Kevin Egan, a former prosecutor here who has represented people fighting extradition to the United States, said that Mr. Snowden’s latest disclosures would make it harder for him to fight an expected request by the United States for him to be turned over to American law enforcement. “He’s digging his own grave with a very large spade,” he said.

But a person with longstanding ties to mainland Chinese military and intelligence agencies said that Mr. Snowden’s latest disclosures showed that he and his accumulated documents could be valuable to China, particularly if Mr. Snowden chooses to cooperate with mainland authorities.

“The idea is very tempting, but how do you do that, unless he defects,” said the person, who spoke anonymously because of the diplomatic delicacy of the case. “It all depends on his attitude.”

The person declined to comment on whether Chinese intelligence agencies would obtain copies of all of Mr. Snowden’s computer files anyway if he were arrested by the Hong Kong police pursuant to a warrant from the United States, where the Justice Department has already been reviewing possible charges against him.[Source]

Xinhua reporter Xu Peixi welcomes Snowden to China and hails him as a brilliant idealist for shedding light on hypocrisy within the U.S. government:

We can see, therefore, that when American politicians and businessmen make accusatory remarks, their eyes are firmly fixed on foreign countries and they turn a blind eye to their own misdeeds. This clearly calls into question the integrity of these rich, powerful and influential figures and gives the definite impression that the U.S. bases its own legitimacy not on good domestic governance but on stigmatizing foreign practices.[Source]

Despite complications shrouding the Snowden case, SCMP reports that the Chinese government has nothing to lose:

“This is a win-win for China,” said David Zweig, director of the Center on China’s Transnational Relations at Hong Kong University of Science and Technology. “I don’t see them losing at this point, the fact that he’s here, running away from the United States with all this information … whether he goes back or whether he goes free. I don’t see this as bad for China.”

Ideally for officials in Beijing, Zweig said, “if they don’t have to get involved and Hong Kong arrests him, and they get the computer, they win.”

Law Yuk-kai, director of Hong Kong Human Rights Monitor, said the Chinese government would be happy to see the case drag on and embarrass the U.S.

“It is a setback for people who want the U.S. to restrain China in its abuse of Internet freedom,” he said.[Source]

The Chinese government appears to be weighing its various options while deciding how to handle the case, the Los Angeles Times reports:

So far, officials in Beijing look to be playing it cool by doing nothing — and that, several experts said Friday, is perhaps the savviest thing they could do.

With some U.S. lawmakers calling Snowden, 29, a traitor and raising questions about whether he has a relationship with a foreign government, any moves by Beijing to contact Snowden could inflame tension with Washington just days after a summit between President Obama and Chinese leader Xi Jinping.

Given that it’s unclear whether Snowden has information that would be particularly valuable to the Chinese — and whether he’d be willing to share it if he did — it’s a risk Beijing may not yet be ready to take.

At the same time, any immediate effort by Beijing to grant Snowden permanent haven or urge him to depart for another locale could raise hackles in Hong Kong. [Source]

The New Yorker’s Evan Osnos, however, foresees bleaker prospects for Snowden.

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Li Haidong, a researcher of American studies at China Foreign Affairs University, said the United States is now stuck in the awkward position of having to explain itself to its citizens and the world following the exposure of Washington’s vast Internet snooping program.

“For months, Washington has been accusing China of cyberespionage, but it turns out that the biggest threat to the pursuit of individual freedom and privacy in the US is the unbridled power of the government,”Li said. [Source]

While the NSA story had received coverage in the Chinese press until today, Foreign Policy’s Isaac Stone Fish notes that it had taken a backseat to other stories such as Tuesday’s launch of the Shenzhou X spacecraft. But Snowden’s latest revelations have sparked sharp reaction in China, both in state-run media and on social media platforms. The South China Morning Post reported that Snowden’s latest claims “triggered scathing criticism from Sina Weibo users on Thursday:”

On Weibo, Snowden’s exclusive interview with the Post was promptly translated into Chinese by Sina News, reposted by influential opinion leaders, and commented thousands of times.

“Isn’t this a slap-in-the-face for Obama?” a microblogger wrote. “What a hypocrite US turns out to be despite its endless talks of freedom and democracy.”

“This is exactly a case of a thief yelling ‘thief’,” commented another blogger, referring to recent allegations the US made about cyberattacks from China. [Source]

The Guardian’s Warren Murray reported that a U.S. State Department spokesperson challenged the notion that such allegations, if true, would represent a double standard amid recent U.S. criticism of Chinese cyber attacks. And as China reacted, The New York Times’ Didi Kirsten Tatlow questioned whether U.S. allegations of Chinese cyber espionage are similar to the NSA’s surveillance program:

A U.S. intelligence employee, speaking on condition of anonymity because of the sensitivity of the issue, said the two situations — China’s stealing of trade and military secrets and N.S.A. surveillance to track possible terrorist attacks — are not comparable, calling them “apples and oranges.”

“I can tell you with absolute certainty the U.S. government does not pass on technological secrets obtained through (strictly speaking, as a byproduct of) espionage to U.S. firms, both as a matter of principle and because there is no fair way to do it,” he wrote in answer to an emailed question.

“I recall some senior bureaucrat proposing this some two decades ago — and he got nowhere,” the person wrote, “none of the agencies wanted anything to do with it.”

“China, by contrast, deliberately targets foreign technology for military and commercial purposes,” he wrote, “so this is apples and oranges. But in the propaganda war, that fact won’t matter.” [Source]

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Snowden said that according to unverified documents seen by the Post, the NSA had been hacking computers in Hong Kong and on the mainland since 2009. None of the documents revealed any information about Chinese military systems, he said.

One of the targets in the SAR, according to Snowden, was Chinese University and public officials, businesses and students in the city. The documents also point to hacking activity by the NSA against mainland targets.

