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Energy & advanced manufacturing / 2013–2021

A China-funded Houston venture recruited insiders to reproduce Trelleborg's deep-sea syntactic foam S1 S2 S3

Shan Shi's Houston company hired former and current Trelleborg personnel, collected recipes and process information, and supplied a China-based partner with the know-how needed to make a specialized buoyancy material. S1 S2 S3

Evidence at a glance How labels work

Evidence status Adjudicated
Case-level nexus context Documented affiliation or support
Public sources 3 Automated checks verify citation linkage; editorial review judges support
Evidence foundation Primary adjudicative record A linked judgment, opinion, verdict, or signed plea anchors the adjudicated posture; source notes distinguish any remaining allegations. S3
Publication record Published Aug 23, 2026 Reviewed Aug 25, 2026 · Next Mar 23, 2027

Evidence status and PRC-state nexus answer different questions and must not be joined across different actors. Actor-specific outcomes appear below.

Compare this file
Finding

Shi was convicted of conspiracy to steal trade secrets, sentenced to 16 months, and lost his appeal. The same jury acquitted him of economic espionage and money laundering, limits that remain prominent here. S1 S3 S2

01 / Executive brief

Executive summary

Syntactic foam looks unremarkable, but microscopic hollow spheres let it provide buoyancy under extreme pressure in deep-sea oil, research, and military applications. Trelleborg spent decades developing formulations and manufacturing controls for the material. A China-based venture funded a Houston affiliate led by Shan Shi to acquire and reproduce that capability. S1 S2 S3

Shi's company recruited people with Trelleborg access, obtained protected recipes and process information, and passed technical data to China. A jury convicted Shi of one trade-secret conspiracy and he received 16 months in prison and more than $330,000 in forfeiture. The jury acquitted him of economic espionage and money laundering, and the D.C. Circuit later affirmed the surviving conviction. S1 S2 S3

Scanning electron micrograph of hollow glass spheres embedded in syntactic foam
technology

A scanning electron micrograph shows the hollow glass microspheres that give syntactic foam its low density and pressure resistance. This is contextual microscopy, not a Trelleborg exhibit from the trial.

Nikgupt / Wikimedia Commons · Creative Commons Attribution-ShareAlike 3.0 ↗

02 / The vignette

What happened

The target was a material system, not a single formula

Deep-rated syntactic foam depends on hollow microspheres, resin chemistry, raw-material selection, mixing, curing, and quality controls working together. The court record described Trelleborg information ranging from formulations and supplier details to manufacturing parameters—exactly the package needed to move from laboratory samples toward repeatable production. S1 S3

Recruiting created the acquisition channel

China-based CBMF provided roughly $3.1 million to establish and operate Construct Better Materials International in Houston. Shi's venture identified Trelleborg personnel with relevant access and hired or worked with them. Information then flowed through spreadsheets, messages, samples, and technical collaboration rather than a single dramatic break-in. S2 S3

The verdict drew a line between theft and espionage

The jury concluded that Shi joined a conspiracy to steal Trelleborg trade secrets, but it did not convict him of economic espionage or money laundering. The appellate court upheld the trade-secret conviction. That distinction matters: documented China-based funding and customers provide a nexus, while the acquittal prevents this archive from claiming that the government-benefit element was proved beyond a reasonable doubt. S1 S2 S3

03 / Anatomy

How access became transfer

This six-part framework asks the same questions of every file. Each stage carries its own evidence state; a listed stage can be alleged, inferred, interrupted, disputed, or not established. The structure does not manufacture a completed transfer or harm.

  1. 01

    Relationship context Documented

    China-funded Houston affiliate

    CBMF financed CBMI, and Shi led the U.S. operation seeking syntactic-foam capability. S2 S3

  2. 02

    Access assessed Documented

    Competitor personnel recruited

    The venture identified and engaged people with access to Trelleborg's research and production know-how. S1 S3

  3. 03

    Acquisition assessed Adjudicated or admitted

    Recipes and process data collected

    Protected formulations, suppliers, raw-material data, and manufacturing details entered the CBMI program. S1 S3

  4. 04

    Movement assessed Documented

    Technical data sent to China

    Emails and spreadsheets moved parts of the Trelleborg knowledge package to the China-based partner. S2 S3

  5. 05

    Downstream use assessed Documented

    Competing production attempted

    CBMI and CBMF used the information to make components and advance a domestic syntactic-foam capability. S1 S2

  6. 06

    Consequences assessed Adjudicated or admitted

    Limited conviction affirmed

    Shi received 16 months for trade-secret conspiracy; the economic-espionage and money-laundering acquittals remain controlling limits. S1 S2 S3

