Would cybertheft sanctions on China be effective?
The U.S. may soon announce sanctions against China for cyberespionage, according to several reports, but experts are torn on just how effective such measures could be.
Citing officials familiar with the matter, the Financial Times that sanctions were forthcoming, a consequence of hacks the U.S. government said were attributable to Beijing. An executive order from April gives the Treasury Department the authority to enact financial restrictions in retaliation for cyberattacks, and an action against China would be its first use. Some say it's about time.
"I believe the consideration of imposing sanctions against Chinese firms that steal intellectual property is long overdue," Paul Stockton, former assistant secretary of defense for Homeland Defense. "This theft has been going on at a monumental scale for many many years at no cost to the Chinese firms, and we need to change the cost-benefit analysis of leaders of these firms and the Chinese government."
Neither China nor Chinese firms have ever publicly admitted cyberespionage, and Beijing has accused the U.S. and its companies of digital spying (which many experts say is likely true).
Stockton, who is now managing director at security and economics consulting firm Sonecon, said that businesses conducting cyberespionage need to see their bottom lines damaged before they will curb their actions.
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But experts say that cyber incursions are often difficult to attribute to any region, let alone specific state- or company-sponsored actors.
While Stockton said he was hopeful that sanctions could begin to shift behavior from China and its corporate sector, others have expressed some doubt, especially in light of Chinese President Xi Jinping's apparent disregard of messaging—like the April executive order—from the White House.
"[Sanctions] are not likely to carry any effect outside of angering President Xi's constituents in China," said Tristan Reed, a security analyst with geopolitical intelligence and advisory firm Stratfor.
In fact, he added, any sanctions are unlikely to be particularly onerous for Beijing.
"The U.S. isn't going to impose wide sanctions on China, particularly with wider economic concerns now," Reed said, referring to worries that China may be losing its grip on an ongoing growth deceleration. "It's going to be difficult to find meaningful sanctions to impose."
A spokeswoman for the Treasury did not respond to a request for comment, and a State Department spokesman said in a news briefing earlier this month that he could not comment on whether there were plans for sanctions on China.
"When it comes to economic sanctions, we don't preview any kind of sanctions beforehand for obvious reasons. We don't want to give a heads-up to those who may be potential targets of economic sanctions to begin to take steps to evade sanctions activity," said Mark Toner, the State spokesman, directing further inquiry to the Treasury Department.
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If sanctions are in fact announced this month, they could have repercussions for a planned state visit from Xi. A Sunday report from The Hill cited experts theorizing that the Chinese president could cancel his trip to Washington in retaliation for economic impositions.
Despite these warnings, Stockton said he hoped that the Obama administration could find common ground on cyber espionage with Xi.
"We should try to find shared areas of concern: The efforts should be made even if piecemeal progress is the only thing possible," Stockton said, adding that establishing a baseline agreement on respect for intellectual property may be a good place to start.
"One step at a time can still take us a significant way," he added.
U.S. officials have said they suspect China was behind a massive breach at the Office of Personnel Management that exposed the personal data of millions of citizens.
—Reuters contributed to this report.