China Warns US to Halt Espionage Against Its Firms
China’s Ministry of Commerce on Friday issued a formal, sharply worded warning demanding that the United States immediately halt espionage activities targeting China and Chinese enterprises, according to Xinhua. The statement escalates a diplomatic dispute over alleged US intelligence operations and lands less than two weeks before a planned summit between President Donald Trump and President Xi Jinping.
The warning was a direct response to public remarks by CIA Deputy Director Michael Ellis, who said at a Washington cybersecurity conference on September 8 that the United States is expanding intelligence-gathering against China and that Chinese companies in artificial intelligence, semiconductors, and biotechnology are legitimate targets of espionage.
What Ellis Said
Speaking at the Billington Cybersecurity Summit, Ellis framed the shift as a response to what he described as China’s “dual threat” in the military and economic spheres, Federal News Network reported.
“Our economy is intertwined with theirs,” Ellis said, arguing that Beijing holds potential leverage over Washington and that the “CIA has to respond differently.” He added: “We have to be able to collect foreign intelligence relevant to that economic security dimension of the competition, which means we need expertise about how to collect that information, how to analyse it.”
Ellis said “intelligence targets” include strategic sectors such as semiconductors and biotech, where rivalry between the world’s two largest economies is particularly intense. Important intelligence on these technologies, he argued, “does not exist where political or military intelligence usually appears” but rather “exists in the private sector,” as Lianhe Zaobao reported.
China’s Response
The Commerce Ministry responded on Friday through a spokesperson’s written reply to reporters, accusing Washington of “bandit logic” and of tearing away the “fig leaf” that concealed covert intelligence theft, Channel NewsAsia reported.
“The US has bluntly declared that Chinese companies are legitimate targets of espionage, tearing away the fig leaf that once concealed intelligence agencies’ covert theft, and laying bare the bandit logic of hegemony,” the ministry said. It added that China’s technological advances in artificial intelligence and biotech “must never be treated as prey,” denouncing a “Cold War mentality.”
The spokesperson said China will act under the Anti-Espionage Law of the People’s Republic of China and other laws to “resolutely take necessary measures” and “strictly punish illegal and criminal acts.” The ministry also accused the US of “deliberately undermining fair competition” and “openly trampling on the norms of international trade.”
A Charge of Double Standards
The Commerce Ministry argued that the US position contradicts its own stated policy. It cited Presidential Policy Directive 28, issued in 2014, which barred intelligence collection of foreign private commercial information or trade secrets for the purpose of giving US companies a competitive advantage, and Executive Order 14086, issued in 2022, which China says reaffirmed those limits.
“What the US has done is a typical example of saying one thing and doing another,” the spokesperson said, according to Global Times. Washington “has disregarded the very boundaries it set for itself,” the ministry added.
Zhou Mi, a senior research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times that openly treating economic competitors and foreign companies as legitimate intelligence targets “breaches basic boundaries” and could ultimately backfire by alienating even US allies and partners.
Diplomatic Timing
The exchange comes ahead of an expected meeting between Trump and Xi at the White House on September 24, with artificial intelligence and trade anticipated on the agenda, according to Washington. Analysts have framed the espionage dispute as heightening tensions before the summit, given that the two leaders are set to discuss precisely the technologies at the center of the dispute.
The flare-up also reflects a broader pattern of intelligence and technology friction between the two powers. China recently arrested a US scholar of Myanmar on suspicion of spying and dismissed US accusations of AI theft in connection with claims by the company Anthropic as “groundless,” according to separate CNA reports.
What to Watch
No public response from the US government—neither the CIA nor the State Department—had been issued as of the coverage reviewed, leaving the dispute so far heavily one-sided toward Beijing’s formal reaction.
Key questions remain unresolved: whether Washington will clarify or defend Ellis’s remarks, whether the two sides can keep the dispute from overshadowing the September 24 summit, and how aggressively China will invoke its Anti-Espionage Law in response. For now, the episode has injected a fresh source of tension into a relationship already defined by competition over the technologies of the future.