President is 'very blunt' with Xi on hacking

President Obama said he had a "very blunt conversation" with his Chinese counterpart Xi Jinping about cybersecurity earlier this month during a U.S.-Sino meeting in California.

In an interview with PBS's Charlie Rose, Obama said he confronted Xi about Chinese hackers cracking into the computer systems of top American companies in an attempt to steal proprietary information and blueprints about future products. The president said he believes China understands that continuing this cyber espionage campaign could damage the relationship between the two countries.

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"There is a big difference between China wanting to figure out how can they find out what my talking points are when I’m meeting with the Japanese, which is standard fare, and we try to prevent them from penetrating that, and they try to get that information," Obama said, according to a transcript of the interview. "There’s a big difference between that and a hacker directly connected with the Chinese government or the Chinese military breaking into Apple’s software systems to see if they can obtain the designs for the latest Apple product."

"That’s theft.  And we can’t tolerate that," he added.

The president said cybersecurity isn't "a side note" in its discussions with China because it plays a major role in the future of the two countries' economic relationship.

"We think this is central in part because our economic relationship is going to be continued to be premised on the fact that the United States is the world’s innovator.  We have the greatest R&D.  We have the greatest entrepreneurial culture," Obama said. "And if countries like China are stealing that, that affects our long-term prosperity in a serious way."

Tensions between the U.S. and China on cybersecurity have reached fever pitch over the past few months after several major U.S. companies have come forward about suffering cyberattacks that stemmed from China. Last month the Pentagon also accused the Chinese government and military of cracking into U.S. government computer systems to steal intelligence.

China has denied such claims and said it is also a victim of hacker attacks.

The tables were turned last week when National Security Agency leaker Edward Snowden told the South China Morning Post that the U.S. government has been hacking into computers in China and Hong Kong since 2009. Snowden said the hacking operations targeted businesses, students and officials from the Chinese University of Hong Kong.

Obama did not address Snowden's claims about the hacking operation during his interview with Rose.

Obama also discussed the recent leaks about classified NSA surveillance programs.

In an attempt to allay public concerns about the sweeping surveillance programs, Obama said the NSA cannot listen to a U.S. citizen's phone conversations and target their emails without a court order.

"If you're a U.S. person, then NSA is not listening to your phone calls and it's not targeting your emails unless it's getting an individualized court order. That's the existing rule," the president said.

One of the alleged NSA programs revealed by Snowden this month only collects and stores information about "call pairs" from Verizon and other service providers, according to Obama.

"You have my telephone number connecting with your telephone number. There are no names.  There is no content in that database. All it is, is the number pairs, when those calls took place, how long they took place," Obama told Rose.

The NSA can query that database to provide other government entities like the FBI with data about those call pairs, but Obama said that "at no point is any content revealed."

Obama also briefly outlined how the second surveillance program, known as PRISM, operates. The program has garnered attention in recent weeks after reports arose that tech companies like Google, Facebook, Apple and Yahoo gave the government access to the contents of users' emails, video chats and documents.

The president stressed that the program only applies to foreign entities and not U.S. citizens, though privacy groups have taken issue with that claim.

"It can only be narrowly related to counter-terrorism, weapons proliferation, cyber hacking or attacks, and a select number of identifiers — phone numbers, e-mails, et cetera. Those — and the process has all been approved by the courts — you can send to providers — the Yahoos or the Googles, what have you," he said. "And in the same way that you present essentially a warrant. And what will happen then is that you there can obtain content."

Tech companies vehemently deny that they have given the government direct access to their servers, or even knew about the program before the media reports about PRISM broke. Over the weekend Facebook, Microsoft and Apple released figures about the number of government requests for user information they have received in an attempt to restore consumer confidence in their handling of personal data.