As the U.S. and China battle it out over technology, South Korea, a U.S. ally in Asia, is also fighting a technology defense battle with China. The Voice of America has learned from industry insiders and experts that China has become the biggest destination for South Korean technology leaks, using increasingly sophisticated tactics ranging from high-paying “poaching” and buying insiders to hacking.
The lure of double the annual salary from China
“Chinese companies are recruiting,” “more than 10 years of experience in a major Korean semiconductor company is required,” “private residence and children’s Education fees are provided,”… …These types of job advertisements can be found on headhunting websites in Korea from Time to time. In Korea’s semiconductor, display panel and other electronic technology industry, Chinese companies are very common “poaching” behavior. Mr. A, who works for a Korean semiconductor company and frequently travels between Korea and China, told the Voice of America that in the semiconductor field, China mainly needs technical personnel in circuit board design and other areas, and the conditions offered are very generous.
“Basically, the annual salary is doubled,” Mr. A has such examples around him. “You know the module factory surface coating process, right, each factory’s process is different. Domestic talent in this area is not a lot, the manufacturer will find engineers from similar companies in South Korea, signed a two-year contract, the salary is twice as much as in South Korea, but also to provide a house, insurance fully paid. You think, the Korean engineer salary is only 80-90 million (won), or 500,000 yuan, but China can open 1 million. For a Korean, two years is not a long time, and with this condition, he will feel good”.
In addition to specific technologies, learning Korean management systems and production technology standards is also the main purpose of Chinese companies to poach people. “There is a gap between China and South Korea in terms of product control”, said Mr. A. “(South Korea) more senior people go over and usually become directors and vice presidents to coordinate the whole technical department. But there is the problem of technology renewal, so generally this kind of high salary is only signed for two years, two years after the following Chinese people have learned almost without you, to put it bluntly is to squeeze the useful things dry before replacing them”.
Mr. A believes that for Chinese companies, the high salary poaching strategy has a very high cost performance. “Independent research and development requires a lot of money and effort, but domestic companies want to see the benefits as soon as possible, so this can be said to be another way. South Korea’s technology is more advanced than the domestic, poaching people in the past can be responsible for new products, complete industrial upgrading; and talent flow this thing can not be restricted, unlike equipment or something, so that China can bypass the control of other countries”.
Money bribes, hacking: China becomes the biggest destination for Korean technology leaks
“Headhunting is only the most superficial part, there are also many cases of buying corporate insiders and buying and selling technology,” Park Won-hyeong, a professor of information security engineering at South Korea’s Sangmyung University, pointed out to the Voice of America. In late January, 17 people at SK Hynix and Samsung Electronics subsidiaries were charged by South Korean prosecutors and the National Intelligence Agency for allegedly leaking core memory chip state technology to Chinese rivals, and in early February, two researchers at Samsung Display were sentenced to two years in prison by a South Korean court for trying to sell technology related to Samsung Display’s world-first OLED panels to China.
According to Park Won Hyung, however, the most worrisome aspect is the theft of technology through hacking. Chinese Hackers are good at finding and attacking weak links, and the most common technique is to find loopholes in corporate closed-circuit surveillance systems through networked device search engines such as SHODAN to monitor important places such as research institutes and production facilities to obtain secrets. In addition, the weaker security departments of large enterprises are also the target of attacks. Samsung Electronics Russia, Italy customer service center has suffered similar methods of hacking, “from the report provides the malicious code, basically can be presumed to be the behavior of Chinese hackers. But why attack the unimportant customer service center? I think their intention was to break through the weak security measures, penetrate the interior, and then attack the headquarters where security is strong, which is a common technique used by Chinese hackers,” said Park Won-hyung.