Snowden believed there had been more than 61,000 NSA hacking operations globally, with hundreds of targets in Hong Kong and on the mainland.

“We hack network backbones – like huge internet routers, basically – that give us access to the communications of hundreds of thousands of computers without having to hack every single one,” he said.

“Last week the American government happily operated in the shadows with no respect for the consent of the governed, but no longer. Every level of society is demanding accountability and oversight.” [Source]

The Morning Post has published a series of articles based on their correspondence with Snowden, focusing on his claims that the U.S. is “bullying” Hong Kong into his extradition, his desire to let the people of Hong Kong decide his fate, and his fear to contact his loved ones.

In his initial revelatory interview with The Guardian, Snowden answered a question regarding the Obama administration’s protests against Chinese hacking by drawing a parallel: ”we [the U.S.] hack everyone everywhere.” While prominent Chinese dissident Ai Weiwei feels that Snowden’s leak shows that the U.S. that is becoming more like China, The Washington Post asks the question “are Chinese and American hacking really as equivalent as Snowden suggests?”:

[...] It’s both possible and even plausible that the U.S. could be conducting cyber espionage within China that meets or even exceeds China’s efforts. The Obama administration’s joint program with Israel to sabotage Iran’s nuclear program with a virus called Stuxnet might just be the tip of the iceberg. But Snowden’s leaks do not seem to demonstrate that American cyber espionage is near on par with China’s when it comes to hacking into civilian and government systems in foreign countries. [Source]

Click through to see the Post’s comparison of known U.S. and China based cyber campaigns.

An expert voice has weighed in on the question of Snowden’s uncertain future in Hong Kong. Human Right’s Watch’s emergencies director looks at a recent case of Hong Kong cooperating with the U.S. on extradition to express his opinion that Snowden may have unwisely chosen his destination. From The Guardian:

“There’s little doubt [reason] to believe that the Hong Kong authorities would not co-operate with the CIA in this case,” said Peter Bouckaert, who after the fall of Muammar Gaddafi found faxes in Tripoli indicating that the Hong Kong authorities had co-operated with the CIA in rendering an anti-Gaddafi Islamist to Libya.

Snowden said he had chosen Hong Kong as the place from which to reveal his identity as the source of the Guardian’s series of stories about US surveillance because “they have a spirited commitment to free speech and the right of political dissent“, and because he believed that it was one of the few places in the world that could and would resist the dictates of the US government.

Bouckaert, however, said Snowden was mistaken on both points.

[...] On Tuesday, a spokesman for Vladimir Putin said that if Snowden applied for asylum in Russia, the request would be considered.

“If such an appeal is given, it will be considered. We’ll act according to facts,” said Dmitry Peskov. [Source]

Snowden told SCMP, however, that “people who think I made a mistake in picking HK as a location misunderstand my intentions,” and raised eyebrows by saying of Russia that “I am glad there are governments that refuse to be intimidated by great power.”

Update (10:50 pm PST June 12): The Chinese government has offered the first quasi-official response through an article in the China Daily, which said the revelations about NSA surveillance will, “test developing Sino-US ties”:

Li Haidong, a researcher of American studies at China Foreign Affairs University, said the United States is now stuck in the awkward position of having to explain itself to its citizens and the world following the exposure of Washington’s vast Internet snooping program.

“For months, Washington has been accusing China of cyberespionage, but it turns out that the biggest threat to the pursuit of individual freedom and privacy in the US is the unbridled power of the government,”Li said.

Zhang Tuosheng, a researcher at the China Foundation for International and Strategic Studies, said that despite controversies, cybersecurity is still proving to be a new realm for cooperation between China and the US, especially in the wake of this surveillance controversy.

“Beijing and Washington, instead of criticizing each other while hiding their own problems, should work together to facilitate a series of well-observed regulations,”Zhang said. [Source]

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Is America becoming more like China, a country that has long subjected its citizens to surveillance?

The revelations came in a week when President Barack Obama met with Xi Jinping in California — and cybersecurity was a major point of discussion, with the U.S. saying China has been stealing secrets.

“It is striking how the west and China are moving incrementally towards each other, especially in the practice of mass surveillance,” wrote Henry Porter, a journalist and novelist and the London editor of Vanity Fair magazine, in the commentary in The Observer.

“But unlike the Chinese, for the moment at least, we have the option to oppose what’s happening,” he concluded. [Source]

For artist and activist Ai Weiwei, the answer is more clearcut. He expresses his disappointment in the U.S. in an op-ed for the Guardian:

I lived in the United States for 12 years. This abuse of state power goes totally against my understanding of what it means to be a civilised society, and it will be shocking for me if American citizens allow this to continue. The US has a great tradition of individualism and privacy and has long been a centre for free thinking and creativity as a result.

In our experience in China, basically there is no privacy at all – that is why China is far behind the world in important respects: even though it has become so rich, it trails behind in terms of passion, imagination and creativity.

Of course, we live under different kinds of legal conditions – in the west and in developed nations there are other laws that can balance or restrain the use of information if the government has it. That is not the case in China, and individuals are completely naked as a result. Intrusions can completely ruin a person’s life, and I don’t think that could happen in western nations.

But still, if we talk about abusive interference in individuals’ rights, Prism does the same. It puts individuals in a very vulnerable position. Privacy is a basic human right, one of the very core values. There is no guarantee that China, the US or any other government will not use the information falsely or wrongly. I think especially that a nation like the US, which is technically advanced, should not take advantage of its power. It encourages other nations. [Source]

While activists throughout Asia have expressed concerns that their personal details will be shared with authorities through the National Security Agency’s Prism surveillance program, some dissidents in China, including Hu Jia, did not share those fears. Some activists, however, expressed worries that the U.S. had lost leverage in calling for Internet freedom from countries like China. From Reuters:

“I’ve never considered abandoning Twitter, YouTube, Google, Gmail or Gchat,” said Hu Jia, a prominent Chinese dissident. [...] “These are the only weapons we have to get our message out and the only safe way to do so. The U.S. would never monitor us. They are using it to fight terrorism. It’s totally different to what the Chinese government does to listen in on us,” he said by telephone.

