China and America's Dangerous Battle in Cyberspace

Move. Countermove. It's cyberspy vs. spy—but will things get out of control? 

With China having put the United States on the defensive for the past year, one could interpret Holder’s indictment as an effort to regain U.S. “naming and shaming” leverage. If it indeed marks “the first-ever charges against known state actors for infiltrating U.S. commercial targets by cybermeans” (Holder’s words), it will likely move the two countries’ dispute over the norms of cyberspace onto new and unstable turf. Jin Canrong, associate dean of Renmin University’s School of International Studies, notes that “[i]n the past, the U.S. talked about [Chinese economic espionage] but never took any real actions. If the U.S. freezes some Chinese military assets as a result of this, China will respond with counteractions accordingly.” In a blog post late last month, Dan Drezner echoed Jin’s concerns about the precedent this latest round of recriminations could set: “If China is willing to cut the McKinseys of the world loose,” he concluded, “it suggests that China’s leadership does not believe that these interest groups are useful anymore in altering U.S. foreign policy….Any action that weakens Sino-American interdependence also weakens the constraints that stop conflicts from spiraling out of control.”

It is clear, then, that strategic tensions between the United States and China have deteriorated in recent weeks. Less clear is how much the two countries’ activities in cyberspace will change as a result. The United States has been unable to convince China that foreign intelligence gathering and commercial espionage should be treated differently. China has yet to convince the United States that it suffers as greatly from cyberattacks. The United States alleges that its government’s computer systems “[continue] to be targeted for intrusions, some of which appear to be attributable directly to the Chinese government and military.” China demands proof and asks why, especially in light of Snowden’s disclosures, it should not conclude that the U.S. government and military are engaged in comparable activities.

The war of words between the United States and China in this latest episode also suggests a more basic problem: how to exercise leverage within a highly interdependent relationship. The United States wants China to stop engaging in economic espionage, stop compelling U.S. companies to transfer their intellectual property as a condition for gaining entry into its market, and act less assertively in the East and South China Seas. But it also wants China to continue holding $1.3 trillion in U.S. Treasury securities, continue supplying a breathtaking array of low-cost products that Americans buy and use in their homes every day, and become a more willing and capable partner so that the United States does not bear such a disproportionate burden of underpinning today’s international system. 

The challenge for the United States is to deconstruct, as completely as possible, the world’s most-complex bilateral relationship into a series of self-contained, issue-based relationships. As the Council on Foreign Relations’ Stewart Patrick and Isabella Bennett explained while reflecting on last week’s G7 Summit, it “cannot afford to abandon international cooperation, especially with potential rivals in this era of interdependence. To solve any of today’s most pressing challenges, it must compartmentalize these rivalries from other forms of cooperation.” Given the strategic distrust between the world’s superpower and its principal competitor, a downturn in one aspect of their relationship is likely to spill over into other components. As Patrick and Bennett would argue, though, the United States cannot allow this reality to dissuade it from pursuing segmentation.

Ali Wyne is a contributing analyst at Wikistrat and a coauthor of Lee Kuan Yew: The Grand Master’s Insights on China, the United States, and the World (2013). Follow him on Twitter: @Ali_Wyne

Image: Flickr/U.S. Department of Defense/CC by-nc-nd 2.0