Strategic Trust-Building

What do you feel is the motivation for this recent ratcheting up of the rhetoric and threats by the North Korean leadership?

In this situation, we have a young leader who feels he has to prove himself—in particular, to his generals. Kim Jong-un wants to solidify his claim to authority after his father’s death. He also has to prove himself internationally and I think he is being advised that this is the way to do it. You can look at similar actions that have occurred earlier – the 2006 and 2009 nuclear bomb tests, for example. They’ve also shut down Kaesong City before, as they did earlier this week. These things were done in the past to demonstrate the nation’s sovereignty; they also seem to think that this bolsters the country’s reputation in the world. I think the difference this time is that everything is happening much quicker. The pace is greater in terms of the amount of rhetoric and the threats to South Korea, the region and even to the embassies in Pyongyang.

Are these actions being taken seriously by the international community?

If you look at reports out of Pyongyang, the embassies have not fled, so it appears that foreign government officials have become immune to the rhetoric. On the other hand, I know the United States takes it very seriously. It’s one of those situations where the probability of an attack is pretty low, but the risk of large scale casualties and damage is dramatic. So you need to take actions appropriately, factoring in the tremendous risk if you get it wrong.

Based on your experiences in South Korea working with the U.S. military, can you offer an estimate of North Korea’s offensive capacity?

Their initial capacity is rather large: there are estimates of up to 7,000 artillery tubes that can reach Seoul, which could produce millions of casualties during an initial assault. On the other hand, the counterattack from the combined forces command would be devastating to North Korea. I believe that they know that. The only thing that they could do is to inflict a huge amount of casualties in Seoul and then the combined South Korean and U.S. forces would attack rather quickly and it would be pretty ugly for North Korea.

So that’s your assessment of the worst-case scenario?

The worst case scenario would be an an artillery and ground attack on Seoul. There would be immediate casualties in South Korea followed by a decisive coalition counter attack. Withan armyof over 600,000 soldiers, South Korea would provide the primary ground troops. The air and naval forces associated with that attack would be strongly supported by the United States.

Setting aside government propaganda, how do you think the average North Korean citizen views the current situation?

North Korea is a country that has been isolated for well over 50 years to an incredible degree. In 1953, the average North Korean and average South Korean were very much alike, even physically. Today the average North Korean is about three inches shorter and 40 pounds lighter than the average South Korean. There has been a policy of starvation for three generations. I think North Koreans support the government because that’s the only thing they know. If average North Koreans had a greater understanding of the outside world and could see the dramatically higher standard of living that South Koreans enjoy, I think they would be opposed to their government’s actions. But, of course, that’s why they’re kept isolated.

Given China’s role as North Korea’s only ally, do you think that it will work to lessen tensions? There were some recent comments from President Xi warning North Korea indirectly not to stir up trouble.

China stands to lose a huge amount, as does the entire region, if the situation spins out of control. The enormous economic progress we’ve seen would be jeopardized. Like President Xi, Russia’s President Putin and German Chancellor Merkel cautioned the North Koreans to avoid provocations. I think that, if needed, both Russia and China would take stronger actions to try to stop Pyongyang from doing something foolhardy.

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

Media commentary in India on the fifth BRICS Summit, held in South Africa on March 27th, has not been particularly positive. Attention has been drawn to the artificial character of this grouping originally thought up by Goldman Sachs, the conflicting interests of its constituents, the disparate nature of their political systems, the doubtful advantages to India of membership, and, now fears of Chinese domination of this ensemble because of its overwhelming economic and financial weight.

If the logic of this criticism were to be accepted, it will apply partially to the United Nations, the IMF and the World Bank too, where differences in the political systems, power equations and interests of countries are even more marked, with the influence of one country—the United States—being the most decisive. The G-20 also cannot be exempt from such criticism too. Yet India is a member of all these international organizations or groupings, without self-questioning.

NATURE

The perceived anti-West orientation of BRICS is troubling for some. True, the Russians pushed for its creation in order to forge a partnership between major non-western countries to promote multipolarity. Members like India—and this would apply to Brazil and South Africa as well—believe in a reform of the West-dominated international system in which their voice is not sufficiently heard. Groupings like BRICS can act as platforms for calls for change, without the three countries in question slipping into any futile anti-westernism.

We should not overuse the democracy argument to question our cohabitation with China and Russia in BRICS. If we are supposedly in bad company, then it is worth recalling that US financial and economic links with China, or those of major European democracies, are incomparably greater than ours. We should also be careful not to buy into the highly tendentious western criticism of Russian democracy for geopolitical reasons.

