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Court papers detail alleged Chinese espionage scheme

Earlier this year, an employee at a major US aerospace company shared a company presentation marked "proprietary" with an alleged Chinese intellectual property spy.

The employee later shared more files, and the information transfer led to the extradition and arrest of the alleged spy, who authorities say was part of a corporate espionage campaign involving a top Chinese university and directed by the Chinese government.

A federal indictment and other court documents released 10 October describe how US officials believe the scheme worked. They say China sought technical aerospace information, including data about composite materials used in jet engine fan blades and engine cases.

GE Aviation, based in Ohio, was among the companies targeted.

The alleged spy, Yanjun Xu, sought to gain information by convincing engineers and other aerospace experts to share company information under the guise of an information "exchange" and giving university presentations.

Xu was extradited from Belgium to the USA on 9 October, where he was arrested by US officials and charged with conspiring to commit economic espionage and to steal trade secrets.

Xu is a deputy division director within a regional division of the Chinese Ministry of State Security, the US government says. Cincinnati-based attorneys representing Xu did not respond to multiple requests for comment.

Court documents describe Xu as conspiring closely with an unnamed Chinese citizen "believed to be a deputy director" at Nanjing University of Aeronautics and Astronautics (NUAA).

That person has not been charged, US officials say.

The US government says the Chinese government's Ministry of Industry and Information Technology operates NUAA.

"NUAA is a regular collaborator with Commercial Aircraft Corporation of China (Comac) and Aviation Industries of China (AVIC), hosting academic and commercial seminars and symposium and sponsoring research published by academics from NUAA," court papers say.

As part of the alleged scheme, Xu and his colleagues targeted leading aviation companies, and identified employees at those companies who were experts in certain technologies.

Targets included an employee at "Company A", a "top aircraft engine" supplier based in southern Ohio, the indictment says.

That company invested billions of dollars researching composite materials in "jet engine fan blades and fan containment structures". It is also was "the only company in the world that has been producing fan blades and encasements constructed of composite materials", the indictment says.

Though court papers do not specify company names, a former GE Aviation employee was among those targeted, GE Aviation says. It declines further comment about the employee.

GE Aviation is also the only company that uses composite fan blades in commercial jet engines, it says. The blades are in GE90s, GEnx, GE9X and the CFM International Leap.

In 2017, the NUAA director invited Company A's employee to the university for an information "exchange", and the employee gave an aircraft engine presentation at the school in June last year.

Then in January the employee sent Xu an "excerpt of presentation… pertaining to containment analysis for a fan blade encasement". The presentation included a warning that it contained "proprietary information", the US government says.

The next month, the employee generated a "file directory" from a company computer, and sent it to Xu, the US charges.

During the course of the scheme, Xu specifically requested the employee provide information "regarding the design criteria for… composite material rotor fan blade, stator fan blade and fan casing", court papers say.

The US government alleges several other companies were targeted, including a manufacturer of commercial and defense aircraft.

Xu sought information related to wing and fuel systems on a military aircraft designed by that company, the US charges.

An employee from a third unnamed company sent Xu "an outline of a proposed white paper discussing unmanned aerial vehicle technology", court papers say. The scheme ended on 1 April, when Xu travelled to Belgium for a meeting where he planned to receive more company secrets.

Belgian officials arrested Xu and eventually extradited him to the USA.

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