Marco Rubio introduced legislation that would block the government from buying or leasing telecoms equipment from Huawei Technologies Co. Ltd. or ZTE Corp., citing concern the companies would use their access to spy on U.S. officials.

The companies did not return calls last week seeking comment on the legislation.

In 2012, Huawei and ZTE were the subject of a U.S. investigation into whether their equipment provided an opportunity for foreign espionage and threatened critical U.S. infrastructure — something they have consistently denied.

"Chinese cyber espionage and cyber attack capabilities will continue to support China's national security and economic priorities," said Dan Coats, the director of national intelligence.