Zachary E. Henthorn12/5/2012

PLS 4670 – Dr. Luehrmann

China’s Path to Technology

A Look into Military and Industrial Espionage

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Zachary Henthorn

Dr. Luehrmann

PLS 4670

5 December 2012

China’s Path to Technology: A Look into Military and Industrial Espionage

I. Introduction

Is China, on a modern scale, able to keep up with the rest of the world in terms of

research, development and critical technological advancements without relying on industrial or,

more importantly to some, military espionage and intellectual property rights violations? On the

books for the Chinese military are two planes that many military intelligence enthusiasts would

take notice to immediately. Known as the Chengdu J-20 (Jian-20) and the Shenyang J-31 (F-60,

Jian-31, J-21), these two planes are the very first Chinese stealth attack fighter planes. The larger

J-20 is longer, wider and overall much heavier than the smaller J-31. Its wings are set far back on

the fuselage, dual engines side by side and a set of smaller wings set back just from the cockpit

known as canard wings. In terms of overall body shape, the Chengdu J-20 greatly resembles a

particular Russian plane known as the Mikoyan Project 1.44/1.42 Flatpack, which was a

response to the Advanced Tactical Fighter (ATF) program that the United States had started,

with its production of the Lockheed Martin F-22 Raptor. Its nose-cone and frontal air-intakes are

almost a direct copy from the F-22 as well.

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Its vertical stabilizers resemble the now retired Lockheed Martin F-117 Nighthawk.

A detailed view, showing the similarities of other Fifth Generation Aircraft to the Chengdu J-20

(Top two images from http://www.defenceaviation.com/, bottom image from http://www.andrewerickson.com/)

When speaking on the Shenyang J-31, its entire body is extremely reminiscent (almost an

exact copy of) the F-22 Raptor, but more importantly, the new Lockheed Martin F-35 Lightning

II. It’s similar in the design and shape of its wings, horizontal and vertical stabilizers and nose-

cone to the F-22, on a size comparable to the F-35 with comparable flight dynamics to this

United States produced Fifth Generation Multirole Fighter. Both the J-20 and J-31 are so similar

to most newly produced Fifth Generation Fighters from countries such as the United States, but

also the more recent Russian and Korean aircraft. The Chengdu J-20 is even reported to be using

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a particular type of Russian produced engine known as the Saturn AL-31, developed by NPO

Saturn, which was originally used in the Sukhoi Su-27 air superiority fighter.

Images of the Shenyang J-31

(Left Image: http://militaryfactory.com; Right Image: http://english.ruvr.ru)

II. Background, Context & The Current Situation

But why does any of this matter? Why do all these confusing aeronautical terms mean

something to military intelligence analysts and enthusiasts? Why is it an important fact that these

Chinese produced aircraft resemble any other Fifth Generation Fighter at all? Or why is it

important that Chinese stealth aircraft are using Russian produced engines, or that the shape of

both the Chengdu J-20 and the Shenyang J-31 strikingly resemble many of the recently produced

American stealth fighters and prototypes? The answer is a simple one, but hardly surprising

given China’s current record. The answer is military technology espionage. China could not be

where it is militarily unless it used deception and the stealing or copying of foreign secrets.

How can this be attributed to stolen military technology secrets? One way to point at

espionage is the amount of pure capital that is spent on military projects between the United

States and China. Currently, the budget breakdown for the United States’ Military is between

$925.2 billion for fiscal year 2012 and $737.5 billion of that on Military defense alone

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(USFederalBudget). Compare this to the 2012 Chinese military budget, which is reported from

China as being $106 billion (with the Pentagon placing total Chinese military spending

somewhere between $120 and $180 billion) (Moss).

The United States has almost had an unlimited budget for military spending since the

beginning of the Cold War. The program cost for the F-22 Raptor alone was $66.7 billion with

each individual aircraft costing $150 million (DefenseIndustryDaily). The origin of the F-22

reaches back to October of 1986 when development and design of the YF-22 and the YF-23. The

first flight of the F-22 was on the September 7th, 1997, over 11 years later. It was introduced to

the United States Air Force for fielding on December 15th, 2005, eight years after its first flight.

