France probes China link in Renault spy scandal

Eric Besson

PARIS, (Reuters) – French intelligence services are  investigating a possible Chinese connection in an industrial  espionage scandal at carmaker Renault, a government source said  yesterday.

Eric Besson

Industry Minister Eric Besson, who spoke earlier this week  of a case that smacked of “economic warfare”, said no official  inquiry had been opened and this would happen only if the  carmaker lodged a formal complaint.

Asked about the possible Chinese lead, Besson said: “I am  not authorised to say anything at all on the subject.”

Three Renault executives, including one member of its  management committee, were suspended on Monday in the case,  which has prompted the French government to warn of a widespread  risk to French industry.

The executives are suspected of leaking information related  to the high-profile electric vehicle programme, a key plank of  the carmaker’s strategy in which, together with its Japanese  partner Nissan, it is investing billions of euros.

Le Point news magazine reported on its website, citing  sources, that the espionage targeted battery technology which  had not yet been patented.

Renault, which declined to comment, is 15 percent owned by  the French state. None of the executives has a high profile  among investors or in the media.

“The DCRI (intelligence service) is working on this case. It  is in contact with Renault,” said the government source, adding  the China connection was a possibility being explored but not  for now in any way substantiated.

Relations between France and China hit a low two years ago  when French President Nicolas Sarkozy criticised Beijing’s  policy on Tibet.

But a visit by Chinese President Hu Jintao to Paris late  last year helped forge closer ties as France seeks to secure  Chinese support for reform of the global monetary system under  its presidency of the Group of 20 club of economic powers.

Bernard Carayon, a lawmaker, told Reuters France needed  tougher laws to defend itself in a “war” against fast-growing  emerging economies hungry for new technology.

“This is a war which does not stop worsening and which has  intensified even more with the emergence of industrial powers  like China,” said Carayon, a member of the ruling UMP party who  is drafting a law on the protection of economic information.
Most at risk from spying were sectors with long development  times such as cars, pharmaceuticals and defence, he said.

“There is a big temptation to cheat to win the race when you  are behind,” he said.

This is not a first for France’s car industry.

In 2007, a Chinese student on a work placement at car parts  maker Valeo was given a prison sentence for obtaining  confidential documents. A court stopped short of an industrial  espionage verdict, instead finding she had “abused trust”.

Christian Harbulot, head of France’s School of Economic  Warfare, which trains students in economic intelligence, told  Reuters TV: “It’s a new world. In this new world there are  players with completely different behaviour”.

Claude Moniquet, head of the European Strategic Intelligence  and Security Center in Brussels, said it was also possible that  the case involved straightforward industrial espionage conducted  by a commercial rival of Renault.

“It is not surprising that Renault and in particular its  electric car programme has been targeted because it is an  enormous company and it is an enormous project. Everyone wants  to develop a viable electric car,” said Moniquet.

“But what’s surprising is the level of penetration…  Usually in cases of this kind the actual spying involves people  at a much lower level.”

CHINA’S ELECTRIC AMBITION

While China has been known since the 1980s for commercial  espionage, particularly in industries where it believes it is  lagging the West, no country is considered clean.