SAN JOSE, Calif. -- One day in June, FBI agents swooped into two affluent Silicon Valley homes and arrested two engineers. Lan Lee and Yuefei Ge stand accused of stealing proprietary chip designs and software from their employer, NetLogic Microsystems of Mountain View, and Taiwan Semiconductor Manufacturing Co. in San Jose.

Now investigators are asking the Department of Justice to charge Lee, an American citizen, and Ge, a Chinese national, with a more serious crime: economic espionage to benefit China.

The case highlights China's role as the main adversary in a complex game of 21st-century espionage where many agents aren't trained spies in trench coats but businessmen, students and researchers. Silicon Valley, counterintelligence experts say, is ground zero.

"Silicon Valley is a hotbed" of economic espionage, said Don Przybyla, who heads an FBI counterintelligence unit in San Jose. The valley is home to many of the estimated 3,000 Chinese front companies nationwide set up to steal secrets and acquire technology, according to the FBI.

Lee and Ge allegedly set up a front company backed by a Beijing venture-capital firm with links to China's military, and planned to go into business with the Chinese government.

In a global economy where intellectual property has become a valuable currency, state-directed espionage increasingly targets technology and commercial trade secrets to advance a nation's military and economic strength.

The intertwining of the economies of America and China complicates the problem, experts say.

"America's being robbed blind. ... We simply don't want to believe it," said John Tkacik of the conservative think tank Heritage Foundation, who headed China intelligence analysis at the State Department in the early 1990s. "If American manufacturers believed it, they'd have to modify their behavior significantly."

Other countries -- including U.S. allies such as France and Israel -- also steal American secrets, but China tops the list, experts say. China is "the number one counterintelligence threat that the U.S. faces," said David Szady, who until this spring was assistant director of the FBI's counterintelligence division.

"If you look at where the Chinese are going to get a lot of the research and development, cutting-edge technology, from nanotechnology to quantum physics to the next generation of missiles and planes -- that all points to Silicon Valley," he said.

To counter the growing problem, the FBI added the San Jose economic espionage and counterintelligence unit last month, officials said. The FBI also operates an economic espionage unit in Palo Alto.

"We see the same people and institutions in China popping up again and again," said Julie Salcido, who oversees a Department of Commerce unit in San Jose that focuses on export violations of technology with potential military uses.

The culprits may be government-backed research institutions, state-owned enterprises or individual provincial governments.

China's central government runs a program linked to its military, dubbed 863, that invests in companies with innovative technologies and that the FBI suspects is involved in many economic espionage cases.