Strategic Trust-Building

Vice President David Firestein talked with Jan van der Made of Radio France Internationale about the institute's latest policy report, Threading the Needle: Proposals for U.S. and Chinese Actions on Arms Sales to Taiwan. Firestein, co-author of the report, states that the time is ripe for decision-makers to act, challenging the current status quo on this contentious issue in the U.S.-China bilateral relationship.

"The better status quo would look like a very modest and incremental adjustment in U.S. arms delivers to Taiwan," Firestein argues. "At the same time, the Chinese could also make a modest adjustment in their armaments posture vis-à-vis Taiwan." 

The authors of the report—Piin-Fen Kok, Director of EWI’s China, East Asia, and United States program, and David J. Firestein, Perot Fellow and Vice President for EWI’s Strategic Trust-Building Initiative and Track 2 Diplomacy—presented their findings and analysis to a gathering of Congressional staff and experts from various organizations and think tanks. 

Perot, Firestein, Kok, Andrew Nagorski and Michael Chertoff

EWI Chairman Ross Perot, Jr. and former Secretary of Homeland Security and EWI Board member Michael Chertoff hailed the report in their opening remarks. “I think what’s remarkable about this report is it does come up with a creative way that each of the parties has recognized has value, that will enable us perhaps to get to the next level and honor all the commitments that the various parties have, but in a way that diffuses tension and allows us to move forward in a way that’s peaceful,” said Chertoff.

Perot expressed hope that the ideas put forward in the report will translate into action, noting that EWI’s history shows that “we can take these projects, take these strategies, work with the governments of the world, and hopefully bring it to a conclusion and make the world a little bit safer one step at a time.”

Read the full report here. 

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Return to EWI Now. 

The trip included meetings with representatives of the Chinese Ministry of Foreign Affairs and the Ministry of Defense, among other institutions. Gady also presented a paper on China-U.S. cooperation in cyberspace, providing a European perspective, at a two-day conference titled "China-U.S. Cooperation and Disagreement Management with a Vision of New Type of Relations" in Changchun, Jilin province in Northeastern China.  

To read the full article in Kommersant, click here. 

Photo: "Sunny city" (CC BY-NC-ND 2.0) by Alexander Kozlov

The United States is racing for the technological frontier in military and intelligence uses of cyberspace. It is ahead of all others, and has mobilized massive non-military assets and private contractors in that effort. This constellation of private sector opportunity and deliberate government policy has been aptly labeled in recent months and years by so many credible observers (in The Economist, The Financial Times and the MIT Technology Review) as the cyber industrial complex.

The United States is now in the unusual situation where the head of a spy agency (NSA) also runs a major military unified command (Cyber Command). This is probably an unprecedented alignment of Praetorian political power in any major democracy in modern political history. This allocation of such political weight to one military commander is of course for the United States to decide and is a legitimate course of action. But it has consequences. The Snowden case hints at some of the blow-back effects now visible in public. But there are others, less visible.

The NSA Prism program exists because it is technologically possible and there have been no effective restraints on its international targeting. This lack of restraint is especially important because the command and control of strategic nuclear weapons is a potential target both of cyber espionage and offensive cyber operations. The argument here is not to suggest a similarity between the weapons themselves, but to identify correctly the very close relationship between cyber operations and nuclear weapons planning. Thus the lack of restraint in cyber weapons might arguably affect (destabilize) pre-existing agreements that constrain nuclear weapons deployment and possible use.

The cyber superiority of the United States, while legal and understandable, is now a cause of strategic instability between nuclear armed powers. This is similar to the situation that persisted with nuclear weapons themselves until 1969 when the USSR first proposed an end of the race for the technological frontier of potential planetary devastation. After achieving initial capability, the U.S. nuclear missile build up was not a rational military response to each step increase in Soviet military capability. It was a race for the technological frontier—by both sides—with insufficient recognition of the consequences. This conclusion was borne out by a remarkable Top Secret study commissioned in 1974 by the U.S. Secretary of Defense, Dr. James Schlesinger. By the time it was completed and submitted in 1981, it assessed that the nuclear arms build-up by both sides was driven—not by a supposed tit for tat escalation in capability of deployed military systems—but rather by an unconstrained race for the technological limits of each side’s military potential and by its own military doctrinal preferences. The decisions of each side were not for the most part, according to this now declassified study, a direct response to particular systems that the other side was building.

