U.S. to Share Cautionary Tale of Trade Secret Theft With Chinese Official
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WASHINGTON -- China's next leader, Xi Jinping, may never have heard of American Superconductor Corporation before he arrived here Monday, but by the end of his visit United States officials hope to make the small Massachusetts wind-energy company an object lesson in the impact of Chinese trade secret theft on American business.
Senator John Kerry, chairman of the Senate Foreign Relations Committee and a Massachusetts Democrat, plans to raise personally with Mr. Xi the case of a company that saw 70 percent of its business evaporate last year after a Chinese partner enticed one of its employees to steal the crown jewel of its technology.
"It's a very clear and, in our judgment, egregious, palpable demonstration of the practice that we are deeply concerned about," Mr. Kerry said, "but it's not the only one. There are so many things: cyberattacks, access-to-market issues, espionage, theft. These are major points of discussion between us and China."
Both President Obama and Vice President Joseph R. Biden Jr. warned Mr. Xi on Tuesday that they had been hearing more and more from United States businesses about intellectual property and trade secret theft, but they did not specifically mention American Superconductor. However, background material on the company's experience was included in briefing papers distributed before the arrival in Washington of Mr. Xi's delegation, and a top administration official said the Chinese were aware of United States frustration over the case.
With anger toward Chinese trade and industrial practices emerging as a major theme for the 2012 campaign season, American Superconductor's story seems ripe for the moment.
The facts are difficult to dispute, given the volume of evidence. Last March, China's Sinovel, the world's second largest wind turbine manufacturer, abruptly refused shipments of American Superconductor's wind turbine electrical systems and control software. The blow was devastating; Sinovel provided more than 70 percent of the firm's revenues.
The value of undelivered components on existing contracts exceeded $700 million, Daniel Patrick McGahn, the company's president and chief executive, told investors. Its share price plunged by more than 80 percent in six months.
First Published February 15, 2012 12:01 am