[...] Nathan Freitas, a New York-based activist who helps Tibetans defend against Chinese cyber-surveillance, said the reports on Prism were nevertheless troubling.

“I’m concerned that from a Western perspective, or at least a U.S. perspective, we are losing some of that moral high ground from which we can pressure China,” he said.

“It’s just going to be harder to say what they are doing is fundamentally wrong, when maybe it’s just becoming statecraft.” [Source]

Other Chinese Internet users have said they are in fact now more hesitant to use U.S. Internet services such as those provided by Google. Tea Leaf Nation translated a range of netizen responses to the news:

Weibo user @SugarCHH expressed his disappointment in Google’s internet services:

I am no longer that fond of Google, especially after PRISM, if the FBI and NSA’s notice about ‘inspecting users other than Americans’ is true. Think about how much of our private information has been sold by Google. America only has around 300 million people, but even if Google’s China search service only amounts to a few percent points, that would be a lot of netizens. Furthermore, some people use all of the services Google provides. I have been betrayed. [Source]

Another Tea Leaf Nation post provides examples to show that, while the NSA leaks are still not a big story on Chinese social media sites, Chinese people who follow the story are developing a more nuanced and critical view of the U.S.:

This does not mean that the U.S. is always at the top of the Chinese collective mind. While there was certainly some revealing chatter about Snowden and PRISM on the Chinese Internet, even the most popular posts garnered only a few hundred retweets, and at no point did any related keyword or post trend.

If Chinese reaction to Snowden’s leak is significant, it is because it contributes in a small way to an increasingly nuanced view of America and its politics. Debates about the U.S. drone program, for example, take place among followers of international politics on China’s Weibo just as they do on Twitter. While some Chinese have lauded what they call Snowden’s “heroism” as an example of American citizens’ “civil awareness,“ others in Chinese cyberspace have begun to ask whether Meiguo [America] is still deserving of its erstwhile status as a benchmark. [Source]

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An intelligence source with extensive knowledge of the National Security Agency’s systems told the Guardian the US complaints again China were hypocritical, because America had participated in offensive cyber operations and widespread hacking – breaking into foreign computer systems to mine information.

Provided anonymity to speak critically about classified practices, the source said: “We hack everyone everywhere. We like to make a distinction between us and the others. But we are in almost every country in the world.”

The US likes to haul China before the international court of public opinion for “doing what we do every day”, the source added. [Source]

(Though Snowden was not named in the original article, an identical quote appears in an interview with him published after his identity was revealed on Sunday.)

At Foreign Policy, intelligence historian Matthew M. Aid describes the group within the NSA responsible for much of this intrusion, following one official’s claim last week that China has gathered “mountains of data” on U.S. attacks:

It turns out that the Chinese government’s allegations are essentially correct. According to a number of confidential sources, a highly secretive unit of the National Security Agency (NSA), the U.S. government’s huge electronic eavesdropping organization, called the Office of Tailored Access Operations, or TAO, has successfully penetrated Chinese computer and telecommunications systems for almost 15 years, generating some of the best and most reliable intelligence information about what is going on inside the People’s Republic of China.

[…] The problem is that TAO has become so large and produces so much valuable intelligence information that it has become virtually impossible to hide it anymore. The Chinese government is certainly aware of TAO’s activities. The “mountains of data” statement by China’s top Internet official, Huang Chengqing, is clearly an implied threat by Beijing to release this data. Thus it is unlikely that President Obama pressed President Xi too hard at the Sunnydale summit on the question of China’s cyber-espionage activities. As any high-stakes poker player knows, you can only press your luck so far when the guy on the other side of the table knows what cards you have in your hand. [Source]

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The reaction to Snowden’s leaks and unmasking in China has been muted, however. From Adam Minter at Bloomberg View:

To start with, for Chinese social-media users, surveillance of communications, electronic and otherwise, is a given. What might sound like a horrifying transgression of basic civil rights to an American comes off as a comparatively benign state of affairs to a young Chinese Internet user. Prism hasn’t trended on Chinese social media or search engines.

This is not unknown to the Communist Party-owned media, and it’s probably a reason they’ve avoided Prism over the last several days. Why hype a story that serves to remind Chinese Internet users that the surveillance to which they’ve become accustomed is so much worse than what Americans experience? Indeed, Chinese media — and the Communist Party that controls it — is unusually sensitive to unfavorable comparisons with other people and places, and none so much as Hong Kong

[…] For Chinese newspaper editors, the choice is thus whether to downplay a good spy story happening just across the border or risk highlighting how Hong Kong citizens enjoy a freer political environment. Then again, the Snowden story has been widely available on China’s Internet since early Monday morning, and Internet users — with some exceptions — still don’t seem to care very much. This is really a story about a martyr for rights enjoyed by Americans, not Chinese. [Source]

China Real Time’s Josh Chin found that some netizens did praise Snowden and his actions.

While Mr. Snowden is being celebrated in China, however, his revelations have provoked debate about the integrity of the U.S. government, with many expressing disappointment that it would engage in activities more typically associated with the Communist regime in Beijing.

[…] Not all Chinese Internet users were ready to equate the NSA programs and aggressive pursuit of leakers with China’s own spying and information-control efforts. As bad as the scandal might seem, some argued, the fact that Mr. Snowden managed to push the information out through the media and was able to talk about it days later was evidence that the freedoms enjoyed by U.S. citizens were still something to envy.

“What I want to know is what would have happened if this guy had tried to do this in the Celestial Kingdom,” wrote one microblogger, using a slang term for China. “I’m guessing he would have been killed in a car accident, or died of carbon monoxide poisoning, or something along those lines.”

