13,658 viewsDec 13, 2018, 03:59pmA Death In Silicon Valley 'With Chinese Characteristics'Arthur HermanContributorPolicyI comment on quantum computing and AI, and American national security.
San Jose, California, United States - October 28, 2018: An advertisement is visible for the Oculus Go virtual reality system from Facebook subsidiary Oculus in Santana Row shopping mall in the Silicon Valley, San Jose, California, October 28, 2018GETTY
On December 1 the distinguished Chinese quantum physicist, venture capitalist, and Stanford University professor Zhang Shoucheng died in what news reports are calling a suicide. The news of his death has been upstaged in the media by the arrest that same day of Meng Wanzhou, CFO of Chinese IT giant Huawei, in Vancouver (discussed in my last column). Zhangˇs death is certainly a much greater human tragedy; but itˇs equally significant in drawing attention to the lengths China is going in order to win its battle for high-tech supremacy with the U.S., including on our home turf in Silicon Valley.
Zhang Shouchenˇs story is like something out of a John Le Carre novel, or maybe David Ignatiusˇs recent thriller Quantum Spy. Intellectually gifted, with a career laden with academic honors including a distinguished professorship at ShanghaiTech University as well as at Stanford, Zhangˇs research in quantum physics even sparked rumors he was a candidate for a Nobel Prize.
Despite being a naturalized U.S. citizen, Zhang maintained close contact with the Communist regime in China (the head of ShanghaiTech, for example, is the son of former party leader Jiang Zemin). His company Digital Horizon Capital, known by the acronym DHVC, has been identified as part of a major Chinese infiltration effort into Silicon Valley, according to the U.S. Trade Representative Richard Lighthizerˇs latest report on Chinaa report released just days before Zhangˇs death.
Lighthizerˇs 53-page reportan update of his landmark March 2018 report on Chinaˇs unfair trade practicescame out on November 20 and is a devastating expose of Chinaˇs ¨unfair, unreasonable, and market-distorting practices,〃 including including a major blitz to buy its way into Silicon Valley, in order to harvest the technologies it wants from the best American high-term firms, both large and small.
Lighthizerˇs report specifically named Zhangˇs DHVC as part of the ¨web of entities〃 set up in Silicon Valley ¨to further the industrial-policy goals of the Chinese government.〃 Zhangˇs DHVC, as it turns out, is heavily back by the investment arm of an entity called the Zhongguancum Development Corporation (ZDG), a Chinese government state-owned firm, which revealed on its website during DHVCˇs launch that Zhangˇs outfit was going to focus on innovative technology being fostered at Stanford and elsewhere in Silicon Valley, for the benefit of ZDG.YOU MAY ALSO LIKE
Confusing? Itˇs actually very simple. DHVC was specifically set up to provide a steady stream of American-developed technology and IP to ZDG, which ZDG uses to build up Chinaˇs high-tech hubs including ShanghaiTech, as well as companies like Ali Baba and Baidu (who invested heavily in DHVCˇs first round of funding). From there those technologies and IP can be used to increase the global market share of Chinese high-tech industrybut also to help to reinforce Chinaˇs Great Firewall and closed Internet; its police state surveillance of its citizens; in addition to boosting Chinaˇs military competition with the U.S.
In an ironic twist, Zhangˇs associations even have a direct link to Ms. Meng and Huawei, since DHVC also helped to fund a company that provided Huawei phones with the technology to allow users to use their knuckles for activating their phones. That technology is called FingerSense and was developed by Qeeco, which just happens to be a U.S. companyeven though both the CIA and FBI have warned against using Huawei phones and AT%T and Verizon won't sell them.
Thereˇs no doubt that the Lighthizer report, and news of Ms. Mengˇs arrest, made Zhang and his associations increasingly radioactive, especially with the increased scrutiny of Chinaˇs infiltration of Silicon Valley. There has been no police investigation of his death on December 1, and his family insist it was a suicide. But there are those who wonder if that claim is accurate, and whethergiven Zhangˇs far-reaching and potentially explosive knowledge of Chinaˇs activities in Silicon Valley--Chinese agents have had a hand in his demise.
Either way, Zhangˇs story is a tragedy. But it is also a warning, that Chinaˇs competition with the U.S. for high-tech supremacy involves Beijing establishing beachheads right here in the U.S. These include the place where Americaˇs high-tech crown jewels are kept, namely Silicon Valley. Itˇs time to take the necessary steps to make sure that we donˇt lose those crown jewels through neglect or greed, and thereby lose the high-tech race for the future.
I am a Senior Fellow at the Hudson Institute and Director of the Quantum Alliance Initiative, and co-author of ¨Quantum Computing: How To Address the National Security Risk〃 (Hudson Institute, August 2018). Iˇm also the Pulitzer Prize Finalist author of nine books, inclu... MORE