THE IMPLICATIONS OF CYBER ON US-CHINA RELATIONS

Maj J. Johnson

JCSP 43 PCEMI 43

Exercise Solo Flight Exercice Solo Flight

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Opinions expressed remain those of the author and Les opinons exprimées n’engagent que leurs auteurs
do not represent Department of National Defence or et ne reflètent aucunement des politiques du
Canadian Forces policy. This paper may not be used Ministère de la Défense nationale ou des Forces
without written permission. canadiennes. Ce papier ne peut être reproduit sans
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© Her Majesty the Queen in Right of Canada, as © Sa Majesté la Reine du Chef du Canada, représentée par
represented by the Minister of National Defence, 2017. le ministre de la Défense nationale, 2017.
 CANADIAN FORCES COLLEGE – COLLÈGE DES FORCES CANADIENNES
JCSP 43 – PCEMI 43
2016 – 2017

EXERCISE SOLO FLIGHT – EXERCICE SOLO FLIGHT

THE IMPLICATIONS OF CYBER ON US-CHINA RELATIONS

Maj J. Johnson

“This paper was written by a student “La présente étude a été rédigée par un
attending the Canadian Forces College stagiaire du Collège des Forces
in fulfilment of one of the requirements canadiennes pour satisfaire à l'une des
of the Course of Studies. The paper is a exigences du cours. L'étude est un
scholastic document, and thus contains document qui se rapporte au cours et
facts and opinions, which the author contient donc des faits et des opinions
alone considered appropriate and que seul l'auteur considère appropriés et
correct for the subject. It does not convenables au sujet. Elle ne reflète pas
necessarily reflect the policy or the nécessairement la politique ou l'opinion
opinion of any agency, including the d'un organisme quelconque, y compris le
Government of Canada and the gouvernement du Canada et le ministère
Canadian Department of National de la Défense nationale du Canada. Il est
Defence. This paper may not be défendu de diffuser, de citer ou de
released, quoted or copied, except with reproduire cette étude sans la permission
the express permission of the Canadian expresse du ministère de la Défense
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Word Count: 5492 Compte de mots: 5492

 1

Introduction

Cyber seems to dominate the US-China relations, which has emerged as one of

the most complex and vital forces with immeasurable impact on the world stage, given

the economic prowess of the two nations. The relationship is characterized by deep

mistrust and conflict due to competing geopolitical interests, historical differences, and

ideological constraints. Recently, the tension has increased significantly due to a number

of cyber incidents linked to the Chinese government that targeted American economic

and national security interests. China’s rising power has been unsettling given its

aggressive modernization of the People’s Liberation Army (PLA) in space, cyberspace,

and certain conventional military capabilities such as ballistic missile and Intelligence,

Surveillance and Reconnaissance technology that supports an asymmetric posture against

the powerful United States military.

Despite the growing concerns of its neighbor, China’s assertive approach in the

South China Sea seems to betray its narrative regarding a peaceful rise. The US presence

in the region provides assurance to allies and sends an explicit message to Beijing about

the need to respect international norms. This backdrop along with historical differences

and increasing malicious cyber intrusions obfuscate China’s intent, creating a security

dilemma, which extends to the cyber domain. Given China’s propensity to link economic

development to security and political survival, its recent deteriorating economic situation

arguably provided an avenue of approach to hold open and honest discussions about

cyber. In 2015, the US threatened significant economic pressure to address the cyber

security tensions, which compelled the Chinese to sign a Cyber Security Agreement with

emphasis on containing malicious cyber activities that affect the economic landscape.

Given the chasm between the two nations, question remains as to whether the differences
 2

are reconcilable despite the agreement. So, how substantive and enforceable is the

agreement? Upon further scrutiny, it merely represents open dialogue to relieve the

pressure, affording China space to recalibrate its cyber strategy to enhance the

sophistication of the cyber intrusions while significantly reducing detection.

The deleterious impact of a potential cyber-induced conflict requires a

cooperative framework to manage the complexity and unpredictability of US-China

relations in cyber security. A comprehensive understanding of the risks, common ground,

and areas of disagreement is vital for solidifying cooperation between the two most

powerful players in the cyber sphere. Nationalistic tendencies tend to complicate matters

and must be suppressed with pragmatism to avoid unnecessary escalation based on

ideological fervor.

The characteristics of cyber such as difficulty of attribution, diverse terminology,

offensive advantage to maximize power in that sphere, decentralization, low barriers to

entry and innovation outpacing policy catapults cyberspace as a tenuous affair that

demands a meticulous structure to avert miscalculation and overreaction that can easily

spillover on the diplomatic, military, and economic dimensions of international relations.

