I again want to point your attention to The Economist’s Debate over whether industrial cyber-espionage (i.e. cyberexploitation) is the biggest threat to relations between American and China. The battle between the proposer and opposition has been quite good, but today I noticed a very good post from the featured guest, Adam Segal (CFR). I’ve cited Mr. Segal’s work on this blog before, and it’s very good; here’s a brief excerpt of his comment:
Furthermore, there is evidence that China’s image is in decline in many parts of the world. While the reasons for this are varied, many believe that China is not playing by the rules—in economics, protecting intellectual property rights and now cyberspace. The Chinese government’s unwillingness or inability to respond seriously to the fairly convincing evidence that China-based hackers are behind the cyber-attacks further deepens distrust of China. This is not just a US-China problem. Japan is beginning to develop new cyber-security measures in part in response to attacks on Japanese defence contractors and government agencies, and German intelligence has warned businesses about the threat of attacks from Chinese and Russian hackers.
Industrial cyber-espionage is unlikely to be the catalyst of a major break in US-China relations. But if China does not begin to recognise the severity of the problem and take steps to rein in the attacks, they will certainly be corrosive—increasing distrust, making co-operation more difficult and accelerating competition.
The proposer, Duncan Clark, came back with his rebuttal today. Here’s a short excerpt:
Chinese-orchestrated phishing attacks on economic targets in America, not Chinese fishing vessels and their armed escorts in the East and South China Seas, are the biggest threat to US-China relations.
. . .
With all respect to Minxin Pei, industrial espionage is indeed different from other forms of espionage—it has the potential to erode support for engagement where China needs it most: American businesses and the American public. For American businesses, the damage continues to spread. A survey released last week by the American Chamber of Commerce in China found that over 25% of respondents had been victims of cyber-attacks in China; 40% said that the risk of a data breach was increasing and 95% saw this as unlikely to improve. The report concluded that this concern “poses a substantial obstacle for businesses in China, especially when considered along concerns over [IPR] enforcement and de facto technology transfer requirements”.
To assert, as Mr Pei does, that “China’s actions … may merely mirror American actions” is not only pure conjecture, but also fundamentally improbable. The very reason that China is engaged in these efforts is its own frustration with its “innovation dissymmetry” compared with America’s: Chinese companies typically don’t (yet) possess information worthy of being purloined.
Mr. Minxin Pei also posted the opposition’s rebuttal. Here’s his concluding thoughts:
Finally, veteran watchers of the volatile US-China relationship have grown accustomed to high-decibel political rhetoric coming from all quarters in America. While no one should dismiss America’s denunciations of China’s industrial cyber-espionage as pure theatre, it would be equally unwise to accept them at face value. The US-China relationship may indeed collapse one day, but the cause will almost certainly be something else.
Again, this is a wonderful debate, and there’s a lot of value in reading both the proposer/opposition’s points as well as the comments and guest statements. The Economist did a great job here.
Oh, and the voting seems to be consistently 33% for and 67% against the motion (most people disagree that China’s pervasive cyberexploitation is the biggest threat to relations between America and China). I doubt these voting results mean that much, however.
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