U.S.-China Summit: Beijing’s Diplomatic Calculus for Continued Rejections of Cyber Espionage Accusations

On June 7-8, U.S. President Barack Obama and People's Republic of China (PRC) President Xi Jinping conducted a summit that included discussion of cyber espionage. During these talks, Obama emphasized the threat cyber espionage posed to U.S. economic and national security and linked it to the future of U.S.-China economic relations. However, Xi largely dismissed the issue and blamed the media for ignoring computer network operations (CNO) conducted against the PRC. Despite this rebuff, U.S. officials claim that Beijing is now more aware of the depth of U.S. concern.

The lack of tangible results regarding cyber espionage is not surprising and, despite hopes that confronting mainland China diplomatically might result in changes to their behavior, it may be too early in this process to expect any real progress. There are three main reasons why Beijing will likely not submit to U.S. diplomatic pressure to curtail cyber espionage efforts in the short-term:

  • Beijing appears to believe that positive attribution is not possible or, at the very least, provides a considerable amount of plausible deniability. This can be seen in Xi's response when, even in the face of a direct accusation in a diplomatic setting, he sidestepped the issue and sought to paint the PRC as a victim. This approach mirrors that of PRC officials in the past and seems to be the official party line.
  • The PRC is still probably studying the fallout over the accusations and has not yet decided on or sees the need for adjustments to its policies. Beijing is undoubtedly monitoring and analyzing the response and impact of U.S. accusations in real-time. As in past scenarios, such as their handling of the Taiwan issue in the late 1990s/early 2000s, it is likely that they are adhering to a "two steps forward, one step back" approach to see how far they can push the boundaries without suffering serious consequences. If the impact of these accusations does result in serious long-term economic or political damage, we can expect Beijing to make a more visible effort to curtail PRC-based CNO.
  • Washington and Beijing have different visions for the future; cyber espionage is one of the obstacles that prevent these two visions from being compatible. While Washington has attempted to shape Beijing into a responsible global partner in its own image over the last decade, the PRC has its own vision for the future including former PRC President Hu Jintao's "Peaceful Rise" and now Xi's "China Dream." Although Beijing does not openly advocate corporate espionage, this tool has and will likely continue to be a key component in allowing the PRC to achieve its long-range economic and technology goals in a timely manner. For that reason, Beijing probably will not be willing to give up cyber espionage easily and it would take more than moderate diplomatic pressure to make them change this position.