The framework must recognize the Chinese right to conduct military espionage while

establishing norms that both countries can endorse on the international stage through

existing organizational structures. This paper peruses the Cyber Security Agreement and

advances cooperation by exploring the dynamics of US-China relations in the cyber

domain and the impact on the international relations landscape. Finally, it proposes an

enforceable cooperative framework that builds on the existing agreement.

 3

US-China Cybersecurity Agreement

The 2015 US-China Cybersecurity Agreement represents an initial step, but is not

effective in and of itself in terms of achieving cooperation in cyberspace and the

cessation of economic espionage. The agreement will be analyzed using a three-prong

approach: first, explore the conflicting views of national security interests in the cyber

sphere; second, contrast China’s and US’ approach to cyberspace in terms of information

control versus network security; Finally, evaluate the agreement to determine its

measurable effectiveness. Nigel Inkster from International Institute of Strategic Studies

stated, “Since the turn of the 21st century, there has been a massive growth in cyber-

exploitation activities operations emanating from China.”1 He indicated China’s target

centers on government, major corporations, and opponent of the Chinese government.

First, the line between national security interests and economic espionage can be

blurred, which has triggered fierce resistance and apathy when the US called China on

the carpet due to increasing cyber intrusions. China has accused the US of hypocrisy and

militarizing cyber, especially after Snowden indicated the multiple and repeated cyber

intrusions into other countries’ cyberspace, including allies. The US draws a clear

distinction between industry and government, while China regards industry as

indispensable to economic security and political survival. Chinese President, Xi Jinping,

asserted, “Security and economic development are inextricably linked.”2 China’s five-

year plan focuses on developing a prosperous China, including enhancing the

monitoring 1 and censorship technologies to promote a hygienic modern system by

1
Nigel Inkster, “China’s Cyber Power.” (Bell & Bain Ltd: Glasgow), 2016.
2
Brookings Institution, “China’s Security and Foreign Policies: Comparing American and Japanese
Perspectives.” Last accessed on 30 October 2016, [Link]
 4

2020.3 China has adeptly used its integration into the global market, and the use of

patriotic Chinese education and historical narratives to consolidate its grip on power and

ensure regime survival.

The Chinese government views legitimacy as a critical factor and seems to frame

all of its endeavors in terms of nationalism while restricting the flow information and

blunting dissent through coercive means to ensure political stability. For instance, China

has galvanized the domestic population with a patriotic narrative by framing the dispute

in the South China Sea and East China Sea in terms of sovereignty and territorial

integrity.4 That legitimacy extends to the cyber realm, as China pushes for cyber

sovereignty to prevent other countries from interfering with its internal affairs. The

proposal seems pointed at the US, as China views freedom of expression, human rights,

and open and reliable internet as a threat to its national security and political survival.

China seems to rely heavily on social and economic development for parity with

the world’s largest economy, the US. Foreign affairs experts from Center of Strategic and

International Studies (CSIS) and Peterson Institute for International Economics identified

three criteria for a country to be considered an economic superpower: large enough to

affect the world economy, dynamic enough to contribute to global growth, and open to

trade and capital flows.5 The Chinese ambassador to the World Trade Organization said

during negotiations to join, “We know we have to play the game now but in ten years we

will set the rules!”6 China is now the second largest economic superpower and while its
3
Huaxia, China’s Five Year Plan to Benefit the World. Xinhua, 3 Nov 2015. Last accessed on 14 Apr
2017. [Link]
4
Robert G. Sutter, Foreign Relations of the PRC (Maryland: Rowman and Littlefield, 2013), 2.
5
Fred Bergsten, Charles Freeman, Nicholas Lardy, Derek Mitchell, China’s Rise: Threats, Challenges,
and Opportunities. (CSIS: Washington D.C.), 2008.
6
Ibid., 9.
 5

economy has contracted, its trajectory is encouraging as the government engages in

significant reforms to modernize its economic structure. China recognizes it faces

significant domestic and environmental challenges that may derail its growth and

political stability, spurring the constant focus on sanitizing information through

propaganda, cyber, and other means while calibrating the agenda for social and economic

development.

China’s claim in the South China Sea seems to be based on economic

development, which may partly explain China’s intransigence despite protests from

neighbouring countries. The World Bank estimates, “South China Sea holds proven oil

reserves of at least 7 billion barrels of oil and 900 trillion cubic feet of natural gas, which

offer tremendous economic opportunity…”7 China’s appetite for energy has grown

tremendously over the past few decades and is unlikely to subside as the trajectory for

economic growth remains solid, albeit slower. Experts from CSIS contend, “…The

changes in the structure of the economy (China) pushed energy demand up by 11 percent

a year. Today China’s share of the global energy use has swelled to over 16 percent,

forcing the country to rely on international markets.”8 The US has been at odds with

China on this issue and consistently conducts freedom of navigation military operations

to preserve international order and as a form of assurance to its allies. China interprets the

US actions as interference in domestic affairs and an attempt to contain China’s rise.

