US official accuses China of ‘industrial cyber spying’ amid looming trade war
Gilbert Kaplan, an international trade undersecretary at the US Commerce Department, told a conference that China is ‘engaging in commercial cyber espionage’, but offered no details
A senior US official has accused China of engaging in commercial espionage and implementing non-market practices, causing the bilateral trade relationship to become “imbalanced and unsustainable” amid an approaching US-China trade war.
Gilbert Kaplan, an undersecretary for international trade at the US Commerce Department, said at a China Institute event in New York on Thursday that China is “stealing American intellectual property and engaging in commercial cyber espionage”. Kaplan provided no details to support his statement.
The undersecretary also criticised China’s continuing embrace of industrial policies and trade practices that are directed by governmental intervention and central planning, rather than market demands.
His harsh critique included China’s non-market policies, including the government's subsidising of top priority industries, and non-market oriented state-owned enterprises acting in support of the government’s interests.
Kaplan said he opposed defending China’s non-market trade and industrial policies. The US “disagrees” with China’s defenders’ acquiescing to treat the world’s second largest country as both a market economy and a developing country at the same time.
Under World Trade Organisation rules, a developing country is entitled, to a certain extent, to use non-market practices to spur economic development.
Since it became an economic powerhouse trailing only the US, developed countries want China to follow the same rules and responsibilities as a market economy.
US President Donald Trump’s administration has labelled China a “strategic competitor”, if not an adversary, that takes advantage of America’s open markets.
Washington has threatened to launch an all-out trade war by imposing US$50 billion in tariffs on Chinese goods if Beijing refuses to meet its demands to fundamentally open its markets to US companies and to abandon its non-market behaviour.
“We are not seeking a combative or adversarial long-term relationship with China,” Kaplan said, “On the contrary, we seek to solve the problems in our trade relations.”
The Trump administration intends to bring reciprocity to the Sino-US trade relationship, Kaplan said.
Chinese companies’ US representatives at the conference event said they worried about the collateral damage the looming trade war could potentially cause.
Yuan Ning, chairman and president of China Construction America, a subsidiary of state-owned China State Construction Engineering Corp, said full-blown trade hostilities would broadly affect both countries.
“We really do not want to see a trade war happening,” he said. “In the US, we have 2,000 employees. If something happens, the impact would [not only be felt] by us, but by everyone.”
“I hope the two governments can pick up some dialogue and find a solution,” Yuan said.
Ni Ping, president of Wanxiang America Corp, a Chicago-based arm of China’s private automotive components maker, Wanxiang Group, said a trade war is “all about killing each other” and “none of us can afford it”.
“It has no fundamental basis as long as leaders from both sides are smart enough to manage the weather,” he said.