BEIJING (Reuters) - Cyber theft of trade
secrets by China is a threat to U.S. national security, U.S. Ambassador
to China Max Baucus said on Wednesday in the first major public address
of his tenure, warning that Washington would continue to pressure
Beijing.
Baucus' remarks come as commercial ties between the world's two
largest economies have been strained over cyber espionage charges
and revelations by former National Security Agency contractor Edward
Snowden of U.S. spying.
In May, Washington indicted five Chinese military officers for
hacking U.S. companies, prompting Beijing to suspend a Sino-U.S.
working group on cyber issues. It adamantly denies the charges.
Such behavior is criminal and runs counter to China's World Trade
Organization commitments, Baucus told business leaders at an
American Chamber of Commerce in China luncheon two weeks ahead of
annual high-level bilateral talks in Beijing.
"Cyber-enabled theft of trade secrets by state actors in China has
emerged as a major threat to our economic, and thus, national
security," Baucus said.
"We won't sit idly by when a crime is committed in the real world.
So why should we when it happens in cyber space?" he said. "We will
continue to use diplomatic and legal means to make clear that this
type of behavior must stop."
Tensions over cyber security rose in late 2012 after Washington
banned Chinese communications equipment makers Huawei Technologies
Co Ltd and ZTE Corp from building U.S. telecoms infrastructure.
Beijing responded by pressuring big state-owned firms to stop buying
U.S.-made hardware, emphasizing security risks following Snowden's
revelations, people in the industry said.
U.S. equipment and software providers such as IBM Corp and Cisco
Systems Inc have already seen their China sales drop after the
Snowden leaks.
INVESTMENT TREATY A PRIORITY
Like a string of ambassadors before him, Baucus, a former Montana
senator who arrived in Beijing in March, has made it his immediate
priority to boost the two countries' commercial and economic links.
He has stressed that stronger economic ties will help resolve a host
of thorny political and security challenges.
Baucus said a bilateral investment treaty would help China rebalance
its economy by opening up its service industries to more foreign
investment and that moving forward negotiations would be among his
top priorities as ambassador.
"I believe that the U.S.-China bilateral investment treaty ... today
could do for China's investment regime what the WTO accession did 15
years ago," Baucus said.
The investment treaty talks, which were launched in 2008, will
likely be at the center of the Strategic & Economic Dialogue that
will bring U.S. Secretary of State John Kerry and Treasury Secretary
Jacob Lew to Beijing in July.
Disputes over cyber security topped the agenda at last year's
meeting, initiated in 2008 to help manage a relationship that is
growing more complex with China's emergence as major economic and
military power. However, the annual talks have yielded few
substantive agreements.
Lew has said he will push China to speed up economic reforms and do
more to allow markets to determine the value of its yuan currency.
Washington's aim for the investment treaty is to loosen Beijing's
restrictions in key sectors from service industries to agriculture,
and ensure that foreign companies receive treatment equal to Chinese
private and state-owned enterprises.
China heavily restricts dozens of industries and U.S. firms have
long complained they are forced to meet unfair burdens such as
ownership caps and are pressured to transfer technology in exchange
for market access.
(Reporting by Michael Martina; Editing by Jeremy Laurence)