This 2 interpretation affects the cyber arena as well, as China is suspicious of the US

dominance in that sphere and seems intent on challenging the US hegemony in the region

7
Beina Xu, South China Sea Tensions. Council on Foreign Relations, 14 May 2014. Last accessed on 15
Apr 2017. [Link]
8
Fred Bergsten, Charles Freeman, Nicholas Lardy, Derek Mitchell, China’s Rise: Threats, Challenges,
and Opportunities. (CSIS: Washington D.C.), 2008.
 6

through significant investments in its military, space, cyberspace, and economy. The

Chinese military PLA Daily stated, “Internet warfare is of equal significance to land, sea,

and airpower, and requires its own military branch.” 9 China seems impressed with US

cyber offensive capabilities and views the necessity for developing offensive

technologies that provide effective countermeasures and effective strikes capable of

crippling a powerful adversary. The aforementioned factors couple with the history of the

rise of the Chinese Communist Party in power are responsible for the coupling of national

security with economic development and political stability. Therefore, China being on

board with an agreement that focuses on economic espionage seems ingenuine and

contradictory with its fundamental belief and values, making verifiable compliance

unlikely.

Espionage is a normal activity from virtually every country; however, the

alarming rate of Chinese cyber espionage targeting corporate and government networks

has strained relations and reinforced the suspicion that China is willing to use duplicitous

measures to grow its economic and military power, thereby increasing its global

influence at the expense of the US and the West. According to Gary Brown and

Christopher Yung from the Diplomat, “The United States has been particularly troubled

with China engaging in espionage to benefit their domestic companies and state-owned

enterprises.”10 3

9
Reveron, Derek S. “Cyberspace and National Security: Threats, Opportunities and Power in a Virtual
World.” (Georgetown University Press: Washington D.C.), 2012.
10
Gary Brown and Christopher Yung, How Washington Approaches Cyberspace and its 2015.
Cybersecurity Agreement with China. The Diplomat, 19 Jan 2017. Last accessed on 15 Apr 2017.
[Link]
to-cyberspace/.
 7

The significant trade deficit between US and China provides further suspicion that

China is positioning itself through cyber espionage to surpass the US economy. US

exports to China are estimated at $55.8 billion while China’s export to US at 229.2

billion.11 China’s indigenous policy where foreign companies are expected to disclose

their trade secrets in exchange for market access deepened the chasm. This strategy

reportedly benefits the domestic companies who develop products based on the secrets

and squeeze out the foreign firms. In addition, Chinese hackers become familiar with the

technology and leverage that knowledge to deploy effective hacking methodologies

against the US, western companies, and government. While the bulk of the exports

represent manufactured goods, a significant segment of the US population relates job loss

to China’s underhanded economic policies and cyber espionage.

Both countries continue to accuse each other, as cyber espionage continues

unabated although seemingly at a lower scale, even though the agreement has been hailed

as a landmark event due to China’s acknowledgement of malicious cyber activities from

its territory. Chinese hackers have penetrated defense networks stealing information on

numerous weapons programs, including the Patriot missile system, F-35 Joint Strike

Fighter. They have also expanded their attention on technology companies, financial

institutions, think tanks and others to the extent General Keith Alexander from US Cyber

Command claimed that the espionage on American firms and government systems

represent the “greatest transfer of wealth in history”. He estimated the loss at $250 billion

in stolen information and $114 billion in related expenses.12 China (as does the US)

11
Daniel M. Slane et al, 2010 Report to Congress of the US-China Economic and Security Review
Commission, (Washington DC: US Government Printing Office, 2010), 18.
12
Segal, Adam. “The Hacked World Order.” (Public Affairs: New York), 2016.
 8

seems to rely on the attribution challenge to deny any involvement in cyber espionage

despite the 2013 Mandiant report identifying PLA 61398 cyber unit actively engaged in

cyber attacks.13 This issue will remain a point of contention, as the US and China do not

share the delineation between national security interests and the economy.

