China cyber theft issue: 6 things you didn’t know

by Chris Zappone

In an unprecedented move, the US Justice Department has charged five members of China’s People’s Liberation Army with crimes related to cyber espionage. Below are six aspects of the issue, which is emerging as an obstacle in US-China relations.

1) One of the parties to the US suit is the United Steel Workers. The Allied Industrial and Service Workers International Union is part of the USW, the largest industrial union in North America, which has taken the lead on a number of issues affecting manufacturing in the US, including trade issues.

2) China is sensitive to the linkages between its military and its state-owned-enterprises. The cozy relationships between the military and business are being unsettled by Xi Jinping’s anti-corruption push. The US may actually be more resilient in the face of China blowback on the issue. As the Center for Strategic and International Studies’ James Lewis explains: “The United States is less vulnerable to Chinese pressure (even if individual US companies are vulnerable). This is a case where the public good may outweigh the good of individual companies.”

3) The US will pursue the five named in the case. FBI director James Comey said: “If these fellas want to travel out of China on vacation, they should be looking over their shoulder.” US authorities have already lured a wanted Chinese businessman Xiang Le to the island of Saipan, where he was arrested, tried and jailed.

4) The decision to indict the 5 comes after the US was challenged by China to offer proof of the alleged cyber-espionage incidents. The US is looking to ratchet up the issue. “We don’t bring criminal cases, we don’t ask grand juries to indict if we don’t have the evidence,” said Comey. “So we would welcome the opportunity to offer these five Chinese military hackers their day in court. We would prove beyond a reasonable doubt to a jury of 12 who would agree unanimously that this conduct was done by these five guys.”

5) It’s no accident that the companies named in the suit are industrial firms that produce the kind of things needed for China’s infrastructure (including powerplants, steel, metals and solar power). China wants access to the kind of designs that would help it rapidly modernize. The US, facing the soon-to-be larger competitor, has an advantage in intellectual property and design. It can’t afford to let this advantage be stolen by its major competitor.

6) Obama had brought up the issue of cyber trade-secret theft to Xi Jinping in the June 2013, the same week Edward Snowden revealed himself and went public with his leaks from the NSA.