Whether it’s money or hacking, “the problem is that this type of behavior is done from the Chinese government level,” according to Park. Last September, a professor at the Korea Advanced Institute of Science and Technology was charged by the South Korean government for allegedly providing driverless-related technology to Chinese institutions. The professor was in charge of an international education cooperation program between the Korea Institute of Science and Technology, one of the top 50 South Korean institutions in the world, and Chongqing University of Technology. The investigation revealed that the professor may have been involved in China’s “Thousand Talents Program” and received additional funds from the Chinese government. In addition, “as far as I know, the hackers were also hired by the Chinese government and were affiliated with the People’s Liberation Army,” Park described.
China has become the largest destination for technology leaks from South Korea. A report submitted to the National Assembly by the Korean National Intelligence Service shows that in the five years up to October 2020, the agency found 123 incidents of technology leaks overseas, 83 of which were destined for China. Faced with this situation, South Korea is steadily strengthening relevant legislation. But Park Won-hyung doesn’t think China will stop stealing technology, “they will adopt more subtle and less detectable techniques, such as using cryptocurrencies to buy and sell technology and conducting more hacking, and they will be more subtle in their methods.”
China’s Strategic Intent in Seeking the Rise of Technology
Yet there is no denying the fact that China’s technological prowess has increased dramatically. According to a report by the Korea Institute of Hyundai Economics, while South Korea still maintains a large advantage in areas such as semiconductors, the gap between the two countries’ overall technology levels has been reduced to one year, and with it, the similarity between Korean and Chinese exports has increased year by year. South Korea mainly exports high value-added technology products and is in the middle and upper reaches of the global value chain, which means that China’s position in the global value chain is rising.
“If China used to stay in the global product chain, it is now really in the value chain,” Seung-Jan Park, former economic and trade officer at the Korean Embassy in China and director of the China Business Institute, told Voice of America. “Despite the Epidemic that swept the world last year, China still attracted more foreign direct investment than the United States, according to the UN report. Foreign investors using cheap labor withdrew, but many knowledge and technology-intensive companies launched investments in China. Currently 80% of the factories or suppliers producing high value-added products are located in China, with the remaining 20% in neighboring countries such as South Korea, Taiwan and Japan. If we were to break the China-dominated value chain, the entire landscape of high value-added manufacturing would change”.
The significance of this change is even greater when considered in the context of the fourth industrial revolution. As new industries and new modes of production based on new technologies will determine the future economic paradigm and thus influence the global political and economic order, China clearly sees this as a strategic opportunity, and the U.S.-China relationship has thus reached a watershed. “The previous technological era and the era of high value-added technologies need to be viewed separately. The previous U.S.-China relationship was like ‘dancing with the wolves’, because they needed each other, so they could still coexist peacefully in the global value chain; but the fourth industrial revolution has brought changes, and China will slowly develop technologies that can be used to counteract the U.S. But the fourth industrial revolution has brought about changes, and China will slowly develop technologies that can be used to counter the U.S., and on this issue, it has calculated very clearly from beginning to end,” Park noted.
Because of this, “China also understands that it will definitely decouple from the U.S. in terms of technology related to the fourth industrial revolution and go its own way, so it proposes technological independence and self-reliance, and promotes a policy of industrial strengthening. That is to say, important materials, components and equipment should be produced domestically in China, but this is impossible to do without the domestic market, which is why China emphasizes the internal cycle as the main focus”, “Ultimately, we want to build up a ‘China Value That’s why China is emphasizing the inner circle,” and “the ultimate goal is to build a ‘China Value Chain’,” says Park.
“The process is very long, but China’s mindset is that it cannot directly challenge the U.S. in the current situation, but has to look to the future and make a long-term layout”, Park Seung-Jan believes. Park Seung-Jan did not give a direct answer as to what kind of future China sees, but cited the example of electronic money. “China is currently stepping up the layout of electronic money, which will be fully available from next year, and the U.S. is lagging behind China in this regard. The U.S. dollar dominates the global financial market and its money supply has a huge impact. But the rules and status of electronic money will be completely different”, from this point of view, “the issue between the U.S. and China relations has been put on the table and cannot be backed off”.
Recent Comments