China, U.S. Agree Not to Engage in Economic Cyberespionage

President Obama and first lady Michelle Obama, playing host to Chinese President Xi Jinping and his wife, Peng Liyuan, wave from the White House balcony on Friday. (Gary Cameron/Reuters)
President Obama and first lady Michelle Obama, playing host to Chinese President Xi Jinping and his wife, Peng Liyuan, wave from the White House balcony on Friday. (Gary Cameron/Reuters)

President Obama and Chinese leader Xi Jinping pledged Friday that neither of their governments would conduct or condone economic espionage in cyberspace in a deal that sought to address a major source of friction in the bilateral relationship.

But U.S. officials and experts said that it was uncertain whether the accord would lead to concrete action against cybercriminals.

The agreement, reached in talks Thursday night and Friday morning between Obama and Xi, has the potential — if enforced — to confront one of the most significant threats to U.S. economic and national security and an irritant for American corporations trying to protect their intellectual property. The pact also calls for a ministerial or Cabinet-level process aimed at ensuring compliance.

Speaking alongside the Chinese president in the Rose Garden, Obama said that the two had reached “a common understanding on the way forward,” but he added that more needed to be done.

“The question now is,” Obama said in a joint news conference with Xi on Friday, “are words followed by actions?”

The two leaders agreed on a raft of other matters, including “nearly complete bans” on the ivory trade; measures to avoid “miscalculation” and unintended collisions of military planes or ships; and an adoption by China of a cap-and-trade system to limit greenhouse emissions and a $3.1 billion pledge by China to help poor nations grapple with climate change.

Wildlife groups said that the ivory measure would pressure Hong Kong, which is the hub for 90 percent of the world’s ivory trade, much of it destined for the Chinese mainland. Poachers are killing an estimated 33,000 elephants annually.

But cybertheft went to the top of the summit agenda. China has long denied such activity — and Xi at the news conference said, “China strongly opposes and combats the theft of commercial secrets and other kinds of hacking attacks.”

U.S. officials have said that America does not conduct cybertheft for the benefit of U.S. companies. The disclosures of a former National Security Agency contractor, Edward Snowden, about extensive U.S. cyberspying overseas have given Beijing ammunition to counter such assertions.

Nonetheless, apparently rattled by the threat of sanctions — a threat that Obama reiterated in his meetings with Xi — China agreed to affirm that it was against economic cyberespionage.

“I raised, once again, our rising concerns about growing cyberthreats to American companies and American citizens,” Obama said at the joint news conference. “I indicated that it has to stop.” Obama added that the two sides made “progress, but I have to insist that our work is not yet done.”

The formulation reached, and reiterated by the two leaders, said that “neither the U.S. or the Chinese government will conduct or knowingly support cyber-enabled theft of intellectual property, including trade secrets or other confidential business information for commercial advantage.”

The two sides also said they would set up a high-level joint dialogue on cybercrime in which officials from both countries would be able to investigate and review allegations of cyber-intrusions. They agreed to establish a hotline to discuss issues that might arise in that process.

The U.S. secretary of homeland security and the attorney general will co-chair the dialogue on the American side. The Chinese side would be represented by ministers of public security, state security, justice, and the State Internet and Information Office.

“The significance of this agreement is in China, for the first time, publicly committing that it will not conduct” economic cyberespionage, said Kenneth Lieberthal, a senior fellow in foreign policy studies at the Brookings Institution. “In the past, they have simply denied that they have engaged in these or other cyberactivities and that they’re the victim and not the perpetrator.”

Lieberthal added: “Only a great optimist will say that now, we’re home-free on this. But [the agreement] at least provides a very high-level, agreed-upon way to engage on this issue and a public [acknowledgment] that this is an issue of genuine consequence.”

Sanctions are not off the table, Obama administration officials said.

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SOURCE: Ellen Nakashima and Steven Mufson
The Washington Post