The Snowden leaks compounded the confusion over the distinction between

national security and economy, as they reveal the US engaging in economic espionage of

numerous financial institutions, including Microsoft, the International Monetary Fund,

Google, Petrobras, and others. The US justified these operations as routine by creating a

linkage to national security. Director of National Intelligence, James Clapper, stated,

“…The US does not use foreign intelligence capabilities to steal the trade secrets of

foreign companies… on behalf of US companies to enhance their international

competitiveness or increase their bottom line.”14 Conversely, stealing to benefit Chinese

firms help the nation, as the firms serve to modernize the country and build economic

power. The subtle distinction from the US perspective may be problematic for other

states as intellectual property related to critical industries may prove valuable to national

security. For instance, China may find energy production vital to increasing national

energy independence, which translates to economic growth, political stability and regime

survival. 4

The US leveraged its economic significance to China by emphasizing the

distinction when in 2014, it indicted five Chinese PLA officers for economic espionage to

13
Mandiant, APT1: Exposing One of China’s Cyber Espionage Units. 2013. Last accessed on 15 Apr
2017. [Link]
14
Gary Brown and Christopher Yung, How Washington Approaches Cyberspace and its 2015
Cybersecurity Agreement with China. The Diplomat, 19 Jan 2017. Last accessed on 15 Apr 2017.
[Link]
to-cyberspace/.
 9

benefit the Chinese domestic firms. Despite objections and China’s abrupt disengagement

from the bilateral cyber working group, in 2015, China was compelled to sign the Cyber

Security Agreement when the US threatened sanctions due to the severity and frequency

of the Chinese malicious cyber intrusions. China’s willingness to acknowledge the cyber

attacks from its territory, not necessarily from its government, reflects the conflation

between China’s national security interests and economic development. It also indicates

China’s pragmatism given the importance of the US on the international stage. The

agreement is largely viewed as an important step towards a more enforceable and

substantive agreement. According to Rand, a US think tank, “The Chinese see

cybersecurity talks as a way to appease U.S. irritation more than to achieve anything

specific. In contrast, the United States places a much higher emphasis on using such

dialogues to resolve cybersecurity issues.”15

China’s discomfort with the US hegemony in cyberspace may impede genuine

cooperation. For instance, both countries appreciate the requirement not to attack critical

infrastructure, but diverge on conducting cyber espionage on such target due to the

attribution problem. Rand contends, “China believes it cannot catch the cheating by the

United States and is apprehensive of any agreement that would put them at a 5

corresponding disadvantage.”16 Such fundamental distrust proves challenging to any

enforceable framework that holds both countries accountable. China seems hesitant about

US intention, as the dichotomy between communism (although China is more of a state-

controlled market economy than it is communism), and capitalism (freedom, human

15
Harold, Scott W; Libicki, Martin C; Cevallos, Astrid S. “Getting to Yes With China in Cyberspace.”
Rand Corporation. Last accessed on 10 Apr 2017.
[Link]
16
Ibid., 12.
 10

rights, etc.) seem to subconsciously control the undertone of any narrative. Furthermore,

China views the pivot to Asia as worse than containment and accuses the US of inciting

its neighbours to assume a posture of confrontation with China. Therefore, China is

protective of its internal affairs and frames the cyber conflicts in terms of sovereignty and

national security interests.

Second, US and China approach cyberspace differently in terms of information

control and network security. As mentioned, the CCP views US democratic values as

antithetical to its fundamental values and therefore a threat to the regime. Dr. John

Lindsay from University of Toronto indicated that China views information security as

information control, which explains the realignment to the bureau that is in charge of

propaganda.17 The US and west refers to information security as network or cyber

security in terms of a robust, secure, and reliable information system. The difference in

terminology is worth noting, as an open and secure network is a non-starter during any

discussions with China.

The free flow of information in cyberspace may be constraining for the US in

terms of abiding by the agreement to address cyber-enabled theft of intellectual property.

Conversely, control of the internet infrastructure is already embedded in the

Chinese 6government system, facilitating compliance with the agreement. China’s

strength may also be a weakness, as denial of malicious activities emanating from its

borders may be limited. Dr. Lindsay explained that malicious cyber activities may be

facilitated by China’s tight governance of the infrastructure, as it focuses on specific sets

of criteria that are politically subversive, not necessarily criminal.18 As a result, hackers

17
Australian National University, The role of Cyber Security in China Foreign Policy. 23 Feb 2016. Last
accessed on 15 Apr 2017. [Link]
 11

tend to function with impunity as they prey on the domestic and international community.

