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Sen. Cruz: ‘China Is Gaining Access to American Secrets Using Non-Traditional Approaches to Conduct Espionage Against Our Allies’

Questions administration officials on threats of Chinese espionage against the United States

December 12, 2018

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202-228-7561

WASHINGTON, D.C. – U.S. Sen. Ted Cruz (R-Texas), member of the Senate Judiciary Committee, today questioned administration officials on the threats of China’s non-traditional espionage against the United States. There, he expressed his concerns of China’s espionage activities stating, “I’m increasingly concerned that China is gaining access to American secrets using non-traditional all-of-nation approaches to conduct espionage against our allies.” Sen. Cruz directed his line of questioning to address concerns of Chinese espionage, as well as the threat it imposes to the United States’ safety and security.

Watch Sen. Cruz’s full line of questioning here. A full transcript is below. 

Sen. Cruz: Good morning, thank you for being here gentlemen. Thank you for your service. I’m increasingly concerned that China is gaining access to American secrets using non-traditional all-of-nation approaches to conduct espionage against our allies. Chinese company Huawei has maneuvered itself into a dominant position providing communication infrastructure across the globe—including to major allies like Canada. For each of the witnesses, can you assess the risks presented by such practices, especially as they relate to Huawei?

Hon. Christopher Krebs: So, when it comes to Huawei specifically—[but] Chinese technology companies—we kind of break things down in terms of hardware, gear, and things like that but also information access. So, its—the challenge is obviously broader than Huawei, it would also include China Mobile, China Telecom, China Unicom, who has access to the data, and then how do they access that data. I would say that globally, when you think about the exposure that China has—its Huawei-like companies—it is fairly broad. There is an awakening though and I wouldn’t take away from the fact that a company in a country has done a deal with Huawei as that country accepting risk of working with Huawei. I think the risk tolerance needle is shifting. Here section 889 of the National Defense Authorization Act, which deals with Huawei and others, I think is a step forward in progress beyond the work we’ve already done. As we shift into 5G it is important that we communicate the risks associated with advancing technology. With our technology companies through—as we’ve talked about with our Five Eyes partners. I think we do have increasing common understanding of those risks looking forward, but yes there is work to be done here.

Mr. Bill Priestap: The Chinese government does not share our government’s values. To me a great example of that is their cyber security laws that they enacted over the last few years which provides their government access to user data from any of their telecommunications or cyber companies. When they want it, whatever they want, they can do whatever they want with that. They basically can exploit that data however they want. With China’s—with Huawei’s let’s call it ‘growing position globally’ and other telecommunications, we have to understand that then means the company, the data, the user data that those companies possess can be utilized by the Chinese government again in whatever manner possible. To me, that’s extremely worrisome. I’ll leave it at that.

Sen. Cruz: Let me raise a related issue, which is I’ve spoken a number of times to leadership of a major research institute in Texas that is facing ongoing challenges of Chinese espionage. In particular, Chinese nationals being paid by the Chinese government working at that institution, working on sensitive research projects. Then they suddenly discover projects that they are in midst of working, companies out of China are filing U.S. patent applications and seeking to get U.S. intellectual property in the midst of the research. How widespread is this problem, is the threat of industrial espionage—theft of intellectual property by Chinese nationals—working here in the United States? And, what are we doing about it? What should we be doing about it?

Mr. Bill Priestap: Sir, I can’t quantify for you—I wish I could—the level of the threat. But what I can tell you is this: I’m waiting for the time that somebody reports to me, comes into my office and says, ‘We have concerns about some activity here relating to China,’ in which again might be up to—or might be engaged in for nefarious purposes and they’ll ask my permission to go take a look. We then go take a look. I am waiting for the time that they come back to say, ‘It wasn’t there. We didn’t find it. We looked and it didn’t exist.’ Every rock we turned over, every time we looked for it, it’s not only there but it’s worse than we anticipated.

Sen. Cruz: And give us an order of magnitude, how widespread are these complaints? Are we talking a handful? Are we talking dozens? Are we talking hundreds? What’s the breadth of complaints and investigations you’re seeing in these issues?

Mr. Bill Priestap: Just say, extremely voluminous.

Sen. Cruz: Hundreds? Thousands? I just want to get an order of magnitude in terms of how broad this challenge is.

Mr. Bill Priestap: Thousands. 

Sen. Cruz: Thousands. Okay, thank you.

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