We are against policies of regime change, interference in the internal affairs of sovereign countries, politicization of human rights issues and doctrines of humanitarian intervention etc. India-Russia annual summit declarations show congruence of thinking on the principles that should govern international relations. With Brazil and South Africa too we have such consonance. The BRICS platform enables all of us to project our opposition to western efforts to create new, destabilizing norms.

In BRICS only India and China have sharp bilateral differences. Should we be in a grouping that provides space to China to expands its influence internationally, eventually at our expense? Russia too should have similar concerns theoretically, but it is working closely with China politically, economically and, once again, militarily, as the decision to sell its 24 SU-35 aircraft, the very same that lost out in competition for the supply of 126 aircraft to us, shows. This is discomforting for us as it devalues the relative importance of India-Russia relations to China’s advantage.

Despite this negative feature of BRICS for us, there are clear strategic advantages of membership. BRICS is an instrument of pressure for change in the international system. The eThekwani Declaration calls for new models and approaches as regards global governance. It notes the negative spillover effects of the monetary policy of the U.S., Europe and Japan which have led to increased volatility of capital flows, currencies and commodity prices, with negative growth effects in developing countries. It calls for prioritizing the G20 development agenda. It expresses concern at the slow pace of IMF reforms and demands that International Financial Institutions should reflect in their structures the growing weight of BRICS and other developing countries. The core principles and the developmental mandate of the Doha Round is stressed, besides asking that the next Director-General of the WTO should be a representative of a developing country. All this reflects India’s thinking and interests.

DECLARATION

The declaration calls for a comprehensive reform of the UN, including its Security Council, with Russia and China reiterating the importance they attach to the status of Brazil, India and South Africa in international affairs and supporting their aspiration to play a greater role in the UN. This kind of patronizing formulation was not needed by India, which is less than what Russia offers us bilaterally.

The eThekwani declaration is moderate, with no anti-western bias. The paragraph on Syria is balanced; the one on Palestine repeats standard formulations. On Iran, there is a call for a negotiated solution, with concern expressed about threats of military action as well as unilateral sanctions. The paragraph on terrorism accords with India’s position. The one on Afghanistan is unobjectionable. The paragraph on climate change is non-controversial. The importance of peaceful, secure, and open cyberspace through universally accepted norms, standards and practices is emphasized.

STEPS

Because the summit was held in Durban, the focus on Africa in the proceedings—with participation of several African countries in discussions—and the final declaration is prominent.

The decision to set up a New Development Bank with substantial and sufficient initial contribution to finance infrastructure in emerging and developing countries has attracted adverse attention, as if working outside the World Bank or ADB is unacceptable. Differences over the size of funding and fears of Chinese domination have been highlighted. A Contingent Reserve Arrangement (CRA) with an initial size of US$100 billion to help BRICS countries forestall short-term liquidity pressures has also been established. These are steps in the right direction.

We should not be dismissive about the declared aim of progressively developing BRICS into a full-fledged mechanism of current and long-term coordination on a wide range of key issues of the world economy and politics. This is part of our sensible policy of playing on all chess boards with prudence, calibration and no ideological bias.

Read this column at The Daily Mail.

In recent months, the words of American politicians on the subject of transatlantic relations have often sounded a bit like the Van Morrison classic: “Have I told you lately that I love you?” Since the U.S. government announced its “pivot” toward the Asia-Pacific, hardly a speech has failed to mention a clear commitment to Europe: ‘Europe is still America's most important partner. America will not abandon Europe. Vice President Joe Biden is not making a special journey to Beijing, but to Germany for the Munich Security Conference.’ And so on, and so forth.

In Europe, and in Germany in particular, we like hearing these things. On both sides of the Atlantic, we seem to have this feeling that our affection for one another needs to be constantly reaffirmed. Where does this insecurity come from? Transatlantic relations are actually more harmonious and less problematic than they have been for a long time. However, in certain ways, we have begun living – staying with the metaphor – somewhat separate lives.

Both of us – Americans and Europeans – have recently been occupied largely with ourselves. The Europeans' attention has been primarily directed towards managing the Euro crisis, while the Americans, for their part, have themselves been struggling with the effects of the financial crisis and a highly polarized and self-obstructing political class. European politicians shake their heads over the endless disputes in Congress about the debt ceiling, while their American colleagues press the EU to finally generate more economic growth in Europe.

In the realm of foreign policy, the U.S. is strengthening its involvement in the Asia-Pacific, whereas Europe is barely considering its own strategic role there. On the other hand, in and around Europe, the U.S. no longer insists on taking the leading role in conflicts and interventions – for the first time since NATO was founded. This was the case in Libya and now once again in Mali.

