The Greatest Wealth Transfer In History

“There are only two types of companies, those that know that they’ve been hacked [by China], and those that don’t know.” – Dimitri Alperovitch, cofounder of CrowdStrike

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Photo by Adi Goldstein on Unsplash

A few years ago, I had an interesting conversation at a party with a friend employed by a defense contractor. I brought up a new superweapon that China claimed to have developed. He confidently assured that the Chinese government was not being truthful. Intrigued, I asked him how he knew. He replied, “Because we [the U.S.] haven’t developed that weapon yet. Therefore, the Chinese military couldn’t have stolen our blueprint.” We both laughed, moving on to lighter topics, but that exchange lingered in my mind.

Recently, I found myself reflecting on that conversation while listening to a compelling mini-podcast series titled “To Catch a Thief: China’s rise to cyber supremacy.” This documentary delves into how Communist China has managed to ascend to the pinnacle of technological dominance in many areas from telecom to solar in such a short amount of time. The explanation is alarmingly clear: a systematic, state-sponsored campaign of intellectual property (IP) theft. As someone who regularly writes about China, I was familiar with the issue of rampant IP theft, but the podcast revealed a staggering reality: trillions of dollars in American IPs have been stolen over decades by Chinese government backed hackers. One of the interviewers on the podcast aptly called it “the greatest transfer of wealth in history.”

The podcast is not a right-wing China bashing. Nicole Perlroth, a former cybersecurity reporter at the New York Times, hosts this revealing podcast. Both Perlroth and David Barboza, the former NYT Shanghai Bureau Chief, emphasized that the primary responsibility of China's IP theft lies with the Chinese Communist Party (CCP), which effectively represents the Chinese government in the context of a one-party state. These two entities are considered interchangeable.