For decades, the United States believed that economic engagement with China would create mutual prosperity and gradually integrate China into a rules based global system. Instead, many intelligence officials and national security experts now argue that China used that openness to conduct one of the largest and most systematic theft campaigns in modern history. The result, they warn, is a massive transfer of technology, wealth, and strategic advantage that has reshaped the global balance of power.
A major examination of this issue appears in the book The Great Heist: China’s Epic Campaign to Steal America’s Secrets by David R. Shedd and Andrew Badger. The authors describe what they believe is a 20 to 30 year covert campaign that helped propel China from a developing nation into a technological superpower. Their argument is not that China lacks its own innovation, but that large scale theft of American intellectual property dramatically accelerated its rise.
Andrew Badger frames the central mystery this way: “How did China rise so quickly?” He argues espionage is a key part of the answer, saying it has shifted the balance of power “in real time,” with China becoming a nation that fields one of the world’s most advanced militaries and what he calls “the most powerful intelligence agency in the world, the Ministry of State Security.”
The Scale of the Theft Is Enormous
The numbers associated with China’s intellectual property campaign are staggering. The FBI estimates that intellectual property theft in the United States linked to China totals roughly $600 billion per year. That represents not only stolen designs and research, but lost jobs, lost market share, and reduced incentives for innovation across entire industries.
One of the most damaging incidents occurred in 2015, when hackers breached the U.S. Office of Personnel Management and stole approximately 22 million to 23 million security clearance files. David Shedd said the breach left a deep impression on him. He described the stolen information as “a treasure trove of enormous value,” explaining that if the United States possessed that level of personal intelligence on an adversary, it would be considered extraordinarily valuable.
The breach included background investigations, fingerprints, and deeply personal details about millions of Americans working in government or defense related roles. Such information could be used for recruitment, blackmail, or long term intelligence targeting.
Security experts also warn that China’s efforts reach deep into the private sector. According to interviews cited by Shedd and Badger, a leading security firm indicated that “basically every Fortune 500 company has been touched by this issue.” That statement highlights the breadth of the campaign and suggests that few major industries have escaped attention.
A Massive Intelligence and Cyber Apparatus
China’s intelligence system operates at a scale rarely seen in history. The Ministry of State Security has reportedly doubled in size over the past decade and functions as a hybrid organization combining intelligence gathering, counterintelligence, cyber operations, and law enforcement powers.
The country has also developed a vast cyber workforce. Estimates suggest that more than 300,000 individuals have participated in hacking competitions and related programs that serve as recruitment pipelines for government and military cyber units. Many of these participants begin as university students or independent programmers and later transition into state sponsored roles.
Universities connected to the People’s Liberation Army play a central role. Capture the flag competitions serve as talent identification tools, and winners are often recruited into elite cyber units such as PLA Unit 61398 and Unit 61486. Analysts have linked these units to intellectual property theft campaigns and cyber espionage operations targeting aerospace, defense, and infrastructure systems.
Dakota Cary, a cyber intelligence analyst, noted that these competitions may involve real world operations rather than simple exercises. He asked, “If it’s a real CTF exercise, why are participants deleting data and backdoors?” His comment suggests that some events may function as live training environments for operational hacking.
Recruitment blends patriotism, career advancement, and financial incentives. Programs such as the Thousand Talents Plan also help bring foreign trained experts back to China with promises of funding, research opportunities, and prestige.
Agents and Human Intelligence Networks
Cyber operations are only one part of China’s strategy. Human intelligence networks remain critical. Chinese dissident Guo Wengui has claimed that China operates a spy network inside the United States that includes approximately 25,000 Chinese agents and at least 15,000 recruited Americans.
Guo said, “I know the Chinese spy system very, very well,” and described the scale of operations as “mind boggling.” He alleged that agents work to obtain military technology, influence officials, and penetrate networks. He also claimed Chinese intelligence services maintain control over operatives by pressuring family members in China.
While such claims are difficult to verify fully, they align with broader concerns among Western intelligence agencies about Chinese espionage networks operating through businesses, academic institutions, and diaspora communities.