“Every country [spies on its citizens],” wrote another. “It’s just that we’re already numb to it.” [Source]

As for the Chinese and American governments, Gillian Wong reported that while recent revelations might strengthen China’s hand, both sides share an interest in limiting the fallout. From the Associated Press:

The leaks about Washington’s own domestic surveillance program could end up hurting U.S. efforts to pressure China on cybersecurity, said Zhu Feng, an expert on China-U.S. relations at Peking University in Beijing.

“This case will hurt the U.S. bargaining power and dishonor its own credibility in charging China for cyberattacks. This is truth-telling,” Zhu said. “China will likely tell the U.S., ‘don’t be too high profile, and don’t take the moral high ground.’”

[… Hong Kong University of Science and Technology's David] Zweig said both sides were likely to try to play down the affair, saying they would not want to waste the effort made over the weekend in California.

[…] “The ‘shirt sleeves’ summit looked nice and they looked like they really were trying to kick back, put up their feet and talk about where they saw the countries going,” Zweig said. “I can’t imagine that after all this effort, they’re going to let this one thing make a mess of it.” [Source]

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Although the leaders of the world’s two biggest powers made no public statements on their second day of talks, their disagreements — over cyberattacks as well as arms sales to Taiwan, maritime territorial disputes in the South China Sea and manipulation of the Chinese currency — spilled into the open when senior officials from both countries emerged to describe the meetings in detail.

From the outset, the White House said the purpose of the meetings here was not to announce new deals or understandings — “deliverables,” in diplomatic parlance — but to create a more comfortable relationship between Mr. Obama and Mr. Xi, who took full power in March, that could avoid plunging the two nations into escalating conflict.

Even so, the White House announced that the two countries had reached at least one concrete accord that environmentalists welcomed as a potential step in combating climate change. China and the United States agreed to discuss ways to reduce emissions of hydrofluorocarbons, known as HFCs, that are used in refrigerants and insulating foams.

[...] The two presidents met for nearly eight hours beginning Friday evening, and appeared eager to redefine the relationship in a way that would allow their countries to overcome their economic, political and diplomatic differences, rather than letting new — or old — crises derail progress across the spectrum of issues. [Source]

Reuters has more on the HFCs deal:

“The United States and China will work together and with other countries to use the expertise and institutions of the Montreal Protocol to phase down the consumption and production of hydrofluorocarbons,” the White House said on the second day of the informal U.S.-China summit in Southern California.

U.S. National Security Adviser Thomas Donilon told reporters the two countries had done most of the work in advance of the California meeting on Friday and Saturday, when the two presidents discussed climate change.

“It was agreed that we have strong joint interests in addressing the climate issue … from a lot of perspectives including sustainable economic growth,” he told reporters.

HFCs are used in refrigerators and air conditioners. They came into wide commercial use to replace ozone-depleting chemicals that are being phased out under the 1987 Montreal Protocol, but they are a big source of greenhouse gases that contribute to climate change. [Source]

Less progress was announced on cybersecurity, an issue that has taken on a new layer of complexity following revelations of the extent of the U.S. government’s own Internet surveillance programs. From NBC News:

Earlier in the day, Obama defended the U.S. National Security Agency’s collection of so-called metadata from telephone and Internet companies from strongly worded accusations that it amounted to unconstitutional secret spying on U.S. citizens.

That made for a delicate situation Friday night as Obama spoke to reporters after an evening meeting with Xi.

Obama said he and Xi agreed that it was important for China and the U.S. to come up with common rules on cybersecurity. But when asked about reports linking cyberattacks back to hackers associated with the government in Beijing, he said caution was needed because hacking often involved “non-state actors.” [Source]

Despite cybersecurity being hailed as a top agenda item at the meetings, Obama said they had approached it only “at the 40,000-foot level.” From the Washington Post:

Although U.S. officials have grown increasingly concerned about China’s hacking of private records of American companies, both Obama and Xi, publicly at least, stopped short of directly confronting the contentious issue.

When a U.S. journalist pressed Xi on the cyber-spying, the Chinese leader asserted that China, too, is a victim of such attacks — and he faulted the news media with leaving what he considers a misleading impression that the threat comes mostly from China. Xi pledged to resolve concerns with the United States “in a pragmatic way.” [Source]

The two leaders also agreed to work together to denuclearize the Korean peninsula. From the Telegraph:

“They agreed that North Korea has to denuclearize, that neither country will accept North Korea as a nuclear-armed state and that we would work together to deepen cooperation and dialogue to achieve denuclearization,” White House national security adviser Tom Donilon told reporters.

Chinese State Councillor Yang Jiechi told a separate news conference that Mr Xi had told Mr Obama that China and the United States were “the same in their positions and objectives” on the North Korean nuclear issue. China is Pyongyang’s ally but has become increasingly concerned at North Korean threats of war against South Korea. [Source]

From Al Jazeera:

Read the full text of remarks by Obama and Xi at the conclusion of their talks and an editorial from the Global Times, “Milestone expected in Sino-US ties.”

Read more about the summit via CDT.

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XI JINPING’S first meeting with President Obama as head of state on June 7th is also the first such summit to feature prominently the issue of alleged Chinese cyber-attacks on American companies and interests. It has taken a long time for the issue to take centre stage in diplomatic relations between the two countries. After years of ineffectual and perhaps overly discreet grumbling about Chinese hacking, American officials are finally forcing the issue.

[...]Chinese officials have at least agreed to talk about the issue. John Kerry, the American secretary of state, said in Beijing in April that the two sides would establish a working group on cyber-security. But it will be hard for Americans to discuss hacking productively with their counterparts. China goes by what three American authors in a new book, “Chinese Industrial Espionage”, call a philosophy of “admit nothing and deny everything”.