Despite promoting universal values, many nations are cautious about the US pre-

eminence in the cyber ecosystem. General Michael Hayden, former Director of National

Security Agency, stated, “When speaking of the (cyber) threat, citizens of the first-world

nations were recently asked whom they fear most in cyberspace and the most popular

answer was not China or India or France or Israel. It was the United States.”19 China’s

ambivalence to comply with an agreement regulating the behavior in a domain that was

created and mastered by the opposing nation is rational. Thus, a cooperation framework

must account for this rationale and establish a governance system that both sides find

acceptable.
7
Unlike the US, China regards privacy and communication rights as destabilizing

to the order and structure established by the CCP. Beijing promotes cyber sovereignty to

emphasize their right to establish their norms in their own country. President Xi Jinping

supports non-interference in China’s ability to monitor and restrict internet access, and

transforming the global internet governance structure into a multi-lateral, democratic and

transparent system; the motive seems pointed at diminishing the US role.20 China seems

constrained by the open internet where democratic ideals may usurp the CCP’s authority

and inspire dissidence, leading the CCP to install the control mechanisms such as the

Great Firewall and the Great Cannon as the intermediary between the open Internet

and China. The monitoring and blocking tools provide China situational awareness for

18
Australian National University, The role of Cyber Security in China Foreign Policy. 23 Feb 2016. Last
accessed on 15 Apr 2017. [Link]
19
Panayotis Yannakogeorgos and Adam Lowther, Conflict and Cooperation in Cyberspace: The
challenge to National Security. (Taylor & Francis Group: Florida), 2014.
20
Gary Brown and Christopher Yung, China’s Cyber Activities (Including Attacks) Closely Mirror How
It Conceives of Cyberspace. 19 Jan 2017. Last accessed on 15 Apr 2017.
[Link]
cyberspace-and-cybersecurity/.
 12

effective administration and management of information within China.

While the philosophy varies significantly, the US is intrigued with the notion of a

cyber common operating picture to enable commanders to plan proactively and react

effectively to fluid and complex cyber intrusions. General Alexander noted, “We must

first understand our networks and build an effective cyber situation awareness in real

time through a common, sharable operating picture.”21 The driver is to project power,

fight, and defend effectively in the cyber domain. While the thrust is not about

information control to the same degree as the Chinese, the concept is similar, as the

management of such a complex domain requires vigilance, planning, and preparation.

Experts from the U.S. Army Research Laboratory stated, “cyber attacks are adversarial

digital ways of determining who gets power, wealth, and resources.”22 Perhaps, this

requirement is a common ground from which dialogue with the Chinese can be based.

The perception of cyber threats differs between both countries, which set the stage

for more suspicion of each other’s intent. The US believes that cyber powers such as

Russia and China represent the threat to US critical infrastructure, economic, military and

political apparatus. Anthony and Justin Cordesman from CSIS indicated, “Most 8

adversaries will recognize the information advantage and military superiority of the

US…they will try to circumvent or minimize US strengths and exploit weaknesses.”23

Conversely, China insists that the US is hypocritical, as it maneuvers the narrative to its

21
Alexander Kott, Cliff Wang, and Robert F. Erbacher, “Cyber Defense and Situational Awareness.”
(Springer: Switzerland), 2014. 21.
22
Ibid., 97.
23
Anthony H. and Justin [Link], “Cyber-threats, Information Warfare, and Critical Infrastructure
Protection: Defending the U.S. Homeland.” (CSIS: Washington D.C.), 2002.
 13

advantage by pushing for cybersecurity cooperation while developing and deploying

technologies that threaten the political stability in Russia and China. The suspicion is

warranted given the history of US involvement in Chinese internal affairs; however, the

economic prowess of both nations and the interdependency of their economy demand

mutually-beneficial approaches based on common ground. Suspicion exacerbates the

chasm and will likely destabilize the two economic powerhouses with global

implications.
9
US and China share a history of launching accusations at each other, especially

when substantial evidence warrants the naming and shaming method. NBC News

reported more than 600 American companies were victims of cyber espionage over a

five-year period with clusters in the industrial centers.24 Furthermore, Admiral Mike

Rogers, the current Commander of US Cyber Command revealed that despite China’s

pledge to halt cyber attacks on the US, China continues to target and exploit US

government, defense industry and private networks designed to exfiltrate valuable

information and map critical computer networks for future attack in a crisis.25 Admiral

Rogers’ testimony is consistent with that of former Director of National Intelligence,

James Clapper. No definitive evidence seems to link the CCP to the cyber attacks from its

territory; however, the CCP is likely connected to a significant portion of the attacks

given the motive, the focus of the attacks on the strategically and economically important

industries identified by the CCP for growth, the linguistic features in the code analysis,

24
Robert Windrem, Exclusive: Secret NSA Map Shows China Cyber Attack on US Targets. NBC News,
13 Jul 2015. Last accessed on 15 Apr 2017. [Link]
map-shows-china-cyber-attacks-us-targets-n401211.
25
Bill Gertz, China Continuing Cyber Attacks on US networks. The Washington Free Beacon, 18 Mar
2016. Last accessed on 15 Apr 2017. [Link]
attacks-on-u-s-networks/.
 14

other technical indicators, and investigations discovering the PLA unit behind the attack.

