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 China, which has long chafed at U.S. accusations that it carries out extensive surveillance on American government and commercial operations, may now have to make a decision on how to deal with the problem presented by the 29-year-old Edward Snowden, who has come out as the source of the leaks.
Cyber-security was one of the main topics during the informal summit this weekend between Chinese leader Xi Jinping and President Barack Obama at an estate in the California desert where they also sought to build a personal relationship.
But Snowden's presence in Hong Kong has already dragged China into what would have been a domestic issue for the United States.
"It's going to be seen by both sides as an unwelcome distraction," said Jean-Pierre Cabestan, a China politics expert at the Hong Kong Baptist University.
"This comes at a delicate time because of the Xi-Obama summit and the much bigger issues that both countries have to tackle and both governments and presidents have to discuss."
The Guardian newspaper reported Sunday that Snowden -- who says he worked at the National Security Agency and the Central Intelligence Agency
-- is the self-confessed source of leaks about a phone records monitoring program and an Internet scouring program. Snowden was working as a contractor in an NSA office in Hawaii until he left for Hong Kong on May 20, the Guardian reported.
Snowden's exact whereabouts on Monday were unclear.
U.S. officials see cybersecurity as probably the most pressing bilateral challenge, and Obama confronted Xi with specific evidence of intellectual property theft the U.S. says is coming from China. Xi said China was also a victim of cyber-attacks but did not publicly acknowledge his own country's alleged activities.
The leaks about Washington's own domestic surveillance program could end up hurting U.S. efforts to pressure China on cybersecurity, said Zhu Feng, an expert on China-U.S. relations at Peking University in Beijing.
"This case will hurt the U.S. bargaining power and dishonor its own credibility in charging China for cyberattacks. This is truth-telling," Zhu said. "China will likely tell the U.S.,
'don't be too high profile, and don't take the moral high ground.'"
In going to Hong Kong, Snowden went to a Chinese territory that enjoys relative autonomy and has what he called a commitment to free speech. Although Hong Kong has an extradition treaty with the U.S., the document has some exceptions, including for crimes deemed political.
However, any negotiations about his possible handover will involve Beijing, which is unlikely to want to jeopardize its relationship with Washington over someone it would consider of little political interest, some analysts said.
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 "He doesn't give any information that's of any particular use to China or that has a great deal of political utility," said David Zweig, an expert on Chinese politics at Hong Kong University of Science and Technology.
Zweig said both sides were likely to try to play down the affair, saying they would not want to waste the effort made over the weekend in California.
A highlight of the summit was a 50-minute stroll Obama and Xi took through the desert on Saturday minus their advisers
-- as well as their coats and ties, sitting on a California redwood bench that Obama gave Xi as a gift.
"The 'shirt sleeves' summit looked nice and they looked like they really were trying to kick back, put up their feet and talk about where they saw the countries going," Zweig said. "I can't imagine that after all this effort, they're going to let this one thing make a mess of it."
China's Foreign Ministry did not immediately respond to a request for comment on the issue.
Cabestan, the expert at Hong Kong Baptist University, suggested that perhaps Snowden's appearance in Hong Kong provided an opportunity for the United States and China to show that they can cooperate.
He said the two sides displayed a similar ability to work together in dealing with Chinese police chief Wang Lijun's flight to a U.S. consulate in February last year, which later sparked China's biggest political scandal. U.S. diplomats say they would not have been able to grant Wang asylum. After an overnight stay at the consulate, Wang was returned to Chinese state security.
"I think, likewise, this case is going to be treated in a discreet manner in order not to complicate a relationship which is already pretty complicated," Cabestan said.
[Associated
Press; By GILLIAN WONG]
Associated Press news
assistant Zhao Liang contributed to this report.
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