Written by: Alan J. Rosenthal, Rosenthal Consultants

The states of South Carolina and North Carolina are getting numerous ‘friends’ from China making them the leader of U.S. states that are attracting Chinese businesses.

One of the North Carolina Chinese Business Association’s (NCCBA) missions is to promote the North Carolina Chinese business community “particularly in promoting entrepreneurial and corporate development related to science and technology.” The NCCBA welcomes delegates of government and business leaders from China.

UNC has agreements with 44 universities in mainland China. The Institute of International Education reports that China sends more students to the United States than any other country. In 2010-11, nearly 158,000 Chinese students are enrolled in American universities. This represents a 24 percent increase from the previous year. Chinese citizens represented 13,000 of UNC’s students in 2010-11. UNC just voted to further develop these relationships and economic ties.

Bloomberg Businessweek reports that, according to South Carolina officials, Chinese manufacturers have invested $308 million and created 1,900 jobs in the state. China was South Carolina’s third-ranked export market in 2010.

Many politicians are taking credit for attracting international business and investment. U.S. ambassador Gary Locke stated, “We in the United States, some 800,000 jobs, are dependent on American-made goods and services being sold to China, from our soybeans to airplanes to machinery. We have an interest in the greater prosperity of the Chinese.”

With tax incentives and other inducements, there remains the question of whether or not these foreign corporations will be helpful or adverse to local and state economies on a net basis. Immediate financial benefit aside, those in the intelligence community and other cyber-security experts have good reason to be concerned.

China’s past history and culture raise large red flags regarding that nation’s tactics to gather intelligence information from their foreign counterparts. It is no secret that the Chinese government and some Chinese businesses have engaged in espionage tactics that go far beyond the scope of reasonable corporate competitive intelligence. For many years, governments and corporations in Asia, Europe and Canada have complained about China’s unabashed and unrelenting incursions into government, trade, intellectual property and corporate secrets. The Chinese government engages in hacking all over the world every day of the year.

The Chinese Ministry of State Security (MSS) has long targeted foreign politicians. Veteran MSS officer and Chinese intelligent agent, Li Fengzhi, who defected to the U.S. in 2004, stated “China wants to find some important, influential people to speak out for China.”

A former diplomat revealed how the particularly problematic tactic of sexpionage is used by the Chinese government to recruit informants. Almost all hotels in China are equipped with listening devices and surveillance cameras. Brothels, bars and massage parlors are owned by criminal organizations that cooperate with the MSS and other spy organizations. Influential men are targeted. False charges of rape or attempted rape cause these targets to cooperate or face time in jail.

Since business and government travelers to China must apply for a visa months before their arrival, Chinese intelligence services have plenty of time to setup their targets. If a corporate executive is caught in one of these sex traps, it could be so devastating to their careers and their organizations that they are often willing to spy against their employers.

While hundreds of Chinese companies are conducting business in the United States, it only takes a few to wreak havoc on the economies of their host countries. The Sydney Morning Herald reports that as few as 12 different Chinese groups, largely backed or directed by the Chinese government, commit the bulk of the China-based cyber attacks stealing critical data from U.S. companies and government agencies.

The general public often looks at spying, whether for military or economic secrets, from the viewpoint of the agencies and governments which dispatch them. No consideration of the problem and the ways to circumvent spying is complete without an understanding of those who are drafted into the service of these clandestine organizations either by choice or coercion. Public servants, politicians, engineers, business people and scientists are the common targets.

Though they are educated by corporate security experts and lawyers about the risks posed by intelligence agencies, tired and lonely executives with money to burn show up in cities all over China looking for affection and relief. Worse yet are those business and trade travelers who participate knowingly or not in the growing industry of sex slavery and human trafficking which often uses young children as a commodity. These targets forget what they have been taught (and perhaps their wedding vows) or justify their behavior as deserving of the perk as they succumb to the well planted enticements.

American Businessmen should be aware of these clandestine activities and enticements. The potential damage and cost to the American economy, individual companies and national security is so great that politicians and executives should pack not only an extra shirt but an extra measure of ethics and morality.

Human ethical failure opens the door to influence. Unethical politicians, operatives and executives weak in moral backbone who travel away from their home while on business may feel that they can play unnoticed. They fool themselves and endanger their companies, agencies and careers. Every movement is being observed, measured and often manipulated. Once compromised, they destroy the lives of their coworkers and their families.

Business executives often say they won’t take the bait but they do so in alarming numbers. Executives from all over the world who lack ethical and moral underpinnings fall prey to this behavior. In the heat of their hubris and lust, they bring humiliation, legal consequences and personal and corporate destruction back home to their families and employers.

Counter-surveillance and bug-sweeping professionals are crucial to corporate and state security. Just as important as the services we provide is the dedication of corporations and agencies to a security program that addresses the clandestine activities of China’s MSS and the intelligence agencies of other countries as well as non-governmental corporate spying.

It may be difficult to bring a bug-sweep technician on every foreign business trip but you can control where domestic meetings are held. In which case, you can have rooms swept and engage in the consulting necessary to protect your trade secrets.

Finally, the greatest threat to your company is in your own personnel. Your company is placed at risk if it’s CEO, CFO, engineers or salespeople participate in illegal, immoral or shameful activities. Threats are often from the inside. Developing a culture of honesty imbued with ethics and morality is a key to the success of your company’s security policy.

Alan J. Rosenthal
IFindOut@aol.com
Alan has 30 years of experience assisting litigants and victims as a private investigator, process server, public records expert and litigation support specialist, providing service to a long list of law firms as well as the New York State Labor Relations Board and the U.S. Olympic Committee. Alan is an Investigative and Personal Privacy Consultant. He speaks at colleges, businesses and social organizations. An author, most recently of Safer Online Dating©, he teaches classes on the subject of personal internet safety. Alan has chaired and sat on professional ethics and legislative committees throughout his career.

Copyright 2012 by Alan J. Rosenthal and Michael Guadagno, Asheville, North Carolina. All rights reserved worldwide. Federal copyright law prohibits unauthorized reproduction by any means without written consent and imposes fines up to $25,000 for each violation.