Current and former officials said Xu’s extradition is apparently the first time a Chinese government spy has been brought to the United States to face charges.
The announcement comes as the Trump administration has significantly escalated its rhetoric against China amid a trade war and general worsening of relations between the world powers. Last week Vice President Pence accused Chinese security agencies of masterminding the “wholesale theft of American technology.”
Justice Department officials said the indictment is the latest example of China seeking to develop its economy at the expense of American firms and know-how. Though China has often used computer hacking to filch secrets, this case relied on traditional espionage techniques, including the attempted recruitment of corporate insiders.
“No one begrudges a nation that generates the most innovative ideas and from them develops the best technology,” Assistant Attorney General for National Security John Demers said. “But we cannot tolerate a nation stealing our firepower and the fruits of our brainpower. We will not tolerate a nation that reaps what it does not sow.”
Xu, also known as Qu Hui and Zhang Hui, was charged with conspiring and attempting to commit economic espionage and steal trade secrets from multiple U.S. aviation and aerospace companies. The indictment and complaint were unsealed Wednesday — the same day Xu appeared in federal court in Cincinnati.
“This case shows that federal law enforcement agencies cannot only detect and disrupt espionage, but can also catch its perpetrators,” said U.S. Attorney for the Southern District of Ohio Benjamin C. Glassman.
The MSS is a civilian spy agency responsible for counterintelligence, foreign intelligence and domestic political security. It was implicated in the hack of a U.S. Navy contractor developing undersea warfare capabilities, including secret plans to build a supersonic anti-ship missile for use on U.S. submarines by 2020.
Xu is a deputy division director with the Jiangsu Province Ministry of State Security, a provincial arm of the MSS.
“If not the first, this is an exceptionally rare achievement — that you’re able to catch an espionage operative and have them extradited to the United States,” said John Carlin, a former assistant attorney general for national security. “It significantly raises the stakes for China and is a part of the deterrence program that some people thought would never be possible.”
Beginning in December 2013 and continuing until his April 1 arrest in Belgium, Xu targeted experts working for aeronautics companies inside and outside the United States, including Cincinnati-based GE Aviation, officials said. GE Aviation has spent decades developing its unique jet engines and fan blades.
Xu recruited experts to travel to China, often under the guise of asking them to deliver a university presentation and passing himself off as an official with the Jiangsu Science and Technology Promotion Association.
Xu often exchanged information with individuals at Nanjing University of Aeronautics and Astronautics, one of the top engineering schools in China, which has significant influence over the country’s aerospace industry, according to court documents.
GE Aviation cooperated with the FBI early on in the investigation, which dates back more than a year, officials said. A spokesman for GE said Xu targeted a former employee, characterizing the impact as minimal “thanks to early detection.”
According to the indictment, in March 2017 a deputy director at the university, described as an unindicted co-conspirator, began emailing with an engineer at GE Aviation and asked him to come to China for an “exchange.” In May and June of 2017, the engineer went to China, met Xu, who claimed to be from the science and technology association. The engineer put five corporate documents on his personal laptop, which he brought to the presentation, according to WCPO, an ABC News affiliate in Cincinnati, citing an FBI affidavit for a search warrant in the case.
In February, Xu began discussing with the engineer the possibility of meeting in Europe during one of the engineer’s business trips, the indictment said. Xu asked the engineer to create a directory of files on his work computer and send a copy to him. Impressed, Xu in March asked the engineer if it was possible to “dump” the material from his laptop to a thumb drive when the two met in Belgium, the indictment said.
Belgian authorities cooperated with the investigation, U.S. officials said.
Xu’s case is linked to the arrest last month of Ji Chaoqun, 27, a Chinese citizen living in Chicago, according to individuals familiar with the matter. Ji was accused of passing information on eight Americans to Chinese intelligence officers for possible recruitment.
Ji targeted individuals in science and tech industries, seven of whom worked for or recently retired from U.S. defense contractors. All were naturalized U.S. citizens born in Taiwan or China.
Ji arrived in the United States in 2013 to study electrical engineering at the Illinois Institute of Technology in Chicago, and in 2016 enlisted in the U.S. Army Reserve under a special program to recruit foreigners whose skills are seen as vital to the national interest.