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31 Aug, 2015 11:32

US to slap Chinese 'cyber-plunderers' with economic sanctions – report

The US is to impose economic sanctions against Chinese companies and individuals they believe to have profited from cyberespionage against America, reports the Washington Post. The sanctions may come shortly after China's President Xi Jinping’s visit next month.

The sanctions are reportedly being prepared under an authority issued by President Barack Obama in an April executive order that allows asset freeze and block of trade interactions with perpetrators of cyber espionage.

“It sends a signal to Beijing that the administration is going to start fighting back on economic espionage, and it sends a signal to the private sector that we’re on your team. It tells China, enough is enough,” a US government official told the newspaper.

The US Department of State has neither confirmed nor denied that the sanctions are being planned.

“I can’t say anything about the sanctions,” State Department spokesman Mark Toner said, adding that “the US still has profound disagreements with China concerning cyber activity.”

“We are concerned with the reports that Chinese authorities encourage attempts to obtain personal and commercial information illegally,” he said, as quoted by TASS.

Toner also announced that this issue will be discussed in the talks between Barack Obama and Xi Jinping during his visit to the USA in September.

The companies affected would likely see difficulties similar to those the entire Iranian oil sector had when the US hit it with the sanctions club. Those are problems with international bank transfers, getting foreign credits and others. The companies “will effectively be put out of business,” said Zachary Goldman, a former policy adviser at the Treasury Department’s Office of Terrorism and Financial Intelligence.

The announcement of the sanctions may come amid or shortly after next month’s state visit by the Chinese president to Washington, the report said. Once issued, they would be a second major shot at China's alleged massive government hacking of America. In May 2014, the White House secured indictments against five Chinese military officers over alleged economic hacking.


“The indictments were a strong move,” Rob Knake, a former White House cyber official and currently a senior fellow at the Council on Foreign Relations, told the Post. “This is going to be an even stronger move. It’s really going to put China in the position of having to choose whether they want to be this pariah nation — this kleptocracy — or whether they want to be one of the leading nations in the world.”

“Sanctions come at a very sensitive moment as [China’s] president, Xi Jinping, is about to visit the US. At the same time, US presidential candidates, especially Republican candidates [such as] Donald Trump, have been attacking China. So, president Xi Jinping expects a lot of pressure and a lot of criticism during his visit to the United States because it is political campaign time,” Joseph Cheng, a political analyst from Hong Kong City University, said in an interview to RT.

Speaking about China’s possible response, Joseph Cheng told RT that “there will be two types of responses depending on the actual package of [the US] sanctions.”

“Naturally, Beijing will deny that it engages in any cyberspace [crimes] and hacking. It will accuse the US of engaging in such activities and it will also formulate its own package of sanctions corresponding to the package imposed or announced by the United States,” he said.

Accusations of economic espionage by hackers are just one of several bones of contension between the US and China, which share numerous economic ties. There are also China's aspirations for disputed territories in the South China Sea, which are also claimed by several American allies, along with the Chinese government's economic policies, which Washington says give Chinese companies unfair advantage on the global markets and discriminate against foreign companies doing business in China.

The WP report claims China is the most active player in economic cyberespionage, citing FBI data. But the American government itself was implicated in economic espionage, according to media reports that cited documents leaked by NSA whistleblower Edward Snowden. German manufacturing giants and Brazilian oil company Petrobras were named among the targets of US cyberespionage.