From Washington State to Washington DC: Xi Jin Ping’s State Visit

Xi Jinping began his seven-day US visit in Seattle on Tuesday. Historically, no state visit by a Chinese president has been an easy visit, but they have generally come in the spirit of cooperation. However, since Hu Jintao’s last trip to US in 2011, China has undergone tremendous political and economic growth[1], placing China at a relatively more advantageous position for this round of discussions. Xi’s visit may be coming at an uncertain time in the Chinese economy, but the underlying rivalry between the two nations prevails. Hence, it wasn’t necessarily odd that speculation arose about possible sanctions on China leading up to Xi’s visit.

On August 31, the Washington Post first revealed that the White House is considering sanctioning Chinese firms and individuals who are responsible for hacking into US enterprises. In April this year, President Obama signed an executive order which defines foreign cyber attacks on US entities “a national emergency” and “an unusual and extraordinary threat.”[2] The decision is grounded in the International Emergency Economic Powers Act, which was passed in 1977. The act allows the president to declare a state of “national emergency” on “any unusual and extraordinary threat” to national security, foreign policy or economy of the United States that originates from outside of the country.[3] The executive order expands the legal scope of actions to be taken by the US government as a response to cyber terrorism. It allows the US Treasury Department to freeze financial assets of and bar commercial transactions with individuals and entities overseas that allegedly take part in cyber crimes. Acting on the directive requires consultation with the Justice and State Departments as well as evidence to withstand a court challenge. Such evidence must prove the crime falls under one of these four “harms”: it harms computer networks of a major infrastructure sector; disrupts provision of services by US entities; limits availability of computer networks; or allows parties to benefit from the gains of a cyber attack.[4] If the administration decides to advance on the sanctions, it would mark the first time this executive order comes into effect. (Following North Korea’s cyber attack on Sony Pictures in January, Obama issued an executive order to impose financial sanctions on certain officials and government entities.[5] However, the order claimed that the sanctions’ authority was not specific to cyber activity and the individuals were not targeted solely for their involvement in the cyber espionage.[6])

During his trip, Xi will also be making his debut appearance at the United Nations General Assembly. Coincidentally, Obama hinted at the possibility of a first arms control accord with China for cyberspace.[7] Although it may not contain “a specific, detailed mention” of a prohibition on attacking critical infrastructure, it will be a “generic embrace” of a code of conduct adopted by a working group at the UN. The agreement appears to be incapable of inhibiting cyber thefts of intellectual property, such as the hacking of 22 million personal security files from the Office of Personnel Management earlier this year, because there are specific requirements for the hacking to constitute an “attack”.

According to The New York Times, in its joint publication with an American computer security firm Mandiant, a significant portion of the cyber attacks on American entities originate from the People’s Liberation Army base near Shanghai, China. Known as the “Comment Crew”, it has allegedly broken into computer systems of US based companies such as Coca-Cola, and the government’s critical infrastructure such as a computer security firm RSA which stores many corporate and government databases.[8] Indeed, China isn’t the sole perpetrator. For decades, there have been several alarming, even embarrassing accounts of cyber breaches on the United States, including the most recent “sophisticated cyber intrusion” on the Pentagon in August. In this case, Russia was accused of draining terabytes of confidential information on 4,000 military and civilian personnel who work for the Joint Chiefs of Staff. Strictly speaking, US has to step up its game of defending its own cyberspace.

Two weeks before Xi’s arrival, the head of domestic security, Meng Jianzhu, came to Washington to address charges against China for stealing intellectual property online. Xi has denied all accusations related to cyber hacking and said, “cyber theft of commercial secrets and hacking attacks against government networks are both illegal; such acts are criminal offences and should be punished.”[9] However, they are not approaching the topic with indifference either. Xi Jinping’s visit commenced with a meeting with tech executives in Seattle rather than with government officials in Washington[10], where he will have a chance to take up allies as he plans on having single or multiple private meetings with US tech firm CEOs, potentially Tim Cook from Apple, and Satya Nadela from Microsoft.[11] It is said that Google’s Sunday Pichai wasn’t invited, probably for openly pulling out of China in 2010 against the new censorship requirements.[12]

In all, whether they were empty or not, threats of sanctions have clearly given US some leverage during Xi’s visit. America wants Xi to know that his meetings in Washington wouldn’t be too smooth: the secretary of commerce, Penny Pritzker, publicly warned Xi before his speech on Tuesday that they “continue to have serious concerns about [..] the lack of a level playing field across a range of sectors.”[13] One thing is for certain: stumbling or not, the Chinese economy continues to threaten US’s position as the world’s No.1, and admittedly or not, cyberhacking will continue to inflict upon the Sino-American rivalry for years to come.

[1] http://www.usatoday.com/story/money/business/2014/04/30/china-us-top-economy/8538689/

[2] https://www.whitehouse.gov/the-press-office/2015/04/01/executive-order-blocking-property-certain-persons-engaging-significant-m

[3] http://www.treasury.gov/resource-center/sanctions/Documents/ieepa.pdf

[4] https://www.whitehouse.gov/the-press-office/2015/04/01/executive-order-blocking-property-certain-persons-engaging-significant-m

[5] https://www.whitehouse.gov/the-press-office/2015/01/02/executive-order-imposing-additional-sanctions-respect-north-korea

[6] https://www.washingtonpost.com/world/national-security/us-to-establish-sanctions-program-to-combat-cyberattacks-cyberspying/2015/03/31/7f563474-d7dc-11e4-ba28-f2a685dc7f89_story.html?wpmk=MK0000203

[7] http://www.nytimes.com/2015/09/20/world/asia/us-and-china-seek-arms-deal-for-cyberspace.html?_r=0

[8] http://www.nytimes.com/2013/02/19/technology/chinas-army-is-seen-as-tied-to-hacking-against-us.html

[9] http://www.theguardian.com/world/2015/sep/22/xi-jinping-says-china-is-not-guilty-of-cyber-attacks-as-he-prepares-for-us-visit

[10] http://www.wsj.com/articles/china-seeks-out-unlikely-ally-u-s-tech-firms-1442808042

[11] Ibid.

[12] Ibid.

[13] http://www.nytimes.com/2015/09/23/world/asia/xi-jinping-of-china-to-address-wary-us-business-leaders.html

All Images courtesy of Flickr Creative Commons.