Hacking to shadow China summit

Tension over hacking will shadow Chinese President Xi Jinping’s first state visit to Washington.

It’s an historic trip for Xi, a new-generation leader of China who assumed office in November 2012. He wants to use this week’s visit, which begins Thursday night and will be capped by a Friday-night state dinner, to show the world that China is on a level playing field with the United States.

{mosads}The visit is also important for the Obama administration, which hopes to make headway on climate change, military cooperation, human rights and various trade discrepancies.

“This is the most consequential bilateral relationship in the world,” Ben Rhodes, White House deputy national security adviser, told reporters. “The more China is invested in resolving global issues and supporting a rules-based international order, the better it will be for the United States and for the world.”

Yet it is the charges that Beijing was behind the theft of the personal data of more than 20 million federal workers that will dominate news coverage of the discussions between President Obama and Xi.

It’s not expected that the two sides will make much progress on the issue of hacking, despite outrage in the U.S. over what’s seen as a campaign by Beijing to pilfer U.S. corporate secrets.

“The best they can hope to accomplish is to raise the issue [of hacking] with the Chinese president, to ‘express grave concern,’ which is the State Department equivalent of saying ‘they’re extremely mad,’” said Christopher Swift, a former official with the Treasury Department Office of Foreign Assets Control and current national security professor at Georgetown University.

Lawmakers on Capitol Hill have urged the White House to use the state visit as a platform to sternly rebuke China.

Members of Congress are upset not only about the hacking charges, but also about China’s recent decision to devalue its currency and its territorial claims in the South China Sea.

“China and the United States both have enormous responsibilities to the global economy, but recent developments suggest that China is not fulfilling that responsibility,” finance leaders in both the Senate and House wrote to Obama Tuesday.

On the campaign trail, surging GOP White House contender Carly Fiorina on Tuesday said she would cancel Friday’s state dinner, though she said Obama should still meet with Xi privately.

“What happens if you let your teenager do bad stuff over and over again, what do they do? Bad stuff,” she told an audience at The Citadel military college in Charleston, S.C.

Beijing sees the visit as part of its long-term plan to have China “taken seriously as a new great power,” said Adam Segal, a Chinese cyber policy expert and senior fellow at the Council on Foreign Relations.

“For the Chinese, the stakes are very high,” he said. “Xi Jinping wants to consolidate and bolster his position back home.”

Businesses watched warily this spring as Beijing devalued its currency and approved a sweeping national security law that critics say would favor domestic firms over foreign competitors.

Meanwhile, human rights activists have urged Obama to rebuke new draft laws they say severely restrict foreign-funded nongovernmental organizations.

The White House on Tuesday insisted it wouldn’t “paper over” these concerns with Xi, particularly on human rights.

“Human rights goes beyond a ‘difference,’” Rhodes said. “This isn’t a policy difference, like we’d have on a trade irritant. We believe that people should have the right to speak freely, and we are going to be very clear about that.”

Whatever Obama is able to accomplish in other policy areas, experts caution not to expect any formal agreement on state-sponsored hacking. The best conceivable outcome, Swift said, is a “gentleman’s agreement” and promises of further discussion.

“If they get a good outcome here, then they will agree to have another meeting to discuss [hacking],” Swift said.

Rumors of a potential cyber warfare agreement circulated earlier this week. Reportedly, the deal would prohibit either side from launching the first cyberattack on the other’s critical infrastructure during peacetime.

The White House has since downplayed the likelihood of such a pact.

“I don’t want to suggest that we reached an arms control agreement here, but I do want to suggest that ultimately the goal here is we start from a common understanding,” Rhodes said.

Regardless, the deal wouldn’t begin to address the “fundamental, underlying issues in the U.S.-China cyber relationship,” said Zachary Goldman, executive director of New York University’s School of Law Center on Law and Security and a former official with both Treasury and the Defense departments. And that’s when, and if, industry espionage is ever acceptable, he said.

Rhodes insisted defining that line would be a top priority during the meetings.

“We want to make very clear that [commercial espionage] puts at risk China’s ability to continue on its economic growth if businesses don’t have confidence that they’re not going to be subjected to cyber theft,” he said.

But it’s a hard distinction to make with Beijing, experts say. While the White House draws a marker between hacking for intelligence-gathering purposes and hacking for commercial gain, China does not.

“As far as [Beijing] is concerned, it’s all one and the same,” Swift said.

Xi has vehemently rejected allegations of both corporate and state espionage, but on Tuesday indicated that China is prepared to start a “high-level” dialogue with the United States on cyber crime.

It would be the two countries’ first official channel on cybersecurity since China quit a working group over last year’s indictment of five members of the Chinese military for hacking the United States.

But that’s likely an unsatisfying outcome for those calling for swift action on Chinese hacking.

“I’m not sure that we’ll know right away the extent to which there’s progress, because the discussions that are underway mark initial steps toward the achievement of a long-term goal,” said Paul Stockton, the assistant secretary of Defense for Homeland Defense from 2009 to 2013.