Obama's China cyber strategy likely more talk, less action

http://www.politico.com/story/2013/06/obamas-china-cyber-strategy-92105.html

 

President Obama likely to talk softly with China on cyber-snooping

President Obama will meet with Chinese President Xi Jinping in California. | Reuters

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By TONY ROMM | 6/2/13 12:05 PM EDT Updated: 6/3/13 10:01 AM EDT

Washington and Wall Street want President Barack Obama to hammer China for the incessant digital snooping that’s long plagued top U.S. businesses.

But they may have to settle for sweet talk — for now.

Obama appears unlikely to threaten new punishments when he meets his Chinese counterpart this week in California — or else the White House might risk long-term progress on cybersecurity while hamstringing cooperation on issues like human rights and North Korea.

Still, the Beltway’s biggest defense hawks are itching to strike. Members of Congress are weighing whether to limit Chinese visas or erect new market barriers for Chinese companies unless the country stymies its notorious hackers. It’s a stark contrast with the more diplomatic prelude to Obama’s face-to-face sit-down with Chinese President Xi Jinping — but one that might ultimately be to Obama’s long-term advantage.

The president likely will play “more of the good cop,” explained Richard Bejtlich, chief security officer at the private cyber security firm Mandiant. He can strike a tough tone on cybersecurity yet still leave the real hardball to other members of his administration, Bejtlich explained.

That approach underscores the reality that there’s no overnight fix to Chinese cyberhacking. As the dialogue continues, though, Obama is likely to point back to Congress. “It’s useful to have these bills to say to the Chinese, you need to realize how much this is damaging the bilateral relationship,” said James Lewis, director of the Technology and Public Policy Program at the Center for Strategic and International Studies.

“China is a big country, and they’re not going to fall on their knees and beg for forgiveness,” he said.

Cybersecurity ranks high on the White House’s priority list. New details emerged only last week, for example, that Chinese hackers previously gained access to sensitive U.S. weapons systems, though the Pentagon insists foreign cyberspies didn’t abscond with any key military documents.

Still, the past few months have yielded a deluge of reports all indicting the country as a haven for hackers trying to steal U.S. businesses’ trade secrets. A seminal report by Mandiant, issued earlier this year, even tied one of China’s most infamous hacker groups to the country’s military.

The White House began to address Chinese cyber espionage explicitly and forcefully only this past April, when National Security Adviser Tom Donilon called on the country in a major speech to adhere to “acceptable norms of behavior in cyberspace.” In the months to follow, leading administration officials — including the president — echoed that message.

And the White House continued in that vein on Friday, as spokesman Josh Earnest repeated that the president is “concerned about” the cyber intrusions from China. But Earnest and others have stopped far short of even hinting at any punishments to come. Secretary of Defense Chuck Hagel, speaking on his way to a key conference in Singapore, also railed Friday on Chinese cyber espionage — yet he, too, offered no new indication of penalties on the horizon.

“Unfortunately, that approach is not going to work,” Bejtlich told POLITICO of a long-term White House strategy premised entirely on dialogue. “Just talking to the Chinese is not going to make any difference.”

That’s the fear on Capitol Hill, at least, and lawmakers already are translating their criticisms into legislation.

A new, bipartisan Senate measure, for example, calls for the creation of a “watch list” of foreign countries engaging in cyber espionage. For the worst offenders, the president could “block imports of certain categories of goods if they benefited from the stolen U.S. technology or proprietary information,” explained Sen. Carl Levin (D-Mich.) in a letter to Obama last week.

“I thought you could refer to this bill in your meeting with President Xi as an example that the U.S. will indeed impose real costs on China should they continue to steal our intellectual property,” added Levin, who promised he would seek action on the bill this year. However, his office declined to explain when and how the senator might advance the bill, which also has the backing of Sens. Jay Rockefeller (D-W.Va.), John McCain (R-Ariz.) and Tom Coburn (R-Okla.).

Others, like Rep. Mike Rogers (R-Mich.), have suggested the U.S. government deny visas to China if it fails to curb the cyber intrusions. He’s working on a bill to counter cyberspying with Sen. Ron Johnson (R-Wis.), the senator’s office confirmed to POLITICO — but both lawmakers declined to specify further details.

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Separately, Rogers also has eyed new ways to strengthen the federal process that oversees foreign purchases of U.S. companies, particularly investments coming from China.

“In years past this cyber trade war has been well down the list of bilateral concerns to address with China. It is high time for it to jump to the top of the list,” Rogers told POLITICO.

“China needs to see real consequences for their actions,” the congressman said. “President Obama should use the opportunity in his upcoming meeting with Chinese President Xi Jinping to address this issue head on at the highest levels of the Chinese government, and let President Xi Jinping know that these cyberattacks from his government will not be tolerated.”

Outside the halls of Congress, there’s shared interest at least in “naming and shaming” the worst actors — be it the Chinese government or the hackers it can’t control. “It’s never been an important enough issue for the leadership to care about because we haven’t made it an issue,” explained Jason Healey, director of the Cyber Statecraft Initiative at the Atlantic Council.

Healey, though, represents a group that still believes additional action is necessary — including restrictions on visas or imports. “If we’re not willing to come up with sticks on this,” he told POLITICO, “then we shouldn’t raise it as an issue.”

Some of those remedies, however, ultimately might prove impractical. A block on foreign imports, for example, could be tough to implement given the time it would take to identify goods crafted with the help of stolen intellectual property, Lewis explained. Even so, the mere threat could prove enough to help turn the tide on Chinese cyber espionage, experts say.

For now, the two sides plan to continue talking. After arriving in China for a meeting in April, Secretary of State John Kerry announced the formation of a bilateral cybersecurity working group, which is only beginning its work.

And the White House, for its part, announced in February an entire new strategy to protect U.S. trade secrets — a process that will see U.S. diplomats talk with international partners as the administration surveys current law for new ways to protect businesses. When it unveiled the document, the White House pointed repeatedly to Chinese cyber theft without criticizing the country by name.

In a sense, it all means the president’s meeting next week marks the beginning — not the end — of the White House work to broker something akin to a Chinese cyber cease-fire.

“A good outcome from the summit would be a commitment from [the Chinese president] to work seriously on the problem, and explain he understands the risk to the bilateral relationship, and specific agreement on a negotiating process,” Lewis said.

“If we get those three things, it’s a success,” he continued. “People say, ‘Gosh, why can’t the president solve it tomorrow?’ That’s not how it works when you’re dealing with big countries.”