Possibly doing something about Chinese commercial espionage

Reuters

Article Highlights

  • DOJ indicts Chinese PLA officials.

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  • This is a small step in public action by the US against Chinese cyber espionage, but not a big one.

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  • We should not act rashly, but we should act.

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The Justice Department today announced charges against five members of the Chinese military for cyber espionage conducted against American companies and a labor union. This constitutes an escalation of the American response to large-scale, government-sponsored theft of technology and trade secrets by the People's Republic. However, it is a small step toward meaningful public action by the US, not a big one.

Today's announcement is a diplomatic action, warning that members of the Chinese state can be prosecuted. But at this point it is merely symbolic, the US still has not actually done anything. What needs to be done is to arrest these people. If they remain within China, as is highly likely, then other action must be taken to punish the government and state-owned enterprises which benefit from economic espionage.

China has stolen hundreds of billions of dollars worth of information, some would say trillions, and has suffered no consequences. No government or firm will depart from such a lucrative path without facing serious costs. Stern words by the US do not constitute serious costs. Neither do threats of arrest which are never going to be fulfilled.

What does? It is not just Chinese government officials who can reasonably be charged here. Officers of Chinese state-owned enterprises can be as well. Many of these firms have benefited from commercial espionage.

It is to America's benefit that Chinese companies are increasingly investing overseas. This means more travel by corporate officers and, generally, more exposure of PRC assets to sanction. This does not just provide leverage, it also provides a rationale: if Chinese companies want to be able to operate freely around the globe, they cannot be the world's biggest thieves.

Attorney General Holder should work with the intelligence and business communities to develop a much longer list of those subject to arrest. Then people should be arrested.

There are a slew of arguments calling for caution. One is retaliation: American government officials and corporate officers will certainly be threatened in response, perhaps just for show but perhaps not. The US side must determine whether Chinese theft is a big enough problem that such risks should be faced. (If not, then perhaps American credibility is best served by shutting up about this.)

And there's that guy holed up in Russia (probably). Just as the US must weigh the benefits and costs of meaningful retaliation against Chinese spying, it must weigh the benefits and costs of curbing spying by the National Security Agency. The latter includes the cooperation of our friends and allies with regard to response to China.

Perhaps the determining factor: American spying has seemed to be partly based on the logic of we should do it because we can. Chinese IP theft was supposed to decline as the country developed; instead, it has increased with increased capabilities to steal. Our own example says this problem is going to become bigger rather than smaller. We should not act rashly, but we should act.

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