RESEARCH STARTER

Industrial Espionage

Industrial espionage refers to the illicit acquisition of trade secrets from companies, typically for the advantage of competitors. These trade secrets can include designs, plans, or techniques that are crucial to a company's success. While traditional espionage often focuses on national security, industrial espionage is driven by the desire for economic gain and competitive edge. Various tactics are employed, including deception, blackmail, and clandestine surveillance, to obtain sensitive information.

Historically, industrial espionage has deep roots, with early examples dating back to the 1680s when a French priest documented the Chinese methods of porcelain production, leading to widespread replication in Europe. In the modern context, nations like China have been frequently accused of engaging in extensive industrial espionage, particularly targeting advanced technologies from Western countries. Reports suggest that this has significant economic implications, with estimates indicating massive financial losses to affected nations due to industrial espionage activities. The rise of digital technology has further complicated the landscape, allowing such theft to occur more covertly. As businesses increasingly seek to protect their proprietary information, the threat of industrial espionage remains a critical concern for global economies.

Full Article

Industrial espionage is the theft of trade secrets from a corporation for use by a rival. Trade secrets are designs, plans, or techniques that a company keeps confidential to help itself succeed commercially. Competitors who steal these secrets can be other corporations or foreign governments.

One prominent example of industrial espionage in the twenty-first century is the theft of Western corporate trade secrets by Chinese agents. This intelligence allowed China to develop and sell technology it otherwise would have taken years to acquire for itself. Despite companies’ increasingly high-tech efforts to protect themselves from this kind of theft, industrial espionage threatens businesses and economies.

Classifying Industrial Espionage

The goal of industrial espionage is to gain an economic advantage. This differs from traditional espionage, which is usually conducted for purposes of national security. Industrial espionage refers to the stealing of information a corporation intends to keep secret. The term competitive intelligence describes the legal observation of a company’s strengths and weaknesses by a rival to enhance the performance of its own business. Though the theft of trade secrets sometimes involves human agents operating in restricted settings, other methods, such as blackmail, bribery, and clandestine surveillance, can also be used.

The Federal Bureau of Investigation (FBI) outlines several methods by which trade secrets can be stolen and classified as industrial espionage. One involves the acquisition of protected information by deception or fraud. Another consists of any type of transmission or replication—including sketching, photographing, or downloading—of the information. A person or an entity that buys or receives the information after it has been stolen is considered an accomplice to the theft. Under the Defend Trade Secrets Act of 2016, trade-secret owners may also bring civil lawsuits in federal court for trade-secret misappropriation.

History of Industrial Espionage

Industrial espionage is not unique to contemporary times. One of the first recorded instances of the practice occurred in the 1680s when a French Jesuit priest named Père d’Entrecolles traveled to Jingdezhen, China. He meticulously recorded the Chinese method of making hard-paste porcelain, at that time a highly valued product in Europe. Within decades after d’Entrecolles returned home, French porcelain factories began making porcelain products similar to the Chinese porcelain. Great Britain later stole the process from France and started manufacturing the porcelain as well.

Britain and France continued to steal trade secrets from each other throughout the 1700s. French agents routinely stole British blueprints and other plans to aid French industries. French recruiters even attempted to lure skilled British laborers into defecting to work in France. Britain later decreed that any British citizens who took up these offers would be fined. Another British law of the era prohibited the exporting of machinery from certain industries for fear its designs would be stolen.

The United States engaged in industrial espionage throughout the 1800s, gleaning numerous business secrets from other countries. The information was one of many factors that led the United States to become the world’s largest economy by the 1870s. Afterward, the country’s industrial and technological advancements became a target for much of the still-developing world. During the Cold War period of the twentieth century, the communist Soviet Union attempted to steal American trade secrets to improve its own economy. The end of the Cold War in the 1990s brought free-market economies to much of the world, leading to increased concerns about industrial espionage involving several countries, including China.

Industrial Espionage Today

Exact details of industrial espionage in the twenty-first century are difficult to identify. This type of theft frequently takes place through computer technology and can go unnoticed. In the twenty-first century, China has often been accused of stealing trade secrets by more technologically advanced Western governments. Targeted fields include computers, automobiles, artificial intelligence, biotechnology, quantum information science, and semiconductors. In 2020, Taiwan-based United Microelectronics Corporation pleaded guilty in a U.S. criminal trade-secret case involving semiconductor technology and paid a $60 million fine. The amount of funding devoted to research and development of these technologies makes their secrets especially valuable. In 2022, the US Department of Commerce expanded export controls on advanced computing and semiconductor manufacturing items sent to China.