The U.S. and NATO cannot be everywhere at once, their officials say. At the same time, they warn Europeans against further reducing their defense expenditures. Complaints were recently heard in Paris that the U.S. was demanding large payments for providing urgently required transport capabilities for the Mali operation. Perhaps this was only a misunderstanding - but it somehow seems symptomatic.

Europeans and Americans now have to come to a fundamental understanding of what they want to do together in future, and what each would prefer to do on their own. There are excellent reasons for us to continue to define as many common goals as possible. Just as in every relationship, however, it also means that we will have to invest something.

A significant step would be to set up a common economic area with a common free trade zone as a core, which, according to the estimations of some experts, could allow the gross national product of Europe and the USA to increase by several - highly valuable - percentage points. But such a free trade area would not only benefit both economies. It would also contribute to a dynamic in which standards and rules to which the U.S. and Europe agree become a sort of blueprint for the entire globe.

Fortunately, this idea, which is not exactly new, has found prominent support and has gained ground in European capitals as well as in Brussels and Washington. President Obama has just expressed his personal support. Such complex projects will only be successful if the negotiations are carried out “top-down” and do not simply get pushed back and forth in the respective bureaucracies. The obstacles are numerous and the stakes high. Let us hope that Obama, Merkel, Barroso etc. will persevere.

Another area that calls for closer cooperation is the U.S. “pivot” to the Asia-Pacific. The transatlantic conversations about potential common goals and policies in that region have been too timid. Europe will not be willing or able to involve itself militarily in Asia in the same way as Washington - nor should it be. But the EU can - and should - have its own clear positions, e.g. on the Chinese-Japanese conflict. From an Asian perspective, Europe barely appears on the radar when it comes to strategic questions. And a division of labor under which we sell expensive cars while the United States works towards strategic stability in Asia will eventually trigger significant transatlantic frictions. There are a number of issues on which we could work together more closely – with respect to promoting democracy or strengthening multilateral structures and organizations, for instance.

When it comes to NATO, there is also a need to act. Of course, we could continue to make speeches reassuring one another on a regular basis that NATO is the most successful alliance of all time. But in the long term this will be insufficient. The decisive question is how we can define the future of NATO together and ensure that it is able to fulfill its purpose. After all, the member states today have quite different ideas about the primary reason for the alliance’s existence.

It is unsettling that the alliance has increasingly developed into a sort of platform for "coalitions of the willing" in which only a certain percentage of members are actually actively involved. The integrated military structure of Nato is unique. But this alone is no guarantee that we can pursue our security interests together and successfully. It must be supported by a strategy, the relevant capabilities, and a minimum amount of solidarity.

Regrettably, over the past few years, European governments have cut their respective defense budgets without considering the bigger European picture. As a result, important military capabilities are being lost; perhaps they could have been retained had there been prior consultation. We need to use pooling and sharing to finally overcome the European ‘small-state’ approach in the area of defense. We could use the European defense budget far more efficiently if we trained and bought together. Such a step towards European self-affirmation would be met with American support.

We should take seriously the warnings of our American partners, which have become clearer and clearer, that the United Statess is simply no longer in a position to bear to main brunt of every crisis. For decades, Europeans have spoken of a two-pillar NATO, of a partnership of equals. This is their chance to actually turn this into reality. From an American perspective, further European integration and a close transatlantic partnership are no longer an either-or proposition. One depends on the other, and vice-versa.

The two new faces of American foreign and security policy, John Kerry and Chuck Hagel, are true transatlanticist with intensive connections to Europe. They take a genuine interest in us. Both have been loyal supporters of, and participants in, the Munich Security Conference. For the next generation of Americans, however, the connection to Europe is less and less close to the heart. Opinion surveys have revealed a trend that Europe's importance for the USA is slowly but consistently decreasing. In a Chicago Council survey last year, among those surveyed 58 percent aged 35 and younger said that Asia was more important to the U.S. than Europe.

This should remind us that the close transatlantic partnership is not a self-evident truth. We have always been connected by an unmatched level of economic interdependence, a network of stable institutions, many common interests, and last, but not least, our common identity as liberal Western democracies. In the coming decades these connections will become ever more important: in a world with new powers, Europe and the U.S. will only be able to stand up for their liberal values and interests together. In order to be able to do this, however, we must invest in these bonds between us. Maybe, we should not only be telling each other how important we are to one another, and how much we value each other. We should once again be embarking on inspiring projects together.

The article covered the negative reaction among Chinese officials to a new bill that requires a strict approval process for American governmental purchases of Chinese software. 

