The United States and China's Corporate Secrets Cyber Theft Agreement

Cyber Theft of Corporate Secrets seems more likely to be found in a movie script than in the real world. But, cyber theft has been estimated to cost American companies tens of billions of dollars annually.[1]  President Obama has gone so far as to call cyber theft an “act of aggression”[2] and with a large amount of cyber theft originating in China it has become an unneeded tension with an international partner.

In an attempt to crack down on cyber theft the United States charged five officers in China’s People Liberation Army for computer hacking and economic espionage after six United States companies were hacked last year.[3]   Also, in the lead up to the September visit of Chinese President Xi Jinping  the Obama administration began preparing a package of sanctions directed at China and other countries who have engaged in cyber theft of intellectual property.[4]

After meeting with Chinese President Xi Jinping, President Obama and President Xi Jinping reached an agreement that the United States and China would no longer knowingly support cyber theft of corporate secrets.[5]

But what does the agreement include?

• Both countries agree that timely responses should be provided to requests for information and assistance concerning malicious cyber activities;
• Both countries agree to cooperate in a manner consistent with their respective national laws and intentional obligations with requests to investigate cybercrimes, collect electronic evidence, and mitigate malicious cyber activity originating from their territory;
• Both sides agree to provide updates on the status and results of these investigations to the other side as appropriate;
• Both countries agree that neither countries government will conduct or knowingly support cyber enabled theft of intellectual property with the intent of providing competitive advantages to companies;
• Both countries are committed to making common effort to identify and promote an appropriate norm of state behavior in cyberspace;
• Both countries agreed to establish a high level joint dialogue on fighting cybercrime and related issues with high ranking officials appointed from each country to the dialogue.[6]

But, at the announcement of the agreement on September 25, 2015 President Obama cautioned that these are just words and that “we will be watching carefully to make an assessment as to whether progress has been made.” [7]

On September 26, 2015, the day after the agreement was announced, five United States technology and two United States pharmaceutical companies detected and rebuffed attacks from hackers associated with the Chinese government.[8]  Crowdstrike Inc., the company that announced the hack, stated that “the primary benefits of the intrusion seem clearly aligned to facilitate theft of intellectual property and trade secrets,” an action that should be prohibited under the new agreement.

Only time will tell if the agreement with China will hamper Chinese hackers or if the agreement will amount to nothing more than words.

[1] http://bigstory.ap.org/article/6968994951104e4a9cec12cb6e5ad368/analysis-us-china-agreement-cybertheft-first-step

[2]http://bigstory.ap.org/article/6968994951104e4a9cec12cb6e5ad368/analysis-us-china-agreement-cybertheft-first-step

[3] http://bigstory.ap.org/article/6968994951104e4a9cec12cb6e5ad368/analysis-us-china-agreement-cybertheft-first-step

[4] http://bigstory.ap.org/article/6968994951104e4a9cec12cb6e5ad368/analysis-us-china-agreement-cybertheft-first-step

[5] http://www.reuters.com/article/2015/09/26/us-usa-china-idUSKCN0RO2HQ20150926; https://www.whitehouse.gov/the-press-office/2015/09/25/remarks-president-obama-and-president-xi-peoples-republic-china-joint.

[6] https://www.whitehouse.gov/the-press-office/2015/09/25/fact-sheet-president-xi-jinpings-state-visit-united-states

[7] https://www.whitehouse.gov/the-press-office/2015/09/25/remarks-president-obama-and-president-xi-peoples-republic-china-joint

[8] http://www.businessinsurance.com/article/20151019/NEWS06/151019852?tags=58|313|158|166