China, on the other hand, also claims that its computer networks are often under attack

from the US, prompting China to expand resources to constantly protect its networks.

China believes cyber sovereignty is the panacea; however, the implication from a

Chinese perspective remains unclear in terms of the meaning of sovereignty and the

enforceability measures. Does sovereignty entail kinetic attack, economic sanctions and

other coercive measures on the offending country? How would one combat the attribution

issue to prevent plausible deniability? What constitutes an act of war? A host of other

questions seem to indicate China uses cyber sovereignty as a deflection tool to evade

responsibility and accountability for cyber espionage and human rights. As a sovereign

nation that promotes a peaceful and responsible rise, and pledges to contribute to

international order and security as a member of the United Nations Security Council,

China’s expectation of non-interference in its internal affairs seems practical. Qin

Yaqing, Executive Vice President at China Foreign Affairs University and member of the

Central Committee of the CCP revealed that China believes in pragmatic diplomacy and

endeavors to cooperate based on commonalities while managing the key

differences.26 The key is to prevent the areas of disagreement from interfering with a
10
collaborative and cooperative framework.

Professor Lindsay offered the following factors as impediments to China in the

cybersecurity realm: espionage does not equate to productivity, aggressive doctrine does

not lend itself to capability, and lack of governing institution.27 China has collected

exabytes of information, but lacks the institutional framework to convert the data into

26
Qin Yaqing, Managing Sino-US Relations: The Chinese Way. Princeton University, 2008. Last
accessed on 16 Apr 2017. [Link]
 15

intelligence and productivity. China has driven informatization from the top down, which

tends to stifle creativity and promote linear thinking. It is thought next to impossible for

China to replicate Silicon Valley given the lack of legal systems, venture capital,

recreational opportunities, and institution that foster creativity free of government

interference.

The technological revolution in the US started from the bottom up by free-spirited

hippies who abhorred government oversight. Silicon Valley is difficult to replicate

anywhere let alone in a society strictly controlled by a government that pushes

informatization from the top down. Furthermore, China lacks the collaborative

organizational structure that can effectively collect and translate the data into intelligence,

and process and distribute it to the appropriate people who can integrate it into the

economy. That is a challenging and complex endeavor that requires contextual data,

innovation, and creativity. In essence, data without context can be useless, as the golden

nugget can be a needle in a haystack. This notion, by no means, obviates the need to

secure cyberspace and address cybersecurity with China. Despite its shortcomings, China

seems to have benefitted from the cyber espionage. Case in point, Microsoft and Cisco

were required to disclose their codes to the CCP and in no time domestic companies such

as Huawei had deployed routers with similar technology to the international market,
11
introducing significant competition to US firms.

China has developed aggressive doctrines that concentrate asymmetric means to

reach parity with a stronger military power. Unrestricted warfare is one such book written

by two PLA officers who advocate cyber attacks on websites and financial institutions,

27
John Lindsay, The Role of Cybersecurity in Chinese Foreign Policy. Australian National University,
2016. Last accessed on 16 Apr 2017. [Link]
 16

terrorism, urban warfare, media manipulation, and other tactics to compensate for

China’s military inferiority. “The first rule of unrestricted warfare is that there are no

rules with nothing forbidden. Strong countries make the rules while rising ones break

them and exploit loopholes.”28 It contends the US is flexible with the rules depending on

its purpose, but it cannot break them due to legitimacy on the world stage. Given the

modernization of the PLA concentrates on asymmetric capabilities, targeting the reliance

of the US military on technology, the doctrine seemingly reflects the principles in the

book. However, China lacks the experience and institutions to fight a formidable foe

effectively in the cyber domain, especially a foe who invented the domain and has proven

capable of conducting combat operations in that ecosystem.

