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Security Insiders: Cyberspying Indictments Will Not Stop China From Hacking U.S. Businesses

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Attorney General Eric Holder.(Liz Lynch)

The high-profile U.S. indictments against five Chinese military officers will not encourage China to stop hacking American businesses to steal valuable trade secrets, virtually all of National Journal's National Security Insiders said.

It was the first time the U.S. brought a criminal case against a foreign government for cyberspying, but 91.5 percent of NJ's pool of security experts downplayed the move, calling the charges "simply silly" and "an empty gesture."

 

"China will continue to pursue its interests in acquiring access to U.S. secrets at any cost," one Insider said. China will meet last week's indictments, another Insider added, "with a big yawn (and lots of self-serving rhetoric) and continue business as usual."

The legal action might instead encourage China to try harder to avoid detection, Insiders said. "The door to the bank vault is still open." 

The real solution, one Insider said, "is to stop complaining and start developing robust widespread encryption to protect everyone from China and the NSA." One Insider said China "won't stop until the U.S. finds an effective sanctions mechanism—and we don't have that yet." 

 

A slim 8.5 percent minority said the cyberespionage indictments might make an impact on China. "It will infuriate them, but it will also underscore to them the potential costs associated with what they have assumed, up until now, is risk-free (and potentially very profitable) behavior," one Insider said. 

Just days after the charges, Beijing accused the U.S. of launching its own large-scale cyberattacks against the Chinese government and Chinese companies. Yet 76 percent of Insiders said Attorney General Eric Holder's high-profile, public announcement of the charges—the Obama administration's most direct confrontation over China's alleged theft of intellectual property—was the right approach. 

The problem of China's cyberspying has "already been raised at the head of state level, the secretary of Defense level, and multiple political and diplomatic avenues, to little effect," another Insider said. "The Chinese minister of defense challenged the U.S. to provide evidence of the allegations; ... well, here it is. In itself, the indictments are not sufficient, but in tandem [with] other means, it is an important tool in our tool kit."

The indictments are also an important signal to the U.S. business community, an Insider said, "that the U.S. government is taking action to protect U.S. interests."

 

A vocal 26 percent objected to the new tack, especially after Edward Snowden revealed the National Security Agency's mass surveillance operations. "The Obama administration's approach looks like blatant hypocrisy," one Insider said. "It would seem that we would be in a much stronger position to make such strong allegations were we not engaged in so many questionable cyberpractices across the globe, not to mention against American citizens."

The Chinese, another Insider said, "will do their homework, build the case against our own electronic intrusions, and quite possibly regain the high ground here. The old rule of espionage applies here: 'Read my mail once, shame on you; read my mail twice, shame on me.' Like so many of our foreign adventures, this will not end well for us."

1. Will the recent U.S. cyberespionage indictments against Chinese military officers encourage China to stop hacking U.S. businesses?
(59 votes)  

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  • No - 91.5%
  • Yes - 8.5 %

No

"Nor will they stop the U.S. from hacking Chinese government and corporate systems."

"No, the risk-versus-reward is far too big for them to give up. What they gain in the theft of intellectual property in tens of billions of dollar versus U.S. public opprobrium is well worth it."

"Keith Alexander has described Chinese cybertheft as 'the greatest transfer of wealth in history.' A few indictments will not deter them."

"This is a sophisticated, government-owned-and-operated enterprise which subsidizes the Chinese economy."

"The economic gains from Chinese hacking of U.S. businesses amount to billions or tens of billions of dollars per year. Moreover, China, Russia, and other U.S. adversaries can be expected to muddy international perceptions by indicting U.S. officials allegedly engaged in covert action and foreign espionage."

"It was an empty gesture. The real solution is to stop complaining and start developing robust widespread encryption to protect everyone from China and the NSA."

"The indictments are an important step, but it's a step that's insufficient to change state behavior."

"They regard it as a legitimate intelligence activity and will not stop."

"This is all about the optics. We have known about this for years, and they know we know. Just a dance."

"They have no reason to change their behavior, and a 'line in the sand' by the U.S. means little to nothing."

"What are a few officers to China? There are so many more hackers they can use."

"The indictments are one tool aimed to dissuade and deter the Chinese government from using their military and intelligence services to engage in espionage against U.S. companies. Will it stop? No. But it may cause them to think about their activities and induce some small changes in behavior."

"Beijing will see its hoped-for economic benefits from the espionage as outweighing any diplomatic friction."

"It will take much more effective action than a few purely symbolic charges of low-level military officers."

"The indictment was simply silly."

"China sees its economic development as its national security. Therefore, it is both mercantilist/zero-sum in its approach, and does not agree with the distinction the U.S. is making between commercial and state espionage."

"In fact, in the short term it may get worse."

Yes

"Possibly, could signal to the Chinese that U.S. will not only defend cyberterritory but will take legal measures as well."

"They will lower activity for a while."

"The move raises the cost for the Chinese, at least in public. Not sure how deep or long-lasting this move will be to reduce cybersnooping on U.S. businesses."

2. Was the high-profile, public announcement—the Obama administration's most direct confrontation over China's alleged theft of valuable trade secrets—the right approach?
(59 votes)  

  • Yes - 76%
  • No - 24% 

Yes

"The indictments are not aimed at China, which will not change its ways. But they serve notice to the rest of the world that we know what China is doing, and what China does to us, [we] can do to them. In this sense the indictments are a crucial tool of international diplomacy."

"The United States, because its government does not do espionage for commercial advantage, is on strong ground in complaining loudly about those who do."

