China’s cyberespionage isn't changing rapidly — America’s will to confront it is

China’s cyberespionage isn't changing rapidly — America’s will to confront it is
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On October 30, the Department of Justice announced charges against Chinese government officials and a network of hired hands employed to steal turbofan technology used in jet engines from an American company. In a press conference announcing these charges and a broader initiative combatting Chinese cyberespionage, then-Attorney General Jeff SessionsJefferson (Jeff) Beauregard SessionsTrump, Christie met to discuss chief of staff job: report Chief justice of California Supreme Court leaves GOP over Kavanaugh confirmation Trump attorney general pick a prolific donor to GOP candidates, groups: report MORE noted that these malicious activities, sponsored by Beijing and designed to give Chinese companies a leg-up in international business, were “increasing rapidly.”

Only it isn’t the criminals in the Middle Kingdom who have changed their behavior, but the victims in the New World that are changing theirs. As I noted in testimony to the House Homeland Security Committee on September 6, the aviation industry is continually targeted for theft of intellectual property, especially via cyber means. The dual-use nature of virtually all original technology developed for flight means that it will continue to be targeted even with agreements in place to protect civilians.

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The agreement Presidents Xi and Obama signed in September 2015 to curb theft by state-backed hackers of intellectual property for commercial purposes has overwhelmingly succeeded, so long as you give China’s hackers the benefit of the doubt. Hacking of restaurant secret recipes, traditional automotive designs, and general manufacturing all dropped to near-zero levels and stayed there through 2017 before broader trade tensions changed the calculus. 

Much of what remained — and to Mr. Sessions’ point may be accelerating — is the illicit acquisition of U.S. commercial technology with defense applications, which in the modern world can be most high-tech products. One could argue that theft of commercial jet engine technology could be used to improve the manufacturing of military jets; that purloined biotechnology could be sought after to enhance public health programs or defend against epidemic outbreaks or even bioweapons rather than to aid China’s economic ambitions; or that stolen sensors, semiconductors, and satellite communications could all be for dominance in aerial combat rather than boardroom showdowns. In the Obama Administration and the first year of the Trump Administration, the U.S. Government seemingly did make that argument and held Beijing to precise, but low expectations which they deserve credit for honorably meeting. 

No more.  As with trade, nuclear proliferation, and arms control, the President has indicated a willingness to walk away from strategically bad deals regardless of technical compliance. China has over the past decade moved from just stealing intellectual property in cyberspace to what the U.S. Trade Representative describes as “unfairly” acquiring it through a combination of increasingly aggressive insider threats, legal maneuvers, investments and acquisitions, government-subsidized loans, overt contracts, joint venture requirements, security inspections, and academic cooperation supported by coordinated cyber operations. Prior administrations treated cyber theft as somehow distinct from other forms of industrial espionage, leaving a policy hole through which China could be technically compliant with hacking-focused agreements while still undermining American competitiveness. The Trump Administration has responded with far-reaching trade complaints, in which cyber theft is an important but secondary concern as part of a systemic “technology transfer regime” that unfairly harms American businesses.

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President TrumpDonald John TrumpAustralia recognizes West Jerusalem as Israeli capital, won't move embassy Mulvaney will stay on as White House budget chief Trump touts ruling against ObamaCare: ‘Mitch and Nancy’ should pass new health-care law MORE has spent an important chunk of his presidency sticking up for the collective interests of American businesses and security in confronting China’s behavior at the national level. When he meets with President Xi again at the G-20 Summit starting this week, he would be wise to not only bring up the return and growing problem of Chinese economic cyberespionage but also the prospect for cooperation: as technology leaders both countries share an interest in a world where patents are respected; as great powers both also want to minimize potentially lethal conflict while ensuring domestic stability, and cyberspace has proven to be tumultuous for both.

A lasting cybersecurity agreement would recognize that the internet is no longer an island unto itself but integrated into every aspect of modern life, and take into account the broader strategic conflicts between Washington and Beijing over trade, military competition, and human rights including freedom of religion. Given the success government and private sector experts have had monitoring compliance with the Xi-Obama Agreement, future cooperation could mean a tougher agreement with higher expectations. Sanctions, indictments, tariffs, and other policy tools will seem attractive as a response to Beijing’s recalcitrance, and the Trump administration will no doubt continue to apply some of them. But as President Trump himself said in July, “Diplomacy and engagement is preferable to conflict and hostility.” So if it’s true that only Nixon could go to China, perhaps it’s also true that only Trump can make a deal with them that protects American civilians and businesses from hacking in the long run.

NOTE: This post has been updated from the original to correct the name of the summit this week: It's the G-20.

Christopher Porter is the Chief Intelligence Strategist at cybersecurity company FireEye and a Senior Fellow at the Atlantic Council.