Daily News

State Dept. 'monitoring China's adherence' to '15 agreement on espionage

July 09, 2018

The State Department is “monitoring” China's commitment to a 2015 agreement that it wouldn't use cyber espionage for the commercial gain of its domestic industries, and may “pursue opportunities for continued dialogue” on the matter, according to a statement provided to Inside Cybersecurity by a department official.

The Office of the U.S. Trade Representative, in a “Section 301” report this spring that helped set the stage for tariffs now being slapped on Chinese products, claimed that China had violated an agreement between then-President Obama and Chinese President Xi Jinping that state-sponsored cyber spying for the benefit of domestic industries was unacceptable.

But the U.S. -- publicly, at least -- has not used any tools related to the 2015 agreement itself to signal that it believes China has violated the accord.

“It's fair to say that [the agreement] had an effect on their behavior,” Christopher Painter, the former top cyber official at State, said in an interview about the 301 report and the State Department's comments. “It created a measurable expectation of behavior” that China has subsequently accepted in agreements with the G-20 and other countries including Japan and Australia, Painter pointed out.

“If the Chinese government is sponsoring [prohibited] activities, the U.S. has tools, including formally notifying them of violations and using sanctions,” Painter said. “China committed to no espionage to benefit the commercial sector and that created accountability -- and the U.S. didn't give up anything to get that, our options are still on the table.”

Painter added: “The State Department is saying, 'we're looking closely, we have all these tools.' … If they violated the agreement, I support taking action. But it's not clear [from the 301 report] that they have violated the agreement.”

The State Department, in its statement to Inside Cybersecurity, did not cite any specific violations of the 2015 agreement, but said: “For the past several years, we have consistently raised our concerns to China regarding cyber-enabled intellectual property theft. Our persistent engagement led to an unprecedented set of cyber commitments announced during President Xi Jinping’s September 2015 state visit. Those commitments included an agreement that neither country’s government would conduct or knowingly support cyber-enabled theft of intellectual property for commercial advantage. … The United States is closely monitoring China’s adherence to these commitments.”

State noted the USTR report, saying, “The Section 301 investigation concluded that China conducts and supports unauthorized intrusions into, and theft from, the computer networks of U.S. companies to access their sensitive commercial information and trade secrets.”

The State Department did not comment on the specific allegations but said: “We consistently and candidly raise our concerns regarding cybersecurity with the Chinese at every level. We remain committed to holding China accountable through a variety of mechanisms, and will pursue opportunities for continued dialogue when appropriate."

James Lewis of the Center for Strategic and International Studies told Inside Cybersecurity that during a recent visit to Beijing, Chinese officials told him that senior U.S. officials have expressed an interest in resuming a bilateral dialogue on cybersecurity issues, possibly with talks in September or October.

The State Department didn't specifically confirm that such an offer is on the table, and neither have the departments of Defense and Homeland Security, which would also be parties to the talks.

Contrary to the USTR conclusions in the Section 301 report, Lewis said “most people think [the 2015 deal] is holding.”

An industry source added that, “There is a working consensus in U.S. circles that China’s observable theft of American firms’ IP by cyber means has decreased but not gone away.”

Painter, the former State Department cyber coordinator, suggested China would not resume state-sponsored cyber espionage for commercial gain even if the current conflict with the U.S. over trade issues intensifies. “If relations with the United States become so bad, China has a number of options. But the agreement [still] makes sense for them for a number of reasons, including that similar language was agreed to with other countries as well.”

Painter suggested that real progress has been made, both for the U.S. and its allies, adding, “It took two years of pressure to bring them to the table in 2015.”

Noting language in the 301 report citing a 2017 indictment of a Chinese tech company for cyber-enabled theft -- the only specific post-2015 example cited in the report -- Painter said, “If [the Trump administration] can conclude that it was state action, not players 'associated' with the government, that's a real concern.” -- Charlie Mitchell (cmitchell@iwpnews.com)