MCLC: hacking talks

[Denton, Kirk]

MCLC LIST
From: kirk (denton.2 at osu.edu)
Subject: hacking talks
***********************************************************

Source: NYT (6/1/13):
http://www.nytimes.com/2013/06/02/world/asia/us-and-china-to-hold-talks-on-
hacking.html

U.S. and China Agree to Hold Regular Talks on Hacking
By DAVID E. SANGER and MARK LANDLER

WASHINGTON — The United States and China have agreed to hold regular,
high-level talks on how to set standards of behavior for cybersecurity and
commercial espionage, the first diplomatic effort to defuse the tensions
over what the United States says is a daily barrage of computer break-ins
and theft of corporate and government secrets.

The talks will begin in July. Next Friday, President Obama and President
Xi Jinping of China, who took office this spring, are scheduled to hold an
unusual, informal summit meeting in Rancho Mirage, Calif., that could set
the tone for their relationship and help them confront chronic tensions
like the nuclear threat from North Korea.

American officials say they do not expect the process to immediately yield
a significant reduction in the daily intrusions from China. The head of
the United States Cyber Command and director of the National Security
Agency, Gen. Keith B. Alexander, has said the attacks have resulted in the
“greatest transfer of wealth in history.
<http://www.defense.gov/news/newsarticle.aspx?id=67713>” Hackers have
stolen a variety of secrets, including negotiating strategies and
schematics for next-generation fighter jets and gas pipeline control
systems.

Nonetheless, a senior American official involved in the negotiations to
hold regular meetings said in an interview on Friday that “we need to get
some norms and rules.”
“It is a serious issue that cannot simply be swatted away with talking
points,” said the official, who noted that the meetings would focus
primarily on the theft of intellectual property from American companies.
“Our concerns are not limited to that, but that’s what needs urgent
attention,” he added.

The Chinese government has insisted it is a victim of cyberattacks, not a
perpetrator, and Chinese officials have vigorously denied the extensive
evidence gathered by the Pentagon and private security experts that a unit
of the People’s Liberation Army, Unit 61398 outside Shanghai, is behind
many of the most sophisticated attacks on the United States.
On Saturday, after Defense Secretary Chuck Hagel spoke of a “growing
threat of cyberintrusions” at a conference in Singapore, in comments
directed at China, a Chinese general gave a tart response saying she
doubted the United States’ assurances that its growing military presence
in Asia was not directed at China.

While cyberattacks will be a major subject of the talks in Rancho Mirage,
at an estate that belonged to Walter Annenberg, the main effort will be to
forge a rapport between Mr. Obama and Mr. Xi. American officials hope the
estate, known as Sunnylands, which has played host to American presidents
and foreign dignitaries dating to Richard M. Nixon, will put both men at
ease.

American officials said they have been surprised by the pace at which Mr.
Xi, a longtime party functionary who consolidated his grip on power in
March, has installed new faces in the Chinese leadership and moved to take
greater control over the military, something his predecessor, Hu Jintao,
never mastered.

Another main issue at the meeting will be North Korea. American officials,
emerging from talks with Mr. Xi and his team, believe that the new Chinese
leader has less patience for North Korea and little of the sentimental
attachment to its leaders that his predecessors had.

“What’s interesting here is the dog that isn’t barking,” the American
official said. The Chinese, he noted, are not urging all sides to resume
talks until the North Koreans agree that the objective is removing all
nuclear weapons from the Korean Peninsula. “We’re not hearing the soothing
mantra of restraint,” he said.

The Chinese have also taken public steps to confront North Korea, like
ordering the Bank of China to stop dealing with North Korea’s largest
foreign-exchange bank.

“They’re much more open to causing pain to North Korea,” said Jeffrey A.
Bader, a top China adviser to Mr. Obama until 2011.

Still, during the latest round of the Korea crisis this spring, Kim
Jong-un, the young and largely untested new North Korean leader, made it
clear that he had no intention of ever giving up his small arsenal.

Cybersecurity issues loom large between the United States and China
because they go to the heart of the economic relationship between the two
countries, even more so now that previous sources of friction, like
China’s foreign exchange policies, have eased in the last year.

Chinese academics and industrialists say that if China is to maintain its
annual economic growth rate of 7 or 8 percent, it needs a steady inflow of
new technology. That could make the Chinese reluctant to cut back on the
systematic theft of intellectual property.

In return, the Chinese will press the Americans on their use of
cyberweapons: while there is no evidence that they have been used against
Chinese targets, the sophisticated cyberattacks on Iran’s nuclear program
by the United States and Israel are often cited by the Chinese news media
and military journals as evidence that Washington, too, uses cyberspace
for strategic advantage.

The talks over computer hacking will start as part of the Strategic and
Economic Dialogue <http://www.treasury.gov/initiatives/Pages/china.aspx>,
an annual meeting of Chinese and American officials on a broad range of
issues. But a new working group is being organized on the subject that
will meet more frequently, officials say.
Where the talks will lead, however, is unclear: after considerable debate
within the Obama administration, officials have concluded that online
conflict does not lend itself to the kind of arms control treaties that
the United States and the Soviet Union began negotiating 50 years ago.
Today, cyberweapons are held by private individuals as well as states, and
figuring out where an attack began can be maddeningly difficult.

Another problem, China experts said, is that neither the Americans nor the
Chinese are well prepared for a candid discussion of cyberissues. The
growth of hacking, and its use in both military and corporate espionage,
is a new enough phenomenon that it is not clear how seriously Mr. Xi and
other senior Chinese leaders view it.
Tung Chee-hwa, a former chief executive of Hong Kong who has close ties to
China’s leaders, said recently that when he raises the American concerns
about hacking with senior officials in Beijing, they express puzzlement.

And neither side, experts said, is ready to discuss military espionage,
which means the conversation will necessarily focus on the theft of
corporate secrets by China-based hackers. On that subject, they said, Mr.
Obama needs to be unyielding.

“Obama has got to say, ‘You’ve got a major hacking operation under way in
Beijing, you’ve got a major hacking operation under way in Shanghai. This
is going to have repercussions if we don’t see changes very quickly,’ ”
said Kenneth G. Lieberthal, a China adviser in the Clinton administration
who is now at the Brookings Institution.

China and the United States, experts say, could find common ground on the
need to stop cyberattacks on critical national infrastructure, like the
electrical grid, since it poses such a danger to both countries. “I
personally think a bilateral ‘no sabotage’ pledge would be a very good
idea,” Mr. Bader said.