Global 'High Alert' Over Tech Theft from China... South Korea's Response is 'Soft Touch' [Reading Science]

Professor A Sentenced to Probation for Stealing Core Autonomous Vehicle Technology
KISTEP: "Major Countries Strengthen Crackdown on Technology Leaks... Korea Also Needs Improvements"

Semiconductor. Stock photo. Not related to the article. [Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Bong-su] #. Professor A, from the country's top science and technology educational institution, was arrested and indicted last September for leaking core autonomous vehicle technology to China. He was released after receiving a 2-year prison sentence with a 3-year probation at the first trial at the end of last month. Professor A is accused of receiving several hundred million won from a Chinese university and handing over research reports on LiDAR technology after being selected for China's overseas high-level talent recruitment program, the "Thousand Talents Plan," in November 2017. LiDAR is an advanced technology considered the "eyes" of autonomous vehicles and is a fiercely competitive field in the global automotive industry. Although the court acknowledged all charges including violation of the Act on the Prevention and Protection of Industrial Technology Leakage, it handed down a 'light' sentence considering factors such as the research materials not immediately generating economic results.

As the US-China hegemonic competition intensifies, competition among major countries over advanced technologies such as semiconductors, artificial intelligence (AI), autonomous driving, and quantum technology is also heating up. In particular, China is siphoning off talent and technology based on abundant funds like the Thousand Talents Plan, prompting major countries including the US to strengthen their 'shields' to prevent technology leakage. On the other hand, South Korea still imposes light punishments as in Professor A's case, highlighting the need for stronger countermeasures.

According to the report "Overseas Technology Leakage Prevention Policy Trends and Implications" released on the 25th by the Korea Institute of Science and Technology Planning and Evaluation (KISTEP), major countries overseas are strengthening systems to prevent technology leakage caused by overseas investment, mergers and acquisitions, and personnel movement in advanced technologies.

The US, which has begun to actively counter China's semiconductor rise, is the most proactive. During President Trump's administration in August 2018, the National Defense Authorization Act (NDAA 2019) was passed, focusing on stricter reviews of overseas technology transfers to protect America's technological superiority. The Export Control Reform Act (ECRA) included in this legislation codifies and permanently enforces US export control policies already applied to commercial and dual-use products, software, and technology, while expanding the scope and tightening regulations. Violations can result in fines up to $1 million (approximately 1.17 billion won) and imprisonment for up to 20 years. The Biden Democratic administration has maintained this stance. The NDAA 2021, passed in January this year, includes enhanced industrial technology protection policies such as the establishment of a deputy assistant secretary position and the creation of lists for foreign talent programs and universities posing national security threats.

[Image source=Yonhap News]

Britain, the US's closest ally, has also taken active measures amid growing concerns that China's technology theft threatens national security. In November 2020, the UK Parliament passed the National Security and Investment Act (NSIA), which came into effect on January 4, 2022. The core of this law grants the government official authority to review and intervene in mergers, acquisitions, or investments by companies that could threaten UK national security. Violations can result in fines up to 5% of the company's turnover or ?10 million (approximately 16 billion won), along with cancellation of the transaction as a strong penalty.

Japan is also making all-out efforts to establish measures to prevent technology leakage from an economic security perspective. Especially as Taiwan and South Korea have become primary targets of China's Thousand Talents Plan, raising concerns about the leakage of cutting-edge technology, Japan held the Integrated Innovation Strategy Promotion Meeting in April and the Ministry of Economy, Trade and Industry's Industrial Structure Council's Trade and Commerce Subcommittee on Security Trade Control in June to establish emergency response policies. The Japanese government is strengthening systems necessary for the collection, analysis, consolidation, and sharing of economic security-related information, and is promoting measures to prevent technology leakage at universities, research institutes, and companies. It plans to revise guidelines on foreign exchange law operations next year to strengthen controls such as mandatory permits for technology transfers.

Semiconductor. Stock photo. Not related to the article. [Image source=Reuters Yonhap News]

Taiwan, a major target of semiconductor technology theft, is also preparing active countermeasures. Last month, Taiwan's Mainland Affairs Council announced plans to amend the "Act Governing Relations between the People of the Taiwan Area and the Mainland Area" to prevent the outflow of Taiwanese talent to the mainland for the protection of "core technologies." Scientists and engineers must obtain permission before visiting China, and violations will incur fines up to 10 million New Taiwan dollars (approximately 410 million won).

In fact, the Chinese government is openly focused on recruiting semiconductor talent from overseas, including Taiwan. At the opening of the annual plenary session of the National People's Congress in early March, the 14th Five-Year Plan revealed plans to expand the recruitment of foreign technical personnel for technological self-reliance. President Xi Jinping publicly declared at the end of May at the Beijing Great Hall of the People his commitment to building a strong scientific nation through technological self-reliance and self-strengthening, and announced efforts to secure foreign technical personnel. Taiwan estimates that over the past three years, China has enticed about 200 semiconductor technology experts away with salaries three to four times higher.

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As major countries strengthen technology controls, China's targeting of Korean technology is also increasing. Representative cases include the 2014 leak of design blueprints from Hyundai and Kia Motors and the 2018 leakage of organic light-emitting diode (OLED) technology from Samsung Display's partner companies. However, only 4% of trials for violations of the Industrial Technology Protection Act over the past three years have resulted in prison sentences, highlighting the problem of weak punishments. Considering difficulties in proving economic compensation such as cryptocurrency transactions, challenges in proving damage when information and technology are leaked via overseas servers, and the near impossibility of judicial cooperation with Chinese authorities, there is a call for stronger enforcement and penalties.

KISTEP advised, "South Korea is also currently pursuing institutional improvements to prevent technology leakage and needs to supplement these by referencing various cases from other countries. However, consideration should also be given to submitting and reviewing legal plans related to technology leakage prevention closely linked to science and technology at the National Science and Technology Advisory Council. Efforts are needed to prevent the increasing attempts to leak South Korea's advanced technologies and personnel."