News / Economy

Economic, Cyber Espionage Issues May Dominate US-China Talks

Economic & Cyber Espionage Issues May Dominate US-China Talksi
X
July 10, 2013 10:21 AM
As the United States and China open the fifth round of their Strategic and Economic Dialogue Wednesday, top U.S. officials are optimistic the two sides will agree to cooperate on a range of strategic issues. But major differences, analysts say, could emerge in the economic discussions where the intense competition between the two nations is highlighted by the controversy surrounding cyber security. Natalie Liu has more from Washington.
Natalie Liu
As the United States and China open the fifth round of their Strategic and Economic Dialogue Wednesday, top U.S. officials are optimistic the two sides will agree to cooperate on a range of strategic issues.  But major differences, analysts say, could emerge in the economic discussions where the intense competition between the two nations is highlighted by the controversy surrounding cyber security.

This latest round of talks is taking place at a time when the U.S. job market is showing signs of steady improvement -- while China's economy appears to be heading into rough waters.

George Haley, author of two books on China - The Chinese Tao of Business, and Subsidies to Chinese Industry, says many Chinese industries have large over-capacity.

"For instance, the solar panel industry - China’s production capacity is actually 200 percent of worldwide demand; you have 20 or 30 percent over capacity in industry after industry that has been receiving government support - steel, auto parts, paper, chemicals,” he said.

Over-capacity, falling demand from overseas and impending high unemployment could pose a real threat to economic and social stability as Chinese companies face the increasing challenge of turning a profit.  

“China’s goal is still market access," said longtime Chinese activist Wei Jingsheng. "Without overseas markets, Chinese companies will have to immediately focus on China’s domestic market, but it would be very difficult, almost impossible, for all these export-oriented companies to turn around fast enough.”

Wei and others believe the symptoms of China’s current economic problems are rooted in the so-called “Chinese model of development" which is directed and largely controlled by the state -- instead of relying on citizens’ initiative and market mechanisms.

Meanwhile, the alleged Chinese state involvement in economic espionage through cyber intrusions has been the focus of Washington’s complaints towards Beijing since the beginning of this year.

“Comparing American espionage with Chinese espionage: I freely admit - because I headed two espionage agencies - that we go out there to steal secrets to keep Americans free and to keep Americans safe," said Michael Hayden, a former director of both the CIA and the NSA.  "We don’t go out there to steal secrets to make Americans rich.  The Chinese cannot make that statement with regard to their espionage activity.”

On the Chinese side, in bilateral meetings held just a month ago in California, President Xi Jinping sounded an optimistic note on potential cooperation between the United States and China on cyber security.

“Through earnest cooperation, doubts and mistrust can be dispelled; going forward, cooperation in the area of information security and cyber security might indeed become a bright spot in bilateral relations,” he said.

But analysts say it would be difficult for cyber security to become a “bright spot” in Sino-U.S. relations - and for foreign investment in China to remain unchanged - if Beijing does not pull back on economic theft and espionage.  

“If they’re proved to be engaging in really illegal, exploitative behavior and deception, they promised they are not, this affects a lot of companies’ investment decisions to invest in China," said Michael Pillsbury, a senior fellow at The Hudson Institute. "It would probably affect our Congress.”

At the same time, analysts say the U.S. is determined to protect and preserve its competitive advantage in science and technology.  

"From the U.S. position, economically speaking, it doesn't make sense to give up technology," George Haley said. "It's the country's competitive advantage, and it's already under very significant challenge worldwide."

The Strategic and Economic Dialogue concludes Thursday with the expected release of a joint statement.

You May Like

Cambodia Seeks Official UN Maps for Vietnam Border

Notice of request comes as 2 countries open border talks Tuesday after a clash last month More

From South Africa to Vietnam, Cyclists Deliver Message Against Rhino Horns

Appalled by poaching they saw firsthand, sisters embark on tour to raise awareness in countries where rhino horn products are in demand More

Uber Wants Johannesburg Police Protection

Request follows recent protests outside ride-hailing service's Johannesburg office More

This forum has been closed.
Comment Sorting
Comments
     
by: Yoshi from: Sapporo
July 10, 2013 9:33 PM
Cncerning about espionage, what Hyden said made us understand the differences between Chinese and American espionages. If China actually has been exploiting and deceiving other countires' intelliences, it shoud be honest to admit the fact and to abandon such illegal manners.

by: Yoshi from: Sapporo
July 10, 2013 9:03 PM
It is reported on this morning newspapers in Japan that main reasons for Chinese economic decline is decreased exportations to Europe and Japan. It could be said that Chinese economy also can not be free from the affection from world economy.

