Rare Earth Firm Executive Discloses Seven State Secrets to Foreign Entity, National Security Department Reveals Details

Deep News04-23

The development of resources, the advancement of technology, and the flow of data are all deeply embedded within the intricate network of industrial and supply chains. The security of these chains is critical to national economic security and high-quality development. In recent years, espionage activities targeting China's industrial and supply chains by foreign intelligence agencies have become increasingly covert, professional, and systematic, posing a severe threat to the nation's economic, technological, and data security.

Espionage threats loom large over industrial and supply chains. — Insider leaks of semiconductor technology. Core technologies represent the lifeline of an industrial chain and are a prime target for malicious actors. Public cases reveal that a former engineer from a domestic semiconductor company, Zhang, violated confidentiality obligations after leaving his post, illegally providing trade secrets, including core production processes, to an overseas organization. The outflow of critical technical parameters and design blueprints can not only nullify years of a company's R&D investment but also weaken China's influence within the global semiconductor supply chain. Zhang was ultimately severely punished by law. — Parasitic theft of data resources. Data is the lifeblood of the digital economy, and the security of its supply chain impacts industrial competitiveness. A public case shows that a domestic company used technical means to parasitically attach itself to an e-commerce platform's system, stealing over a million pieces of operational data daily and illegally profiting by tens of millions of yuan. This activity was not simple commercial infringement but organized, industrialized data theft aimed at depleting the platform's core commercial resources and undermining a healthy data ecosystem. The individuals involved were ultimately subjected to legal punishment. — Extraction of classified information on critical minerals. Rare earths are strategic resources vital for high-end manufacturing and national defense. Foreign entities have long shown intense interest in related stockpiling information, resorting to various methods to obtain internal data. A public case discloses that a foreign non-ferrous metals company, through its Chinese employee Ye, used monetary incentives to lure Cheng, the deputy general manager of a domestic rare earth company. Cheng, seeking personal gain, violated regulations and illegally provided seven items of classified state secrets, including details on China's rare earth stockpile categories, quantities, and prices, to the foreign entity. Both Ye and Cheng were ultimately met with severe legal consequences.

Protective measures for industrial and supply chain security. Confronted with a severe and complex security landscape, mere patching of individual links or passive responses are insufficient; a scientific and efficient protective system must be established. — Strict hardware management. Rigorously control access to critical hardware like chips, servers, and industrial control equipment, implementing supplier security reviews and traceability management. Conduct comprehensive checks to prohibit the use of equipment with security risks and establish mechanisms for supplier vetting and dynamic management to prevent malicious actors from implanting spying devices or pre-installing spyware firmware. — Strict software management. Strengthen security controls for software, open-source components, and cloud services, conducting code audits and vulnerability assessments to prevent the implantation of malicious code or backdoors. Enforce strict lifecycle management for classified and sensitive data, core technologies, and trade secrets, implementing principles of least privilege, end-to-end encryption, and cross-border data security evaluations to staunchly prevent data theft, tampering, or illegal transfer abroad. — Strict personnel management. Implement responsibilities for counter-espionage security prevention. Conduct background checks and confidentiality training for personnel in key positions, strictly prohibiting the handling of classified information on non-secure devices. Standardize the management of foreign cooperation, outsourcing, and subcontracting to prevent foreign intelligence agencies from using recruitment, coercion, or financial inducements to steal classified and sensitive information. Safeguarding industrial and supply chain security is not a solo performance by the government and enterprises but a shared responsibility where everyone can contribute. All sectors of society, especially professionals in relevant industries, must heighten vigilance, strengthen awareness of confidentiality and the rule of law, and help fortify the nation's security defenses. If suspicious activities threatening the security of China's industrial and supply chains are detected, reports can be made through the National Security Agency's reporting hotline at 12339, its online reporting platform (www.12339.gov.cn), the Ministry of State Security's WeChat public account reporting channel, or by contacting the local national security authority directly.

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