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Xi Jinping Pledges to Work With U.S. to Stop Cybercrimes Xi Jinping Pledges to Work With U.S. to Stop Cybercrimes
(about 1 hour later)
SEATTLE — President Xi Jinping pledged in a speech here on Tuesday night to work with the United States on fighting cybercrimes, saying that the Chinese government was a staunch defender of cybersecurity. SEATTLE — President Xi Jinping pledged in a speech here on Tuesday night to work with the United States on fighting cybercrime, saying that the Chinese government was a staunch defender of cybersecurity.
“The Chinese government will not in whatever form engage in commercial theft, and hacking against government networks are crimes that must be punished in accordance with the law and relevant international treaties,” Mr. Xi said in an address to American business executives.“The Chinese government will not in whatever form engage in commercial theft, and hacking against government networks are crimes that must be punished in accordance with the law and relevant international treaties,” Mr. Xi said in an address to American business executives.
At the end of his first day of a state visit to the United States, Mr. Xi told his audience, which also included Chinese business leaders, “China is ready to set up a high-level joint dialogue mechanism with the United States on fighting cybercrimes.” At the end of his first day of a state visit to the United States, Mr. Xi told his audience, which also included Chinese business leaders, that “China is ready to set up a high-level joint dialogue mechanism with the United States on fighting cybercrimes.”
Mr. Xi appeared to be attempting to reassure his business audience, many of its members from tech industries at the forefront of cyberspace issues, but how far his words would be believed by the Obama administration remained to be seen. At a briefing for reporters in Washington on Tuesday, a senior China adviser to President Obama said that “we won’t paper over those differences,” a reference to cyberspace and economic issues. There would be “very robust discussion” with Mr. Xi, said the adviser, Daniel J. Kritenbrink. Mr. Xi appeared to be attempting to reassure his business audience, many of its members from tech industries at the forefront of cyberspace issues, but how far his words would be believed by the Obama administration remained to be seen.
At a briefing for reporters in Washington on Tuesday, a senior China adviser to President Obama said that “we won’t paper over those differences,” a reference to cyberspace and economic issues. There would be “very robust discussion” with Mr. Xi, said the adviser, Daniel J. Kritenbrink.
Two weeks before Mr. Xi’s arrival, one of his closest aides, Meng Jianzhu, the head of domestic security, visited Washington to deal with the administration’s accusations that China was responsible for massive cyberattacks on American businesses and government agencies. The Chinese deny the administration’s claims.Two weeks before Mr. Xi’s arrival, one of his closest aides, Meng Jianzhu, the head of domestic security, visited Washington to deal with the administration’s accusations that China was responsible for massive cyberattacks on American businesses and government agencies. The Chinese deny the administration’s claims.
The meetings failed to lead to a concrete agreement that the administration had hoped for on how to deal with such attacks, particularly the theft of trade secrets from American companies that benefit their Chinese competitors, according to a senior administration official.The meetings failed to lead to a concrete agreement that the administration had hoped for on how to deal with such attacks, particularly the theft of trade secrets from American companies that benefit their Chinese competitors, according to a senior administration official.
After Mr. Meng’s return to Beijing, an assistant foreign minister, Zheng Zeguang, also made it clear in a news briefing before Mr. Xi’s departure that little had been achieved on curbing online theft in commercial and government spheres. The tone of Mr. Xi’s address across a range of issues was positive, without a jarring word. He refrained from talking about thorny differences with the United States over China’s construction of artificial islands in the South China Sea. On China’s softening economy he sounded a soothing tone, saying that all economies faced difficulties and though China was under downward pressure “this is only a problem in the course of progress.”
Speaking in general terms but offering few specifics, Mr. Zheng said, “China is a country with the most Internet users in the world, and the U.S. has the most advanced cybercapabilities, so the two are facing a severe common challenge and we have vast common interests in safeguarding cybersecurity.” He also told his audience not to worry about the Chinese stock market, whose sudden plunge over the summer sent shock waves across the world. He defended his government’s intervention, which failed to stop the fall, saying the “government took steps to stabilize the market and contain panic in the stock market and this avoided systemic risk.”
As Mr. Xi’s advisers prepared him for his trip to the United States, he was encouraged by several Americans to include some personal themes that would resonate with the audience.
He won applause for a line about his anticorruption campaign against government officials not being like the television show “House of Cards.”
The audience also appreciated his anecdote about ordering one of Ernest Hemingway’s favorite cocktails, a mojito, when he visited Cuba.
The audience included Satya Nadella, the chief executive of Microsoft, and the company’s founder, Bill Gates — they sat on either side of Mr. Xi’s senior adviser, Li Zhanshu — as well as other senior executives whose tech firms have suffered in China from the imposition of new, intrusive security measures, commercial cybertheft and demands for transfers of technology.
Mr. Xi addressed some of those concerns with general reassurances but no specifics, saying. “We will address the legitimate concerns of foreign investors in a timely fashion, protect their lawful rights and interests, and work hard to provide an open and transparent legal and policy environment.”
The reactions of the business community to Mr. Xi’s promises may become clearer at a high-level tech forum Wednesday, organized by the Chinese in conjunction with Microsoft, and expected to draw 200 executives.
Since Mr. Xi came to power three years ago, human rights advocates and lawyers been rounded up and imprisoned, and Chinese nongovernmental organizations have been closed. The Obama administration has called these measures some of the most serious infringements of human rights in China in a long time.
On that issue, Mr. Xi sounded a familiar refrain by Chinese officials, saying “we are ready to discuss rule-of-law issues with the U.S. side in a spirit of mutual learning for common progress.”
