China’s cyber attacks and a US response

The US has many options available to counter China's cyber threat. But does it possesses the political will to choose one?

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Does America have an answer to China's cyber arsenal?
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Fernando Menendez
On 22 February 2013 15:42

A report released by a security firm in Alexandria, VA, finds China’s military behind a massive cyber espionage effort to steal massive volumes of intellectual property from hundreds of multinational corporations and US government databases. Apparently, the hacked data is used to help China accelerate its economic growth and could be used to launch cyber attacks against US infrastructure sites.  

This is clearly a breach of security, yet it is neither the first nor last time it will take place. In fact, it is part of China’s strategic offensive.

The Chinese have been involved in espionage and cyber war for decades. They have breached security several times using both human assets and other means. Infiltrating Lockheed Martin, the US Defense Department, and the case of Wen Ho Lee at the Los Alamos National Laboratory, are simply examples so severe as to make the front pages of major newspapers.

China is, after all, a geopolitical adversary of the United States, and has as its major objective shifting the balance of power whether militarily, politically or economically. China’s expanding relations with developing countries in the last decade is partly economic and its frequent use of the UN veto is part of its strategy of global positioning.

There are those who argue that war is politics by other means, and given the ubiquity of today’s technology it should come as no surprise that cyber technology should be used as a modern weapon of war. China’s unique state capitalist system, with strong ties between government, the People’s Liberation Army conducting the espionage, and the monopolistic state-owned enterprises receiving the results, provides it a comparative advantage.

What then, one may ask, can the United States do in response?

First, the US-China relationship must be placed in a wider context. China is the United States’ largest banker. With a $16 trillion debt and a widening trade gap, the US relies on China’s financial forbearance. An estimated 65 percent of China’s $3.2 trillion in foreign reserves is held in dollars, giving them enormous clout. After the European Union, the US is China’s largest trading partner making it a mutually dependent relationship.

Nevertheless, the United States has options, some tactical and others more strategic. It is doubtful whether fines, penalties and trade sanctions will have much of an effect on Chinese behavior. Of course, the technologically superior US could retaliate in kind. Clandestine attacks, launched from third countries, would have serious repercussions for China. Yet there are more strategic responses available.

Reunification of the mainland with Taiwan, considered a disobedient rouge province, is China’s number one foreign policy objective. Nothing bothers China more than US sales of arms, fighter jets and sophisticated weaponry to Taiwan, extending the possibility of permanent separation. An escalation of military support to Taiwan would be both costly and embarrassing for Beijing.

More important, however, is China’s position in the Pacific. Recently Vietnam has broached the subject of welcoming US naval vessels in Cam Ranh Bay. Vietnam calculates Chinese hegemony in the South Pacific as far more threatening than its former enemy’s destroyers, aircraft carriers and nuclear submarines on its shores. The so-called US pivot towards Asia could take on a decidedly strategic orientation.

Similar moves would force China’s leadership to conduct a serious cost-benefit analysis. Increased US presence and pressure in the region, as well as alliances formed to contain China, could prove prohibitively costly to further expansion. Such strategic reverses would far outweigh any compensation provided by cyber intrusion.

Clearly, the US has plenty of options; what it lacks is political will to choose one.

Fernando Menéndez, is an economist and principal of the Cordoba Group International, LLC, a strategic consulting firm

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