Hydro-Quebec worker charged with spying for China, Canadian police say

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By Steve Scherer and Doina Chiacu

OTTAWA (Reuters) -An employee and researcher at Hydro-Quebec, whose work related to battery materials, has been charged with espionage for allegedly trying to steal trade secrets to benefit China, the Royal Canadian Mounted Police (RCMP) said on Monday.

Yuesheng Wang, 35, is due to appear on Tuesday in court in Longueuil, Quebec, to face four charges including obtaining trade secrets, unauthorized computer use, fraud for obtaining trade secrets, and breach of trust by public officer, the RCMP said.

"While employed by Hydro-Quebec, Mr. Wang allegedly obtained trade secrets to benefit the People's Republic of China (PRC), to the detriment of Canada's economic interests," the RCMP said in a statement.

Police said Yuesheng, who is from Candiac in the mostly French-speaking province of Quebec, allegedly committed the crimes at the electricity utility from February 2018 to October 2022. An RCMP special national security unit began investigating in August, police said.

Yuesheng worked for Hydro-Quebec's Center of Excellence in Transportation Electrification and Energy Storage, a research unit devoted to developing battery materials that has teamed up with industry players including the U.S. Army Research Laboratory.

He started working there in 2016 and was fired this month, the company said.

"Damage was limited by our internal detection mechanisms," said Hydro-Quebec spokeswoman Caroline Des Rosiers, who declined to detail what information he had allegedly tried to steal.

A lawyer for Yuesheng could not immediately be located for comment.

According to a profile on ResearchGate, a social networking site for scientists, a Yuesheng Wang who worked at Hydro-Quebec briefly held a post-doctoral position at the University of Arkansas in 2016, and contributed to numerous scientific articles.

"Wang allegedly used this position to conduct research for a Chinese University and other Chinese research centers. He reportedly published scientific articles and submitted patents in association with this foreign actor, rather than with Hydro-Quebec," an RCMP spokesman said.

Canada is seeking to scale up its own production and processing of critical minerals so it can produce electric vehicle batteries and battery materials domestically. China is the world's dominant supplier of EV battery materials.

"The fact that this alleged espionage was with respect to the battery ecosystem just reminds me how careful we'll need to be," Industry Minister Francois-Philippe Champagne told reporters. He said his ministry recently "blocked three transactions where we saw foreign actors trying to take equity interest in some mining companies in lithium."

Earlier this month, Canada ordered three Chinese companies to divest their investments in Canadian critical minerals, citing national security.

News of the arrest came as Canadian Prime Minister Justin Trudeau attended a G20 meeting on the Indonesian island of Bali. Chinese President Xi Jinping is also attending and met earlier there with U.S. President Joe Biden on Monday.

Diplomatic tensions between Canada and China have been running high since the detention of Huawei Technologies executive Meng Wanzhou in 2018 and Beijing's subsequent arrest of two Canadians on spying charges.

Tensions eased after all three people were released last year, but are rising again ahead of Canada's announcement of a new Indo-Pacific strategy to challenge China on human rights issues, while cooperating with the world's second-biggest economy on climate change and other shared goals.

Spokespeople for Trudeau and Public Safety Minister Marco Mendicino had no immediate comment.

"No organization is immune to such a situation and we must therefore constantly remain vigilant and transparent," Dominic Roy, senior director for corporate security at Hydro-Quebec, said in a statement.

Police said Hydro-Quebec was cooperating fully in the probe.

(Reporting by Doina Chiacu and Steve Scherer, additional reporting by Allison Lampert in Montreal; editing by Paul Simao and Bill Berkrot)


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