He was more precise about the operations of foreign nonprofits that have come under increasingly restrictive regulations in the last year, offering few concessions. Such groups, he said, “need to obey Chinese law.”
In a speech before Mr. Xi spoke, the secretary of commerce, Penny Pritzker, warned him about problems with China’s behavior on cyberspace practices, and seemed to want to disabuse Mr. Xi of an expectation that his meetings in Washington would be smooth going.
“We — and our companies — continue to have serious concerns about an overall lack of legal and regulatory transparency, inconsistent protection of intellectual property, discriminatory cyber and technology policies, and more generally, the lack of a level playing field across a range of sectors,” she said.
Mr. Xi arrived in Seattle on Tuesday morning on an Air China Boeing 747-400 aircraft, landing at Paine Field adjacent to a Boeing manufacturing complex 30 miles from the city center. He will visit the Boeing plant on Wednesday.Mr. Xi arrived in Seattle on Tuesday morning on an Air China Boeing 747-400 aircraft, landing at Paine Field adjacent to a Boeing manufacturing complex 30 miles from the city center. He will visit the Boeing plant on Wednesday.
Accompanied by his wife, Peng Liyuan, a squadron of aides, senior government officials and nearly two dozen journalists from Chinese state news media, he was welcomed by the governor of Washington, Jay Inslee.Accompanied by his wife, Peng Liyuan, a squadron of aides, senior government officials and nearly two dozen journalists from Chinese state news media, he was welcomed by the governor of Washington, Jay Inslee.
He then headed to a downtown hotel to meet with a group of governors from Western states, including Jerry Brown of California. Afterward, he prepared for the dinner, scheduled to begin early to accommodate Jewish guests who wanted to attend prayers marking the start of Yom Kippur at sundown.He then headed to a downtown hotel to meet with a group of governors from Western states, including Jerry Brown of California. Afterward, he prepared for the dinner, scheduled to begin early to accommodate Jewish guests who wanted to attend prayers marking the start of Yom Kippur at sundown.
On Wednesday, Mr. Xi will take part in a roundtable discussion among Chinese and American executives arranged by the Paulson Institute, a research group run by a former Treasury Department secretary, Henry M. Paulson Jr.
Mr. Xi will also meet with more than a dozen business leaders, including the head of General Motors, Mary T. Barra, and Warren Buffett of Berkshire Hathaway. Apple’s chief executive, Timothy D. Cook, whose company is doing spectacularly well in China — the company’s revenues are expected to soon surpass those in the United States — is also scheduled to be there.
The Chinese worked hard to front-load Mr. Xi’s trip — his first to the United States as president — with two days of events in Seattle intended to show an upbeat relationship with American business. And in a broad sense it has worked as a show of force to President Obama about the power that China wields, and how much American companies need China even if its policies do not align with Washington’s.The Chinese worked hard to front-load Mr. Xi’s trip — his first to the United States as president — with two days of events in Seattle intended to show an upbeat relationship with American business. And in a broad sense it has worked as a show of force to President Obama about the power that China wields, and how much American companies need China even if its policies do not align with Washington’s.
Yet frustrations are simmering here. The U.S.-China Business Council, one of the hosts of the dinner, said member confidence about doing business in China has eroded considerably over the past five years.Yet frustrations are simmering here. The U.S.-China Business Council, one of the hosts of the dinner, said member confidence about doing business in China has eroded considerably over the past five years.
In 2010, 58 percent of executives were optimistic about the business outlook in China, while 33 percent were somewhat optimistic, said John Frisbie, the council’s president. Now just 24 percent of executives surveyed are optimistic while 67 percent are somewhat optimistic or neutral. In 2010, 58 percent of executives were optimistic about the business outlook in China, while 33 percent were somewhat optimistic, said John Frisbie, the council’s president. Now just 24 percent are optimistic while 67 percent are somewhat optimistic or neutral.
“American business leaders — especially in the tech sector — are listening to President Xi with tremendous care in hopes of discerning the balance he will strike between the economic promise of new innovations and a preference for enhanced national security controls regardless of marketplace efficiency,” said Daniel H. Rosen, a co-founder of the Rhodium Group, a New York-based advisory firm with expertise on China.
“Many U.S. firms are at a tipping point as to whether to double down on their investment in China, and the conclusions they reach in reaction to Xi this month may shape their strategies for years to come,” Mr. Rosen added.
The U.S. Chamber of Commerce said in a recent submission to the Obama administration that although China represented a $600 billion market for American companies, it “should be more.”
The chamber said a number of Chinese laws functioned as barriers to market access, effectively deterring American businesses from competing against Chinese enterprises. They include a new law that says national security must take primacy in all fields, from culture to cyberspace.
A bilateral investment treaty designed to open up markets that was supposed to be discussed during talks in Washington this week may get only cursory attention because it is not close to completion despite two recent rounds of negotiations, Chinese and American officials said.
The concerns in the business community are intensified, the business council said, because of the size of China’s economy.
“Even if China were to grow 6 percent a year over the next decade, that would add two Germanys to China’s G.D.P., so that’s the kind of scale we’re at,” Mr. Frisbie said.
In written answers to questions submitted by The Wall Street Journal before he left China, Mr. Xi said that although economic growth was slowing, the “Chinese economy is still operating within the proper range.”
Mr. Xi skirted a question from The Journal about new Chinese laws that unfairly targeted American information technology companies, like Cisco, by favoring their Chinese competitors.
China has maintained that disclosures of American espionage from Edward J. Snowden, the former National Security Agency contractor, are sufficient reason for the country to wean itself off foreign technology.