In 1969, the USSR acted first to propose an end to the race for the technological frontier of nuclear weapons because it knew it was losing the contest and because it knew there was political sentiment in the United States and in its Allied countries that supported limitations on the unbridled nuclear fetish.

As we ponder the American cyber industrial complex of today, we see a similar constellation of opposition to its power emerging. This constellation includes not just the political rivals who see they are losing in cyberspace (China and Russia), but nervous allies who see themselves as the likely biggest victims of the American race for cyber superiority, and loyal American military commanders who can see the risks and dangers of that quest.

It is time for the United States to take stock of the collateral damage that its quest for cyber military power, including its understandable quest for intelligence superiority over the terrorist enemy, has caused amongst its allies. The loss has not yet been seen at the high political level among allies, in spite of several pro forma requests for information from countries such as Germany. The loss of U.S. credibility has happened more at the popular level. Around the world, once loyal supporters of the United States in its war on terrorism had a reasonable expectation to be treated as faithful allies. They had the expectation, perhaps naïve, that privacy was a value the Americans shared with them. They did not expect to be subject to such a crude distinction (“you are all non-Americans now”). They did not want to know that their entire personal lives in cyber space are now recoverable—should someone so decide—by the running of a bit of software in the NSA. After the Prism revelations, so many of these foreign citizens with an internationalist persuasion and solidarity for the United States now feel a little betrayed.

Yet, in the long run, the most influential voice to end the American quest for cyber military superiority may come from its own armed forces. There are military figures in the United States who have had responsibility for nuclear weapons command and control systems and who, in private, counsel caution. They advocate the need to abandon the quest for cyber dominance and pursue a strategy of “mutual security” in cyberspace—though that has yet to be defined. They cite military exercises where the Blue team gets little or no warning of Red team disruptive cyber attack on systems that might affect critical nuclear command and control or wider war mobilization functions. Strategic nuclear stability may be at risk because of uncertainty about innovations in cyber attack capability. This question is worth much more attention.

U.S. national security strategy in cyberspace needs to be brought under stronger civilian oversight and subject to more rigorous public scrutiny. The focus on Chinese cyber espionage has totally preempted proper debate about American cyber military power. Most in the United States Congress have lined up to condemn Snowden. That is understandable. But where are the critical voices looking at the bigger picture of strategic instability in cyberspace that existed before Snowden and has now been aggravated because of him? The Russian and Chinese rejections of reasonable U.S. demands for Snowden’s extradition may be every bit as reasonable given their anxiety about unconstrained American cyber superiority.

Greg Austin is EWI director of policy innovation. He wrote this article for the policy innovation blog. It also ran on China-US Focus. 

The High-Level Security Dialogue is an annual dialogue between current and former government and military officials, U.S. and Chinese academics and business leaders. The goal of the dialogue is to generate concrete recommendations to policymakers in both countries on building a common vision for the bilateral relationship; promoting mutual long-term trust and confidence; and fostering cooperation in challenging areas within the relationship.

The key discussions during the week focused on a wide range of geopolitical and military issues, including the forging of “a new type of relationship between major countries,” Taiwan, nuclear proliferation in North Korea and Iran, maritime disputes in the East and South China Seas, U.S.-China military confidence-building in the Asia-Pacific and cybersecurity.

To read more about the event, click here.  

Although cybersecurity has been a central issue in the U.S.-China bilateral relationship, President Xi still has not acknowledged the allegation that PLA military units have been involved in hacking American sites. What is your opinion of the Chinese response?