12
As mentioned before, China views informatization as the requirement to

modernize the society and control the information to sanitize the Internet. As a result, the

cyber vocabulary is different from the US and West, which can cause unnecessary

tension. The fact that the Cyberspace Administration of China answers to the Central

Leading Group for Internet Security and Informatization in charge of propaganda reflects

the CCP’s priority to control the narrative as opposed to securing the network (in a West

sense) within China. China has tightened its grip on internet control to prevent dissidents

from using sites such as Github, reportedly funded by the US government, that provide

instructions on how to bypass the great firewall in China. According to the Economist,

the CCP hires 100,000 (other sources note 300,000 to 500,000) people to police China’s

Internet around the clock based on certain criteria such as no criticism of senior

leadership, no organizing to threaten the government, no search of democracy or human

28
Qiao Liang and Wang Xiangsui, Unrestricted Warfare. Feb 1999. Last accessed on 16 Apr 2017.
[Link]
 17

rights, no pornography, and other prohibited actions.29 China does not tolerate dissidents

or freedom of speech in its territory, but it promotes pragmatism and universal rights on

the International stage. This paradox cements misgivings about its true intent despite

signing the agreement.

Finally, scrutiny of this agreement asserts that the effectiveness of this agreement

is debatable, as implications of the divergent views in cyberspace can have a cascading

effect on other aspects of the relationship. RAND report on the agreement sheds light on

the rationale behind China’s ambivalence based on interviews of officials in China and

several experts, “China’s own approach to deterrence tends to assume…the most

powerful actor or actors in the system will attempt to cover up the differences between its

interests and those of other weaker actors.”30 China expects the US to use normative

language that promotes cooperation and legitimacy as a pretext to subdue the weaker

actors.
13
China views the norm in cyberspace as a zero-sum game and tends to view the

implication as benefits and losses based on power relationships as opposed to right and

wrong. China consistently voice opposition to the norms and laws that govern the

international system, as they do not reflect China’s growing power and status. China

29
E.H., How does China Censor the Internet. The Economist, 22 Apr 2013. Last accessed on 16 Apr 2017.
[Link]
internet.
30
Harold, Scott W; Libicki, Martin C; Cevallos, Astrid S. “Getting to Yes With China in Cyberspace.”
Rand Corporation. Last accessed on 10 Apr 2017.
[Link]
31
China Daily, International Strategy of Cooperation on Cyberspace. 2 Mar 2017. Last accessed on 16 Apr
2017. [Link]
32
Harold, Scott W; Libicki, Martin C; Cevallos, Astrid S. “Getting to Yes With China in Cyberspace.”
Rand Corporation. Last accessed on 10 Apr 2017.
[Link]
 18

considers the norms reflective of the interests of the hegemonic powers as opposed to the

international community. In short, China wants a seat at the table as indicated by its new

International Strategy of Cooperation in Cyberspace where President Jinping advocates

for a multi-lateral governance. The Strategy states, “The United Nations, as an important

channel, should play a leading role in coordinating the positions of various parties and

build international consensus.”31 The strategy also calls for an open, secure, cooperative,

and orderly cyberspace. The word ‘orderly’ supports China’s and Russia’s cyber

sovereignty, which aims to relieve pressure from western countries about human rights

and coercive control within their territory. China seems to be using normative language

as well to reinforce and legitimize its current practices.

China is concerned about the fact that the US government is immune to sanctions,

giving China no leverage in any agreements. China’s assertion is consistent with the

obsession to emerge from the ‘century of humiliation’ to instill national pride and avert

interference from foreign powers that cause China to collapse into civil war. Thus, any

agreement with the Chinese must account for their values and present them in a powerful

and positive light on the international stage. According to Brookings Institution, “There

are 4 billion people behind the 50 billion devices that connect to the Internet. They send

more than 90 trillion emails a year and conduct more than two trillion

transactions.”32 Cyberspace is valuable, but the optics must avert Chinese acquiescence to

a stronger power.

It stands to reason that the agreement has no substance. In 2014, The US has

shown good faith by distancing itself from the Internet Corporation for Assigned Names

and Numbers, which is a non-profit organization that coordinates the maintenance and
 19

procedures of the databases of Internet names and numbers world-wide. China is clearly

not satisfied as evidenced by its proposal for a multi-lateral governance structure. To be

fair, 10 of the 13 root servers that enable the Internet to function reside in the US, which

likely raised suspicion that the US continues to dominate the cyber domain.

