Five Eyes intelligence chiefs warn on China's 'theft' of intellectual property

By Zeba Siddiqui

STANFORD, California (Reuters) - The Five Eyes countries' intelligence chiefs came together on Tuesday to accuse China of intellectual property theft and using artificial intelligence for hacking and spying against the nations, in a rare joint statement by the allies.

The officials from the United States, Britain, Canada, Australia and New Zealand - known as the Five Eyes intelligence sharing network - made the comments following meetings with private companies in the U.S. innovation hub Silicon Valley.

U.S. FBI Director Christopher Wray said the "unprecedented" joint call was meant to confront the "unprecedented threat" China poses to innovation across the world.

From quantum technology and robotics to biotechnology and artificial intelligence, China was stealing secrets in various sectors, the officials said.

"China has long targeted businesses with a web of techniques all at once: cyber intrusions, human intelligence operations, seemingly innocuous corporate investments and transactions," Wray said. "Every strand of that web had become more brazen, and more dangerous."

In response, Chinese government spokesman Liu Pengyu said the country was committed to intellectual property protection.

"We firmly oppose to the groundless allegations and smears towards China and hope the relevant parties can view China’s development objectively and fairly," the spokesperson for China's embassy in Washington said in a statement to Reuters.

The U.S. has long accused China of intellectual property theft and the issue has been a key sore point in U.S.-China relations. But this is the first time the Five Eyes members have joined publicly to call out China on it.

"The Chinese government is engaged in the most sustained scaled and sophisticated theft of intellectual property and expertise in human history," said Mike Burgess, the Australian Security Intelligence Organisation's director-general.

While China's intention to innovate for its own national interest was "fine and entirely appropriate", Burgess said "the behaviour we're talking about here goes well beyond traditional espionage."

Last month, his department busted a Chinese plot to infiltrate a prestigious Australian research institution that involved planting an academic there to steal secrets, he said.

"This sort of thing is happening every day in Australia, as it is in the countries here," Burgess said.

The Five Eyes statement follows the group's warning in May of a widespread Chinese spy operation it said was targeting critical infrastructure and various other sectors.

The Chinese government dismissed those allegations as a "collective disinformation campaign."

Wray said China had "a bigger hacking program than that of every other major nation combined" that together with Beijing's physical spies and stealing of trade secrets from private businesses and research institutions gave the country enormous power.

"Part of what makes it so challenging is all of those tools deployed in tandem, at a scale the likes of which we've never seen," Wray said.

The officials called for private industry and academia to help in countering those threats, chief among which they said were artificial intelligence tools.

"We worry about AI as an amplifier for all sorts of misconduct," Wray said, accusing China of stealing more personal and corporate data than any other nation by orders of magnitude.

"If you think about what AI can do to help leverage that data to take what's already the largest hacking program in the world by a country mile, and make it that much more effective - that's what we're worried about," he said.

(Reporting by Zeba Siddiqui in Stanford, California; Editing by Jamie Freed)