In 2009, for example, Germany stated that industrial espionage by foreign nations caused major economic losses. China, it claimed, was identified as a major source of industrial espionage, using spies, wiretapping, and computer hacking to steal sensitive business secrets. Germany also accused Russia of stealing its industrial information, claiming the thefts saved the Russian economy billions of dollars on performing its own technological research and development.

Chinese industrial espionage has also plagued the American economy for many years. Much of it is carried out by individuals or organizations supported by the Chinese government. A 2015 FBI survey found that half of 165 private companies claimed to have been victims of industrial espionage, and many cases involved allegations connected to China. The United States experienced increased industrial espionage investigations, with many involving allegations connected to China. In 2022, the FBI and the United Kingdom’s MI5 intelligence agency warned business leaders that China-linked economic espionage could affect companies, universities, and research institutions.

In May 2015, the US Justice Department indicted six Chinese citizens on charges of stealing confidential wireless technology from American companies Avago Technologies and Skyworks Solutions Inc., which manufacture components for the Apple iPhone. The individuals allegedly established a market through connections associated with Tianjin University to manufacture and sell the technology to Chinese businesses and military contractors. By the time of the indictment, the six individuals had returned to China and could not be easily extradited to the United States. One, however, was later arrested upon arriving in Los Angeles from China.

In another case in March 2017, US citizen Xiaorong You and Chinese national Liu Xiangchen conspired to steal trade secrets related to the development of BPA-free coatings. The information was worth more than $100 million. She stole trade secrets from two American companies that employed her and provided them to Liu, whose company used them to create products to compete with the American companies’ products. In 2024, federal prosecutors charged former Google engineer Linwei Ding with stealing trade secrets related to artificial intelligence technology; in 2026, a federal jury found him guilty of economic espionage and theft of confidential AI technology.

Industrial espionage extends to military secrets as well. In 2023, two US Navy sailors were charged with espionage after federal prosecutors accused them of providing photographs and other sensitive information to individuals connected to China.


Bibliography

“Annual Threat Assessment of the U.S. Intelligence Community.” ODNI, Mar. 2025, www.dni.gov/files/ODNI/documents/assessments/ATA-2025-Unclassified-Report.pdf. Accessed 23 May 2026.

Bruer, Wesley. “FBI Sees Chinese Involvement Amid Sharp Rise in Economic Espionage Cases.” CNN, 24 July 2015, www.cnn.com/2015/07/24/politics/fbi-economic-espionage/. Accessed 23 May 2026.

“Commerce Implements New Export Controls on Advanced Computing and Semiconductor Manufacturing Items to the People’s Republic of China (PRC).” Bureau of Industry and Security, 7 Oct. 2022, www.bis.gov/press-release/commerce-implements-new-export-controls-advanced-computing-semiconductor-manufacturing-items-peoples. Accessed 23 May 2026.

Connolly, Kate. “Germany Accuses China of Industrial Espionage.” The Guardian, 22 July 2009, www.theguardian.com/world/2009/jul/22/germany-china-industrial-espionage. Accessed 23 May 2026.

“Director’s Remarks to Business Leaders in London.” FBI, 6 July 2022, www.fbi.gov/news/speeches-and-testimony/directors-remarks-to-business-leaders-in-london-070622. Accessed 23 May 2026. 

“Former Google Engineer Found Guilty of Economic Espionage and Theft of Confidential AI Technology.” US Department of Justice, 30 Jan. 2026, www.justice.gov/opa/pr/former-google-engineer-found-guilty-economic-espionage-and-theft-confidential-ai-technology. Accessed 23 May 2026.

Grossman, Andrew. “U.S. Charges Six Chinese Citizens with Economic Espionage.” The Wall Street Journal, www.wsj.com/articles/u-s-charges-six-chinese-citizens-with-economic-espionage-1432046527. Accessed 23 May 2026.

“Industrial Espionage: What It Is and Why It Matters.” Investopedia, www.investopedia.com/terms/i/industrial-espionage.asp. Accessed 23 May 2026.

“Survey of Chinese Espionage in the United States Since 2000.” CSIS, www.csis.org/programs/strategic-technologies-program/survey-chinese-espionage-united-states-2000. Accessed 23 May 2026.

“Taiwan Company Pleads Guilty to Trade Secret Theft in Criminal Case Involving PRC State-Owned Company.” United States Department of Justice, 28 Oct. 2020, www.justice.gov/archives/opa/pr/taiwan-company-pleads-guilty-trade-secret-theft-criminal-case-involving-prc-state-owned. Accessed 23 May 2026.