How then, with its comparatively meager military budget, is China able to develop and produce

not one but two Fifth Generation stealth aircraft in such a drastically short amount of time?

If the question were to be posed to the Chinese government, but more specifically, the

Chinese military, the answer would possibly be that the two planes were produced by Chinas

greater might, manpower and how its engineers are more superior to any other in the world.

Chinese might and ingenuity, over the need of stolen technology. But this is a standard response

from China – a predictable one. The most recent and most covered bit of Chinese cloning

technology can be found in the iPhone 5 copy scandal.

Before consumers even knew what the new Apple iPhone 5 even looked like, China was

reporting on their new GooPhone i5 – a near exact body copy of the actual iPhone 5, running the

Android operating system instead of Apple OS. Not only had GooPhone copied and produced

this knockoff iPhone 5, but also began issuing threats to Apple that it would sue the company if

the iPhone 5 was released in China. Is this to say that there is a strict correlation between how

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certain elements of the Chinese industry will openly copy a product through leaked documents or

even espionage, and the actual Chinese military? Possibly not, but it raises the question of why

doesn’t the Chinese government do anything to curb such blatant copying?

All of this is begging and leading toward a larger question that China is currently facing:

can China keep up with the world in actual development, research and innovation? Or, is China

only able to gain through this copying, espionage and reverse engineering? Does China have

capability to innovate, create new and exciting products and designs? Or, has the fact that China

is currently the ‘factory of the world’ stained the country?

One particular story, coming from a paper written by Sergei Skorobogatov of the

University of Cambridge and Christopher Woods of Quo Vadis Labs, and reported on by a

DefenseTech.org news story proves the possibility that China could be stealing American

military secrets. The product in question was the American-designed, Chinese-made

Actel/Microsemi ProASIC3 A3P250 microchip (known as the PA3). This chip was found to

have a “backdoor, or Trojan, deliberately built into it” (Reed). The reason that this is extremely

important to have found out earlier than later is because the “PA3 is what’s called a Field

Reprogrammable Gate Array (FRGA); an almost blank slate of a microchip that can be

programmed by its owner to perform a variety of tasks” (Reed). This microchip was seen as

being one of the most “impenetrable” chip designs available to military and industrial

applications. Used by the military through “weapons, guidance, flight control, networking and

communications” hardware to “nuclear power plants, power distribution, aerospace, aviation,

public transport and automotive products” (Skorobogatov and Woods), this chip is embedded in

multitudes of products.

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Why is this important? Because the backdoor embedded within the microchip can allow

Chinese cyber espionage agents access into whatever the chip is installed in to gain remote

access to the chip and reprogram it. This reprogramming can then be used to gain access to

important military pass codes, records, identification codes, nuclear plant procedure, the layout

of power grids and even more. And the main problem with this backdoor is that this backdoor is

unable to be removed, due to it being embedded in the chips silicone and hardware. That means

the chip would have to be completely redesigned and reproduced, and each chip be replaced in

order to fix the problem that has surfaced because of this backdoor. According to Skrobogatov

and Woods, “to our knowledge, this is the first documented case of finding a deliberately

inserted backdoor in a real world device with critical applications” (Skrobogatov and Woods).

The implications of these findings points to an active and heavily backed espionage

program, (likely) funded by the government and possibly the Chinese military, specifically

aimed at stealing secret and sensitive information from not only the United States, but from the

world due to the microchip being applied in more than just US technology. If China is after

sensitive information through the use of something as innocuous as a microchip, then what is to

stop them from seeking the actual technology that these microchips are installed in, such as next

generation United States military weapon systems, ships, aircraft, aircraft carriers, missiles,

satellites, tanks and mobile infantry carriers?

The problem, however, might stem from a simple reason. The idea of intellectual

property rights (IPRs) have only been acknowledged and placed in law books since 1979.

