U.S. Attorney General Merrick Garland accused China of committing acts of espionage against the United States in a Monday press conference. Here's what you need to know:
The DoJ's Case: Garland said the Justice Department has taken several actions in the last week to disrupt criminal activity by individuals working on behalf of China. On Monday, a complaint was unsealed charging two Chinese intelligence officers with attempting to obstruct and influence a criminal prosecution of a Chinese telecommunications company, presumably Huawei.
"The complaint alleges that in 2019, the defendants directed an employee at a U.S. government law enforcement agency to steal confidential information about the United States criminal prosecution of the company," Garland said.
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Operation Foxhunt: Also on Monday, an additional indictment was unsealed charging four people, including three Chinese intelligence officers, with attempting to procure information, technology and equipment on behalf of the Chinese government and stop legal protests in the United States that would have been embarrassing to the Chinese government.
The Department of Justice has also brought charges against seven individuals allegedly operating on behalf of China to harass and threaten a U.S. resident into returning to China.
Garland said these arrests are tied to a global Chinese campaign known as "Operation Foxhunt," a mission to hunt down critics of the Chinese government that have fled the country and return them to China.
"As these cases demonstrate, the government of China sought to interfere with the rights and freedoms of individuals in the United States and to undermine our judicial system that protects those rights. They did not succeed," Garland said.
Xi's Power Grab: The Chinese Communist Party concluded its national congress meeting over the weekend. Chinese leader Xi Jinping consolidated his control over China's Communist Party by appointing loyalists to the party's most powerful positions and shunning convention by maintaining his presidency for a third term.
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Given Xi's aggressive crackdown on large Chinese tech companies in recent years, investors see his latest power grab as bad news for Chinese innovation and economic growth.
The SPDR S&P 500 ETF Trust (NYSE:SPY) traded higher by 0.7% on Monday, while the iShares China Large-Cap ETF (NYSE:FXI) tumbled 10.5%.
The announcement comes roughly two weeks before the U.S. midterm elections on Nov. 8. Republicans are currently positioned to take back majority control of both the House of Representatives and the Senate from Democrats, according to online prediction market PredictIt.
Benzinga's Take: It seems diplomatic relations between the U.S. and China are getting worse by the day.
The latest news of alleged espionage activity comes after the U.S. Department of Commerce announced a new set of rules restricting the sale of advanced computing semiconductors or related manufacturing equipment to China on national security grounds earlier this month.