This requirement, an element of the Consolidated and Further Continuing Appropriations Act of 2013, follows a recent uproar over reports of alleged Chinese cyber attacks on American computer systems. Chinese officials have expressed opposition to the change, calling it a "discriminatory" action.

Firestein explained that “it's no surprise that this rule has generated a lot of attention in China, but one shouldn't overstate what the law seeks to do," continuing "it puts in a quality control premise. It doesn't seek to ban, but to [implement] a vetting mechanism.”

Click to read the article at SC Magazine.

Can you give us a brief background on Sino-Russian relations following the dissolution of the Soviet Union?

There was a period of pretty frigid relations between China and the Soviet Union for about three decades that really only thawed with Gorbachev in the mid-to-late 1980s, culminating with his historic visit to Beijing in 1989. I was a student in Beijing during that visit; it was a very interesting thing to see from that angle.

In the 1990s and 2000s, the China-Russia relationship, while thawed relative to the Soviet period, was not a particularly dense one from the standpoint of diplomatic contact or pragmatic collaboration. Russia was dealing with its own enormous upheavals in the 1990s, culminating in the economic crisis in 1998. Meanwhile, China was really gaining momentum as it embarked on its own economic growth strategy. There weren’t particularly serious diplomatic issues or problems in the relationship.

One of the areas that had been a source of some tension and conflict between the Soviet Union and China was over the correct path of Leninism/Marxism. Once the Soviet Union ceased to exist, the ideological differences that had always been a part of the cool relations between the Soviet Union and the PRC dissipated overnight; there was no longer an ideological competition.

The 1990s and early 2000s were periods of a kind of benign neglect. One phrase that I have used to describe this with reference to how China saw Russia – but I think the same could probably be said vis-à-vis how the Russians viewed China –was “a deficit of strategic relevance.” Simply put, neither country was a top-tier priority for the other during this period.

Do you feel that Russia and China are “balancing” against U.S. power and its partners in Asia?

I don’t think there’s a concerted effort on the part of Russia and China to consciously work together to balance the U.S., per se; but the net effect of the positions that both of these countries tend to take for their own national interest puts them on the same side of a lot of issues in the world, particularly issues before the UN.

Both China and Russia are very proud nations. They’re both great nations. It’s very important to the leadership of both countries—if you look back historically in their foreign policy doctrines—to espouse the notion of non-interference in their internal affairs. This notion of protecting sovereignty, protecting territorial integrity and keeping foreigners out of “our business” and out of “our internal affairs” is a very important theme for both countries. That leads them to a convergence of viewpoints on a lot of issues.

That being said, the reason I say that I don’t think it’s a concerted effort is because there still is a lot of mistrust between the two countries. While things are changing, there’s this long legacy of a neglected relationship and, before that, rather deep distrust. To me, this precludes the notion of a true China-Russia partnership that is sort of designed with intentionality to counter the U.S.

Where might Russian and Chinese interests diverge in the coming years?

They share a long land border, but China is fundamentally an East Asian nation surrounded by 14 countries (it has more border countries than any other country in the world), while Russia is both a European and a Eurasian landmass. Russia is in its own category, but it is much more connected geographically and culturally to Europe. It looks at issues like NATO in ways that are different from China because it’s a stakeholder in those issues similar to the way China is a stakeholder vis-à-vis issues like the South China Sea (which doesn’t particularly affect Russia).

As I discussed, there are many issues where, in matters of foreign policy doctrine and foreign policy principle, there are convergences. But there are disagreements. Take the case of Georgia. Russia has recognized two areas of the nation of Georgia that have broken away from Georgia and declared independence. Russia was the first country to recognize the independence of what it regards as states. China disagrees with Russia on this particular issue because it would set a dangerous precedent vis-à-vis potential breakaway provinces in parts of China. Chinese leaders don’t want to be on record supporting this kind of separatist activity; obviously, that would have implications for Taiwan, but also for Tibet, Xinjiang and other parts of China.

What are the geopolitical implications of the past decade’s heightened level of Sino-Russian trade relations?

Even as recently as 2001, China-Russia trade totaled only about $10 billion. Today, looking at the trade figures for 2012, it’s $88 billion. It’s increased almost nine-fold in a period of eleven years, which is a remarkable growth trajectory. There’s a stated goal on the part of the Chinese and Russian leadership to get to the $200 billion two-way trade mark by 2020; that starts to become a very real number in global international trade. To put it in perspective, U.S.-China trade relations amount to about $500 billion.

