Washington, July 21 (IANS) A group of senior Republican lawmakers has introduced legislation that would make it easier for US prosecutors to pursue economic espionage cases involving Chinese companies by treating all businesses based in China as instruments of the Chinese state under federal law.
The proposed Stop PRC Economic Espionage Act, introduced by Senator John Cornyn, Chairman of the Senate Select Committee on Intelligence Tom Cotton, and Chairman of the House Select Committee on China John Moolenaar, seeks to amend existing economic espionage laws to reflect what the sponsors describe as the reality of state control over Chinese companies.
“There are no ‘private’ companies in China because they are – by law and design – beholden to the Chinese Communist Party,” Cornyn said while announcing the legislation.
He said the bill is “a commonsense fix to reflect that reality, account for the PRC’s state-sponsored efforts to cheat and steal their way ahead in emerging tech, AI, and defense, and enable our government to prosecute without the burden of proving the obvious.”
Under current US law, prosecutors pursuing economic espionage charges must establish that the alleged offence was intended to benefit a foreign government, its agent, or a “foreign instrumentality”. Existing statutes define a foreign instrumentality as an entity that is substantially owned, controlled, sponsored, commanded, managed or dominated by a foreign government.
The proposed legislation would remove that burden for companies based in China by treating them as foreign instrumentalities under the law.
“Communist China treats every business as an arm of the state. Anyone stealing trade secrets to benefit a Chinese business does so for the benefit of their government,” Cotton said.
“Our bill accepts that reality in law and would remove the requirement to show that a Chinese company is controlled by the Communist Chinese government.”
According to the lawmakers, the measure is intended to strengthen the government’s ability to prosecute cases involving trade secret theft and other forms of economic espionage linked to strategic competitors.
Moolenaar said the legislation would modernise US espionage laws and close what he described as a legal loophole.
“The Stop PRC Economic Espionage Act will update our nation’s espionage laws and make it harder for spies and intelligence assets to escape justice based on the technicality of what counts as a ‘foreign instrumentality,'” he said.
“In China, everything is an instrument controlled by the state, there are no private companies. The CCP’s sweeping national security law empowers its strategy of military-civil fusion and the pursuit of its military ambitions across all industries.”
Besides China, the legislation would also classify organisations based in Russia, Iran and North Korea as foreign instrumentalities for the purposes of economic espionage prosecutions. The existing legal standard requiring proof that a company is substantially owned or controlled by a foreign government would continue to apply to organisations from all other countries.
The legislation comes as Washington continues to tighten scrutiny of technology transfers, trade secret theft and foreign influence operations linked to China.
Over the past several years, successive US administrations and Congress have adopted measures aimed at protecting critical technologies, supply chains and intellectual property from foreign adversaries, particularly in sectors such as artificial intelligence, semiconductors, quantum computing and defence.
China has consistently rejected US allegations that its companies operate as extensions of the state or engage in state-directed economic espionage. Beijing has accused Washington of politicising trade, technology and investment issues and has criticised a series of US restrictions targeting Chinese firms on national security grounds.
–IANS
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