US reaches economic cybersecurity agreement with China

22 Mar, 2019

China's pledge to help crack down on hackers who steal commercial secrets from the United States, even coming as it did amid a bit of arm-twisting by President Barack Obama, is a big breakthrough that could reduce U.S.-China tensions and end huge losses for American companies.

Analysts say the agreement between the world's two biggest economies is just a start but could lead to real progress on the cybertheft issue — depending on how well it's implemented. Obama announced the agreement at a joint news conference Friday with Chinese President Xi Jinping. "I think it's a big deal," said Dmitri Alperovich, who published a seminal paper in 2011 identifying Chinese cyber economic espionage and now runs the cybersecurity firm Crowdstrike. "For the first time ever, the Chinese have made a distinction between national security espionage and economic espionage." Also significant, Alperovich said, is the fact that the Chinese have agreed to provide responses to U.S. government requests for investigations. "They can't just shrug and say, 'We don't do hacking; hacking is illegal,'" he said.

Mark MacCarthy, vice president for public policy at the Software and Information Industry Association, said the tech industry trade group agrees with Obama that the cybertheft of intellectual property must stop. "We are hopeful the understanding reached by the president and Chinese President Xi Jinping results in real progress on the ground," he said. The U.S. has accused Beijing of backing Chinese hackers who steal trade secrets from American companies. Before the Xi summit, Obama called cybertheft by China "an act of aggression."

James Lewis, director of the Center for Strategic and International Studies' Strategic Technologies Program, said the thefts probably cost American companies tens of billions of dollars annually. Last year the U.S. charged five officers in China's People Liberation Army for computer hacking and economic espionage against six U.S. companies, including Westinghouse, U.S. Steel and Alcoa.