Under pressure from American industry to curb Chinese cyber attacks, White House national security adviser Thomas Donilon warned China on Monday that the United States will defend its computer networks from the attacks.
Donilon said U.S. businesses share serious concerns "about sophisticated, targeted theft of confidential business information, and proprietary technologies through cyber intrusions emanating from China on an unprecedented scale," in a speech on Asia.
"The international community cannot afford to tolerate such activity from any country," he told a meeting of the Asia Society in New York. "As the president said in the state of the union, we will take action to protect our economy against cyber-threats."
The remarks were the administration’s first public acknowledgement of China’s large-scale computer hacking that has involved government entities, including military cyberwarfare units. Administration officials previously avoided criticizing Beijing for the hacking that has included theft of both government and defense secrets and proprietary corporate data stolen by hackers who broke into computer networks.
Donilon’s warning to China followed disclosure on Monday in the Free Beacon that senior Obama administration policymakers rejected tough action against Chinese military cyber attacks more than two years ago.
Administration officials close to the White House said an interagency policy committee examining ways to deter Chinese cyber attacks turned down several options, including the imposition of economic sanctions against China, and counter cyberattacks against Chinese hackers as potentially too disruptive for U.S.-China relations. The options were rejected in October 2011.
The administration has instead limited its reaction to diplomacy, including requests for China to explain the attacks and issuing protests in high-level meetings.
A report by the security firm Mandiant recently identified a Chinese military unit in Shanghai as a major source of Chinese cyber espionage attacks. Earlier reports linked large-scale Chinese cyber strikes to a second military unit in Beijing.
China has denied its government carries out any cyber attacks and responded to the U.S. charges by claiming that the United States is behind hacking of Chinese computer networks.
U.S. officials told the Free Beacon that during a recent meeting between U.S. and Chinese officials, Chinese representatives threatened to curtail U.S.-China talks unless the United States stops making public accusations of cyber attacks.
Donilon, in his speech, said the United States wants three things from China to resolve the problem of cyber attacks.
"First, we need a recognition of the urgency and scope of this problem and the risk it poses—to international trade, to the reputation of Chinese industry, and to our overall relations," Donilon said.
The United States also wants Beijing to "take serious steps to investigate and put a stop to these activities," he said.
"Finally, we need China to engage with us in a constructive direct dialogue to establish acceptable norms of behavior in cyberspace," Donilon said.
Critics of the administration’s conciliatory policy have said the lack of an effective response to the Chinese cyber attacks has encouraged more attacks.
Donilon defended during the speech the administration’s so-called pivot to Asia as the wars in the Middle East and South Asia wind down.
The national security adviser said the rebalancing is designed to promote stability and openness in the region.
"To pursue this vision, the United States is implementing a comprehensive, multidimensional strategy: Strengthening alliances; deepening partnerships with emerging powers; building a stable, productive, and constructive relationship with China; empowering regional institutions; and helping to build a regional economic architecture that can sustain shared prosperity," he said.
Donilon insisted that the shift to Asia does not mean denigrating alliances in other parts of the world or "containing China or seeking to dictate terms to Asia."
The Pentagon has adopted a semi-secret Asia strategy called the Air Sea Battle Concept that calls for developing weapons and capabilities that can counter China’s growing arsenal of advanced weapons, including anti-ship ballistic missiles, anti-satellite weapons, and cyber warfare capabilities.
Donilon said the Asia pivot is not limited to military capabilities but seeks to use all elements of U.S. power, including strengthening alliances with Japan and South Korea and building closer ties to states like Australia and India.
On North Korea, Donilon warned that any attempt to export nuclear or other weapons of mass destruction would be viewed as a "grave threat" to security.
Donilon said the United States welcomed China’s support for international sanctions on North Korea for its nuclear and missile tests.
However, he made no mention of the recent discovery in North Korea of a Chinese-made road-mobile missile launcher for a new North Korean intercontinental ballistic missile that can reach the United States. The Chinese-made launcher for the KN-08 missile was made public during a military parade in Pyongyang in April 2012.
On recent North Korean threats to conduct missile and nuclear attacks on the United States, Donilon said the claims "may be hyperbolic."
"But as to the policy of the United States, there should be no doubt: We will draw upon the full range of our capabilities to protect against, and to respond to, the threat posed to us and to our allies by North Korea," he said.
"This includes not only any North Korean use of weapons of mass destruction, but also, as the president made clear, their transfer of nuclear weapons or nuclear materials to other states or non-state entities. Such actions would be considered a grave threat to the United States and our allies, and we will hold North Korea fully accountable for the consequences."
Donilon said that one of the three pillars of the Asia pivot is seeking better relations with China, including closer military ties.
"A deeper U.S.-China military-to-military dialogue is central to addressing many of the sources of insecurity and potential competition between us," he said.
China’s military buildup in Asia is "drawing our forces into closer contact and raising the risk that an accident or miscalculation could destabilize the broader relationship," Donilon said.