“The FBI estimate of IP theft (mainly by China) which has cost the US economy up to US$600 billion (A$860 billion) a year over the past decade.” That number, lifted from a new forensic account of theft and acquisition, frames a story that the authors call an epic campaign — systematic, sustained and state-directed.
US$600 billion a year: the FBI estimate and the scale of the loss
David R Shedd and Andrew Badger, both formerly of the US Defense Intelligence Agency, place the FBI’s figure at the centre of their analysis. The book they wrote, The Great Heist: China’s Epic Campaign to Steal America’s Secrets, treats that US$600 billion annual estimate as symptomatic of a broader pattern: the transfer of intellectual property (IP) that, the authors argue, has been a driving catalyst of China’s rapid technological rise. The Australian Strategic Policy Institute’s Critical Technology Tracker is cited for an additional metric: China now publishes the most high-impact research in 69 of the 74 technologies tracked, with the US leading in the remaining five.
Made in China 2025 and espionage as a policy tool
One turning point in the authors’ narrative is China’s accession to the World Trade Organisation in 2001, which they say became “a global apparatus for collecting IP.” A second was the 2015 launch of the Made in China 2025 industrial roadmap. That strategy, the authors write, aimed to lift Chinese production toward self-sufficiency in ten technology sectors — including electric vehicles, information technology, aerospace and aeronautical equipment, and biopharma and advanced medical devices — and espionage was “a critical part of the toolkit” to reach those goals.
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End the scrambleMinistry of State Security, Article 7 and military–civil fusion
Shedd and Badger describe an intelligence architecture that is large and whole-of-society. They attribute to the Ministry of State Security some 300,000 people, contrasted with an American intelligence community total of about 100,000 people, and portray the ministry as the lead organisation for industrial espionage. They point to China’s National Intelligence Law — specifically Article 7 — to show legal obligation: “All Chinese organisations and citizens must support, assist and cooperate with state intelligence efforts.” The authors use the term “military–civil fusion” to capture the absence of a clear line between public and private sectors in China’s approach.
Stark case studies: Tesla, the Los Alamos Club, OPM and Equifax
The book documents concrete episodes that the authors say illustrate how the campaign operates. Tesla’s investment in China is singled out because it was achieved without a forced local joint venture; the company’s chief executive, Elon Musk, is quoted as having brushed aside the IP risk — and, according to the authors, a top Tesla engineer later copied the Autopilot source code, which “seemingly found its way to Xpeng.”
Another episode concerns what the authors call the Los Alamos Club: 162 or more scientists who returned to China after working at the Los Alamos National Laboratory and then contributed to Chinese research and development programmes, including hypersonic weapons — “a field in which China now dominates the West,” the authors say. The book also points to large data breaches, notably at the US Office of Personnel Management and at Equifax, as part of the broader pattern of acquisitions that feed capability building.
What this means for government, business and academia
- Government: The authors judge that attention has been inadequate. They identify several causes — distraction by the post‑9/11 war on terror, hubris about China’s threat, and cultural sensitivities that make authorities wary of allegations of racial discrimination — and call for a strategic reassessment.
- Business: Shedd and Badger highlight economic dependency as a brake on action; US companies have found China an important source of profitability, and that has complicated collective responses to IP loss.
- Academia: The authors cite the movement of scientists — their example is the Los Alamos Club — as a conduit for transfer, and treat the porous boundary between commercial, academic and state activity in China as a vector that challenges traditional Western separation of public and private sectors.
The authors close with an epilogue proposing a seven‑pillar “counter strategy,” but they stress that the primary need is cultural: “a change of mindset.” They write that China treats industrial espionage as part of an existential struggle; the book’s final charge is that the United States must move beyond a passive, defensive posture in protecting its IP. The policy proposals are set out, the case studies assembled, and the large number — US$600 billion a year — remains the ledger that the book asks readers to consider: will government, business and academia change their approach to match what Shedd and Badger describe as an aggressive, take‑no‑prisoners campaign?