Cooperative Framework

The security dilemma in the cyber domain from a realist perspective can be

destabilizing, but pragmatism will ultimately prevail as both countries will tolerate

malicious events up to a significant threshold due to the economic impact. President

Obama reiterates that US foreign policy is based on pragmatism as opposed to realism or

idealism given the disorder in the world.33 Recently US President Trump decided not to

label China as a currency manipulator, despite obvious evidence, to enlist its cooperation

on dealing with North Korea. The complex realities of geopolitics demand cooperation in

the quest for influence, even if it means the agreement is more symbolic than substantive.
14
A cooperative framework should leverage the Tallinn Manual 2.0, which

establishes international regulatory cyberspace norms similar to the law of armed conflict

from the Geneva Conventions. Brookings Institution asserted that US-China cooperation

on cyber would “bolster US-China bilateral relations, serve as a crucial building block for

multi-lateral efforts in the cyber arena, and also aid on broader… engagement on issues

of importance such as global finance and the environment.”34 The report estimates 55,000

new malwares each day and 200,000 computers are turned into zombies, which means

33
Barack H. Obama, Obama on American Politics and Economy: The Extended Voxx Conversation. 9 Feb
2015. Last accessed on 16 Apr 2017. [Link]
34
Kenneth Lieberthal and Peter W. Singer, Cybersecurity and US-China Relations. Feb 2012. Last
accessed on 15 Apr 2017. [Link]
content/uploads/2016/06/0223_cybersecurity_china_us_lieberthal_singer_pdf_english.pdf
 20

the cyberspace threat is pervasive and dynamic. The urgency and amorphous nature of

cyber requires cooperation to prevent miscalculation and address the criminal actions.

Both countries must accept their right to develop and deploy cyber capabilities to

support military espionage and to respect their political differences in terms of human

rights and freedom of expression. Brookings proposed the following cooperative

measures: expand engagement to a large scale, focus on common areas of interest such as

crime, address the key principles (even in the intractable areas) to enhance understanding,

hold open and honest discussion of the existing norms in the global institution to identify

areas of agreement, account for the red lines, and clarify the attribution issue. The

framework cannot be rushed, as it lays the foundation for mutual trust.

Given the innovative spirit of the Americans and the West encouraged by an open

and democratic system, a normalized and cooperative relationship with China is more

likely to influence China than an antagonistic narrative that seems to threaten its

foundation. Thus, the US must resume a frequent US-China cyber-working group that

comprises influential and knowledgeable delegates immersed into each other’s decision

calculus, culture and history to ensure transparency, and trust in developing norms that

can survive international scrutiny. Second, the US government must engage with Canada

and the corporations to develop a proactive and effective cyber defense of their critical

infrastructure. The idea is to significantly reduce vulnerabilities given the

interdependencies of the countries’ economies and harden the cyber battlespace to make

it more challenging for China and Russia’s offensive cyber capabilities. A perplexed

environment will likely induce Chinese cooperation and suppress nationalism. Otherwise,

China stands to gain more from covert cyber economic and military espionage than
 21

cooperation. Third, the US must include measurable enforcement and verification

measures that respect China’s sovereignty while discouraging and reducing cyber

violations from their territory. Finally, The US must retain some leverage such as

economic or diplomatic sanctions that persuade China to address cyber intrusions, given

the linkage between economic and political stability to regime survival.

Conclusion

The existing 2015 US-China Cyber Security Agreement merely represents

China’s acknowledgement of significant cyber security intrusions from its territory and

not necessarily the CCP being complicit in economic espionage. Scrutiny of the

agreement yields no substance as evidenced by the conflicting views of the relationship

between national security interests and the economy, the divergent approaches to

cyberspace, and the non-measurable and unverifiable measures of effectiveness. The

historical narratives, geopolitical interests, and ideological constraints underline China’s

pragmatic approach in terms of advocating a cyberspace governance structure that

weakens the US dominance in that sphere under the guise of a normative message based

on open and democratic structure that gives a voice to all countries. China also pushes for

cyber sovereignty to reduce the threat posed by the US democratic ideals such as freedom

of expression and universal human rights.

The pernicious impact of a destabilizing US-China relationship on the world

economy requires a cooperative framework that reduces mistrust and conflict. Cyber has

become weaponized to the extent it can cripple an economy, critical infrastructures, and

command and control systems where nations become entangled in a security dilemma
 22

that will likely induce escalation. US and China, among many other nations, are equipped

with potent offensive cyber capabilities that require a cooperative framework to ensure

mutual trust, acknowledge their right to espionage, accept the fundamental differences,

and plow ahead on areas of common interests on which norms can be based that

withstand international scrutiny.

The US must cooperate with other like-minded nations and western corporations

to develop a robust cyber defense of their critical infrastructure and create a non-

permissive environment for Chinese offensive cyber capabilities. The structure must

involve an interconnected cyber common operational picture that provides shared

situational awareness and a mechanism that fosters coordinated and proactive cyber

response. The idea is to dissuade China’s illicit cyber exploitation and flipped the

decision calculus where cooperation is advantageous. The narrative must drive

cooperation versus antagonism, so frequent bilateral cyber working groups with the

appropriate expertise is critical to developing a more comprehensive agreement.

 23

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