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

Is West Doing Enough to Tackle Islamic State?

There is growing uncertainty over whether West’s response to ISIS is adequate More

China Crackdown on Dual Citizens Causes Concern

New policy encourages reporting people who obtain citizenship in another country, but retain Chinese citizenship; move spurs sharp debate More

Video Coalition to Fight Islamic State Could Reward Assad

Losing ground to Islamic State fighters, Syria's government says it is ready to cooperate with international community 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.
Ukraine Accuses Russia of Territorial Incursionsi
X
Zlatica Hoke
August 28, 2014 4:07 AM
Ukraine says a key border town (Novoazovsk) and surrounding areas of in southeastern Ukraine have fallen under the control of Russia's military. President Poroshenko says "Russian troops have actually been brought into Ukraine." Despite repeated denials from Moscow, Ukraine accuses the Kremlin of providing weapons and fighters to separatists in eastern Ukraine, toward the Russian leadership's alleged goal of annexing that strategic territory. Zlatica Hoke reports.
Video

Video Ukraine Accuses Russia of Territorial Incursions

Ukraine says a key border town (Novoazovsk) and surrounding areas of in southeastern Ukraine have fallen under the control of Russia's military. President Poroshenko says "Russian troops have actually been brought into Ukraine." Despite repeated denials from Moscow, Ukraine accuses the Kremlin of providing weapons and fighters to separatists in eastern Ukraine, toward the Russian leadership's alleged goal of annexing that strategic territory. Zlatica Hoke reports.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.
Video

Video America's Most Popular Artworks Displayed in Public Places

Public places in cities across America were turned into open-air art galleries in August. Pictures of the nation’s most popular artworks were displayed on billboards, bus shelters, subway platforms and more. The idea behind “Art Everywhere,” a collaborative campaign by five major museums is to allow more people to enjoy art and learn about the country’s culture and history. Faiza Elmasry has more.
Video

Video Chinese Doctors Use 3-D Spinal Implant

A Chinese boy suffering from a debilitating bone disease has become the first patient with a part of his spine created in a three-dimensional printer. Doctors say he will soon regain normal mobility. VOA’s George Putic reports.
Video

Video Uneasy Calm Settles Over Israel, Gaza Strip

Israel and the Gaza Strip have been calm since a cease-fire set in Tuesday evening, ending seven weeks of hostilities. Hamas, which controls Gaza, declared victory. Israelis were more wart. VOA’s Scott Bobb reports from Jerusalem.
Video

Video India’s Leprosy Battle Stymied by Continuing Stigma

Medical advancements in the treatment of leprosy have greatly diminished its impact around the world, largely eliminating the disease from most countries. India made great strides in combating leprosy, but still accounts for a majority of the world’s new cases each year, and the number of newly infected Indians is rising - more than 130,000 recorded last year. Doctors there say the problem has more to do with society than science. Shaikh Azizur Rahman reports from Kolkata.
Video

Video Scientists Unlock Mystery of Bird Flocks

How can flocks of birds, schools of fish or herds of antelope suddenly change direction -- all the individuals adjusting their movement in concert, at seemingly the same time? British researchers now have some insights into this behavior, which has puzzled scientists for a long time. VOA's George Putic has more.

AppleAndroid

World Currencies

EUR
USD
0.7537
JPY
USD
103.79
GBP
USD
0.6032
CAD
USD
1.0957
INR
USD
60.522

Rates may not be current.