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

Attorney General Eric Holder Justice Department DOJ Decision Makers 6/8/2009, 12:52:41 PM
© 2009 Liz Lynch/202-744-8737
May 27, 2014, 6:46 p.m.

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)  

  • No - 91.5%
  • Yes - 8.5 %


“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.”


“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% 


“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.”


“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.

What We're Following See More »
Prosecutors Poring Over Inauguration Documents
21 minutes ago
SCOTUS Says Businesses Can't Donate to Candidates
26 minutes ago
Deutsche Bank Flagged Several Transactions by Trump, Kushner
2 hours ago

"Anti-money-laundering specialists at Deutsche Bank recommended in 2016 and 2017 that multiple transactions involving legal entities controlled by Donald J. Trump and his son-in-law, Jared Kushner, be reported to a federal financial-crimes watchdog." Bank executives did not follow up on the recommendations.

Ford Cutting 2,300 American Jobs
2 hours ago
Trump Drops Metals Tariffs
3 hours ago

Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.