Obama urges China to stop cyber theft

President Obama is urging China to stop cyberattacks to steal trade secrets and allow foreign companies to compete equally.

China must create “a playing field where competition policy promotes the welfare of consumers and doesn’t benefit just one set of companies over another,” Obama said during remarks Monday at the Asia-Pacific Economic Cooperation (APEC) forum.

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“We look to China to become an innovative economy that values the protection of intellectual property rights, and rejects cyber theft of trade secrets for commercial gain,” he added.

The two countries have clashed repeatedly over cyberattacks this past year.

The U.S. accused China of hacking both government agencies and high-profile tech companies. China countered that U.S. launched attacks targeted 80 percent of its government websites.

Ahead of a meeting with Chinese President Xi Jinping later this week, Obama promised the two would “speak directly and candidly, as we always do, about specific actions China can take to help all of us, across the Asia-Pacific, to expand trade and investment, which many of the CEOs I talk to raise in our discussions.”

Major tech players like Apple and Facebook have tried to make inroads into the Chinese economy, viewed as a large untapped resource for many foreign companies. China, though, places restrictions on foreign companies operating within its borders.

Apple CEO Tim Cook and Facebook chief Mark Zuckerberg last month spent a week traveling around China. Cook met with Chinese officials to discuss differences on data security amid reports China had been hacking Apple iCloud accounts to gain information on pro-democracy protesters in Hong Kong.

While Apple has been allowed to roll out its new products in China, including the iPhone 6 last month, Facebook is still banned in the country.

Opening China’s economy benefits all APEC countries, Obama said Monday.

“We don’t suggest these things because they’re good for us; we suggest that China do these things for the sake of sustainable growth in China, and the stability of the Asia-Pacific region,” Obama said.  

Cybersecurity experts, though, have not had high expectations that this week’s talks will break new ground on a broad cyber agreement.

China pulled out of a cyber working group earlier this year after the U.S. indicted five members of the Chinese military for hacking.

The two countries have continued “quiet discussions” through unofficial channels, but have made little progress, said Chinese cyber policy expert Adam Segal, a senior fellow at the Council on Foreign Relations.

“The question is, can they come up with a face-saving way to restart the working group?” he said. “I haven’t seen any configuration of that.”

The U.S. surveillance programs revealed by former National Security Agency contractor Edward Snowden have also given the Chinese little incentive to budge.

“The Chinese are pretty happy to just keep hammering away on Snowden,” Segal said.