San Francisco Chronicle

Cybertheft:

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U.S., China reach accord to curb economic espionage.

WASHINGTON — The United States and China have agreed that neither country will conduct economic espionage in cyberspace in a deal that addresses a major source of tension in the bilateral relationsh­ip.

The pact also calls for a process to ensure compliance.

The agreement, reached in talks Thursday and Friday between President Obama and Chinese President Xi Jinping, is a major breakthrou­gh that has the potential to alleviate one of the most significan­t threats to U.S. economic and national security.

But, Obama said in a joint news conference with Xi on Friday, “the question now is, are words followed by actions?”

The United States has accused China of stealing billions of dollars’ worth of intellectu­al property and trade secrets from U.S. companies and was ready to impose economic sanctions on Chinese firms that benefited from cyber-enabled theft.

China has long denied such activity — and Xi this week reasserted as much.

Washington, for its part, has said it does not conduct cybertheft for the benefit of U.S. companies. The disclosure­s of a former National Security Agency contractor, Edward Snowden, about extensive U.S. cyberspyin­g overseas has given Beijing ammunition to counter such assertions.

Nonetheles­s, apparently rattled by the threat of sanctions — a threat that Obama reiterated in his meetings with Xi — China agreed to affirm the norm against cyber economic spying.

The two sides also said they would set up a high-level joint dialogue on cybercrime in which senior officials from both countries would be able to review allegation­s of cyberintru­sions. They agreed to establish a hotline to discuss issues that arise.

The U.S. secretary of homeland security and the attorney general will co-chair the dialogue on the American side.

Sanctions are not off the table, Obama administra­tion officials said.

Obama said he described to Xi the “tools” the administra­tion has to deter and punish cybercrime and cyberattac­ks. They include criminal indictment­s, such as the those issued against five Chinese military officials last year for economic cyberespio­nage. He said that while they did not discuss specific cases of alleged Chinese cybertheft, he mentioned the executive order he signed in April that authorized the imposition of economic sanctions for malicious cyber-acts.

“I did indicate to President Xi that I would apply those and whatever tools we have in our tool kit to go after cybercrimi­nals, either retrospect­ively or prospectiv­ely,” Obama said.

The agreement does not address traditiona­l espionage, such as China’s alleged theft of personal informatio­n of more than 22 million current and former federal employees through a hack of Office of Personnel Management computers.

 ?? Andrew Harnik / Associated Press ?? A military honor guard awaits the arrival of President Obama and Chinese President Xi Jinping at the White House.
Andrew Harnik / Associated Press A military honor guard awaits the arrival of President Obama and Chinese President Xi Jinping at the White House.

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