US Unveils New Strategy to Combat Hacking - Wall Street Journal

By SIOBHAN GORMAN WASHINGTON—The White House unveiled a new strategy to exert pressure on China and other countries that engage in corporate espionage against the U.S. as part of a new administration push to counter cyberattacks and commercial spying. The strategy, released Wednesday in a report that was the subject of a White House meeting, raised the prospect of stepped-up U.S. trade restrictions on products and services derived from stolen trade secrets. Officials also outlined a series of diplomatic actions to reinforce the administration's commitment to curbing such thefts. The new push comes on the heels of fresh revelations of Chinese cyber spying and represents an effort by Washington to respond to growing complaints about the constant theft of military and corporate secrets, especially by China. Incidents linked to China in recent years include cyberinfiltrations of Google, the computer security firm RSA, Lockheed Martin, and Nortel Networks, as well as the New York Times and The Wall Street Journal. The White House on Wednesday didn't specify actions toward China, but the strategy document is peppered with examples of Chinese theft of corporate secrets. The Obama administration is casting trade-secret theft as a major threat to both economic and national security. "Trade secret theft threatens American businesses, undermines national security, and places the security of the U.S. economy in jeopardy," the document outlining the strategy says. "These acts also diminish U.S. export prospects around the globe and put American jobs at risk." Wednesday's move follows an executive order President Barack Obama signed last week to create voluntary cybersecurity standards for companies running critical infrastructure like the electric grid. Both initiatives were under development for several months and coincided with a spike in recent disclosures about cyberinfiltrations of the U.S. news media and critical infrastructure by cyberspies believed to be linked to the Chinese government. The new strategy largely expands upon efforts already underway and is aimed at producing a change in Beijing, which bitterly denies it sponsors such incursions. "This is what you have to do to get the Chinese to behave differently," said James Lewis, a former top State Department official who is now a cybersecurity specialist at the Center for Strategic and International Studies. "You've got to keep pushing on them; you've got to keep grinding." But, he cautioned, it will likely take several years to show results. The U.S. successfully employed a similar strategy of diplomatic and trade pressure in the 1990s to curb Chinese proliferation of weapons of mass destruction and related military equipment, Mr. Lewis said. In addition to denying it condones computer hacking, China also has said that it is itself a victim of cyberattacks and that Chinese law forbids such attacks. But U.S. intelligence agencies issued a rare public report in 2011 that fingered Chinese hackers as the "most active and persistent perpetrators of economic espionage." Senior intelligence officials said the Chinese government and sympathetic hackers are behind the cyberspying. A House intelligence committee report last year concluded the Chinese telecom giant Huawei's presence in the U.S. poses a national security threat. As one component of the new strategy, U.S. law enforcement and intelligence agencies will work more closely with the private sector to school them in counterspy tradecraft and provide warnings about emerging corporate espionage threats. The spy agencies will provide reports to the private sector on key aspects of the threat, including the number and identity of foreign governments involved, the industry sectors most targeted, and how the espionage is being conducted. The new U.S. strategy also calls for a more aggressive diplomatic response to the theft of trade secrets, much of which is now done by infiltrating computer networks of target companies but some is also still done by recruiting human spies. The State Department will ensure that a consistent and "appropriate" message is delivered to foreign governments to communicate the administration's commitment to reducing the theft of intellectual property and the importance it places on more effective legal penalties and enforcement for trade-secret theft. Wednesday's report said Washington would work with its allies to coordinate on ways to pressure countries like China that the U.S. government says are engaged in rampant theft of intellectual property. That effort will be led by the State and Commerce Departments and the U.S. Trade representative. The U.S. also will use trade arrangements such as the Trans-Pacific Partnership to seek new provisions on trade secret protections that include penalties similar to those in U.S. law. Mr. Lewis said that over time, the government will probably need to up pressure with such actions as denying visas to Chinese researchers or denying certain Chinese companies access to U.S. banks. The strategy also directs agencies to evaluate current laws and determine if additional legislation is needed to protect trade secrets. —Jared A. Favole contributed to this article. via Technology - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNEK1FfUVicPXfXZMHDE8XfLh4kFUA&url=http://online.wsj.com/article/SB10001424127887323549204578316413319639782.html

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