In general, the Chinese have not been all that transparent in terms of what the PLA does, so I am not surprised by this lack of acknowledgement in terms of PLA involvement in the hacking of U.S. sites. It’s no secret that the PLA is enhancing its cyber-warfare capabilities, but if you look at the Mandiant Report, it states that PLA involvement in hacking goes beyond the military realm and extends into hacking commercial entities and other private organizations. But if the Chinese did acknowledge that the PLA’s hacking activities are state-sponsored actions, they would be shooting themselves in the foot.

Thus far, the more fundamental problem—which is creating a great deal of frustration for the U.S. and other countries—is that China, more broadly, has been unwilling to acknowledge any involvement in any of these hacking activities and cyber intrusions beyond saying that China is a victim. But according to former National Security Advisor Tom Donilon’s press conference after the summit between Obama and Xi, he did mention that the Chinese have at least acknowledged, in private, that it is a concern. This is a good start for fostering progress in the dialogue on cyber issues between the two countries.

How does China see the U.S. effort to “rebalance” to Asia?

China has been very suspicious about the U.S. rebalancing to Asia, maintaining that it is primarily a way to contain China, particularly in the region. If you look at Defense Secretary Chuck Hagel’s speech in Singapore, you see that the U.S. is trying to allay those fears. But then you have a prominent military academic saying, “we don’t believe you,” so it is clear that suspicions run very deep.

China is currently advocating a new type of relationship between major powers, and looking at the Asia-Pacific region, this is where the U.S. and China could potentially collide. I think China is trying to avoid the kind of conflict and confrontation in line with a Cold War model akin to the American and Soviet experience. Looking at State Councilor Yang Jiechi’s press briefing that is titled “Transpacific Cooperation,” you can see how China is trying to frame this issue.

There are some positive things that we can glean from the presidential summit in terms of outcomes. One, the Chinese asked for more information on the Trans-Pacific Partnership (TPP), which is something they view as part of the overall U.S. containment strategy in the region. This is a good sign; both sides are looking at this in the spirit of being more transparent about this whole process. Another good step is that China has agreed to participate in the 2014 Rim of the Pacific (RIMPAC) exercises, which is another way for both countries and other countries in the region to reduce tensions, build military confidence, and reduce the potential for miscalculation. I think that both sides are trying to find a way to work directly with each other because at the end of the day, what happens between the U.S. and China affects not just them but also the region as a whole.

Will the slowing growth of the Chinese economy affect U.S.-China economic cooperation—and, if so, how?

It will and it has. If you look at the cyber issue, there is an argument that the key motivating factor for the Chinese allegedly hacking into U.S. systems is that their economy is slowing and that they are trying to find all sorts of ways to jumpstart it, such as trying to gain an advantage in the technological realm. This definitely impacts U.S.-China economic cooperation because it increases the cost of U.S. companies doing business in China. It also affects the level of trust between these top two economies, creating a barrier in terms of effective economic cooperation. Finally, it affects China’s credibility as a trade and investment partner.

Nonetheless, through processes like the U.S.-China Strategic and Economic Dialogue (S&ED), the two countries should find ways to promote economic cooperation that would help to meet their respective problems and challenges. This is where opportunities for economic cooperation exist. For example, both countries could try to make more headway on the Bilateral Investment Treaty.

Overall, how do you perceive the U.S.-China bilateral relationship under China’s new leadership?

I think that there is going to be continuity. China’s new leadership will be very preoccupied with domestic challenges, including slowed economic growth and struggles to reach economic targets, all of which have an impact on domestic stability. I don’t believe China is going to try to rock the boat, except in some areas where a supposed wave of nationalistic sentiment could be advantageous. This is where the leadership is going to be very careful in how it manages these situations.

In terms of the U.S.-China bilateral relationship, Xi has advocated a new type of relationship between major powers, and the Chinese are really trying to push this notion forward. I think there is a certain level of sincerity on the part of the Chinese leadership and also on the part of the Obama administration in trying and foster cooperation rather than conflict. Xi has become very comfortable in his leadership role; he projects a very statesman-like aura. China will certainly be more assertive and confident now that they know they are being viewed as a major rising power. That might translate into certain actions on issues such as maritime disputes and territorial disputes, so this is something that has to be well-managed. Furthermore, Yang Jiechi’s press briefing mentions that both sides are talking about common interests without avoiding differences. Having the courage and the ability to address those differences is also very important.

