US-China cyber agreement, the hotline, and the “knowingly” qualification

Xi Jinping’s US visit has yielded a modest agreement between the US and China regarding hacking. Very modest.

Stopping, or at least slowing the theft of US commercial data that can aid foreign businesses is a central concern to the US. But the one line that addresses this phenomenon in the agreement has a troubling qualifier in it.

“The United States and China agree that neither country’s government will conduct or knowingly support cyber-enabled theft of intellectual property, including trade secrets or other confidential business information, with the intent of providing competitive advantages to companies or commercial sectors.”

“Knowingly” makes all the difference. Because if China’s government is unaware of the commercial hacking efforts, it’s hard to hold Beijing responsible.

Possibly the most tangible result is the establishment of a hotline to be used with a group of high-level officials on both sides, to support “fighting cybercrime and related issues.”

On the US side it will include:

The Secretary of Homeland Security
The Attorney General
with input from the FBI and intelligence agencies.

On China’s side:

An official at the ministerial level
the Ministry of Public Security
the Ministry of State Security
the Ministry of Justice
and the State Internet and Information Office

But the wording suggests this is separate for the all-important issue of commercial hacking. That use of hacking would come under the “search for norms” statement on China and the US.

“Both sides are committed to making common effort to further identify and promote appropriate norms of state behavior in cyberspace within the international community.”

Already US Director of National Intelligence James Clapper has said he wasn’t optimistic the deal would slow China’s cyber onslaught.

The same Reuters report contains this line: “…there were questions about the extent to which it was orchestrated by the Chinese government.”

Either the Chinese government is masterminding and controlling these raids on valuable US corporate data and hiding its hand in them, or the Chinese government is not fully in control of them. In fact, in many cases, the Chinese government is helpless to control them. Hence, the “knowingly” clause of the agreed pledge.

If that’s the case, it says a lot about the division of power within China, with central authorities themselves unable to rein in the activity. I suspect the real importance of this agreement about economic hacking may be how much it tells the world about the kind of control Beijing exercises over hacking taking place on their territory. To be fair: the US struggles to police hacking within the US. But when the target is high-profile enough, US authorities throw resources at it.

Robert Knake of the CFR sees another future implication of the deal. He notes that under the terms of the deal, China is expected to respond to requests for law enforcement actions from the US. “This is how the United States will measure the Chinese commitment,”

A big part of the BRICs rise is the elevation of BRIC-level governance onto the world stage. So it remains to be seen how China handles this challenge. But I suspect it’s quite a bit different from the twilight of the Cold War, with its treaties and dialogues that were effective in changing the world. We’re all still searching for the new rules. I imagine they will only become apparent after more crises.

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A China-US Technological Cold War

Forget the South China Sea. If you want to see the diciest area of US-China competition, it’s in the technology world – from cyberspace, to the technology industry, to outer space. The September 23 U.S.-China Internet Industry Forum is being described by the New York Times as China flexing it’s tech muscles before the Xi Jinping’s visit to the White House.

Five short observations.

1) This New York Times article describes China and the US in a “sort of technological Cold War” in which the US opposes China’s hacking and China squeezes US tech firms operating in China with unfair rules. A technological Cold War, if accurate, is significant because it points to a long-term struggle.

2) If this meeting is aimed at reminding the US that Beijing can hurt US companies, it also serves to drive a wedge between the US government and US business. This exploits the divisions between industry and government which arose in the aftermath of the Edward Snowden revelations.

3) Some would say those are the point of the Snowden revelations. Sure, for Westerners, Snowden is all about privacy rights. But for Snowden’s host-country, it’s about sowing divisions with the US and West. China may be taking a page from Russia’s playbook by using this tech forum in this way.

4) While the US and companies are tussling over privacy issues, there a questions of how far Corporate America backs the White House in its quest to rein in China’s hacking. After all, these companies stand to make a lot of money from China, though clearly many US tech companies also look to the US government for support in their China struggles.

It’s worth noting that the prospect of US corporate interests colliding with the public interest, epitomized within the US-China tech struggle, was ironically the theme to another Seattle event, the protests outside the 1999 World Trade Organization meeting. It is a major meta-theme in the US election today.

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US-China cyber issue: US adapting to China’s modus operandi

The US is taking a page from China in how it contends with Beijing on the cyber issue. This is significant because every great geopolitical struggle reflects the chemistry of the two powers. The behavior the US embraced with the USSR during the Cold War, or with Western partners, doesn’t work with China. Consequently, the US is adapting to the changed circumstances. Case in point: the US desire to publicly shame China over the cyber-theft issue. Most recently, the indictments from the US Justice Department came days after a visit from PLA General Fang Fenghui.