“Trade Secrets: Additional Information and Resources.” USPTO, www.uspto.gov/ip-policy/trade-secret-policy/trade-secrets-additional-information-and-resources. Accessed 23 May 2026.

Wendling, Mike. “Two US Navy Sailors Charged with Spying for China.” BBC, 4 Aug. 2023, www.bbc.com/news/world-us-canada-66365641. Accessed 23 May 2026.

Full Article

Industrial espionage is the theft of trade secrets from a corporation for use by a rival. Trade secrets are designs, plans, or techniques that a company keeps confidential to help itself succeed commercially. Competitors who steal these secrets can be other corporations or foreign governments.

One prominent example of industrial espionage in the twenty-first century is the theft of Western corporate trade secrets by Chinese agents. This intelligence allowed China to develop and sell technology it otherwise would have taken years to acquire for itself. Despite companies’ increasingly high-tech efforts to protect themselves from this kind of theft, industrial espionage threatens businesses and economies.

Classifying Industrial Espionage

The goal of industrial espionage is to gain an economic advantage. This differs from traditional espionage, which is usually conducted for purposes of national security. Industrial espionage refers to the stealing of information a corporation intends to keep secret. The term competitive intelligence describes the legal observation of a company’s strengths and weaknesses by a rival to enhance the performance of its own business. Though the theft of trade secrets sometimes involves human agents operating in restricted settings, other methods, such as blackmail, bribery, and clandestine surveillance, can also be used.

The Federal Bureau of Investigation (FBI) outlines several methods by which trade secrets can be stolen and classified as industrial espionage. One involves the acquisition of protected information by deception or fraud. Another consists of any type of transmission or replication—including sketching, photographing, or downloading—of the information. A person or an entity that buys or receives the information after it has been stolen is considered an accomplice to the theft. Under the Defend Trade Secrets Act of 2016, trade-secret owners may also bring civil lawsuits in federal court for trade-secret misappropriation.

History of Industrial Espionage

Industrial espionage is not unique to contemporary times. One of the first recorded instances of the practice occurred in the 1680s when a French Jesuit priest named Père d’Entrecolles traveled to Jingdezhen, China. He meticulously recorded the Chinese method of making hard-paste porcelain, at that time a highly valued product in Europe. Within decades after d’Entrecolles returned home, French porcelain factories began making porcelain products similar to the Chinese porcelain. Great Britain later stole the process from France and started manufacturing the porcelain as well.

Britain and France continued to steal trade secrets from each other throughout the 1700s. French agents routinely stole British blueprints and other plans to aid French industries. French recruiters even attempted to lure skilled British laborers into defecting to work in France. Britain later decreed that any British citizens who took up these offers would be fined. Another British law of the era prohibited the exporting of machinery from certain industries for fear its designs would be stolen.

The United States engaged in industrial espionage throughout the 1800s, gleaning numerous business secrets from other countries. The information was one of many factors that led the United States to become the world’s largest economy by the 1870s. Afterward, the country’s industrial and technological advancements became a target for much of the still-developing world. During the Cold War period of the twentieth century, the communist Soviet Union attempted to steal American trade secrets to improve its own economy. The end of the Cold War in the 1990s brought free-market economies to much of the world, leading to increased concerns about industrial espionage involving several countries, including China.

Industrial Espionage Today

Exact details of industrial espionage in the twenty-first century are difficult to identify. This type of theft frequently takes place through computer technology and can go unnoticed. In the twenty-first century, China has often been accused of stealing trade secrets by more technologically advanced Western governments. Targeted fields include computers, automobiles, artificial intelligence, biotechnology, quantum information science, and semiconductors. In 2020, Taiwan-based United Microelectronics Corporation pleaded guilty in a U.S. criminal trade-secret case involving semiconductor technology and paid a $60 million fine. The amount of funding devoted to research and development of these technologies makes their secrets especially valuable. In 2022, the US Department of Commerce expanded export controls on advanced computing and semiconductor manufacturing items sent to China.

In 2009, for example, Germany stated that industrial espionage by foreign nations caused major economic losses. China, it claimed, was identified as a major source of industrial espionage, using spies, wiretapping, and computer hacking to steal sensitive business secrets. Germany also accused Russia of stealing its industrial information, claiming the thefts saved the Russian economy billions of dollars on performing its own technological research and development.