Any final thoughts on U.S.-China relations in general?

Some commentators tend to focus on the intractability of the cyber relationship and how that will continue, regardless of the number of summits between the two presidents. Nevertheless, there are a couple of positive takeaways from the recent summit. First, the primary goal was for the two presidents—at a relatively early stage in their terms—to establish face-to-face contact and develop personal chemistry and a relationship. Otherwise, Obama and Xi would have first met on the sidelines of the G-20 summit, in September, which would have been too long a wait. Spending eight hours together in a largely informal and seemingly unscripted format displays a different side of China’s leadership relative to what we have seen in the past. This bodes well. You need that sort of relationship to be able to talk about sensitive issues when the going gets tough.

Second, there has been progress on some substantive issues. For example, the two sides are in greater convergence on how to address the nuclear issue in North Korea. They came to an agreement on common objectives, focusing on what they can both do together and on their own to address the North Korea issue. On climate change, the two countries signed an agreement to curb hydrofluorocarbons (HFCs), which is a positive sign. This comes on the heels of an announcement that a working group has been set up to deal with climate change.

Even if we talk about cybersecurity—an issue that will not be resolved anytime soon—the fact of the matter is that cybersecurity is now a presidential issue. In his second State of the Union address, Obama speaks about cyber for the first time. Now he has raised it directly with Xi, advancing the issue in the bilateral agenda. As uncomfortable as the elevation of this topic may make the Chinese, their top leadership will have no choice but to address this issue more seriously going forward.

On June 7-8, President Obama will meet with his Chinese counterpart Xi Jinping at a desert retreat in southern California. In what is touted as a “shirt-sleeves” summit, the informal meeting will dispense with the pomp and circumstance usually reserved for a state visit in favor of relaxed, less scripted discussions. The summit will be Xi’s first visit to the U.S. since assuming the triumvirate of posts at the apogee of China’s leadership: general-secretary of the Communist Party, chairman of the Central Military Commission, and head of state.

By design, the visit will lack a rigid agenda. However, there are several areas of common interest that the two presidents should explore during the visit. First and foremost, Beijing appears to be more inclined to engage in meaningful discussions on the denuclearization of the Korean Peninsula. China recently ratcheted up pressure on North Korea and increasingly acknowledges the harm that North Korea’s nuclear and missile programs present for China’s strategic interests. China has also expressed an interest in participation in negotiations on the Trans-Pacific Partnership (TPP), a free trade agreement that many in China previously felt was designed to exclude Beijing.

A more contentious issue that Obama will likely bring up is that of cybersecurity and the theft of intellectual property. Last month, the U.S. Defense Department released a report that accused Chinese hackers of accessing data from over two dozen weapons systems. The report comes on the heels of an earlier report by a U.S. security firm that exposed a specialized unit within the People’s Liberation Army that had penetrated the networks of over a hundred companies.

President Xi, on the other hand, will undoubtedly focus on the U.S. rebalancing efforts in Asia and the maritime disputes in the South and East China Seas. Competing claims between China and at least six other countries in the region over scattered islands and their resources have created an ominous flashpoint. Although the U.S. has no territorial claims in the region, Beijing likens U.S. defense commitments as a threatening containment strategy directed against China.

Given the informality of the visit, few expect the discussions to yield a joint statement or other major policy announcement. However, both the Obama and Xi administrations view the summit as an opportunity for the two leaders to develop a personal rapport and gain a better understanding of each other’s positions and intentions. The relaxed setting will allow Presidents Obama and Xi to move beyond scripted talking points and exchange views on the difficult strategic issues that challenge the bilateral relationship.

Though it would be imprudent to expect Obama and Xi to become the best of friends, the two leaders would be wise to utilize the visit to assuage some of the doubts and ambiguities that the other may have. President Obama should explain America’s strategy and goals within the context of the Asia-Pacific rebalance. Likewise, President Xi must flesh out the “new-type great-power relationship” that his administration calls for between the U.S. and China. During two days of discussions without suits and ties, Obama and Xi will have the opportunity to accomplish just that.