Hacking has in the past six months moved to “the top of the list” for business executives’ meetings with Chinese officials, says James McGregor of APCO Worldwide, a consultancy. And also, it appears, for Mr Obama’s meeting with Mr Xi. Putting the issue at the top of Mr Xi’s list will apparently take more doing. [Source]

NBC News reports that campaign officials have recently acknowledged Chinese state-sponsored hacking against the 2008 presidential campaigns of Barack Obama and John McCain. The editors at Bloomberg compiled a list of issues where they view diplomatic progress as crucial to dispel what the Brookings Institute has labeled “strategic distrust.” Cybersecurity is included, as well as:

North Korea: Xi has criticized Kim Jong Un’s nuclear antics, with China showing new willingness to enforce sanctions. Yet the U.S. and China see the future of the Korean peninsula very differently. What the two sides need is a sustained high-level dialogue about how they would respond to a humanitarian emergency, sudden collapse or other contingencies.

Regional tensions: China has become embroiled in territorial spats with many of its maritime neighbors. Without weighing in on individual claims, Obama needs to convey that the U.S. will stand by its treaty commitments to its allies. China, for its part, would be wise to focus on agreements to develop resources and settle disputes instead of lectures about sovereignty. The U.S. could help promote the success of that approach by — dare we repeat it — ratifying the Law of the Sea Convention, which provides a framework for resolving such disputes.

Economic relations: With China slowing and the U.S. growing, tensions are at a relative ebb. The yuan has appreciated by 10 percent since Obama took office, and the trade deficit with China has fallen. That could change if the U.S. economy’s demand for imports grows. Obama needs to avoid fanning protectionist flames. As recent U.S. solar tariffs on China show, such strategies are of dubious benefit. He also needs to stress to Xi that Chinese failure to live up to economic agreements will create a poor climate for more high-profile investments such as the $4.7 billion purchase of Smithfield Foods Inc. Xi, meanwhile, would benefit by prioritizing planned structural reforms that also improve market access for U.S. and other foreign companies. [Source]

Another article from the Economist looks at the many reasons for mutual anxiety in U.S.-China relations, and the need for cooperation to begin characterizing the “century’s most important bilateral relationship”:

There are plenty of good reasons for America to be nervous about the rise of a new economic giant and to be angry about cyber-attacks, obstructionism over Syria or the regime’s brutality towards its own citizens. There are also plenty of reasons for China to be annoyed with America: Americans have been too willing to demonise successful Chinese companies such as Huawei or CNOOC. But the lesson of history is that everybody loses if the world allows legitimate worries to get out of hand. More than 2,000 years ago Greece was torn apart by Sparta’s failure to manage the rise of Athens. A hundred years ago Europe was torn apart by its failure to manage the rise of Germany. If the 21st century is to be more peaceful than the 20th, America and China must learn to co-operate better. [Source]

In a New Yorker blogpost, John Cassidy further examines the 20th-century Germany/21st-century China analogy:

The analogy between twentieth-century Germany and twenty-first-century China isn’t perfect, of course, and neither is the comparison of the British Empire to Pax Americana. But the likenesses are close enough to be discomforting, especially as President Obama and Chinese President Xi Jinping meet for a two-day summit in Southern California that begins on Friday. (Evan Osnos has more on the summit.) Like Wilhemine Germany, China combines a vibrant economy with an authoritarian political system. Its culture has nationalistic elements, and, partly through the vigorous pursuit of economic relationships, it is expanding its influence around the world. [Source]

Accusations of financial fraud have long been hurled at Chinese firms listed on U.S. exchanges, and an unwillingness on the part of China’s financial regulators to assist the U.S. with probes seemed to have recently been breached with the signing of a memorandum last month. But, a U.S. senator isn’t convinced that the new memo goes far enough, and is pressing the Obama administration to raise the issue in California. From the Wall Street Journal:

Sen. Charles Schumer (D., N.Y.) in a letter sent Thursday to Treasury Secretary Jacob Lew urged the administration to “ensure this issue receives serious consideration” during an upcoming U.S.-China summit, slated to begin Friday.

In the letter, which was reviewed by The Wall Street Journal, Sen. Schumer said China should allow U.S. inspectors to examine Chinese auditing firms that audit companies trading on U.S. markets and should grant U.S. regulators access to audit information of China-based companies suspected of fraud.

Those moves are needed to protect U.S. investors, Mr. Schumer said. “It is in the interests of both U.S. financial markets and Chinese companies seeking to raise money here that investors know they can trust the financial statements of those companies,” he said in the letter. [Source]

Other U.S. lawmakers and activists are putting pressure on President Obama to bring up human rights issues at Sunnylands. Reuters reports:

U.S. lawmakers and 30 human rights groups on Thursday urged President Barack Obama to use a weekend summit with Chinese President Xi Jinping to press for the freedom of 16 prominent political and religious prisoners.

The “China 16″ include imprisoned Nobel Peace laureate Liu Xiaobo, rights lawyer Gao Zhisheng and political prisoners from the Tibetan and Uighur ethnic minorities, Christians and followers of the banned Falun Gong spiritual movement.

[...]The 30 rights groups include Amnesty International, Jubilee Campaign and the International Campaign for Tibet and are backed by Democratic and Republican lawmakers. They called on Obama to restore human rights as a central issue in U.S.-China relations – as it had been in the first two decades after diplomatic ties were established in 1979. [Source]

In what has been described as an “apparent goodwill gesture by Beijing,” China issued passports to relatives of Chinese activist Chen Guangcheng in the immediate lead-up to the summit.

While Isaac Stone Fish warns not to expect too much from the upcoming summit in a piece for Foreign Policy, the Global Times is expecting the meeting to be a “milestone” in Sino-U.S. ties. As we wait to see what transpires in the California desert, ChinaFile asked seasoned China-watching journalists and ambassadors to craft the joint Xi-Obama statement that would close out their ideal of this weekend’s summit (click through to read the four entries and vote on your favorite).

