In an Effort to Appear Relevant, Obama Administration Finally Sort of Developing Sanctions Against China Over Cyberthefts

A decision on whether to act could come soon, close to a major state visit by President Xi Jinping.

Ellen Nakashima reports: The Obama administration is developing a package of unprecedented economic sanctions against Chinese companies and individuals who have benefited from their government’s cybertheft of valuable U.S. trade secrets.

The U.S. government has not yet decided whether to issue these sanctions, but a final call is expected soon — perhaps even within the next two weeks, according to several administration officials, who spoke on the condition of anonymity to discuss internal deliberations.

“The indictments were a strong move. This is going to be an even stronger move. It’s really going to put China in the position of having to choose whether they want to be this pariah nation — this kleptocracy — or whether they want to be one of the leading nations in the world.”

— Rob Knake, a former White House cyber official and currently a senior fellow at the Council on Foreign Relations.

Issuing sanctions would represent a significant expansion in the administration’s public response to the rising wave of ­cyber-economic espionage initiated by Chinese hackers, who officials say have stolen everything from nuclear power plant designs to search engine source code to confidential negotiating positions of energy companies.

Any action would also come at a particularly sensitive moment between the world’s two biggest economies. President Xi Jinping of China is due to arrive next month in Washington for his first state visit — complete with a 21-gun salute on the South Lawn of the White House and an elaborate State Dinner. There is already tension over a host of other issues, including maritime skirmishes in the South China Sea and China’s efforts to devalue its currency in the face of its recent stock market plunge. At the same time, the two countries have deep trade ties and the administration has sometimes been wary of seeming too tough on China.

But the possibility of sanctions so close to Xi’s visit indicates how frustrated U.S. officials have become over the persistent cyber plundering.

[Read the full text here, at The Washington Post]

The sanctions would mark the first use of an order signed by President Obama in April establishing the authority to freeze financial and property assets of, and bar commercial transactions with, individuals and entities overseas who engage in destructive attacks or commercial espionage in cyberspace.

“China is not the only country that hacks computer networks for trade secrets to aid its economy, but it is by far the most active, officials say. Just last month, the FBI said that economic espionage cases surged 53 percent in the past year, and that China accounted for most of that.”

The White House declined to comment on specific sanctions, but a senior administration official, speaking generally, said: “As the president said when signing the executive order enabling the use of economic sanctions against malicious cyber actors, the administration is pursuing a comprehensive strategy to confront such actors. Read the rest of this entry »