Chinese President Xi Jinping’s first trip to the United States next week comes at a time of growing tension between the two countries, particularly over cybersecurity.
President Barack Obama says cyber theft is “probably one of the biggest topics” that he will discuss with President Xi. Earlier this week Obama told U.S. business leaders that China’s theft of trade secrets is an “act of aggression that we have to stop.”
Cyber espionage is “fundamentally different from your government or its proxies engaging directly in industrial espionage and stealing trade secrets, stealing proprietary information from companies,” the president said.
U.S. officials have suggested they could impose sanctions in response. Obama told members of the Business Roundtable that the U.S. government is preparing “a number of measures that will indicate to the Chinese that this is not just a matter of us being mildly upset.”
An editorial in China’s state-backed Global Times newspaper Friday called the U.S. president’s comments “disappointing” and said the U.S. exaggerates the severity of the cyber security threats. China’s government claims it also is a victim of cyber attacks.
China has repeatedly stressed that it is cracking down on cyber crime. This week, Zheng Zeguang, an assistant foreign minister, voiced the government’s opposition to any kind of hacking activity.
“Whoever is carrying out hacking attacks or business espionage in China is violating the country's law and will be punished by law," Zheng said.
China has denied past reports that showed evidence linking the hacking of foreign targets to Chinese military units.
Ahead of what could be a tension-filled stop in Washington, Chinese President Xi Jinping will meet with top U.S. and Chinese technology executives, part of a high-profile attempt to showcase China’s importance and influence over the industry both as a consumer and producer of high-tech products.
The forum, which will be co-hosted by Microsoft in Seattle Wednesday, is expected to include tech tycoons such as the CEOs of Apple, IBM, Facebook, Google and Uber from the U.S. as well as their Chinese rivals from Baidu, Alibaba and ZTE.
Despite the commercial allure of China’s billion plus market, it remains unclear how high-tech companies are going to respond to the event. China’s Internet Tsar Lu Wei, the man responsible for keeping in place restrictions that are key obstacle to companies wanting to do business in China is expected to be a keynote speaker.
And the meeting comes at time when there is increasing uncertainty about regulations in China for high-tech firms.
According to the 2015 business climate survey, conducted by the American Chamber of Commerce in Beijing, 61 percent of the chamber’s members in the information and communications technology sector said China’s rule-making is unclear or inconsistent, which has an impact on companies’ ability and willingness to invest there.
Some feel the forum could help both sides address the issues.
“Governments and standardization agencies can also work together with their counterparts from different countries on common security standards. That’s really the key thing I am expecting — that such [a] dialogue will provide some framework for the future joint efforts,” Cheng Lixin, chairman and CEO of ZTE USA, told VOA. Cheng is among those expected to attend the event next week.
Understanding on cyber theft
But reaching a framework might be difficult given that cyber security is a new terrain that all countries are trying to navigate.
U.S. officials have struggled to formulate a response to allegations of cyber hacking from abroad, partly because the phenomenon is still relatively new. It is also difficult to determine who carried out specific cyber attacks: activists, government employees or corporations.
Peter Yu, law professor at Texas A&M University, said that uncertainty makes imposing sanctions extremely difficult, but talks could help both sides come up with a common understanding.
“The condition of the sanctions will allow the U.S. government to draw a more clear line about what is acceptable, and what’s not. It will also be a good stepping stone to have more discussions about how we can actually contain [hacking] activities,” Yu said.
Help for Chinese tech industry?
Chinese officials at the summit likely want to focus on developing local brands and technologies with the help of foreign companies, said Kitty Fok, managing director of IDC China.
“If the discussion is going to be focused on how the American companies partner with local companies… or to develop something in China together. That would be a very good first step,” Fok said.
That echoes with the Chinese leader’s pledge of promoting “indigenous innovation” in a bid to wean off the country’s dependency on foreign technology. However, Fok said many initiatives China has in place to grow its economy cannot be achieved by Chinese brands alone. She says that means China will have to carefully strike a balance between its protectionist approach and growth strategy.