This signifies a qualitative change in the way the two countries are dealing with each other. It symbolizes a level of engagement and a comfort level that is new. It also represents a very significant trend in terms of global economics. In the case of Russia exporting to China, it’s mostly energy (e.g., oil, natural gas, minerals). In the case of China, it’s electronics and textiles. There is a real growth here that is having a significant impact on both economies.

China has become Russia’s number one export market, surpassing Germany, which is of symbolic significance; I believe this is the first time in Russian history, or at least in modern Russian history, in which its top export market is in Asia, not Europe – that’s a real milestone. Meanwhile, China is looking West to a greater degree. It sees that there is real potential in that direction further to develop its economy and create opportunities for trade and investment.

Does Sino-Russian cooperation in the UN Security Council and growing trade relations reflect a growing shift in the global balance of power?

I think that China and Russia, again, do often tend to see global issues and issues before the U.N. in very similar terms because of rather similar foreign policy doctrines that place an emphasis on multilateralism and the U.N.. They like the U.N. as a forum for dealing with international issues because, as veto-wielding members, they can control the agenda. They have similar views on the notion of interference in internal affairs and the notion of unilateralism. They both have wariness about U.S. motives and strategic intentions. But again, I don’t think that there’s a concerted effort, per se, to counter the United States.

They probably think of themselves as having somewhat similar positions in the world, which is they’re great powers but not yet (or, in Russia’s case, anymore) superpowers. There’s a certain element of what might be called “triangulation” in the relationship, as well. Bear in mind, the U.S.-China opening in 1972 occurred principally on the basis of the idea that the United States and China should come together to counter the Soviet Union – “the enemy of my enemy is my friend.” That element, that triangular dynamic, is one of the reasons that U.S.-China relations got out of the starting blocks to begin with.

I think that Chinese leaders are mindful of Russian views and vice versa because there is a sense that the world is changing. While the United States remains the world’s sole superpower, it is not as powerful vis-à-vis all the other countries in the world as it was 10, 20, 30, 40 years ago. This notion of a growing multi-polarity is a key theme in both Chinese and Russian foreign policy; and indeed, it’s a goal of both countries’ foreign policies.

China and Russia want an increasingly significant voice in international relations commensurate with their growing economic clout. The notion of a U.S. that is, if you will, less omnipotent is one that is welcomed by the leaders of both nations. In this sense, and in others, China’s and Russia’s interests converge to a much greater degree than they diverge.

Both countries’ leaders – who will each be in place for the next decade or so – have publicly characterized the China-Russia bilateral relationship as the strongest it’s ever been. It seems probable that we’re in for a major growth spurt in China-Russia ties. And that’s going to have significant implications for the world. This is going to be an interesting relationship to watch over the coming years.

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

There is, according to the paper, a “new order in the relationship between Moscow and Beijing, in which China is no longer the junior partner.”

Titled “Russian–Chinese Security Relations: Moscow’s Threat from the East?” the report reviews positive and negative aspects of the relationship. It also considers the role of Western nations in the future of Sino-Russian relations.

The paper, released in the wake of Xi Jinping’s recent visit to Russia (his first as China’s President), maintains that China’s rapid growth has shifted the nature of this bilateral relationship, which has largely been based on energy and arms transactions.

 “When China has reached enough independence from Russia in military technology and has created sufficient alternative ways of gaining energy,” it argues, “Beijing might well ‘dump’ Russia as a ‘strategic’ partner.”

That raises the possibility of a more positive relationship between Moscow and the West. De Haas maintains that recent Sino-Russian political cooperation was mostly due to opposition towards Western policies, not the result of a “genuine desire for country-to-country political cooperation.” Following China’s so-called “dumping,” Russia may find itself resorting to an alignment with Europe and the United States on security issues.

In attendance were 32 Brussels-based academics, NGO officials and diplomats. Representatives from Russia and China voiced objections to the report’s claims of a fracturing relationship, maintained that although Sino-Russian relations consist of different approaches and interests, China and Russia’s roles are complementary, not confrontational.

In the economic realm, he explained that both the United States and China are dealing with each other from points of weakness. The U.S. is coming from a position of sustained economic weakness due to the recession, while China is experiencing slowing economic growth relative to the past 30 years.

He also noted that China is moving up the value chain as a producer of goods and services, which in turn reinforces another major shift. The U.S. business community’s support for U.S.-China relations has deteriorated recently, stemming from disillusionment towards the Chinese market for U.S. exports and stiffer competition at home from higher-end Chinese imports.

