- The Washington Times - Tuesday, November 12, 2002

A congressionally mandated commission on China and security issues will investigate Beijing's approach to obtaining economically valuable data from the U.S. government, including the Securities and Exchange Commission, the commission's chairman said yesterday.
"The commission is likely to be alert to new Chinese targets of opportunity for economic, industrial and militarily useful espionage," said Roger Robinson, who took over as chairman of the U.S.-China Security Review Commission last month.
Mr. Robinson, a former National Security Council staff member during the Reagan administration, made the remarks in response to a report in yesterday's editions of The Washington Times of an SEC employee being dismissed after improperly passing sensitive data on U.S. computer companies to China.
The employee, Mylene Chan, left the SEC in July after co-workers found she had improperly sent sensitive data from within the SEC's computer and online-services division to Shanghai.
Miss Chan, reportedly a Chinese national, said she left the SEC for personal reasons and that one of her jobs at the commission was to work with Chinese securities commissions.
She said that "in the course of that, I provided a small number of SEC materials mistakenly, all of which were retrieved as soon as I learned of the mistake."
"It's troubling to learn that a soft, but sensitive, agency like the SEC may have been penetrated," Mr. Robinson said in an interview. "If so, it would herald a more sophisticated approach to economic and dual-use espionage."
Mr. Robinson said the commission "raised attention to economic and industrial espionage in its first annual report to Congress in July and will continue to accord this issue serious treatment."
The review commission stated in a report made public in July that China's government has an aggressive program to collect sensitive U.S. technology to apply to its own economic and military modernization program.
The report said a "principal means China is using to channel scientific and technological information to China is through Chinese foreign nationals studying and working in the U.S."
"China is covertly acquiring the more sensitive technologies it cannot buy on the open market through a targeted collection program and espionage initiatives," the report stated.
The commission report said more needs to be done to keep tabs on Chinese nationals seeking to acquire U.S. technology.
"The commission believes that the lack of oversight of Chinese foreign nationals, as well as those of many other countries, studying and working in sensitive disciplines can have serious national security implications," the report said.
"The transfer of 'know-how' could potentially be applied to China's military industrial base," the report said. "Consequently, the commission concludes that increased oversight, review, screening and tracking of Chinese foreign nationals studying and working in the United States is necessary."
A U.S. government security specialist said China could gain valuable commercial and technology data from someone with access to internal information at the SEC.
"This case begs for a whole new look at SEC hiring practices and security-minded safeguards," the official said.

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