Yes, I agree China should explore more domestic demands and transfer state-own firms to private ones. In order to develope industries, state supports would be needed in every developing coutires. But now China is no longer a developing country at least on the aspect of economy. Thank you.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Getting it Done Beyond a Nuclear Deali
X
July 07, 2015 12:02 PM
If a nuclear deal is reached between Iran and world powers in Vienna, it will be a highly technical road map to be used to monitor nuclear activity in Iran for years to come to ensure Tehran does not make nuclear weapons. Equally as complicated will be dismantling international sanctions that were originally intended to be ironclad. VOA’s Heather Murdock talks to experts about the key challenges any deal will present.
Video

Video Getting it Done Beyond a Nuclear Deal

If a nuclear deal is reached between Iran and world powers in Vienna, it will be a highly technical road map to be used to monitor nuclear activity in Iran for years to come to ensure Tehran does not make nuclear weapons. Equally as complicated will be dismantling international sanctions that were originally intended to be ironclad. VOA’s Heather Murdock talks to experts about the key challenges any deal will present.
Video

Video Rice Farmers Frustrated As Drought Grips Thailand

A severe drought in Thailand is limiting the growing season of the country’s important rice crop. Farmers are blaming the government for not doing more to protect a key export. Steve Sandford reports from Chiang Mai, Thailand.
Video

Video Making Music, Fleeing Bombs: New Film on Sudan’s Internal Refugees

In 2012, Sudanese filmmaker Hajooj Kuka went to make a documentary among civil war refugees in Sudan’s Blue Nile and Nuba Mountains region. What he found surprised him: music was helping to save people from bombing raids by their own government. VOA’s Carolyn Weaver has more.
Video

Video 'From This Day Forward' Reveals Difficult Journey of Transgender Parent

In her documentary, "From This Day Forward", filmmaker Sharon Shattuck reveals the personal journey of her transgender father, as he told his family that he always felt he was a woman inside and decided to live as one. VOA’s Penelope Poulou has more.
Video

Video Floodwaters Threaten Iconic American Home

The Farnsworth House in the Midwest State of Illinois is one of the most iconic homes in America. Thousands of tourists visit the site every year. Its location near a river inspired the design of the house, but, as VOA’s Kane Farabaugh reports, that very location is now threatening the existence of this National Historic Landmark.
Video

Video Olympics Construction Scars Sacred Korean Mountain

Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Xenophobia Victims in South Africa Flee Violence, Then Return

Many Malawians fled South Africa early this year after xenophobic attacks on African immigrants. But many quickly found life was no better at home and have returned to South Africa – often illegally and without jobs, and facing the tough task of having to start over. Lameck Masina and Anita Powell file from Johannesburg.
Video

Video Family of American Marine Calls for Release From Iranian Prison

As the crowd of journalists covering the Iran talks swells, so too do the opportunities for media coverage.  Hoping to catch the attention of high-level diplomats, the family of American-Iranian marine Amir Hekmati is in Vienna, pleading for his release from an Iranian prison after nearly 4 years.  VOA’s Heather Murdock reports from Vienna.
Video

Video UK Holds Terror Drill as MPs Mull Tunisia Response

After pledging a tough response to last Friday’s terror attack in Tunisia, which came just days before the 10th anniversary of the bomb attacks on London’s transport network, British security services are shifting their focus to overseas counter-terror operations. VOA's Henry Ridgwell has more.
Video

Video Obama on Cuba: This is What Change Looks Like

President Barack Obama says the United States will soon reopen its embassy in Cuba for the first time since 1961, ending a half-century of isolation. VOA White House correspondent Luis Ramirez reports.
Video

Video Hate Groups Spread Influence Via Internet

Hate groups of various kinds are using the Internet for propaganda and recruitment, and a Jewish human rights organization that monitors these groups, the Simon Wiesenthal Center, says their influence is growing. The messages are different, but the calls to hatred or violence are similar. VOA's Mike O’Sullivan reports.
Video

Video Blind Somali Journalist Defies Odds in Mogadishu

Despite improving security in the last few years, Somalia remains one of the most dangerous countries to be a journalist – even more so for someone who cannot see. Abdulaziz Billow has the story of journalist Abdifatah Hassan Kalgacal, who has been reporting from the Somali capital for the last decade despite being blind.

VOA Blogs

World Currencies

EUR
USD
0.9084
JPY
USD
122.73
GBP
USD
0.6431
CAD
USD
1.2639
INR
USD
63.444

Rates may not be current.