Chinese president Xi Jinping begins a state visit to the U.S. on September 22 in the Seattle area. He is scheduled to tour a massive Boeing assembly plant, visit a local high school, and meet with high-tech executives at Microsoft’s headquarters.
China’s suspected cyber-attacks against U.S. government agencies, such as the Office of Personnel Management, and against U.S.-based multinational corporations, are an ever-present point of contention in U.S.-China relations. However, while the issue is likely to be addressed behind the scenes, experts said it might not be aired explicitly in official statements and public appearances by the countries' leaders.
“I would estimate that if you took the Fortune 500 companies, at least half of them have been attacked,” said Gary Hufbauer, an expert on China at the Peterson Institute for International Economics. Hufbauer said media and cybersecurity industry reports put companies including Dow Chemical, General Electric, Lockheed Martin and many leading Silicon Valley firms on the list of likely targets.
Hufbauer pointed out that governments always try to hack each other's computers to steal military and diplomatic secrets. He said the Obama Administration and U.S. multinational companies object most strenuously to China's commercial espionage — state-sponsored hackers stealing U.S. companies’ trade secrets, for instance, the pricing proposal for a new bridge to be built overseas, or blueprints for a new robotic manufacturing line, to give Chinese companies a leg up.
Eswar Prasad is a professor of trade policy at Cornell University and previously directed China policy at the IMF. “The stakes are very high in this case,” Prasad said. “China is the number-two economy in the world, and it’s trying to move up the value-added chain to fields of technology where the U.S. has traditionally had a big edge. This is a threat to U.S. commercial interests."
But Prasad said U.S. economic and diplomatic leverage on the issue is limited. American companies don’t want to rock the boat overmuch, and risk being shut out of the huge, and still-growing, Chinese market. And if bilateral trade relations do sour, Chinese companies still have the rest of the world with which to expand investment and trade.