Have We Reached a Tipping Point on Chinese Cybertheft?

Washington has long stopped short of articulating a serious strategy aimed at confronting and deterring China's cyberespionage efforts.

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Isaac Medina is a researcher at the American Foreign Policy Council in Washington, DC.

Suddenly, the cyberthreat from China is once again commanding attention. In mid-February, Virginia-based internet security firm Mandiant issued a new report detailing the activities that just one of China's cyberespionage units has directed against the United States over the past half-decade. The campaign mounted by APT 1, a unit connected with the People's Liberation Army, China's military, is breathtaking in scope, and entails the systematic theft of "hundreds of terabytes of data from at least 141 organizations," and both "the capability and intent to steal from dozens of organizations simultaneously."

"China is attacking the U.S. on a scale like we've never seen before," Mandiant's vice president, Grady Summers, has told CNN. “We believe that the Communist Party of China is very aware of this."

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News of the report sent ripples across Washington. These were amplified by a February 20 Washington Post report that virtually every think tank, news agency, contractor, and embassy in the nation's capital has been hacked. The White House, U.S. Chamber of Commerce, Nortel Networks, Google, the Wall Street Journal, the New York Times, ThyssenKrupp, European Aeronautic Defense and Space Company, the Department of Energy, Twitter, Facebook, and Lockheed Martin have all suffered similar intrusions in recent years. The damage inflicted in this way is huge. AOL Defense estimates that the equivalent to $300 billion worth of intellectual property was stolen by Chinese hackers last year alone.

Up until now, they have done so largely unimpeded. Wary of roiling delicate diplomatic and trade relations with Beijing, successive administrations in Washington have stopped short of articulating a serious strategy aimed at confronting and deterring China's cyberespionage efforts. Instead, they have relied on official entreaties—and quiet diplomacy—to attempt to curb Chinese cybertheft.

All of that may be changing, however. In the wake of the Mandiant report, the White House announced, in a document aptly entitled "Administration Strategy on Mitigating the Theft of U.S. Trade Secrets", that it will respond to state-sponsored cyberespionage activities carried out against the United States with trade restrictions and diplomatic measures. That it has taken the step of doing so speaks volumes about the extent of China's efforts, and their impact on the U.S. economy.

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What comes next will be decisive. To be sure, nobody wants a cyberwar with China, particularly at a time of economic instability and fiscal belt-tightening. Current domestic conditions only serve to reinforce the longstanding Beltway consensus that the United States will benefit from a stable and happy China. But it is increasingly evident that China's happiness and stability—as well as its economic dynamism—comes at least in part at the expense of American intellectual property and trade secrets.

At long last, the Obama administration has begun to admit this reality. Time will tell whether it is actually prepared to do something about it.

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