US-China cyber tension to resume in 6-12 months

by Chris Zappone

That little prediction came out of the US-China Economic and Security Commission panel in Washington this week. The delay?

Well, all of the hullaballoo over Edward Snowden’s NSA revelations.

Without a doubt, they cloud the accusation by the US that China is systematically stealing US commercial data to be given to
Chinese businesses, which, as you recall, was a talking point between Obama and Xi Jinping at the so-called “shirtsleeves”
summit in California. That event ended just as Snowden appeared on the scene having delivered a couple laptops worth of NSA
Powerpoint presentations to the Guardian, the Washington Post, and Der Spiegel.

You couldn’t beat the timing.

The revelations have allowed China to claim it’s a victim of hacking, which it is in the sense all states are, and the US
doesn’t deny. But there is little evidence to suggest the NSA is stealing trade secrets from China and passing them along to US
businesses, to save on R&D costs, or marketing, for economic gain. And this goes exactly to the situation the US faces with China.

The Reuters report says the naming-and-shaming of China, over People’s Liberation Army Unit 61398, had the effect of slowing the operations for about a month:

The U.S.-China Economic and Security Commission, a panel which advises the U.S. Congress on China policy, said Mandiant’s
revelations brought only a brief pause in cyber intrusions by that PLA unit.

“There are no indications the public exposure of Chinese cyber espionage in technical detail throughout 2013 has led China to change its attitude toward the use of cyber espionage to steal proprietary economic and trade information,” the commission said in a draft of their annual report to Congress.

The draft report, made available to Reuters on Wednesday, said Mandiant’s revelations “merely led Unit 61398 [the PLA unit doing the economic hacking] to make changes to its cyber ‘tools and infrastructure’ (to make) future intrusions harder to detect and attribute.”

There remains a confusion between the types of hacking occurring: general national security snooping (a la Snowden) and
specific economic espionage used in turn to give a boost a country’s own indigenous industries (what the US claims China is
doing). But the confusion can be willful, too, depending on who is describing the situation.

If nations act on interests and not friendship, it very much is in the US’s interest to defend its area of comparative
advantage – maintaining an economy with world leading companies, innovations and ideas. For the US, facing a multipolar world, with China being a big pole, it must be able to defend its ability to incubate and then build new ideas and industries without the fear, presumption or expectation that its best ideas will be pilfered.

That’s why this article in Foreign Affairs rings false. It decries the US as “a hypocritical hegemon.” Yet any country with the
power of the US, which has shaped global affairs as the US (internet? satellite technology?), will of course be hypocritical –
but there is nothing unique to the US in this regards.

Discussing the US-China cyber dispute, authors Martha Finnemore and Henry Farrell shrug:

(the US) may attempt, as the former head of U.S. counterintelligence Joel Brenner has urged, to draw distinctions between China’s allegedly unacceptable hacking, aimed at stealing commercial secrets, and its own perfectly legitimate hacking of military or other security related targets. But those distinctions will likely fall on deaf ears. Washington has been forced to abandon its naming and-shaming campaign against Chinese hacking.

Just give it 6 months to a year. Clearly if this is a real problem for the US, it won’t go away. Rather it will come back and
stay. If China becomes the huge, enduring economic power many predict it will become, this issue between the US and China will become fixed. It will become a permanent feature of US-China relations. It won’t be an issue brought up by Obama to Xi. It will begin to drive the way the economies evolve much in the way the internet has changed whole industries. Really.