Could you provide the background on Sino-U.S. diplomacy on cybersecurity in recent years?

U.S.-China tensions over cybersecurity have been rising for many years now, so this isn’t really a new issue. The U.S. has, for years, accused China of probing and hacking systems—whether it’s emails or networks—of various U.S. entities (e.g., government agencies, commercial businesses and various non-commercial entities). In terms of commercial interests, this is one of the biggest points of contention for U.S. businesses. The main allegation is that Chinese entities have used cyber means to steal proprietary information, trade secrets and intellectual property from U.S. companies. In 2011, the U.S. and China added cybersecurity to their bilateral Track 1 agenda, as part of the Strategic Security Dialogue, but after two years, those talks didn’t seem to result in much progress.

On the military side, the Chinese military is also building up its asymmetric capabilities (including cyber) under the broader rubric of “informationization” of warfare. There is a good amount of concern on the part of the United States and other countries, especially in Asia, about China’s military, because of a lack of transparency from the People’s Liberation Army (PLA) about its strategic capabilities and intentions. 

With regard to the various allegations of probing and hacking, the standard Chinese response has been: “Our cyber capabilities are not as developed as those of U.S. and other Western nations, and we are victims of such intrusions too.” Some Chinese officials and experts even claim that China is only a victim. Public opinion leaders, scholars and Chinese officials have posited that the U.S. is using the cyber issue, among many other issues, as an excuse to contain China’s rise.

Why have tensions become more significantly pronounced this spring?

The Obama administration is facing increasing pressure from its constituents and U.S. businesses about Chinese actions in the cyber realm, as well as the seeming lack of accountability on the Chinese side. This comes on the heels of various media reports, from earlier this year, about widespread hacking—apparently from Chinese sources targeting media companies, research organizations, and other U.S. entities. 

For example, a New York Times reporter who broke a story about Wen Jiabao’s family’s fortune had his email hacked, as did other Times reporters. Media organizations and some NGOs had their systems hacked as well, so it’s reached an apex. In his most recent State of the Union address, President Obama indicated that the U.S. would not stand for “enemies” attacking U.S. critical infrastructure, as well as foreign countries stealing U.S. commercial secrets. 

Around the same time, Obama signed an Executive Order that was meant to boost the defenses of U.S. critical infrastructure. While he did not single out China by name, if you’ve read the news over recent months, it would not be stretch to infer that much of his recent words and actions were  aimed at China. Again, it reflects a great sense of frustration on the part of the Obama administration. Then, there was the Mandiant report, which linked a lot of the Chinese hacking actions to a PLA unit. This is where it gets really tricky and very controversial; this would mean it’s state-sanctioned.  

Another sign that the U.S. government’s patience has really run out is that high-level officials such as National Security Advisor Tom Donilon and Under Secretary of State Robert Hormats have publicly called out China and urged them to work on cybersecurity issues. 

How do you see these disputes affecting U.S.-China relations on important bilateral issues, such as trade and defense, going forward?  

This different and more outspoken approach by the U.S. has suddenly generated a great deal of discomfort in China. We hear several people saying similar things: “we are primarily victims,” “we should be thinking about constructive approaches and working on common interests,” “the U.S. is trying to contain China,” “the U.S. is more advanced than us,” etc.

On the trade issue, there’s growing concern about allegations of Chinese entities engaging in commercial cyber espionage—for example, by stealing proprietary information. That immediately affects the U.S.-China trade relationship because it erodes the trust between the two and it just makes it very difficult for American businesses to do business with China. As I noted in a recent op-ed, there will come a point when the costs to foreign investors of doing business in China will rise relative to the benefits. If China is serious about attracting foreign investors, then it really has to do something about this issue. 

On the defense side, China’s key concerns are about how the Pentagon will use this cyber issue for the military. Chinese concerns are that it might be used as an excuse or justification for the U.S. to beef up its cyber offensive capabilities. So, there’s this whole issue of the militarization—and weaponization—of cyberspace, where the U.S., at this point, has realized that perhaps the best defense is offense.

