U.S.–China Week: New cyber contests, naval nerves, Iran progress, the U.S. TPP plan (2015.04.06)

There is a lot to discuss on cybersecurity this week—so much, in fact, that I won’t be able to do all the news justice. The first two items in this issue, however, cover very significant new developments in the way both the U.S. and Chinese governments are treating the Internet, and the way companies like Baidu and Google are entangled in it all. One way to look at the news is that both governments are seeking greater protection for their domestic online space, and in doing so, they are attempting to project their authority abroad. Unlike, for instance, in Iran negotiations, the two governments show little common ground.

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ONLINE CLASHES
Chinese government accused of attacking U.S. site with foreign web traffic, all for domestic censorship

Sparing the technical details, it seems very likely that a large-scale attack designed to disable or bog down the online coding website GitHub was implemented by actors controlled by the Chinese government. The widely suspected but unconfirmed reason for attacking GitHub is that activists had used GitHub to host copies of sites blocked in China, including The New York Times and the anti-censorship group GreatFire. The culprit and motivation are both very difficult to confirm. Meanwhile Google, detecting a very different security problem, stopped trusting China’s encryption certificate authority.

ANALYSIS: The GitHub attack is extremely consequential in that it breaks from previous Chinese actions by hijacking individual browsing activity to disable a very important platform for computer developers worldwide. It also distorted services and code from Baidu, China’s top search engine, to accomplish the attack—hurting the company’s reputation. This kind of attack brings Chinese censorship efforts to everyone’s browser and, and if it continues, the political ramifications will be broad and deep.

CYBER SANCTIONS
Executive order gives White House room to threaten sanctions on hackers

Just as the GitHub attack apparently opens a new frontier in Chinese censorship efforts, a new U.S. executive order puts economic sanctions on the table as a possible measure against “individuals carrying out significant malicious cyber activity,” in onephrasing. The sanctions could also target firms that sponsor commercial espionage and benefit from stolen information. Though an official emphasized that “this executive order is not targeted at any one country or region,” it’s clear that China is on everyone’s mind.

ANALYSIS: For U.S.–China ties, the question is whether sanctions allowed by this order would actually deter the activities emanating from China that, for instance, led to U.S. indictments of accused PLA hackers last year. If sanctions are levied, how would China’s government react? As in U.S. discussions about China’s actions in the South China Sea, this move reflects a desire to “impose costs” on those the U.S. sees as “bad actors.” But imposing cost can also lead to retaliation.

IRAN TALKS
China’s role in Iran nuclear talks unclear, but FM Wang Yi says good for U.S.–China ties

A week ago, Xinhua was one of the many news agencies reporting pessimism about the prospects of reaching a “framework” agreement in the talks between Iran and the P5+1. Once skeptics were surprised, Chinese Foreign Minister Wang Yi called U.S. Secretary of State John Kerry. Wang, who had taken part in the talks, said: “China and the United States, both taking on major responsibilities in safeguarding the international nuclear non-proliferation system, maintained good contact with each other during the negotiations, while instilling positive energy into bilateral relations.” (English via Reuters; Chinese here.)

ANALYSIS: The real Chinese role in the present negotiations is unknown. China, with it’s UN veto, had both enabled and limited the scope of sanctions against Iran, but China and the United States appear to be working together here. There will be fertile ground for historians in the records of U.S.–China and China–Iran communications, should we every get to see them. For now, non-proliferation remains an important common cause in bilateral ties.

MILITARY TIES
U.S. concerns about Chinese naval developments persist

WSJ profiles Adm. Wu Shengli, chief of the PLA Navy and a key figure in U.S.–China military ties. “I would say that he doesn’t want to build a navy that’s equivalent to the U.S.,” Adm. Gary Roughead, a former U.S. Chief of Naval Operations (CNO), said of Wu. “He wants to build a navy that surpasses the U.S.” The current CNO, Adm. Greenert, told a conference audience that planned bilateral naval exchanges for 2015 were “Not a lot. Not as much as I would hope.” Meanwhile the incoming U.S. Pacific Command chief, Adm. Harry Harris, said China is building “a Great Wall” in the South China Sea, according to John Garnaut.

ANALYSIS: Naval ties between the United States and China have historically been as good or better than those of the other military branches. If we see a chill there, this does not bode well for bilateral military ties, which U.S. leaders have seen as a critical confidence-building mechanism to ensure that accidents or political tensions don’t turn into flash-points.

TPP
Russel: TPP ‘most important’ in Asia relations this year, best route to FTAAP

Concluding the Trans-Pacific Partnership (TPP) trade pact “is the most important thing we can do for U.S. relations with Asia this year,” U.S. Assistant Secretary of State Daniel Russel said in Seattle this week. “We also see TPP as the best pathway to a larger Free Trade Area of the Asia-Pacific [FTAAP]. But in the meantime, we’re continuing to move forward with partners outside the TPP. The biggest, of course, is China,” he later added. On China: “[W]e strongly believe that a U.S.-China Bilateral Investment Treaty holds the promise of further opening China’s market to foreign investors and creating an improved investment environment for U.S. companies.”

ANALYSIS: It was already clear that TPP was the administration’s top priority for Asia policy this year. It has also been clear since this year’s State of the Union that an economic “China threat” was on the menu for how to sell it. In reality, Russel is right that first concluding TPP is the most likely path to an APEC-wide free trade area—the current preferred option for China. Watch for U.S.–China BIT progress this September when Xi visits Obama. If it’s not substantial, U.S.–China economic ties are stagnating.