In the political sphere, Firestein described 2012 as a “tectonic year.” For the first time since the founding of the People’s Republic of China, both the United States and China experienced the possibility of real leadership transitions in the same year, resulting in a lack of restraint in how U.S. and Chinese leaders framed the other country in public remarks.

Additionally, U.S. political leaders have changed the way they view and discuss China in American political discourse. In the past, both Democrats and Republicans framed China in terms of human rights issues, but today, the prism through which U.S. politicians view China is based on trade, investment and—ultimately—national competition. Firestein also noted that congressional sentiment towards China has deteriorated sharply.

He then explained the emerging geopolitical shifts in the U.S.-China relationship. In terms of balance of power, China’s military has made rapid and significant strides in its development, creating a more formidable challenge to U.S. foreign policy-making. The U.S. rebalancing or "pivot" to the Asia-Pacific region is another major geopolitical development. Lastly, Firestein pointed out two unique “firsts” in U.S.-China relations: neither the U.S. nor China are now dealing with each other in terms of sustained economic growth, and the two powers no longer share a grand common objective.

On March 12, a spokesperson for China’s Foreign Ministry said the government is prepared to talk to the United States about the concerns raised on March 11 by National Security Adviser Thomas Donilon on cyber-assisted theft of intellectual property. But as flagged by Donilon himself, the concerns raised are not limited to the commercial sector and go to deeper issues of national security. 

This linkage is not about whether the Chinese actions are destabilizing traditional areas of military activity. The United States, as revealed again in the Donilon speech, has now staked out its view of global Internet governance and order as in themselves constituting vital strategic interests. The United States will now regard as its enemies those countries that “seek the ability to sabotage our power grid, our financial institutions and our air traffic control systems,” as expressed by President Barack Obama in his State of the Union address this year. The remark is understood to have been an allusion to China, among others. But China is rejecting the very foundations or premises of this U.S. policy. 

The international system of 2013 could not have thrown up a policy challenge less likely to be solved soon than this one. Its solution depends on so many bureaucratic interests in two very different countries—from law enforcement and commerce to national defense and internal security. The issues range from the most sensitive intelligence sources and methods to protection of political leaders. The private sector, so very different in legal character and standing in each country, is heavily involved. The legal regimes and indeed the capabilities of its agencies to fight cyber crime are very different, and in both cases, weak.

In the two countries, though the balance of opinion among political elites on privacy and surveillance rights is very different, there is no strong consensus among policy elites. This lack of consensus constrains formulation of a national position on effective international cooperation. What’s worse, and what makes this problem so difficult, is that the “smoking gun” in cyber crime—if we are lucky enough to find one—is so indecipherable to the non-specialist it might as well be invisible. While specialists have no problem with it, having policymakers allocate large amounts of money to investigating cyber attacks (something many of them don’t understand and can’t actually see) is a very big demand. Even worse, staking the future of the entire strategic relationship between China and the United States on an early resolution of the challenges would seem foolhardy in the extreme. 

In his speech, Donilon acknowledged that a major weakness of the strategic relationship between the two countries is the lack of military exchanges. He noted that to solve major security challenges in the region and the world, such as the Korean nuclear situation, the armed forces of the two countries need a better understanding of each other and much more direct contact. He appealed for some action on this front. As importantly, however, if the two countries are to begin to address the global cybersecurity challenges, including the very sensitive bilateral ones, then the police and internal security organizations, and the lawyers, of both countries need much closer ties as well. 

The underlying motivations of each are not well understood by the other. Donilon issued three demands to China. It is unlikely that China will be able to meet these demands in the short term in a way that satisfies the United States. The tension around cybersecurity issues will remain until both sides find a way of bridging the gulf between the countries’ different perceptions of them. Moreover, the bigger challenge may be addressing what the Foreign Ministry spokesperson in the remarks on March 12 called China’s marginalization in the digital world. That marginalization is the result of a deep gulf in Chinese and American cyber power. The gulf is evident in military capabilities, law enforcement capabilities, and legal regimes.

In light of the Donilon’s challenge to China and its positive response in principle, this short commentary offers an outline of concrete steps that might be taken to advance dialogue between the two countries. It centers on the idea of connecting Chinese and American cyber crime fighters and their policy advisers.

Understand the problem first

Little attention has been paid, in public debate at least, to ways of getting American and Chinese cyber crime fighters together to discuss solutions to the challenges raised by Donilon. This is an urgent matter. It would have to have a wide view of all of the challenges outlined above, at the same time focusing on concrete problems that are bedeviling the relationship today.