Chinese industrial espionage has also plagued the American economy for many years. Much of it is carried out by individuals or organizations supported by the Chinese government. A 2015 FBI survey found that half of 165 private companies claimed to have been victims of industrial espionage, and many cases involved allegations connected to China. The United States experienced increased industrial espionage investigations, with many involving allegations connected to China. In 2022, the FBI and the United Kingdom’s MI5 intelligence agency warned business leaders that China-linked economic espionage could affect companies, universities, and research institutions.

In May 2015, the US Justice Department indicted six Chinese citizens on charges of stealing confidential wireless technology from American companies Avago Technologies and Skyworks Solutions Inc., which manufacture components for the Apple iPhone. The individuals allegedly established a market through connections associated with Tianjin University to manufacture and sell the technology to Chinese businesses and military contractors. By the time of the indictment, the six individuals had returned to China and could not be easily extradited to the United States. One, however, was later arrested upon arriving in Los Angeles from China.

In another case in March 2017, US citizen Xiaorong You and Chinese national Liu Xiangchen conspired to steal trade secrets related to the development of BPA-free coatings. The information was worth more than $100 million. She stole trade secrets from two American companies that employed her and provided them to Liu, whose company used them to create products to compete with the American companies’ products. In 2024, federal prosecutors charged former Google engineer Linwei Ding with stealing trade secrets related to artificial intelligence technology; in 2026, a federal jury found him guilty of economic espionage and theft of confidential AI technology.

Industrial espionage extends to military secrets as well. In 2023, two US Navy sailors were charged with espionage after federal prosecutors accused them of providing photographs and other sensitive information to individuals connected to China.


Bibliography

“Annual Threat Assessment of the U.S. Intelligence Community.” ODNI, Mar. 2025, www.dni.gov/files/ODNI/documents/assessments/ATA-2025-Unclassified-Report.pdf. Accessed 23 May 2026.

Bruer, Wesley. “FBI Sees Chinese Involvement Amid Sharp Rise in Economic Espionage Cases.” CNN, 24 July 2015, www.cnn.com/2015/07/24/politics/fbi-economic-espionage/. Accessed 23 May 2026.

“Commerce Implements New Export Controls on Advanced Computing and Semiconductor Manufacturing Items to the People’s Republic of China (PRC).” Bureau of Industry and Security, 7 Oct. 2022, www.bis.gov/press-release/commerce-implements-new-export-controls-advanced-computing-semiconductor-manufacturing-items-peoples. Accessed 23 May 2026.

Connolly, Kate. “Germany Accuses China of Industrial Espionage.” The Guardian, 22 July 2009, www.theguardian.com/world/2009/jul/22/germany-china-industrial-espionage. Accessed 23 May 2026.

“Director’s Remarks to Business Leaders in London.” FBI, 6 July 2022, www.fbi.gov/news/speeches-and-testimony/directors-remarks-to-business-leaders-in-london-070622. Accessed 23 May 2026. 

“Former Google Engineer Found Guilty of Economic Espionage and Theft of Confidential AI Technology.” US Department of Justice, 30 Jan. 2026, www.justice.gov/opa/pr/former-google-engineer-found-guilty-economic-espionage-and-theft-confidential-ai-technology. Accessed 23 May 2026.

Grossman, Andrew. “U.S. Charges Six Chinese Citizens with Economic Espionage.” The Wall Street Journal, www.wsj.com/articles/u-s-charges-six-chinese-citizens-with-economic-espionage-1432046527. Accessed 23 May 2026.

“Industrial Espionage: What It Is and Why It Matters.” Investopedia, www.investopedia.com/terms/i/industrial-espionage.asp. Accessed 23 May 2026.

“Survey of Chinese Espionage in the United States Since 2000.” CSIS, www.csis.org/programs/strategic-technologies-program/survey-chinese-espionage-united-states-2000. Accessed 23 May 2026.

“Taiwan Company Pleads Guilty to Trade Secret Theft in Criminal Case Involving PRC State-Owned Company.” United States Department of Justice, 28 Oct. 2020, www.justice.gov/archives/opa/pr/taiwan-company-pleads-guilty-trade-secret-theft-criminal-case-involving-prc-state-owned. Accessed 23 May 2026.

“Trade Secrets: Additional Information and Resources.” USPTO, www.uspto.gov/ip-policy/trade-secret-policy/trade-secrets-additional-information-and-resources. Accessed 23 May 2026.

Wendling, Mike. “Two US Navy Sailors Charged with Spying for China.” BBC, 4 Aug. 2023, www.bbc.com/news/world-us-canada-66365641. Accessed 23 May 2026.

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