WASHINGTON — Commitments on stepping up cooperation on cyber security and cracking down on cyber espionage; lowering greenhouse emissions, and expanding tourism were among the outcomes achieved at a tense state visit between President Obama and Chinese President Xi Jinping here Friday.
Obama, who held a White House summit meeting with Xi followed by a joint press conference in the Rose Garden, said he was encouraged by the Chinese President’s joint pledge with the U.S. to not engage in cyber espionage for commercial gains.
“I raised once again our very serious concerns about the growing cyber threat to American companies and American citizens,” Obama said. “I indicated that it has to stop. The United States government does not engage in cyber economic espionage for commercial gain and today I can announce that our two countries have reached a common understanding on the way forward. We’ve agreed that neither the U.S. nor the Chinese government will conduct or knowingly support cyber-enabled theft of intellectual property, including trade secrets or other confidential business information for commercial advantage.”
Obama noted that the U.S. and China have agreed to work together with other nations to “promote international rules of engagement for appropriate conduct in cyber space.”
“So this is progress, but I have to insist our work is not yet done,” he said.
Xi, who has been under intensifying pressure from the U.S., including a recent threat by Obama of possible sanctions against alleged cyber theft by China, pledged that his country will work with the U.S. on the problem.
“China and the U.S. are two major cyber countries and we should strengthen our dialogue and cooperation,” Xi said through an interpreter. “Confrontation and friction are not the right choice for both sides. During my visit, the [officials] of both countries have reached important consensus of jointly fighting against cyber crimes. Both sides agreed to step up [criminal] cases, investigation assistance and information sharing, and both governments will not engage in or knowingly support online theft of intellectual properties and we will explore a formulation of appropriate state behavior norms of cyber space, and we will establish a high-level joint dialogue mechanism on the fight against cyber crimes.”
A White House fact sheet noted that the two countries agreed to “timely responses” for reported malicious cyber attacks, stepped up cooperation on investigations of cyber crimes, collection of electronic evidence, and providing updates and status on investigations.
The U.S. and China also jointly pledged to create a high-level joint dialogue mechanism on fighting cyber crime. China said it will designate a ministerial level official to lead the effort and coordinate with its own agencies. On the U.S. side, the Secretary of Homeland Security and U.S. Attorney General will cochair the dialogue with input from other law enforcement agencies. Its main objective will be to review the timeliness and quality of responses to requests for information related to malicious cyber attacks. As part of the mechanism, both countries also agreed to establish a hotline for the escalation of issues. The first meeting is slated for the end of the year and the meetings will occur twice a year.
Cyber attacks have been on the rise in the U.S., hitting the public and private sectors. An official with the Retail Industry Leaders Association said recently in an interview that retailers face “thousands of attacks a day and oftentimes those attacks originate from China.”
Xi was asked if his government is prepared to prosecute Chinese citizens and organizations who have hacked U.S. companies and whether China would retaliate if the U.S. does impose sanctions. He repeatedly warned against confrontation and encouraged more cooperation through the soon-to-be-launched cyber dialogue.
“China strongly opposes and combats the theft of commercial secrets and other kinds of hacking attacks,” Xi declared. “The Chinese will take seriously the U.S. [charges]. We have already and will in the future through the law enforcement authorities maintain a communication and coordination of this matter and appropriately address them.”
China’s recent move to devalue its currency, which shook international financial markets and prompted an outcry internationally and in the U.S., was also raised at the press conference.
Augustine Tantillo, president of the National Council of Textile Organizations, said Friday, “The domestic textile industry has long fought for changes to China’s predatory trading practices including currency manipulation, illegal subsidizes and intellectual property infringement. On behalf of the U.S. textile industry, I implore President Obama to address these critical issues with President Xi and urge immediate policy reform.”
Xi was asked what he told Obama that will restore confidence that such interventions in its currency exchange would not have a spillover effect into the global economy in the future. He said China is “now committed to improving the marketized renminbi exchange rate.”
“Since 2005, we adopted exchange rate reform,” Xi said, adding that the value of China’s currency had risen significantly against the dollar through August. He blamed in part the strengthening dollar over previous months and “turbulence” in financial markets for what he said were fluctuations in the exchange rate.
“However, there is no basis for the renminbi to have a devaluation in the long run,” he said. “At present, the exchange rate between the renminbi and U.S. dollar is moving toward stability.”