Is the Great Stone Industrial Park a Concern for US Companies?

in Counterintelligence, China, Huawei, ZTE, Belarus, Great Stone Industrial Park, China CAMC Engineering Co Ltd, One Belt One Road Initiative, Silk Road

Executive Summary

Using Diffeo to quickly understand the Great Stone Industrial Park, Diffeo recommended content that suggests US Companies choosing to reside in or do business with other companies in the Great Stone Industrial Park in Belarus, are possibly exposing themselves to a history of suspected Chinese intelligence collection and intellectual property (IP) theft, due to the heavy involvement of Chinese telecom giants ZTE and Huawei in the development of the industrial park.

Background

Announced by China's President Xi Jinping in 2013, efforts to join the Silk Road Economic Belt and the 21st Century Maritime Silk Road under the One Belt One Road Initiative have led to massive infrastructure investments across Western Asia and Eastern Europe in efforts to expand and solidify China's reach into an increasingly globalized market. 1

These networks are evolving as part of China’s great expansion, which includes re-activating the ancient Silk Road.

anchor text Figure 1. One Belt One Road Initiative Routes 2

One particular initiative of interest is the China-Belarus Industrial Park, commonly referred to as the "Great Stone Industrial Park", a joint Chinese-Belarusian effort to build an "eco-city with an emphasis on high-tech and competitive innovation products with high export potential". 3 Situated 25km from Minsk, the capital city of Belarus, the project was initiated under a 2010 agreement between the Belarus Economy Ministry and China CAMC Engineering Co., Ltd. (CAMCE). Development of the Great Stone Industrial Park is overseen by the China-Belarus Industrial Park Development Company (JSC) and is owned 60/40 by the governments of China and Belaurs, respectively. 4

Collaborating With The Diffeo Agent

Wanting to learn more about the Great Stone Industrial Park, we decided to use Diffeo in order to find out more about who was developing the park.

Starting with information on the web page for the Great Stone Industrial Park, Diffeo began to recommend content on CAMCE, highlighting that an employee of CAMCE, the Bolivian President’s ex-Girlfriend, was under investigation by the government of Belize for her role in the government having awarded high dollar contracts to the company. 5

anchor text Figure 2. Diffeo Recommended Content on CAMCE Employee under Investigation

Diffeo also discovered statements made by Zhang Zhenzun, a Senior Vice President of ZTE, referring to the park as a project with “good potential for the development of high-tech industries” in Belarus. 6

anchor text Figure 3. Diffeo Recommended Comments by a ZTE Senior VP

After learning that ZTE and Huawei are both heavily involved in the development of Great Stone from the park’s website, we decided to have Diffeo help us research the two companies. Diffeo revealed to us that ZTE and Huawei are both companies that have been banned from various aspects of the US market and entirely from doing business with the US government due to US government claims that Huawei and ZTE assist the Chinese government in spying operations and Intellectual Property rights theft. 7

anchor text Figure 4. Diffeo Recommendation on Huawei and ZTE Spying Allegations

On the surface, this seemingly benign investment on behalf of China seems to jive with their Silk Road initiative, and for all intents and purposes, it mostly may. However, China has a proven history of investing in foreign high-tech industries and stealing intellectual property in order to endogenously develop technology that it otherwise cannot. 8 Since China has largely been denied access to the US market, a current strategy relies on investing early in hi-tech Silicon Valley startup companies developing technologies in which they’re interested. 9

Diffeo quickly revealed to us some fairly troubling allegations about some of the developers and facilitators of the Great Stone Industrial Park. As we reflected on the data and the implications therein, considering whether or not there was real risk from Huawei and ZTE at Great Stone, Diffeo recommended another document highlighting that Huawei had focused interest in Research and Development within Belarus. 10

anchor text Figure 5. DIffeo Recommendation Huawei Interest in Belarus

Why Does it Matter

China’s interest in US IP as well as the spying allegations levied against ZTE and Huawei may be common knowledge to those who follow the subject matter, but to a financial investor or US tech startup looking to working in or with companies residing within Great Stone may not be aware of the risks.

There are reportedly over 20 companies that have signed deals to move into Great Stone, an unreported number of which have been US high-tech companies. 11 While more internationally experienced US companies are well aware of the risk of IP theft and foreign interests in their company, younger start ups may not have the same reservations, though they would be wise to learn from history, such as when a Huawei partner offered export controlled US tech to Iran where such a sale is banned. 12 Could current technologies and IP at Great Stone already be at risk?

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