US Must Step Up Sanctions on Chinese Cyber Attacks

Experts, lawmakers call for tougher action

June 26, 2013

Lawmakers and cybersecurity experts urged Congress and President Barak Obama Tuesday to enact tougher sanctions against the Chinese government for its widespread theft of intellectual property and defense technology as well as its abuse of human rights activists.

Experts told members of the Congressional-Executive Commission on China at a hearing that the nation continues to disregard the intellectual property rights of U.S. businesses. Former Sen. Slade Gorton (R., Wash.), a member of the Commission on the Theft of American Intellectual Property, noted findings from a report by the commission that China accounts for between 50 and 80 percent of global intellectual property theft, costing U.S. businesses more than $300 billion annually and about 2 million jobs.

A February report by the cybersecurity firm Mandiant contained evidence linking one Chinese hacker group that acquired confidential data from at least 141 companies to a unit of the People’s Liberation Army.

Recent reports have also revealed that Chinese hackers have gained access to the designs of more than two dozen major U.S. weapons systems.

When asked by Rep. Robert Pittenger (R., N.C.) how the United States could successfully influence China to begin honoring property rights, Gorton replied that leaders must "threaten the profitability of Chinese companies that sell goods and services in the United States."

"We will not really get command of intellectual property theft until we have created internal incentives in China to obey rules regarding such theft," he said.

Sen. Carl Levin (D., Mich.) has sponsored legislation that would require the Director of National Intelligence to develop a watch list of foreign countries that engage in economic or industrial cyber espionage against U.S. trade secrets.

Senate Bill 884, the "Deter Cyber Theft Act," would further obligate the president to block the import of goods made by companies or state-owned enterprises that benefit from hacking.

"If foreign governments like China want to deny their involvement in cyber theft, we can’t change their denials," Levin said at the hearing.

"Maybe once [Chinese companies] understand that complicity restricts their access to U.S. markets, they will press their government to stop."

Wen Yunchao, a Chinese human rights activist who has suffered repeated hacking of his his Gmail, Twitter accounts, and personal phone, told commission members that the cyberassaults could only be the coordinated acts of government officials.

Before Yunchao delivered a speech at the June 2011 U.N. Human Rights Council meeting expressing support for Chinese citizens persecuted during the so-called "Jasmine revolution," he received a text message with the warning: "A wise person takes action after thorough thinking; do not let ignorance have the upper hand and leave you in sadness. Whereas life can be splendid, why obsess with one thing? Put it down, put it down."

Yunchao gave the speech but then received hundreds of phone calls and spam email messages in the following months.

Yunchao has yet to return to China, but called on the U.S. government to stand with activists in his native country.

"I hope that the U.S. Congress and government will recognize such cyber attacks against human rights defenders as human rights persecution, and impose sanctions and visa restriction on organizations, companies and their employees who engage in such malicious activities," he said.