From the Financial Times:

The US announcement was calculated to cause offence in China, with the FBI publishing “Wanted” notices on its website depicting the alleged hackers, some in full PLA regalia, as common criminals.

“They are pretty annoyed, especially with pictures of guys in uniforms on wanted posters,” says Chris Johnson, of the Center for Strategic and International Studies, and formerly the CIA’s chief China analyst, who discussed the case with Chinese officials in Beijing this week.

“This touches on the guardians of the regime at a time when the high politics [in Beijing] are very sensitive,” he says.

One powerful Chinese who will be especially offended is General Fang Fenghui, the chief of the general staff of the PLA, who had just been to Washington but was not told of the coming indictments.

“This is a huge loss of face for Fang Fenghui…” said Mr Johnson.

But this is not without precedent from the American side. Recall Obama’s willingness to bring up the issue publicly with China’s president Xi Jinping at the shirtsleeves summit in Sunnyvale California last year. In December, when VP Joe Biden visited Beijing, he met with US reporters whose visas were being denied by China – which would be a source of embarrassment for them.

Basically, the US is learning what’s most effective with China by watching China’s behavior in these matters. In 2012, the day before US Defense Secretary Leon Panetta visited Beijing, the US ambassador’s car was jostled by protesters.

More pointedly, in 2011 ex-US Defense Secretary Robert Gates visiting China only to have China roll out a new fighter plane on his visit.

As CNN wrote:

China took its latest powerful toy, a new stealth fighter jet, out for its first test spin Tuesday, leading U.S. Defense Secretary Robert Gates to wonder whether the flight was scheduled to coincide with his visit.

“I asked President Hu (Jintao) about it directly,” Gates said at a briefing with reporters in Beijing. “And he said that the test had absolutely nothing to do with my visit and had been a pre-planned test. And that’s where we left it.”

And the surprises related to China’s military go back further than that. In 2007, a PLA Navy sub popped up amidst a US fleet. The same year China shocked the world by destroyed one of its defunct satellites, sending debris through orbit.

Xi Jinping will attend opening of the Sochi Games – A glimpse of an East-West divide


It would be difficult to argue the world is splitting into East-West spheres, roughly along the lines of the Cold War. But if the world was, the politics of the opening ceremony of the Sochi Olympics would be the most vivid example of the divide.

China’s president Xi Jinping‘s attendance would represent the biggest name from the authoritarian bloc to attend the Russian Olympics. China is not shy about their motives either, according to this report from Gary Anderson at Inside The Games.

“Mutual support is an important feature of China and Russia’s strategic cooperation,” said a spokesman for the Chinese Foreign Ministry.

“This shows the close friendship between the two leaders.”

Joining Xi Jinping and Russia’s Vladimir Putin will be the Dutch Prime Minister Mark Rutte and King Willem-Alexander, along with leaders from Switzerland, Czech Republic and Latvia.

But the not-attending column is notable, and exposes the growing gulf between the authoritarian East and the West:

US President Barack Obama

German Chancellor Angela Merkel

French President François Hollande

British Prime Minister David Cameron.

German President Joachim Gauck

Canadian PM Stephen Harper

A major issue has been the anti-gay propaganda law imposed by Russia, which bans the publication of what is considered pro-gay information in places accessible by minors. This is interpreted in the West as an assault on human rights. Meanwhile in Russia, the liberalization of attitudes around LGBT issues is considered an “assault” on traditional values. LGBT issues aren’t the only divider.

The Russians are fuming at Europe over what they see as Western interference in Ukraine issue. Outgoing German foreign minister Guido Westerwelle paid a visit to protesters in Kiev (which, given the events of the 20th Century is a pretty ballsy move by the Germans if you ask me). The US is upset with Russia over their sheltering of ex-NSA leaker (hero?) Edward Snowden. The Germans and Russians have clashed about museum treasures.

All of which adds to a growing divide between the two spheres. The authoritarians are threatened by Western values and emboldened by what they see as a decline in Western power. The US is tired of the war decade and extended military deployments. Obama, in line with US domestic attitude, is focusing on nation-building – a wise move. Although it runs the risk of sending the wrong message abroad. Unfortunately under Xi’s leadership, China may needs an enemy to help keep the nation cohesive. In any case, slowly, there is a consensus among countries like Russia and China that their interests run counter to those in the West – and overtime the West may begin to look East in the same way.