Officially, the government nods toward many international laws on the protection of intellectual

property rights. Thus, most Chinese view the very “western” idea of intellectual property rights

as something close to non-existent. This is partially due to a problem with the education about

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intellectual property rights, to the point that there is little awareness that property right has been

infringed or that there is even a crime for those infringements. This has led to copyright

violations being common in the People’s Republic of China (PRC) and IPR crimes being

committed by prominent members of the electronics and automotive industries.

III. Likely Developments

So what does this mean for the future of Chinese military and industrial espionage? Can

the problem be solved through international sanctions and trade embargos, or through the

removal of product production within China to avoid the possibility of having technology or

trade secrets stolen and replicated? This is doubtful, due to the increasing interconnectivity of the

world on a scale that surpasses regional boundaries. Especially with the recent transition of

government, it is likely that any possible sanctions or warnings of intellectual property right

infringement will be swept under the carpet by the Party or ignored completely.

With the introduction of the very first backdoor in the PA3 microchip, it is likely that

other such secret ‘ins’ will be found as China spreads the manufacturing process used in the

production of the PA3 to other arenas. It is even likely that soon, we will be seeing more stories

just like the PA3 come to light.

This stolen intellectual property, however, is a financial boon for China as a whole. It

allows China to spend much less on research and development programs and innovation than

other countries, thus allowing it to allocate its precious and limited resources to other parts of its

economy such as the education and welfare of its some 1.344 billion people. It also allows the

Chinese to stand back and say how much better and more efficient their military program is,

when compared to the United States military budget and programs.

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If the uncontrolled copying and downright espionage aren’t halted by the Chinese by

sanctions or through tightening of regulations on production of sensitive materials and a

strengthening of internet firewalls to block cyber warfare, then several things are most likely

bound to happen. One likely outcome of this would be the continued theft of military secrets and

technology, and a real, marked increase in the speed at which China can reverse engineer and

reproduce a replica or reformation of the piece. The possibility that China could continue to

develop the Chengdu J-20 and the Shenyang J-31 could double, and the possibilities of having

mass produced versions of these aircraft becomes ever more likely. As China would feel

confident in its military power, the possibility of armed conflict with China in certain parts of

Asia could become a reality. The sphere of influence that China holds could expand, through

technological and militaristic superiority alone. Suddenly, their active military of approximately

2.3 million personnel would be viable on the world stage. The approximately 369 million males

available for military service would suddenly be overwhelming, as replacement for troops lost in

battle would be virtually limitless.

The current power of the United States military is based on technological superiority,

versus overwhelming odds. It is focused on weapon systems that act as force multipliers; guns,

bombs, planes or tanks that make a few troops worth the cost of hundreds, through training and

capability. If China were somehow able to catch up to the United States through the militaristic

espionage that they have been conducting, the United States could surely feel threatened. A

brand new arms race could ensue, one that would put the nuclear buildup with Russia during the

Cold War to shame. Weapons would be developed to be more deadly on the battlefield, without

having to resort to nuclear exchange. A future war between China and the United States (given

current trends within the United States military, technologically) could be between unmanned

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aerial drones, robotic tanks and super soldiers (all out cyberwarfare), both sides holding the same

type of technology – one saying Made in the U.S.A., the other saying Made in China.

IV. Conclusions

Can China survive in this world without resorting to militaristic and industrial espionage?

Most likely, the answer is no. Their education system is vastly different than that in the United

States. The way that large sections of the population still live as subsistence farmers, or are

vastly undereducated when compared with their U.S. counterparts is still a major problem. The

way that China, as a whole, deals with intellectual property would have to change populace wide,

instead of just having the laws protecting intellectual property on their books with little to no

enforcement.

A complete paradigm shift would need to occur within China in order for the country to

be able to shift and give back to the world with innovation, research and development rather than

just needing to steal or copy the ideas of others to hold power. New laws would need to be

written and the power to enforce them given to police. Internal investigations would need to be

conducted to remove those who would continue their practices of theft and copying. The

likelihood of this happening, however, is almost non-existent with current PRC leaders. China

and the Chinese people come first.

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Works Cited

Aguilar, Mario. "China’s Already Knocking Off the IPhone 5." Gizmodo. N.p., 28 Aug. 2012.

