John Kerry warns China about hacking's 'chilling' effect on business

US secretary of state says computer attacks have a chilling effect on business while Beijing insists it is also a victim of hacking

PUBLISHED : Friday, 11 July, 2014, 4:36am
UPDATED : Friday, 11 July, 2014, 3:22pm

US Secretary of State John Kerry yesterday denounced the "chilling effect" of internet hacking on American businesses as he wrapped up two days of high-level talks with Chinese government officials.

"Instances of cybertheft have harmed our business and threatened our nation's competitiveness," Kerry said during a closing session with his Chinese counterparts. "The loss of intellectual property through cyber [spying] has a chilling effect on innovation and investment."

Kerry's comments came after the authorities in Washington indicted five Chinese military officers in May for hacking into US companies.

The issue was among several topics discussed by the world's two leading economic powers during the sixth annual strategic and economic dialogue in Beijing.

Kerry said the two countries had frank talks on cyberissues and had agreed to continue discussions on them.

Beijing insists it too is a victim of hacking and accuses Washington of hypocrisy as it conducts sweeping surveillance around the world.

Leaks by former US government contractor Edward Snowden have alleged widespread US snooping in China.

State Councillor Yang Jiechi said cybersecurity was a "common threat and challenge facing all countries".

"Cyberspace should not become a tool for damaging the interests of other countries," Yang warned.

Despite calls from the US, Beijing did not agree to resume a cybersecurity working group, which it suspended after the charges were brought against the PLA officers.

"We hope the US will create conditions for dialogue on the cyberissue," Yang said.

The New York Times reported this week that Chinese hackers broke into the computer networks of the US Office of Personnel Management earlier this year to access the files of tens of thousands of federal employees who had applied for top-secret security clearances.

Senior US officials said the hackers gained access to some of the agency's databases in March before the threat was detected and blocked, the Times reported in an article posted on its website on Wednesday.

The Foreign Ministry spokesman in Beijing yesterday reiterated Beijing's position that it was "resolutely opposed" to internet hacking and said there were people who wanted to make China look like a cybersecurity threat. "Some of the American media and cybersecurity firms are making constant efforts to smear China," spokesman Hong Lei said.

Agence France-Presse, Associated Press, Reuters