For its part, the EastWest Institute’s cyber crime legal working group, led by Norwegian Judge Stein Schjolberg, has recommended one course of action to address the threat to critical infrastructure referred to by Obama. In a 2011, summary report, this group suggested that a new treaty should be agreed upon that outlaws “intentional global cyber attacks against critical national infrastructures.” The group noted that this issue has “not yet been regulated by international law” and has not yet been sufficiently addressed in the practices of states. It further recommended that “all countries implement legislations necessary to establish as criminal offences under its domestic law, when committed intentionally and without right, whoever by destroying, damaging, or rendering unusable critical communications and information infrastructures” or “causes substantial and comprehensive disturbance to the national security, civil defense, public administration and services, public health or safety, or banking and financial services.”

To pursue that recommendation, policy makers would need to begin to navigate between the very divergent Chinese and American approaches toward treaty regulation of cyberspace, with the former favoring new formal treaty arrangements, and the latter so far not remotely disposed to any new treaty. The United States has argued that current international law is adequate. Yet Donilon’s appeal for the United States and China to agree on rules of the road for cyberspace may presage a shift on this point. 

The institutional structure of the bilateral relationship at official levels for addressing these issues is weak. It was only in September 2012 that the U.S. Department of Homeland Security and the Chinese Ministry of Public Security agreed to an annual meeting.  They also agreed to lower level working interactions to address the structures to address the “full range of homeland security issues,” of which cyber crime was one. Even though the FBI set up an office in China in 2002 (mainly for counter-terrorism issues after 9/11), and China has maintained a ministry of public security representative in its Washington Embassy for some years, the cooperation in terms of cyber crime has been episodic. Those offices have so far clearly failed to bridge the huge gulfs between the two countries in this area of policy.

One view of the strategic framework of the relationship between the United States and China in cyberspace is spelled out in an EWI policy paper on this subject published in October 2012. One of its recommendations was the inclusion of China in the G8 working group on high-tech crime. At the Munich Security Conference in February 2103, an EWI briefing identified three urgent measures for international collaboration on fighting cyber crime and three for addressing stability in cyberspace. One of the anti-crime proposals which could have immediate symbolic effect was to develop an international action plan against the “most wanted” cyber criminals. A second was to create an international process for standardization of procedures and exchange of information among national and regional CERTs and other first responders. These sorts of ideas can be worked into the U.S.-China framework.

The international setting provides a foundation for closer connections between crime fighters in the United States and China. But this also remains weak. Separate from a sharp difference of opinion over the value of the Budapest Convention on Cyber Crime, which the United States has signed but which China refuses to sign, international cooperation on policing of cyber crime is a fairly recent phenomenon and expertise in most police forces and prosecutorial services remains weak. The first Interpol Cyber Crime Investigation Training Conference was held in Lyon, France in 2005. An Interpol General Assembly resolution of 2006 acknowledged global weaknesses in terms of investigating cyber crime, while calling for international standards on the search, seizure and investigation of electronic evidence. China is an active member of Interpol and has an office in Beijing. A Chinese vice minister visited Interpol HQ in Lyon in 2011 where he reasserted China’s commitment to international collaboration in fighting crime. Both China and the United States have trouble filling the rapidly expanding number of government posts in cyber crime fighting because demand is high and competition from the private sector is intense.

Is détente on cyber crime possible without addressing the military security dilemmas?

No. A close reading of Donilon’s speech and China’s reaction would suggest that the political will for closer cooperation between China and the United States on cyber crime is simply not there for the moment. That will probably change only if some mutual understanding can be reached at high levels on what China calls its marginalization and on what the United States regards as China’s quest for a military advantage in penetrating critical infrastructure. While these are each highly complex problems in their own right, there are crossover points between the two issues on which joint efforts might produce an improvement in the political atmosphere. One is to understand better the mutual dependence of the ICT sectors of the two countries, and the development trajectory of this relationship which will eventually see the lifting of technology trade bans on China. A second is to try to find the middle ground on legal approaches to critical infrastructure protection (perhaps simply by mutually compatible domestic legislation).

We can modify the three recommendations from EWI’s briefing for the 2013 Munich Security Conference to fit the U.S.-China scenario as follows: 

1. Commitment: States need to make an explicit commitment to strategic stability in cyberspace within the framework of a fully articulated foreign policy and national security doctrine. This has to be grounded in a series of overlapping bilateral and multilateral understandings. 
2. Transparency and understanding: Parliaments, business leaders and specialists in the two countries should undertake studies on the impact of their national military activities in cyberspace. 
3. Joint Action: The two governments, research organizations, businesses and NGOs need to foster the emergence of many more informal but highly focused exchange processes with a view to making progress on sub-elements (points of disagreement) within the larger picture of cybersecurity. 

