May 20, 2015 / 4:28 AM / 2 years ago

U.S. charges six Chinese nationals with economic espionage

WASHINGTON (Reuters) - The U.S government charged six Chinese nationals with economic espionage, saying they stole secrets from two companies that develop technology often used in military systems, the Department of Justice said on Tuesday.

It was the third time in as many years that U.S. authorities have made accusations of economic espionage conducted on behalf of China, a sign that the United States is increasingly focused on what it has termed a top national security concern.

The charges against the six could exacerbate tensions between China and the United States, coming two days after U.S. Secretary of State John Kerry's China visit was overshadowed by concerns over Beijing's maritime ambitions in the South China Sea.

"The Chinese government expresses strong concern about the relevant matter and we are checking further details," China's Foreign Ministry spokesman, Hong Lei, told reporters at a regular press briefing.

Hong declined to comment when asked whether the case would undermine Sino-U.S. relations, but said the Chinese government would make sure that the "legitimate rights and interests of the Chinese personnel are guaranteed."

One of the suspects, Professor Hao Zhang, 36, was arrested on Saturday in Los Angeles after he arrived on a flight from China, the Justice Department said in a statement. The other five suspects are believed to be in China.

Zhang and two other professors from Tianjin University were charged with stealing source code and other proprietary information from chipmakers Avago Technologies Ltd (AVGO.O) and Skyworks Solutions Inc (SWKS.O), where two of them worked.

Avago has headquarters in San Jose, California and Singapore, and Skyworks is based in Woburn, Massachusetts.

Zhang, a former Skyworks employee, and others established a company, ROFS Microsystems, at Tianjin with secrets stolen from the U.S. firms, prosecutors said. Calls to ROFS Microsystems went unanswered on Wednesday.

Tianjin University organized an immediate investigation, an employee from the university's publicity department told Reuters by phone. He declined to be named as he was not authorized to speak to media.

"The current investigation is still under way," he said, adding that the school would issue an official response soon.

State-backed Tianjin University, which was founded in 1895 as Northern University, is China's oldest institution of higher learning, according to its website. The ruling Communist Party's Central Committee, a council of some 200 senior officials who meet about once a year, identified the school "as a national key university" in 1959, the website said.

Prosecutors identified the other five suspects as Wei Pang, 35, a former Avago employee and a professor; Jinping Chen, 41, a professor and a member of the board of directors for ROFS Microsystems; Chong Zhou, 26, a Tianjin University graduate student and design engineer at ROFS Microsystems; Huisui Zhang, 34, who studied with Pang and Zhang; and Zhao Gang, 39, who is the general manager of ROFS Microsystems.

According to the indictment, Pang and Zhang met while studying electrical engineering at University of Southern California and took jobs as engineers at Avago and Skyworks, respectively.

Both companies specialize in Film Bulk Acoustic Resonator (FBAR) technology, which is primarily used in mobile devices like cellphones, tablets and GPS devices, but also has military applications.

Between 2006 and 2007, Pang and Zhang hatched a plan to start manufacturing the technology in China and met with Tianjin University officials, prosecutors said. In 2009, both left the U.S. companies to become professors at Tianjin, nearly 100 miles (160 km) southeast of Beijing.

If convicted, the defendants could face jail terms of up to 50 years.

U.S. State Department spokesman Jeff Rathke told reporters that the United States is committed to protecting U.S. companies' trade secrets.

"This is an important issue for the United States," he said.

"YOUNG AND NOT PERFECT"

Hao teaches at Tianjin University's school of precision instrument and opto-electronics engineering, according to the university's website. Both Zhang and Pang led a research team in a microelectromechanical systems filter chip project, the university said in 2011 on its website.

In 2010, Zhang and Pang were featured in an article in the state-run China Economic Net website as four of Tianjin University's younger generation of "academic leaders", wearing "backpacks, jeans and youthful sunny smiles".

"Perhaps they are still young and not perfect, but they have very good projects and research funding support," Chen Zhihua, Tianjin University's director of discipline development, was quoted as saying.

"They stand at the forefront of technology and their fields of study are very promising."

In March 2014, a California businessman was convicted of stealing DuPont trade secrets to help a state-owned Chinese company develop a white pigment used in a wide range of products and last May five Chinese military officers were accused of hacking into American nuclear, metal and solar companies.

Skyworks and Avago did not immediately respond to requests for comment.

Additional reporting by Bill Trott in WASHINGTON and Sui-Lee Wee and Beijing Newsroom; Editing by David Storey,; Jonathan Oatis, Christian Plumb and Nick Macfie

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