U.S. Demands China Block Cyberattacks and Agree to Rules

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Reposted from The New York Times

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Mark Landler and David Sanger  |  March 11, 2013  |  The New York Times

WASHINGTON — The White House demanded Monday that the Chinese government stop the widespread theft of data from American computer networks and agree to “acceptable norms of behavior in cyberspace.”

The demand, made in a speech by President Obama’s national security adviser, Tom Donilon, was the first public confrontation with China over cyberespionage and came two days after its foreign minister, Yang Jiechi, rejected a growing body of evidence that his country’s military was involved in cyberattacks on American corporations and some government agencies.

The White House, Mr. Donilon said, is seeking three things from Beijing: public recognition of the urgency of the problem; a commitment to crack down on hackers in China; and an agreement to take part in a dialogue to establish global standards.

“Increasingly, U.S. businesses are speaking out about their serious concerns about sophisticated, targeted theft of confidential business information and proprietary technologies through cyberintrusions emanating from China on an unprecedented scale,” Mr. Donilon said in a wide-ranging address to the Asia Society in New York.

“The international community,” he added, “cannot tolerate such activity from any country.”

In Beijing, a spokeswoman for the Chinese Foreign Ministry, Hua Chunying, did not directly say whether the government is willing to negotiate over the proposals spelled out by Mr. Donilon. But at a daily news briefing Tuesday she repeated the government’s position that it opposes Internet attacks and wants “constructive dialogue” with the United States and other countries about cybersecurity issues.

Until now, the White House has steered clear of mentioning China by name when discussing cybercrime, though Mr. Obama and other officials have raised it privately with Chinese counterparts. In his State of the Union address, he said, “We know foreign countries and companies swipe our corporate secrets.”

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U.S. Panel Calls 2 Chinese Firms ‘National Security Threat’

MICHAEL S. SCHMIDT, KEITH BRADSHER and CHRISTINE HAUSER

WASHINGTON — The House Intelligence Committee recommended on Monday that American companies should be blocked from carrying out mergers and acquisitions involving two Chinese telecommunications firms, saying their equipment could be used for spying in the United States. The recommendations, the result of a yearlong investigation, also said the United States government should not use equipment from the companies, the giant Huawei Technologies and ZTE Inc., and that American companies should find alternative suppliers as well.

A report on the inquiry described the companies as a “national security threat” to the United States, saying that the committee had obtained internal documents from former employees of Huawei that show it supplies services to a “cyberwarfare” unit in the People’s Liberation Army. The committee said that the United States government should go through the federal Committee on Foreign Investment to carry out its recommendations to block any business or other transactions involving the Chinese companies.

The report was presented by Representative Mike Rogers, Republican of Michigan, the chairman of the House Intelligence Committee, and Representative C. A. Dutch Ruppersberger of Maryland, the top Democrat on the committee.

It was the latest development to highlight the sensitive terrain that the United States and China are navigating as they try to build their commercial ties. Those efforts have formed part of the political dialogue just weeks ahead of the presidential elections, as both candidates have spoken of the importance of United States ties with China and have promised to act strongly on Chinese currency and trade practices that are damaging to American business interests.

Mitt Romney, the Republican presidential candidate, has called repeatedly during his campaign for a more confrontational approach to China on business issues, although he has focused his warnings more on Chinese currency market interventions than on the business activities of Chinese telecommunications companies.

President Obama has also taken a tougher stance on China recently. Late last month, Mr. Obama, through the Committee on Foreign Investment, ordered a Chinese company to divest its interest in four wind farm projects near an Oregon Navy base where drone aircraft training takes place. It was the first time a president had blocked such a deal in 22 years. Also this month, the Obama administration filed a case at the World Trade Organization in Geneva accusing China of unfairly subsidizing its exports of autos and auto parts, the ninth trade action the administration has brought against China.

The report on Monday opened up the potential for a new salvo, broadening the discussion of China’s expansion plans in the telecommunications sector.

The report included a classified annex, but several cybersecurity officials said they did not know whether the Congressional Committee had discovered evidence that the telecommunications firms had added “backdoors” making it possible to surreptiously gain access to the products.

In testimony before the Committee in September officials from both Huawei and a second Chinese Telecommunications vendor ZTE, said that alleged backdoors were actually software flaws and not intentional vulnerabilities.
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