"This is just the start of what will be a long international journey to figuring out norms for behavior in cyberspace. This case alone doesn't mean much, beyond indicating that the U.S. government finally has made steps on attribution (determining, with some certainty and specificity, who's at the other end of state-sponsored hacking). Over time, though, these kinds of cases will become more common; this is a start to understanding how to control this kind of indiscriminate cybertheft."

"Assuming private diplomatic measures have not been successful, then public steps show U.S. will to the Chinese, and is an important signal to the U.S. business community that the U.S. government is taking action to protect U.S. interests."

"It signals the problem; but we are a long way from an agreed international solution."

"Of course China would prefer a quiet dialogue—because they want to keep on doing what they've been doing, with the victims too embarrassed to talk about what's been done to them."

"But it was perhaps more of an attempt to demonstrate strength diplomatically in the face of much criticism that the Obama administration is not leading from behind but has been left behind by its rivals Russia and China on the national security front."

"An overdue but welcome step."

"It's high time to call them on it."

"Why not? It puts them on notice."

"As long as there is follow-up, something rare in this administration."

"Pretending it isn't happening only encourages more hacking."

"President Obama very much needs to show potential troublemakers he is not a weakling. He has a huge image problem overseas of his own making."

"Absolutely and long overdue. Now it must be followed up by other measures to demonstrate to the Chinese that their cyber behavior will have consequences throughout the Sino-American relationship."

"As long as it is followed up with additional legal actions as possible trade restrictions. Otherwise, it will be an irritant at best."

"It is an important stake in the ground and starts to create a stronger international norm that China may some day follow."

"Yes, but poorly executed. The intent to draw a distinction between national security spying and [intellectual property] theft was a good idea, but the headline was buried and had no White House follow-through. An unserious effort."

"Sometimes this is the only way to bring attention to or shine a light on this issue. The more that the Chinese push back against these measures, the more likely that they feel they have been exposed."

"There will undoubtedly be negative repercussions, but this is a sensible step to take to try to garner broad, international business and government support to deter China's activities."

No

"It was little more than a publicity stunt, since there is no possibility of China extraditing them. It is also the height of hypocrisy, since the U.S. is stealing everyone's privacy around the world."

"A better approach would be passage of legislation with mandatory cybersecurity standards for all critical infrastructure industries, and liability protection and cyberassistance if they agree to share threat signatures with the Department of Homeland Security. Better U.S. cyberhygiene is the most effective tool."

"China has already decided to suspend a dialogue on cyberissues with the United States, and China could easily retaliate by indicting U.S. officials for hacking Chinese firms."

"Only if it was the high level response for public consumption that was accompanied by a direct, no-nonsense demonstration of our network defense, exploitation, and attack capability that would have a combined chilling effect. Otherwise just another line-in-the-sand minuet."

"Someone in the White House has fallen in love with personally directed sanctions like against Putin's friends. These sanctions are 'easy' and 'symbolic' [and] appear to call the individual miscreants on the carpet. They are also laughable. In reality, the only effective sanctions are those that cause political pain on a mass scale. And we are not going to do that to one of main trading partners."

National Journal's National Security Insiders Poll is a periodic survey of more than 100 defense and foreign policy experts. They include: Gordon Adams, Charles Allen, Michael Allen, Thad Allen, Graham Allison, James Bamford, David Barno, Milt Bearden, Peter Bergen, Samuel "Sandy" Berger, David Berteau, Stephen Biddle, Nancy Birdsall, Marion Blakey, Kit Bond, Stuart Bowen, Paula Broadwell, Mike Breen, Mark Brunner, Steven Bucci, Nicholas Burns, Dan Byman, James Jay Carafano, Phillip Carter, Wendy Chamberlin, Michael Chertoff, Frank Cilluffo, James Clad, Richard Clarke, Steve Clemons, Joseph Collins, William Courtney, Lorne Craner, Roger Cressey, Gregory Dahlberg, Robert Danin, Richard Danzig, Janine Davidson, Daniel Drezner, Mackenzie Eaglen, Paul Eaton, Andrew Exum, William Fallon, Eric Farnsworth, Jacques Gansler, Stephen Ganyard, Daniel Goure, Mark Green, Mike Green, Mark Gunzinger, Todd Harrison, John Hamre, Jim Harper, Marty Hauser, Michael Hayden, Michael Herson, Pete Hoekstra, Bruce Hoffman, Linda Hudson, Paul Hughes, Colin Kahl, Donald Kerrick, Rachel Kleinfeld, Lawrence Korb, David Kramer, Andrew Krepinevich, Charlie Kupchan, W. Patrick Lang, Cedric Leighton, Michael Leiter, James Lindsay, Justin Logan, Trent Lott, Peter Mansoor, Ronald Marks, Brian McCaffrey, Steven Metz, Franklin Miller, Michael Morell, Philip Mudd, John Nagl, Shuja Nawaz, Kevin Nealer, Michael Oates, Thomas Pickering, Paul Pillar, Larry Prior, Stephen Rademaker, Celina Realuyo, Bruce Riedel, Barry Rhoads, Marc Rotenberg, Frank Ruggiero, Gary Samore, Kori Schake, Mark Schneider, John Scofield, Tammy Schultz, Stephen Sestanovich, Sarah Sewall, Matthew Sherman, Jennifer Sims, Suzanne Spaulding, James Stavridis, Constanze Stelzenmüller, Ted Stroup, Guy Swan, Frances Townsend, Mick Trainor, Richard Wilhelm, Tamara Wittes, Dov Zakheim, and Juan Zarate.

This article appears in the May 28, 2014 edition of NJ Daily.

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