President Xi Jinping of China arrived in America the week of September 22 (during the same time that Pope Francis and India’s Prime Minister Narena Modi were touring the U.S.) His first stop was Seattle to meet with 25 major U.S. business leaders, including Warren Buffett, Tim Cook, Mark Zuckerberg, and Satya Nadella. The September 19 issue of The Economist previewed the meeting between Xi and Obama as “nothing to smile about.”
From the U.S. point of view, there are several growing tensions with China:
- The alleged hacking by Chinese cyber spies in April of 22 million personal records of U.S. government employees’ (including CIA) from the Office of Personnel Management
- Accusations that China is manipulating its currency to make Chinese exports cheaper
- China’s island building for military purposes in the disputed territory of the South China Sea
- The U.S. presidential election candidates contributing to a rise in “China-bashing”
- The botched attempts in August by the Chinese government to prop up the Chinese stock market
- Americans worrying about the excesses and deceptions of Chinese state capitalism, making the term “state capitalism” an oxymoron.
When Xi met with U.S. business leaders in Seattle, they confronted him about the rampant theft of intellectual property that continues to take place; they complained about the Chinese demand that U.S. companies doing business in China transfer their technology to their Chinese partners; and they protested the many ways China unfairly discriminates against U.S. business. The main services of Google and Facebook are blocked in China, which is why Mark Zuckerberg met with Xi in Seattle and was seated next to him at the White House state dinner. (Incidentally, Zuckerberg’s wife is a Chinese physician, and both he and his wife speak Mandarin.)
Xi and Modi contrasts/Internet
In his meeting with U.S. business leaders, Xi was unwavering on China’s tough internet control and censorship. The contrast with India’s prime minister could not have been more striking: Modi regularly uses Twitter and Facebook, and he is taking the world by storm with his “Digital India” campaign. He implores U.S. business to help make India an “Internet powerhouse.” Like China, the Indian government engages in censorship, but it pales by comparison with China’s complete blackout of many services.
Although U.S. business still covets access to China’s huge market, when Modi and Xi are side-by-side, India shows up as more attractive. U.S. business is beginning to realize that India today is like China five years ago, and with a progressive leader like Modi, India looks very positive with less political baggage than China.
Unfortunately, Xi refused to admit to any hacking and cyber theft by the Chinese government, in spite of compelling evidence, but he did pledge to cooperate with the U.S. on cybersecurity issues with a signed agreement that “neither country’s government will conduct or knowingly support cyber-enabled theft of intellectual property.” Xi agreed to informational exchanges and legal cooperation for investigating cyber-crimes, including regularly scheduled meetings between U.S. and Chinese officials on cyber security violations. The agreement also established a hotline between the two nations should there be an escalation of issues. Xi also agreed to participate in the United Nations effort to establish appropriate norms of state behavior in cyberspace.
All this is well and good, but the editorial staff of The Wall Street Journal, September 28, 2015, is right to point out that all these agreements are tied to each country’s “respective national laws.” From the U.S. perspective, the Chinese Communist Party is above the law as it regularly invents interpretations to advance its power and control.
On the Bright Side
On the positive side of the ledger:
- China helped broker the nuclear deal with Iran in April (not everyone agrees that this is positive).
- China is supportive of America’s concerns about North Korea.
- President Xi is waging a strong campaign against corruption in China.
- Beijing has agreed to put a cap on carbon emissions and put a price on carbon for Chinese industries (virtually every country is now offering to pitch in to help limit carbon emissions).
The U.S. Government and the Obama Administration should exercise and pursue to the max the informational exchanges and legal cooperation China has agreed to regarding breaches of U.S. cybersecurity and the theft of intellectual property, as well as participate fully in regular scheduled meetings.
- The U.S. should impose sanctions on Chinese business if cybersecurity violations are not resolved appropriately.
- The U.S. should check and monitor the Chinese territorial grab in the South China Sea by practicing international maritime access standards.
The overriding question is: Will Chinese actions follow Chinese words?