China resumes cyberspying to obtain U.S. technology

WASHINGTON — Three years ago, President Barack Obama struck a deal with China that few thought was possible: President Xi Jinping agreed to end his nation’s yearslong practice of breaking into the computer systems of U.S. companies, military contractors and government agencies to obtain designs, technology and corporate secrets, usually on behalf of China’s state-owned firms

The pact was celebrated by the Obama administration as one of the first arms-control agreements for cyberspace — and for 18 months or so, the number of Chinese attacks plummeted. But the victory was fleeting.

Soon after President Donald Trump took office, China’s cyberespionage picked up again and, according to intelligence officials and analysts, accelerated in the past year as trade conflicts and other tensions began to poison relations between the world’s two largest economies.

The nature of China’s espionage has also changed. The hackers of the People’s Liberation Army — whose famed Unit 61398 tore through U.S. companies until its operations from a base in Shanghai were exposed in 2013 — were forced to stand down, some of them indicted by the United States. But now, the officials and analysts say, they have begun to be replaced by stealthier operatives in the country’s intelligence agencies.

The new operatives have intensified their focus on America’s commercial and industrial prowess and on technologies the Chinese believe can give them a military advantage.

That, in turn, has prompted a flurry of criminal cases, including the extraordinary arrest and extradition from Belgium of a Chinese intelligence official in October. Trump administration officials said the arrest reflected a more determined counterattack against a threat that has infuriated some of the country’s most powerful corporations.

“We have certainly seen the behavior change over the past year,” said Rob Joyce, Trump’s former White House cybercoordinator, speaking at the Aspen Cyber Summit.

Trump and administration officials often suggest that all technology-acquisition efforts by China amount to theft. In doing so, they are blurring the line between stealing technology and negotiated deals in which corporations agree to transfer technology to Chinese manufacturing or marketing partners in return for access to China’s market — a practice U.S. companies often view as a form of corporate blackmail but one distinct from outright theft.

The stealing of industrial designs and intellectual property — from blueprints for power plants or high-efficiency solar panels, or the F-35 fighter jet — is a long-running problem. The U.S. trade representative published a report this month detailing old and new examples. But the administration has never said whether cracking down on theft and cyberattacks is part of the negotiations or simply a demand that China cease activity that Beijing has acknowledged, in the Obama years, was illegitimate.