For prior posts and to see how the Sunnylands meeting unfolds, stay tuned to CDT’s coverage of the 2013 California Summit.

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Post tags: 2013 california summit, Barack Obama, cyberattacks, cyberespionage, cybersecurity, diplomacy, financial fraud, human rights conditions, U.S. relations, Xi Jinping
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China would happily produce a document that Mr. Xi could brag about at home, while accepting responsibility for only a carefully negotiated set of mutually profitable projects. A new communiqué should therefore include negotiated agreements on the joint development of clean energy technologies, cooperation in scientific research and coordinated strategies to mitigate conflict in the developing world.

It’s not a sign of weakness that Washington can’t force China’s leaders to change course on issues they consider central to their national security. Naming and shaming can be an important foreign policy tool. But China will never change its approach on these core issues because of America’s objections, and we can’t allow criticism to drown out calls for cooperation in other areas.

So Mr. Obama shouldn’t expect much movement on issues like Tibet, territorial disputes between China and its neighbors in the East and South China Seas, and a range of human rights issues. Mr. Obama can commit the United States to a frank approach, one that acknowledges China’s core interests, and where appropriate, allows Washington to act as an honest broker. [Source]

At Brookings, meanwhile, Kenneth Lieberthal emphasizes sensitive topics like cybersecurity and North Korea as the key issues on Obama’s agenda. Lieberthal also cautions Obama to keep China’s perspective on cybersecurity in mind if he raises criticisms during the California Summit:

[…] First, cyber space is so new that there is not even agreement on basic terminology, such as what constitutes a “cyber attack.” Since states have a legal right of response when they are attacked, it is important to reach an understanding of what clears the bar to qualify as a “cyber attack” (e.g., espionage by itself does not, while using cyber tools to produce destructive kinetic outcomes in most cases presumably does).

Second, President Obama needs to be sensitive to the reality that, from a Chinese perspective, the United States nearly owns the cyber arena. America has the most advanced tools and capabilities, and the Chinese political and financial systems largely run on American software. China assumes the U.S. uses that huge capability to its advantage. That is a perception that will be part of the equation in any serious cyber discussion. [Source]

But the opportunity to build chemistry may be at least as important as the direction of policy issues, Lieberthal suggests:

Perhaps the most important purpose of the summit is to enable each leader to develop a serious sense of the other. If it goes well, each will at the conclusion effectively say to himself, “I get that guy. I understand his top priorities, his fears, his political constraints, and how he thinks about the big issues. I think I can do business with him.” Of course, there is a possibility that one or both will conclude that he cannot really “read” or trust the other, in which case the future relationship will also reflect that reality. Personal chemistry between leaders means a lot in major power relations. [Source]

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Post tags: 2013 california summit, Barack Obama, cybersecurity, diplomacy, Jon Huntsman, U.S. relations, Xi Jinping
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[...T]reating today’s Beijing like Brezhnev’s Moscow distorts the nature of the threat and how Washington should respond to it.

In confronting today’s cyberbattles, the United States should think less about Soviets and more about pirates. Indeed, today’s cybercompetition is less like the cold war than the battle for the New World.

In the era after the discovery of the Americas, European states fought for mastery over the Atlantic. Much like the Internet today, the ocean then was a primary avenue for trade and communication that no country could cordon off.

At that time, the Spanish empire boasted a fearsome navy, but it could not dominate the seas. Poorer and weaker England tested Spain’s might by encouraging and equipping would-be pirates to act on its behalf without official sanction. These semi-state-sponsored privateers robbed Spain of gold and pride as they raided ships off the coasts of the New World and Spain itself, enriching the English crown while augmenting its naval power. Spain’s inability to attribute the attacks directly to England allowed Queen Elizabeth I to level the playing field in an arena lacking laws or customs.

Today’s cyberbattles aren’t so different.

[...T]he cold war model of a struggle with calibrated boundaries, clear rules, and the threat of mutual assured destruction simply doesn’t fit cyberspace. [Source]

Click through to learn more about this compelling new martial metaphor. Also see prior CDT coverage of cybersecurity.

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Post tags: Cold War, cyberespionage, cybersecurity, cyberspace, cyberwar, hacking, military technology, U.S military, U.S. relations
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In a public statement before the closed-door session with General Fan, Mr. Donilon repeated the Obama administration’s desire for stronger strategic communications between the two militaries and for joint, rather than competitive, efforts to deal with regional problems in Asia.

Mr. Xi’s blunt focus on a new relationship with the United States puts that notion at the center of the summit meeting, Chinese and American analysts said, although few were sure what specifically Mr. Xi, who is regarded as a man of big ambitions and a friend of the military, had in mind.

Even before assuming the presidency in March, Mr. Xi mentioned the desire for a new relationship, alluding to it on his visit to Washington as vice president in February 2012.

Earlier this year, officials from the Foreign Ministry met with professors of international relations in Beijing to discuss how best to define the “great power relationship,” but no one knew how to flesh it out, several professors said. [Source]

Reuters has more on Donilon’s comments in Beijing:

“An essential part of building a new model for relations between great powers is ensuring we have a healthy, stable and reliable military to military relationship,” Donilon told Fan at the Chinese Defence Ministry, in brief comments before reporters.

He added the two countries should work to face “non-traditional security challenges” including peacekeeping, disaster relief and countering piracy.

Fan, the vice chair of China’s powerful Central Military Commission, called for a “new type of major power relations”. [Source]

While cybersecurity was not explicitly mentioned, it will be high on Obama’s agenda, following revelations of widespread Chinese hacking attacks, some of which may be linked to the People’s Liberation Army. A recent Washington Post article revealed a confidential report prepared for the Pentagon which states that Chinese hackers had gained access to the designs for the United States’ most sensitive advanced weapons systems:

Among more than two dozen major weapons systems whose designs were breached were programs critical to U.S. missile defenses and combat aircraft and ships, according to a previously undisclosed section of a confidential report prepared for Pentagon leaders by the Defense Science Board.

