China Suspends Involvement In U. S. Cybersecurity Group After Spying Accusations

Foreign Ministry spokesman Hong Lei speaks during a daily briefing at the Ministry of Foreign Affairs office in Beijing on May 20, 2014. (Photographer: Andy Wong/AP Photo)
Foreign Ministry spokesman Hong Lei speaks during a daily briefing at the Ministry of Foreign Affairs office in Beijing on May 20, 2014. (Photographer: Andy Wong/AP Photo)

China’s decision to suspend its involvement in a cybersecurity working group with the U.S. after being accused of commercial spying threatens to undo efforts aimed at finding common ground to tackle hacking.

China halted the dialogue and threatened further retaliation after the U.S. indicted five Chinese military officials yesterday for allegedly stealing trade secrets. China’s Foreign Ministry called the U.S. move a “serious violation of the basic norms of international relations,” while China’s State Internet Information Office likened the U.S. actions to “a thief yelling ‘Catch the thief.’”

The group was established last year when U.S. Secretary of State John Kerry visited Beijing and the two sides tried to patch up ties that have long been dogged by accusations of cyber espionage. It met in Washington in July, even after former U.S. National Security Agency whistle-blower Edward Snowden began making revelations about Amercia’s cyber-spying that included hacking into computers in China since 2009.

“Beijing and Washington had reached a certain consensus that both sides don’t point the finger at each other regarding cyber-hacking,” said Shi Yinghong, director of U.S. Studies at Renmin University in Beijing. “Now this hard-won dialogue channel in this strategic area has been damaged.”

The charges follow a campaign by the Obama administration dating back at least three years to escalate public pressure on China to stop economic spying. By bringing the indictment, the U.S. draws a distinction between government surveillance for national security and the theft of commercial secrets of private companies to boost Chinese competitors.

Job Losses
While hundreds of U.S. entities have been penetrated by Chinese military hackers since 2002, the Justice Department focused on five companies specializing in solar panels, metals and next-generation nuclear power plants. David Hickton, U.S. Attorney for the Western District of Pennsylvania where four of companies are headquartered or have main offices, blamed the hacking for job losses, plant closures and billions of dollars to companies in lost research and development costs.

“The FBI action paints China as a threat to commercial interests above all else, and this will probably have traction in the U.S. domestically where there is a feeling that China is waging a form of economic warfare,” said Kerry Brown, director of the China Studies Center and professor of Chinese politics at the University of Sydney. “Beijing might decide to take some punitive actions against U.S. companies, but I think it more likely they will not do this explicitly.”

The working group established a mechanism for dialogue on cybersecurity that may resume once the current furor has died down, Brown said.

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SOURCE: Bloomberg
Ting Shi and Michael Riley

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