Targets That Determine Future Power
China’s intelligence campaign focuses on technologies that define economic and military leadership. These include artificial intelligence, quantum computing, biotechnology, aerospace engineering, and advanced manufacturing.
The National Security Commission on Artificial Intelligence warned that “China possesses the might, talent, and ambition to surpass the United States as the world’s leader in AI in the next decade.” That warning underscores why intellectual property theft in these sectors carries such strategic importance.
Cyber operations also increasingly target infrastructure. Investigations have found Chinese hackers probing telecommunications systems, water utilities, ports, and energy facilities. Officials believe such intrusions may be preparation for potential future conflict scenarios in which disruption could create chaos or hinder military responses.
Anne Neuberger, a senior cybersecurity official, noted that investigators often cannot determine the full scope of intrusions because attackers erase logs or victims fail to retain records. She said there are details “we will never know regarding the scope and scale of this.”
Economic Warfare Without Traditional Constraints
Experts argue that China’s approach differs fundamentally from Western espionage models because it is integrated into national policy. China’s 2017 National Intelligence Law requires organizations and citizens to “support, assist and cooperate with state intelligence work.” This effectively turns companies, universities, and individuals into potential intelligence assets.
David Shedd describes the campaign as a form of unilateral economic warfare. He warns that China has weaponized the openness of Western economies against them, exploiting global trade systems and technology partnerships.
Secretary of State Marco Rubio captured the concern bluntly when he said American companies sometimes engage in “corporate suicide” by transferring technology or operating in ways that strengthen Chinese competitors without recognizing long term consequences.
Strategic Consequences Already Visible
The effects of this campaign are increasingly visible across industries. China has surged ahead in electric vehicle manufacturing, battery technology, and certain areas of advanced manufacturing. Analysts note that Chinese firms are releasing new models and innovations rapidly, sometimes outpacing Western competitors.
China also holds significant leverage through control of rare earth minerals and supply chains essential for electronics, defense systems, and renewable energy technologies. Shedd warned that the United States still has not fully “woken up” to the implications of this dependency.
The broader cybercrime environment adds to the challenge. Cybercrime costs are projected to reach $10.5 trillion globally and may grow to $12.2 trillion by 2031. Experts describe cybercrime as “the greatest transfer of economic wealth in history,” highlighting how digital theft has become a central battlefield in global competition.
How China Views the Competition
Chinese leadership views technological rivalry as part of a broader national struggle for power and rejuvenation. Experts say this perspective explains the intensity of espionage operations.
Badger argues that China sees the contest with the United States as existential and is willing to “do whatever it takes to steal these secrets.” He contrasts that with what he sees as American complacency, saying the United States has often been operating at “half speed.”
U.S. officials continue to sound alarms about the scale of the threat. The FBI has called China’s cyber activity a “grave threat to the economic well being and democratic values of the U.S.” Senator Dan Sullivan warned during a congressional hearing, “It’s shocking how exposed we are, and still are.”
Former intelligence leaders warn that cyber warfare could play a central role in future conflicts. George Barnes, former deputy director of the NSA, said that in a conflict over Taiwan, “the U.S. would be target zero for disruptive cyberattacks.”
The Damage May Be Irreversible, But the Competition Continues
Many experts believe much of the damage cannot be undone. Badger acknowledged that “a lot of it is already outside the bottle.” Once technology spreads and competitors gain expertise, reversing that process becomes nearly impossible.
However, Shedd and Badger argue that the United States still has advantages, particularly in innovation capacity, alliances, and research leadership. They believe decisive action could still preserve American leadership in future technologies.
The challenge now is whether the United States recognizes the scale of what has occurred. Shedd argues economic security must be treated with the same urgency as national security, similar to the mindset of the Cold War.
The outcome of this technological competition may shape global power for decades. If the United States fails to respond, experts warn that the erosion of American leadership could continue, driven not only by competition, but by one of the most ambitious intelligence campaigns in modern history.