Experts warn that the electronic intrusions gave China access to advanced technology that could accelerate the development of its weapons systems and weaken the U.S. military advantage in a future conflict.

The Defense Science Board, a senior advisory group made up of government and civilian experts, did not accuse the Chinese of stealing the designs. But senior military and industry officials with knowledge of the breaches said the vast majority were part of a widening Chinese campaign of espionage against U.S. defense contractors and government agencies.

The significance and extent of the targets help explain why the Obama administration has escalated its warnings to the Chinese government to stop what Washington sees as rampant cyber­theft. [Source]

But the Pentagon was quick to downplay the report publicly, according to Reuters:

Pentagon spokesman George Little and other defense officials downplayed as outdated and overstated a report in Tuesday’s Washington Post, which cited a Defense Science Board (DSB) report as saying that Chinese hackers have gained access to designs of more than two dozen major U.S. weapons systems.

The newspaper said the compromised U.S. designs included those for combat aircraft and ships, as well as missile defenses vital for Europe, Asia and the Gulf. But Little said it was wrong to suggest that U.S. capabilities had been eroded.

“We maintain full confidence in our weapons platforms,” Little said in a statement. “Suggestions that cyber intrusions have somehow led to the erosion of our capabilities or technological edge are incorrect.” [Source]

Nevertheless, according to the same Reuters report, the White House has confirmed that cybersecurity is a “key concern” that will be discussed at the California summit.

Meanwhile, Australian Foreign Minister Bob Carr commented on allegations that Chinese hackers stole plans for the country’s new intelligence headquarters, while emphasizing that it would not effect relations between the two countries. From BBC:

On Monday the Australian Broadcasting Corporation reported blueprints setting out the building’s cable layouts and security systems had been illegally accessed by a server in China.

Mr Carr did not comment directly on the claims.

But he said the government was “very alive” to cyber security threats.

“I won’t comment on whether the Chinese have done what is being alleged or not,” he said. [Source]

Watch the full ABC broadcast, “Hacked!”.

On Wednesday, the Chinese government announced that the military would hold its first “‘digital’ war games” to prepare the country for “informationalized” war.

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Post tags: 2013 california summit, cybersecurity, hacking, U.S military, U.S. relations
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The New York Times reports on just how pervasive hacking is in Chinese society, and on the many free-agents who contract their hacking skills for corporate, official, and illicit projects (and often, all of the above). While joint operations between military and academic institutions are covered to describe China’s “complex universe of hacking and cybersecurity,” the Times also quotes a former hacker, who explains that western assertions of state-sponsored hacking may be misinformed:

The culture of hacking in China is not confined to top-secret military compounds where hackers carry out orders to pilfer data from foreign governments and corporations. Hacking thrives across official, corporate and criminal worlds. Whether it is used to break into private networks, track online dissent back to its source or steal trade secrets, hacking is openly discussed and even promoted at trade shows, inside university classrooms and on Internet forums.

[...]Corporations employ freelance hackers to spy on competitors. In an interview, a former hacker confirmed recent official news reports that one of China’s largest makers of construction equipment had committed cyberespionage against a rival.

[...]Another former hacker said the monolithic notion of insidious, state-sponsored hacking now discussed in the West was absurd. The presence of the state throughout the economy means hackers often end up doing work for the government at some point, even if it is through something as small-scale as a contract with a local government office.

“I don’t think the West understands,” he said. “China’s government is so big. It’s almost impossible to not have any crossover with the government.”

[...]“In China, everyone is struggling to feed themselves, so why should they consider values and those kinds of luxuries?” the former hacker said. “They work for one thing, and that’s for money.” [Source]

At his Washington Post blog, Max Fisher also reports on the legions of freelance Chinese hackers, focusing on the damage they are wreaking upon China’s economy:

A year of stunning revelations has made many Americans aware that Chinese hackers, some of them believed to be associated with the country’s military, have infiltrated just about every powerful institution in the District, from federal agencies to think tanks to, yes, media organizations. But less well-known are the freelance and industrial hackers operating within China, where they’re estimated to have caused $873 million in damage to Chinese economy in 2011 alone. [Source]

For more on cyber espionage, hacking, and China’s “patriotic geeks,” see prior CDT coverage.

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Post tags: cyberattacks, cyberespionage, cybersecurity, hackers, hacking, People's Liberation Army, PLA
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Mr. Obama and Mr. Xi will meet on June 7 and 8 at Sunnylands, the Walter and Leonore Annenberg estate in Southern California, the White House said. Mr. Obama already had travel scheduled on the West Coast at that time, officials said, so they decided that Sunnylands, a less formal setting, would provide a better environment for the two men to get to know each other. To prepare for the meeting, Thomas E. Donilon, the president’s national security adviser, will travel to Beijing from May 26 to 28.

“The U.S.-China agenda is big and complex, and we have a lot of issues to discuss and work though,” said Caitlin Hayden, a spokeswoman for the White House. “As we have said before, the relationship has elements of cooperation and elements of competition. We have no illusions about this. Our approach to China seeks to expand the areas of cooperation in managing regional and global challenges, and we seek to manage our differences in a way that prevents disruptive and unhealthy competition from undermining our interests and those of our allies in Asia.”

[Source]

The two leaders will attempt to “establish common ground after an awkward three-year period which has demonstrated many of their competing interests,” write Geoff Dyer and Victor Mallet of The Financial Times. The agenda will likely include North Korea, cyber security, the ongoing dispute in the South and East China Seas, as well as a range of economic issues, according to The Los Angeles Times.

