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SUNDAYREVIEW | EDITORIAL

America, China and the Hacking Threat

By THE EDITORIAL BOARD MAY 24, 2014

Over several years of trying to persuade China to stop cyberattacks against

corporate America, the Obama administration has gotten nowhere. What

officials say is the most aggressive effort by any country to steal secrets

from some of the most prominent and successful American companies is

still going strong. Losses are estimated at billions of dollars in profits and

thousands of jobs.

In this context, the Justice Department’s decision to indict five

members of the Chinese People’s Liberation Army for fraud is

understandable as a feel-good gesture and seems within the parameters of

American law. As a matter of substance, though, it is pointless and

perhaps counterproductive.

The indictments reflect the administration’s frustration with China’s

resistance to proposals that differences about cybersnooping be discussed

through diplomatic channels and that rules of the road be worked out. To

underscore American seriousness, President Obama raised the issue with

China’s president, Xi Jinping, at last year’s summit meeting in California,

but that seemed to have little effect.

The 31-point indictment, in the works for two years, named members

of Unit 61398, which was publicly identified last year as the Shanghai-

based cyber unit of the People’s Liberation Army. It alleged that since

2006, the hacking unit invaded the networks of American corporations,

including Westinghouse Electric and the United States Steel Corporation,

copying their emails and infecting computers with malware. Such

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behavior cannot go unchallenged. Hacking deprives firms of proprietary

intellectual property that they have spent billions of dollars and countless

hours developing. It compromises an Internet that depends on the free

flow of information.

Mr. Obama is always under political pressure, some of it no doubt

from American corporations, to act tough with China. Still, the Justice

Department’s unprecedented legal action has serious weaknesses — and is

largely symbolic.

It is hard to imagine, first of all, that the indicted men will present

themselves in the United States for trial. The administration also has

drawn a tenuous distinction between spying for national security reasons

and spying on foreign companies for economic advantage, which it says

must not be permitted. But America’s own practices are a problem. As

National Security Agency documents made public by Edward Snowden

revealed, the United States regularly uses cyberspying to gain economic

advantage in trade talks. Many other countries, including France, are also

aggressive in spying to benefit domestic companies.

The case has certainly gotten China’s attention. The Chinese state

media petulantly called the United States a “mincing rascal” for lodging

the case. More substantively, the Chinese have called off the bilateral

working group that was the only venue dedicated to cyberissues, and they

have announced plans for tighter checks on foreign technology companies

doing business in China.

It would be unfortunate if China used the confrontation to withdraw

totally from cooperating with the United States, especially on improving

relations between the two militaries — an effort that has just begun to gain

traction. Tensions have already risen over China’s aggressive moves in the

South China and East China seas.

China, as a rising economic power, believes that ferreting out the

business secrets of foreign companies is a national security interest. One

day, however, it will have its own pathbreaking achievements and will

want to protect them.

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The responsible thing would be for China to work with the United

States now to establish rules of the road that would reduce economic

hacking and equip the two countries with strategies for reacting to

cyberattacks during military-related tensions. Washington should make

clear that the option for dialogue on cyberissues remains open, even as it

pursues its legal case.

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A version of this editorial appears in print on May 25, 2014, on page SR10 of the New York editionwith the headline: America, China and the Hacking Threat.

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