04 / Evidence boundary

What is established—and what is not

Established in the record

  • A jury convicted Shi of conspiring to steal Trelleborg syntactic-foam trade secrets. S1 S3
  • The same jury acquitted Shi of economic espionage and money laundering, and those acquittals are not displaced by the trade-secret conviction. S1 S2

Uncertain, limited, or unresolved

  • The public record does not establish full-scale production or quantify the final competitive harm; prosecutors said the operation was interrupted before complete mass-production capability was secured. S2 S3

Subject response / procedural context

  • Shi contested the charges at trial and on appeal, obtaining acquittals on economic espionage and money laundering but not reversal of the trade-secret conspiracy conviction. S1 S3

05 / Sequence

Timeline

  1. Houston program organized

    China-based funding supported CBMI's effort to acquire syntactic-foam capability. S2 S3

  2. Undercover meeting and arrests

    An undercover presentation exposed the program's technical progress and intended applications before arrests. S2

  3. Mixed jury verdict

    Shi was convicted of trade-secret conspiracy and acquitted of economic espionage and money laundering. S1

  4. Conviction affirmed

    The D.C. Circuit rejected Shi's appeal and affirmed the surviving conviction. S3

06 / People and institutions

Who appears in the public record

Shan Shi

President of Houston-based CBMI S1 S2 S3

Outcome: Convicted of trade-secret conspiracy; acquitted of economic espionage and money laundering S1 S2 S3

Actor-specific PRC nexus Documented affiliation or support

Shan Shi: The record documents China-based corporate and government-linked funding and prospective users, but the jury acquitted Shi of economic espionage; no foreign-government-benefit conviction is claimed. S1 S2 S3

Construct Better Materials International (CBMI)

Houston vehicle used to recruit personnel and develop syntactic foam S1 S2 S3

Actor-specific PRC nexus Documented affiliation or support

Construct Better Materials International (CBMI): The record documents China-based corporate and government-linked funding and prospective users, but the jury acquitted Shi of economic espionage; no foreign-government-benefit conviction is claimed. S1 S2 S3

CBMF

China-based partner that funded CBMI and received technical information S1 S2 S3

Actor-specific PRC nexus Documented affiliation or support

CBMF: The record documents China-based corporate and government-linked funding and prospective users, but the jury acquitted Shi of economic espionage; no foreign-government-benefit conviction is claimed. S1 S2 S3

Originator / affected institution

Trelleborg Offshore

Developer and owner of protected syntactic-foam technology S1 S2 S3

07 / Consequences

Documented, attributed, potential, and unknown consequences

Documented record

The conspiracy transferred significant parts of a decades-developed production package, while law enforcement intervention limited the remaining acquisition and large-scale use. S2 S3

08 / Hindsight analysis

Where leadership could have seen risk

These are our analytic judgments based on the public record, not court findings. They are framed to improve controls without treating nationality as a risk factor.

The target was a whole production recipe

Individual spreadsheets and supplier details became strategically valuable when combined with formulations, samples, and experienced personnel.

Former and current staff formed a bridge

Recruiting around one specialist company created multiple paths back into the same protected development program.

09 / Apply the lesson

Actions leaders can take

  1. companies

    Model competitor hiring clusters

    Review coordinated recruitment of current and former staff who together could reconstruct a protected manufacturing process.

  2. companies

    Protect supplier and parameter data

    Treat bills of material, supplier identities, tolerances, and failed experiments as part of the crown-jewel package.

  3. both

    Preserve count-level outcomes

    Record each conviction and acquittal separately so a trade-secret finding is not restated as an espionage conviction.

10 / Source record

Sources

Links point to the public record reviewed for this file. Government releases can summarize court proceedings but remain government-authored sources; the source note identifies those limits.

  1. S1

    Texas Man Convicted of Conspiracy to Commit Theft of Trade Secrets ↗

    U.S. Department of Justice · Published Jul 29, 2019 · Retrieved Aug 23, 2026

    official summary government release
  2. S2

    American Businessman Sentenced in Theft of Syntactic Foam Trade Secrets ↗

    U.S. Department of Justice · Published Feb 11, 2020 · Retrieved Aug 23, 2026

    official summary government release
  3. S3

    United States v. Shan Shi, Opinion Affirming Conviction ↗

    U.S. Court of Appeals for the District of Columbia Circuit · Published Mar 23, 2021 · Retrieved Aug 23, 2026

    adjudicative record court record

12 / Reference

Cite this dossier

Use the permanent URL and review date below so readers can identify the version of the public-source record you consulted.

ChinaSteals. “A China-funded Houston venture recruited insiders to reproduce Trelleborg's deep-sea syntactic foam.” CS-028. Published Aug 23, 2026; last reviewed Aug 25, 2026. https://chinasteals.com/cases/shan-shi-trelleborg-syntactic-foam/

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