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Looking at China’s huge technological leaps within the last few years, especially in the cyber domain, there arises the question, how a country with low university standard (at that time) and only state owned industry was able to achieve the now seen technological advantages compared with western countries and especially Europe. European Security & Defence spoke with Alan R. Shaffer, Deputy Under Secretary of Defense for Aquisition and Sustainment at Department of Defense, United States, on this topic.


Photo: U.S. Department of Defense

ESD: How many dollars American intellectual property are stolen every year by China?

Shaffer: 600 billion. That is our high end estimate.


ESD: How is it stolen?

Shaffer: Cyber theft. They come into our networks – and by the way, European nation networks also – they copy data and steal it.


ESD: So, it is also a problem for Europe?

Shaffer: Yes, it is huge problem for Europe, not only for industries. If you value intellectual property, then it is a problem for Europe.


ESD: How is China using this stolen intellectual property?

Shaffer: The worst, it allows them to do is make great technological leaps without investing in the fundamental research underlying it. So they have been able to make tremendous advances very quickly. That is a problem if you are looking at an economically competitive world. Do you want Chinese technology to advance from both Chinese investment and European investment? So, if European nations are investing in research, I would say theft of European intellectual property is a problem.


ESD: How does the U.S. secure their networks?

Shaffer: There is a whole layer of different things. It starts with awareness of the problem and taking hygiene steps. If you have secure data or data you want to protect, you don’t go out and browse the web with this computer. These are just simple steps and then you go from there to more hardened systems. You can do a data encryption on everything. You pay a penalty but then all people can get at is encrypted data and they cannot make any sense of it, or they have to spend a lot of time decoding the data. There is a layered number of steps, everything from computer hygiene to encryption to disconnecting people from public browsers. It will allow you to have more secure intellectual property.


ESD: Does the U.S. support their industry in taking these steps?

Shaffer: We are in the process of doing that, and we will have a policy and funding in place by the end of the year.


The interview was conducted by Dorothee Frank.