In Beijing, Reuters reports that a spokesman for the Foreign Ministry said China is willing to put its best foot forward to bolster ties with the United States:

“Of course, some differences exist between China and the United States, which require proper and active management by both sides,” Hong said. “This year, Sino-U.S. relations have got off to a good start and are facing an important opportunity for development.”

Hong said the two leaders would have “comprehensive and in-depth discussions” on a range of issues.

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Cui emphasized that China’s integration into international organizations must be met with a reform of outdated rules:

So we are ready to integrate ourselves into the global system, and we are ready to follow the international rules. Of course, these rules were set without much participation by China, and the world is changing. You cannot say that the rules that were set up half a century ago can be applied without any change today. But what we want is not a revolution. We stand for necessary reform of the international system, but we have no intention of overthrowing it or setting up an entirely new one.

[Source]

When Tepperman questioned China’s engagement on an international scale, Cui explained that interfering in other country’s matters is not China’s responsibility or the U.S.’s responsibility.  Tepperman said, “Americans sometimes wonder whether China is really willing to help solve key international problems” and pointed out that China “has not been very cooperative” in Syria. Cui explained:

If we are really serious about building a new type of relationship, we have to have mutual accommodation and mutual understanding. It’s not that we are just helping the United States, or that the United States is just helping us. We have to help each other. We must make efforts to see issues from the other guy’s point of view.  We certainly don’t want chaos and civil war in Syria or anywhere in the world. We understand there are political differences in the country. But we always follow the principle that the affairs of a particular country should be determined by its own people, not by us, not by outsiders. It’s not up to China or the United States to decide the future of the country. [Source]

When asked about Chinese cybersecurity threats launched at the U.S., particularly the case of threats against The New York Times, Cui pointed out there is no hard evidence against China, that the United States is the more powerful country in this regard, and that international rules need to be determined:

Cybersecurity is a new issue for the international community at large. First of all, the technologies are new, and the attacks are invisible. Traditionally, if you perceived a threat, it could be seen. It was physical. But not in cyberspace.  Second, very few international rules have been designed for these kind of problems. So we have to work out a new set of international rules for everybody to follow.

[...] if we look at the development of IT and at the industry itself, the United States is much more advanced than China. So logically, I think the weaker should be more concerned about the stronger. The stronger is in a better position both to defend itself and to maybe go on the offensive against others.  [...] I don’t think anybody has so far presented any hard evidence, evidence that could stand up in court, to prove that there is really somebody in China, Chinese nationals, that are doing these things. [Source]

On whether or not the U.S should take a stance on issues facing China and Japan, Cui echoed his previous stance on China’s willingness to interfere in foreign conflicts.  He said: “The most helpful thing the U.S. could do is to remain truly neutral, to take no side.”

In a recent conference held in New York City, the Committee of 100 Annual Conference, Cui also expressed his hope that the media would provide more “objective, accurate, and balance reports on China and China-US relations” to create “more positive energy for a stable and healthy China-US relationship.”

Cui Tiankai is the current Chinese Ambassador to the U.S. and previously served as the Vice-Minister of Foreign Affairs.

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Until this week, Mr. Ren, 68 years old, had made few public appearances. The last time he was seen speaking at a public event was at a conference last June in St. Petersburg.

Mr. Ren’s first media briefing comes at a time when his company is trying to increase transparency after facing challenges in the U.S., where security concerns raised by lawmakers over the Chinese firm’s network equipment have prevented it from doing any meaningful business. The event also followed Huawei’s recent efforts to make more executives available to the media. When the company released its 2012 annual report last month, two of its most senior executives hosted a roundtable with reporters. Still, improved accessibility of executives made Mr. Ren’s absence even more obvious.

“Mr. Ren was starting to feel more comfortable about speaking with the media,” said Huawei spokesman Scott Sykes. “This is a major step for us.”

[Source]

Huawei only recently began to offer the public access to its decision makers. No international media or photographers were allowed at the briefing, according to BBC News, which reported that Ren addressed concerns held by the U.S. and other countries over Huawei’s relationship with the Chinese government and military:

“Huawei has no connection to the cyber-security issues the US has encountered in the past, current and future,” he told the reporters.

“Huawei equipment is almost non-existent in networks currently running in the US. We have never sold any key equipment to major US carriers, nor have we sold any equipment to any US government agency,” Mr Ren said.

…

There have been concerns and allegations that Huawei was helping China gather information on foreign states and companies, charges that the firm has denied.

According to a Fairfax Media, one of the outlets to interview Mr Ren, he told reporters that he was confident that no staff member of Huawei would engage in spying even if asked to do so by Chinese agencies.

[Source]

Ren chose New Zealand as the location for the briefing because Huawei has enjoyed friendly treatment in the country, according to Forbes’ Robert Olsen. Bloomberg Businessweek’s  Bruce Einhorn notes that Ren stepped into the spotlight far away from his company’s biggest markets:

Ren didn’t reveal much. What is his relationship to the People’s Liberation Army? What role, if any, does the Chinese military have in the ownership or operation of Huawei? Suspicions about that connection drive a lot of the anti-Huawei activity of lawmakers and officials in the U.S. and elsewhere, so Ren could have helped clear the air by talking about the army.

Instead, he described how he became a Communist. He joined the party in 1978, shortly after the Cultural Revolution, and presented himself as an idealist who still believed the era’s serve-the-people rhetoric. “At that time my personal belief was to work hard, dedicate myself or even sacrifice myself for the benefit of ‘the people,’” he said. “Joining the Communist Party was in line with that aspiration.” As for human-rights issues in today’s China, Ren said, “For people like myself who went through the Cultural Revolution and all those complicated times, I think China has gone through tremendous progress.”

[Source]

Read more about Huawei via CDT.

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Post tags: cybersecurity, huawei, New Zealand, Ren Zhengfei, telecommunications, U.S. relations
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