Web. 19 Nov. 2012.

<http://gizmodo.com/5938613/chinas-already-knocking-off-the-iphone-5?tag=iphone5>.

"Chengdu J-20." - China's 5th Generation Fighter. N.p., n.d. Web. 31 Oct. 2012.

<http://www.defense-update.com/products/j/29122010_j-20.html>.

Chen, Shirong. "China Conducts First Test-flight of Stealth Plane." BBC News. BBC, 01 Nov.

2011. Web. 31 Oct. 2012.

<http://www.bbc.co.uk/news/world-asia-pacific-12159571>.

Erikson, Andrew, and Gabe Collins. "China's New Project 718/J-20 Fighter: Development

Outlook and Strategic Implications." China Signpost. U.S. Naval War College / China

Maritime Studies Institute, 17 Jan. 2011. Web. 19 Nov. 2012.

<http://www.andrewerickson.com/2011/01/j-20-fighter-development-outlook-strategic-

implications/>.

"Military Technology Espionage | Homeland Security News Wire." Military Technology

Espionage | Homeland Security News Wire. N.p., 2 Oct. 2012. Web. 31 Oct. 2012.

<http://www.homelandsecuritynewswire.com/dr20121002-former-l3-employee-guilty-of-

selling-weapon-secrets-to-china>.

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Moss, Trefor. "5 Things the Pentagon Isn’t Telling Us About the Chinese Military" Foreign

Policy. N.p., 23 May 2012. Web. 19 Nov. 2012.

<http://www.foreignpolicy.com/articles/2012/05/23/5_things_the_pentagon_isn_t_telling

_us_about_the_chinese_military>.

Reed, John. "Proof That Military Chips From China Are Infected?" Defense Tech RSS. N.p., 30

May 2012. Web. 19 Nov. 2012.

<http://defensetech.org/2012/05/30/smoking-gun-proof-that-military-chips-from-china-

are-infected/>.

Skorobogatov, Sergei, and Christopher Woods. "Backdoors Embedded in DoD Microchips From

China." Scribd. Defense Tech, 5 Mar. 2012. Web. 31 Oct. 2012.

<http://www.scribd.com/doc/95282643/Backdoors-Embedded-in-DoD-Microchips-

From-China>.

"The F-22 Raptor: Program & Events." Defense Industry Daily RSS News. N.p., 23 Oct. 2012.

Web. 05 Dec. 2012.

<http://www.defenseindustrydaily.com/f22-raptor-procurement-events-updated-02908/>.

"Two Models of Chinese 5th-Gen Fighter in Works (PHOTOS) RT." Two Models of

Chinese 5th-Gen Fighter in Works (PHOTOS) RT.com, 18 Sept. 2012. Web. 19 Nov.

2012.

<http://rt.com/news/china-five-generation-lightweight-fighter-378/>.

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"US Federal Budget Analyst." US Defense Budget: US Federal Budget FY12 Estimated

Spending Breakdown. N.p., n.d. Web. 05 Dec. 2012.

< http://www.usfederalbudget.us/defense_budget_2012_3.html>

Walcott, John. "China Is Rapidly Closing The Technology Gap With Its Sneaky Espionage

Tactics." Business Insider. N.p., 18 Apr. 2012. Web. 31 Oct. 2012.

<http://www.businessinsider.com/china-is-rapidly-closing-the-technology-gap-with-its-

sneaky-espionage-tactics-2012-4>.

Walcott, John. "Chinese Espionage Campaign Targets U.S. Space Technology." Bloomberg.

N.p., 18 Apr. 2012. Web. 31 Oct. 2012.

<http://www.bloomberg.com/news/2012-04-18/chinese-espionage-campaign-targets-u-s-

space-technology.html>.

"Was China’s Stealth Tech Made in America?" Wired.com. Conde Nast Digital, 24 Jan.

2011.Web. 31 Oct. 2012.

<http://www.wired.com/dangerroom/2011/01/was-chinas-stealth-tech-made-in-america/

>.