The proposal

The Donilon demands and China’s positive response in principle need to be buttressed by quick action from the private sector and non-government organizations. To this end, private actors in the United States and China should set up a high-level task force to mobilize support for more effective cooperation between China and the United States in investigation and prosecution of cyber crime in three areas: (a) protecting intellectual property (b) securing critical national infrastructure in peacetime; and (c) practical measures for drawing the line in international law between criminal action and national security.

Greg Austin is a professorial fellow at the EastWest Institute. He leads the Institute's Policy Innovation Unit.

"Increasingly, U.S. businesses are speaking out about their serious concerns about sophisticated, targeted theft of confidential business information and proprietary technologies through cyber intrusions emanating from China on an unprecedented scale,” said Donilon. “We have worked hard to build a constructive bilateral relationship that allows us to engage forthrightly on priority issues of concern.  And the United States and China, the world’s two largest economies, both dependent on the Internet, must lead the way in addressing this problem.”   

Donilon’s speech came in the wake of a widely cited report by the computer security firm Mandiant, which accused Beijing of sponsoring cyber espionage and theft of corporate secrets in the United States. During his annual State of the Union address on February 12, President Barack Obama presented an executive order to protect U.S. critical infrastructure from cyber threats. 

In his speech, Donilon outlined three requests for Beijing related to the cybersecurity issue. “First, we need a recognition of the urgency and scope of this problem and the risk it poses—to international trade, to the reputation of Chinese industry and to our overall relations,” he said.  “Second, Beijing should take serious steps to investigate and put a stop to these activities.  Finally, we need China to engage with us in a constructive direct dialogue to establish acceptable norms of behavior in cyberspace.”

In response, the Chinese government adopted a defensive posture, while emphasizing its willingness to cooperate with Washington. "China has always urged the international community to build a peaceful, secure, open and cooperative cyberspace and opposed turning it into a new battlefield," said Foreign Ministry spokeswoman Hua Chunying, who argued that China is also a major victim of cyber attacks. 

Hua added: “Cyberspace needs rules and cooperation, not wars. China is willing, on the basis of the principles of mutual respect and mutual trust, to have constructive dialogue and cooperation on this issue with the international community including the United States to maintain the security, openness, and peace of the Internet."

Hua’s response echoes earlier comments by outgoing Chinese Foreign Minister Yang Jiechi, on Saturday, rebutting accusations of Chinese hacking. “Anyone who tries to fabricate or piece together a sensational story to serve a political motive will not be able to blacken the name of others or whitewash themselves,” said Yang. 

Writing in The Washingtonian, Shane Harris argued that Donilon’s remarks, which evoke “carefully tuned language,” bring “the private sector into the problem as a key player, not a bystander.” 

Speaking to CNBC, Michael Chertoff, a former director of Homeland Security and EastWest Institute board member, said he hoped that the Chinese business community could put pressure on Beijing to rein in cyber attacks. “I’ve been in a number of public events recently, where people including myself have been very outspoken to audiences that include Chinese investors and businessmen about what is going on with intellectual property theft,” he said.

Chertoff continues: “I think what may happen is that these business people will go back home to China and they’ll start to tell their government, ‘Look, we’re going to be pushed out of global markets, we’re going to be global pariahs, if we don’t agree to reining in what’s been going on.’ So I’m hoping some business pressure may be part of the solution here.” 

James Lewis, a senior fellow and director of the Technology and Public Policy Program at the Center for Strategic and International Studies, told the Christian Science Monitor that Washington’s message to Beijing was unusually straightforward. “This is really the first time a senior U.S. official has come out and given Chinese officials three specific steps on what we need to do to work on this cyber spying problem,” he said, adding that “no one has ever publicly come out and said this directly to the Chinese before—that we want recognition by them of the scope of the problem, we want direct investigation of these cases—and direct dialogue on international norms.”

While Chinese hacking of U.S. computers remains a pressing challenge, it is important to keep the background of this issue in mind, especially in the wake of the Mandiant report and Obama’s executive order on cybersecurity. As EWI’s Franz-Stefan Gady pointed out in US-China Focus, the Mandiant report, “did not reveal anything new to experts in the field”; many nations, especially the U.S. and China, are known to already engage in significant cyber espionage, he added. 

Beijing’s efforts to that end will likely “continue and intensify regardless of what the United States does,” EWI Professorial Fellow Greg Austin argued in the The International Herald Tribune. “The real issue,” wrote Gady, “is how to avoid that these sort of [cyber] attacks lead to escalating tensions between the two great powers on a strategic level.”