Chinese hacking: Obama admin. signals it will elevate issue with Beijing

February 19, 2013

President Obama met with Chinese leader Xi Jinping in the White House in February 2012. (Martin H. Simon/Pool via Bloomberg)

When U.S. cyber-security firm Mandiant released a lengthy report this morning on Chinese hacking, tracing an extensive cyber-espionage campaign against American corporations back to a specific unit in the Chinese military, it implicitly raised a question that has loomed over such reports. At one point does this become a diplomatic issue between the U.S. and China?

There are signs that the Obama administration is elevating the hacking issue in its diplomacy, putting more emphasis on publicly signaling its unhappiness with the Chinese government.

The New York Times reports, "Obama administration officials say they are planning to tell China’s new leaders in coming weeks that the volume and sophistication of the attacks have become so intense that they threaten the fundamental relationship between Washington and Beijing." That's a pretty significant elevation.

This, below, is from the Washington Post's story on the report, by Beijing-based William Wan and cyber-security report Ellen Nakashima (my emphasis added):

[The Mandiant report] also comes days after President Obama issued an executive order aimed at better securing the computer networks run by critical U.S. industries, such as transportation and energy.

“We know foreign countries and companies swipe our corporate secrets,” Obama said in his State of the Union address. “We cannot look back years from now and wonder why we did nothing in the face of real threats to our security and our economy.”

On Tuesday, White House spokeswoman Caitlin Hayden said the administration was aware of the Mandiant report and reiterated that the United States “has substantial and growing concerns about the threats to U.S. economic and national security posed by cyber intrusions, including the theft of commercial information.”

Before she left office this month, Secretary of State Hillary Clinton said that the United States has elevated the cyber-espionage issue to the strategic dialogue level with China. “We have to begin making it clear to the Chinese that the United States is going to have to take action to protect not only our government, but our private sector, from this kind of illegal intrusions,” Clinton said.

This is not a small thing: the U.S.-China relationship is complicated, important to both countries and at times quite thorny. While that relationship is not necessarily zero-sum, elevating a touchy subject like hacking does have the potential to distract from other issues, such as trade, currency manipulation, regional territorial disputes or human rights.

The Obama administration surely knows this, as does Beijing. So it will be interesting to watch how both countries incorporate this newly elevated dispute into their larger diplomatic efforts. Will the Obama administration's displeasure substantively change China's behavior on cyber-security? Will it introduce greater tension into the relationship that could distract from other issues? Or maybe some combination of both?

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Olga Khazan · February 19, 2013