What kind of action is being taken on this issue at a global level? Are the U.S. and China going to forge ahead on their own or will the international community play a role?

Interestingly, China and Russia actually jointly submitted a draft code of conduct to the UN, on information security. And that’s another thing: the terminology is going to be tricky because the term cybersecurity doesn’t really exist in the Chinese language. It’s called 网络安全 (wangluo anquan), but if you actually translate it literally, wangluo means network. Because the Chinese language is very precise, you have separate terms for concepts like information security, Internet security and network security. There are also philosophical differences. The Chinese view cyberspace as a domain for promoting common development; they don’t want to touch the whole freedom/human rights aspect, whereas the U.S. is really big on that – so that’s another form of tension. 

The U.S. has urged China to engage in dialogue to establish acceptable norms of behavior in cyberspace. It has to be an international effort, because I really don’t see the U.S. and China teaming up to set rules of the road for the whole world. In June 2010, the Chinese government issued its first ever white paper on the Internet in China and laid out its key concerns and challenges. Under the section on international cooperation, China specifically proposed a UN-backed mechanism to govern actions of the international community in cyberspace. This indicates the desire of China and other developing countries for a greater say in developing international norms governing this domain. As it is, China hasn’t been very pleased about the fact that the few global institutions governing cyberspace, such as the Internet Corporation for Assigned Names and Numbers (ICANN), have been primarily U.S.- or Western-led initiatives.

Given the current course of the relationship, what could potentially ease these tensions? 

We’ve seen a lot of tension being played out publicly in the media. It’s tricky because the Chinese like to save face. And this whole “name and shame” thing doesn’t go well with the Chinese psyche because they are publicly embarrassed. It’s understandable that they are going to come up with the responses that they have come up with publicly, but if the rhetoric is ratcheted up through the media, that’s not going help. This would create an even more contentious public climate that will tie the hands of both countries, especially if it affects public opinion on both sides.

Discreet conversations need to continue. I’m glad to hear that the U.S. and Chinese governments have agreed to form a bilateral working group on cybersecurity, in a continued effort to try and address their mutual concerns at the Track 1 level. And I think one encouraging sign is that we’ve seen some reports recently that China has actually reached out to the U.S. and said “OK, let’s sit down and talk about this, we are willing to talk about this.”  The first step is that both sides need to acknowledge that there is a problem, especially on the Chinese side. It definitely is a perceptual and public diplomacy issue because everybody thinks that China is the bad guy.

You said that the Chinese want to save face. I would imagine that Washington understands that this element is important to the Chinese? 

It is precisely because the U.S. opted to save face for the Chinese that it has not come out, until recently, to say, “Look China, you’ve got to deal with this right now.” The U.S. has decided that enough is enough, and I think there was a lot of domestic pressure for the Obama administration to do something. The Chinese need to recognize that, first, this is a big public diplomacy problem for them. Second, and perhaps more importantly, look at the evidence—they can’t just say that this is a cyber threat, that they are just victims. They should at least acknowledge that they need to assess how much of that is true, and they are of course entitled to come to their own defense, but at least acknowledge the problem. Acknowledging the problem is a first step to actually finding a way to move forward.

China’s foreign minister Yang Jiechi effectively said, “We need to talk about this.” Was that their way of acknowledging that there is a problem?    

Yes, and I think the Chinese realized that for them, at least on the public diplomacy front, there is an issue. The way they’ve tried to address it is to present themselves as very engaged in bilateral, multilateral and international cooperation. I think they’ve been active enough. Even now, the Chinese and many Americans are saying that while they’re having these discreet conversations and trying to acknowledge the problem and address perceptual issues, there are also some very real, concrete concerns that affect both sides. For example, protecting critical infrastructure is something that’s going to affect every single country. It’s a mix of talking it out and addressing perceptions, and implementing concrete cooperation and confidence-building measures—I think that’s key.    

EastWest Direct is an ongoing series of interviews with EWI experts tied to breaking news stories.