Original URL: http://www.theregister.co.uk/2012/07/27/china_military_denies_us_chopper_tech/

China denies US chopper tech espionage claim

Says US Courts handed out US$75m fine in error

By Phil Muncaster

Posted in Government, 27th July 2012 06:25 GMT

The Chinese government has hit back at claims that technology used in its first fleet of attack helicopters was illegally sold to it by a US defence contractor.

In a well-publicised case in the States, United Technologies and its two subsidiaries Pratt & Whitney Canada (PWC) and Hamilton Sundstrand admitted earlier this month in a federal court to more than 500 violations of export restrictions, and were hit with a whopping $75 million (£47.8m) fine.

Highlighted in the case was the illegal sale of engine control software, without which it was claimed China could not have completed development of its Z-10 attack chopper.

It was claimed in the court proceedings that PWC deliberately turned a blind eye to the fact the software could be used in military aircraft, in the hope that its co-operation with China would lead to a $2bn contract for civilian helicopters.

Chinese government spokesman Yang Yujun said in response to a question at a Department of Defence press conference yesterday that the allegations are “seriously inconsistent with the facts”.

He argued that the “development of China's weapons and equipment always adhere to the principles of independence” and that “China’s armed helicopter and its engines” were built with “completely independent intellectual property rights”.

So who do we believe? A federal court and a shamed defence contractor hit with a $75m fine, or the Chinese government?

The Chinese military has been suspected for many years now of cyber espionage, but despite accusations from senior US and UK officials and the continued finger-pointing of many reports, it has been difficult to prove beyond all doubt that such attacks were directly sanctioned by government.

This case, however, would seem to present slightly more compelling evidence that China has illegally used western IP to aid its military development – not that this changes the stock government denials that are used to respond to any accusations.

Interestingly, the Chinese claims of “independent innovation” regarding military tech are slightly at odds with the government’s recent admission that it is not yet an “innovation-oriented country”. ®