To Build China’s Biotech, Just Keep Stealing: DoJ Jails Two For Spying

If you can steal it, you can build it. This is starting to look more and more like the motto behind the Made in China 2025 plan. China’s biotechnology sector is part of that plan. From making new advanced gene therapy drugs and other pharmaceuticals, China’s deep ties to American academia and research have helped it grow, in part, by theft.

On April 20, an Ohio man was sentenced to 33 months in prison for conspiring to steal trade secrets concerning the research, identification, and treatment of a range of medical conditions, including cancers, the Department of Justice said.

Yu Zhou, 51, of Dublin, Ohio, pleaded guilty in December 2020 to stealing scientific trade secrets related to exosomes and exosome isolation from Nationwide Children’s Hospital’s Research Institute to sell to China.

“Yu Zhou sought to exploit U.S. taxpayer dollars intended to fund critical, life-saving research at Nationwide Children’s Hospital through the wholesale theft of their trade secrets,” said Assistant Attorney General John C. Demers for the Justice Department’s National Security Division. “Zhou’s greed was encouraged and enabled by a series of Chinese Government programs which incentivize thievery in an attempt to supplement China’s own research and development goals on the back of American ingenuity and investment. This successful prosecution should serve as a warning to anyone who seeks to profit from pilfering hard-earned U.S. trade secrets.”

Zhou and his wife Li Chen concocted a scheme over the course of several years to set up businesses in China that would sell biotech IP. They were sentenced to around three years in prison.

“Yu Zhou willingly took part in the Chinese Government’s long-term efforts to steal American intellectual property,” said Acting U.S. Attorney Vipal J. Patel for the Southern District of Ohio.

According to court documents, the couple worked in separate medical research labs at the Research Institute for 10 years each.

“No matter how many cases of IP theft directed by Chinese state security get exposed and how many people are convicted, these cases continue and they often involve family members working together,” said Jeff Ferry, chief economist for CPA.

Part of the Section 301 tariffs on China was due to stolen trade secrets. Huawei was accused by Cisco Systems of stealing coding for routers, for example. That case was later dropped.

On Thursday, Michael Wessel, commissioner for the U.S.-China Economic and Security Review Commission, told a Senate Finance Committee hearing on China that some $2.4 trillion in intellectual property has been stolen from the U.S. over a number of years. Most of that is due to China.

“If we continue to lose at that pace, we will lose our tech sector,” Wessel warned. “You will see the continued hollowing out of our manufacturing base and a reduction in our standard of living.”

Sadly, American academia is also in cahoots with some of these bad actors. This is a massive headwind for legitimate China and Chinese-American researchers here and erodes the trust factor of scientific research institutions on American campuses.

A Boston University Physics post-grad, Yanqing Ye, was a member of the People’s Liberation Army and was, at a minimum, part of an intel-gathering operation.

In January 2020, the Department of Justice arrested the Chairman of Harvard University’s Chemistry and Chemical Biology Department along with two Chinese nationals. All three were charged in connection with helping China pouch trade secrets for its budding biotech sector.

Dr. Charles Lieber, 60, Chair of the Department of Chemistry and Chemical Biology at Harvard University, was charged with a criminal complaint with one count of making a materially false, fictitious, and fraudulent statement about his association with the Wuhan University of Technology science lab. He was indicted in June of last year.

Lieber’s research at the Lieber Research Group has been funded by more than $15 million in research grants from the National Institutes of Health (NIH) and Department of Defense (DOD).

Yanqing Ye, 29, a Chinese student, was charged in an indictment at the same time with one count each of visa fraud, making false statements, acting as an agent of a foreign government, and conspiracy. According to the FBI, Yanqing was a member of the PLA, China’s army, at the same time that she was a student at Boston University.

Harvard University said that they did not know that Lieber was a “Strategic Scientist” at the Wuhan school in China and was a participant in China’s Thousand Talents Plan between 2012 and 2017.  China’s Thousand Talents Plan is one of the most prominent Chinese talent recruitment plans designed to attract, recruit, and cultivate high-level scientific talent to further China’s scientific development, economic prosperity, and national security, all three things in which U.S. individuals and American multinationals continue to foster daily.

CPA’s Ferry pointed to a 2020 study showing that Harvard has received $93 million in funding from China since 2013. “Under the cover of supporting so-called cross-border research, American universities led by Harvard are assisting China’s spies in stealing American research and in effect helping the Chinese Communist Party in its industrial buildup and oppression of the people of China, Hong Kong, Xinjiang, and Tibet,” Ferry said.

As far as the Ohio couple is concerned, the two received employee benefits from the Chinese government, including the State Administration of Foreign Expert Affairs and the National Natural Science Foundation of China. Zhou and Chen were also part of application processes related to multiple Chinese government programs, including talent recruitment, a method used by China to transfer foreign research and technology to the Chinese government.