Cyber-disconnect at joint US-China press conference. Is that a problem?

Defense Secretary Hagel called a new US-China cyberaffairs working group a 'venue for addressing issues of mutual concern.' His counterpart denied there was a problem.

The Pentagon has made no secret of its concerns about China’s cyberincursions into US networks and of the ways in which these forays complicate the US-China relationship.

For this reason, cyberespionage was high on the list of points of “mutual concern” for the two nations, Defense Secretary Chuck Hagel noted at a closely-watched joint press conference Monday with his Chinese counterpart.

To this end, Mr. Hagel pointed to the recent establishment of a new US-China cyberaffairs working group “as a venue for addressing issues of mutual concern in the area of cyber.”

But what are the prospects for this working group having much success? 

It did not bode well, analysts noted, that the Chinese minister of defense, Gen. Chang Wanquan, denied at the same press conference that there was actually a problem between the two nations.

“The Chinese military has never supported any form of hacker activities,” he said.

The veracity of this assertion may depend on how the Chinese military defines hacking. 

Certainly, the Peoples Liberation Army (PLA) has engaged in state-sponsored cyberattacks, according to an oft-cited report by the cybersecurity firm Mandiant.

The group uncovered a cybercell that it dubbed APT1, saying it is responsible for hundreds of web-based attacks. The cell, it concluded, “is likely government-sponsored and one of the most persistent of China’s cyber threat actors.”

“We believe that APT1 is able to wage such a long-running and extensive cyber espionage campaign in large part because it receives direct government support,” Mandiant said.

Former Central Intelligence Agency Director Michael Hayden made a similar charge at a symposium earlier this month. “I think without question, you know, the country that’s out there stealing our stuff the most is China,” he said.

The good news, Mr. Hayden offered, is that, “I find it hard to imagine circumstances where China would do something incredibly destructive to any American network – the grid – absent a far more problematic international environment in which the cyberattack is itself part of a larger package of really, really bad things.” 

The cyber working group cited by Hagel is an encouraging development, says Christopher Johnson, a former senior China analyst at the CIA and now a Freeman Chair in China Studies at the Center for Strategic and International Studies in Washington.

Even so, “One of Hagel’s key points has to be that this is only going to be real if there is active participation from the PLA.”

That said, “I think it was useful that both sides were focused on the positive.” There was discussion of some high-level exchanges, for example, including the US Naval Academy hosting Chinese midshipmen for the first time.

Perhaps, Mr. Johnson says, “Cyber was downplayed for that purpose.”

It doesn’t help that US officials lost a great deal of diplomatic leverage with the revelations from Edward Snowden that the National Security Agency (NSA) was doing some cyberincursions of its own into Chinese networks.

“China knows that and they have been playing that card very effectively,” Johnson says.

General Chang made what many interpreted to be an allusion to these attacks during the press conference Monday. 

“China is one of the primary victims from hacker attacks in the world,” he lamented. “We face severe threats coming from those cyberattacks.”

But moving forward, “Cyber is going to be a fundamental irritant in the relationship. It may be a situation where both sides agree to disagree in the short term,” Johnson adds. “But obviously that’s not going to be effective in the long term.”