The Obama administration ramped up its rhetoric yesterday, calling out China for the first time by name to stop its cyber-attacks “and agree to ‘acceptable norms of behavior in cyberspace.’”:

“The White House, Mr. Donilon [Obama’s national security advisor] said, is seeking three things from Beijing: public recognition of the urgency of the problem; a commitment to crack down on hackers in China; and an agreement to take part in a dialogue to establish global standards.

“Increasingly, U.S. businesses are speaking out about their serious concerns about sophisticated, targeted theft of confidential business information and proprietary technologies through cyber-intrusions emanating from China on an unprecedented scale,” Mr. Donilon said in a wide-ranging address to the Asia Society in New York.”

Just for comparisons sake, here’s what Obama said in his State of the Union address:

“America must also face the rapidly growing threat from cyber attacks.

Now, we know hackers steal people’s identities and infiltrate private e-mails. We know foreign countries and companies swipe our corporate secrets. Now our enemies are also seeking the ability to sabotage our power grid, our financial institutions, our air traffic control systems.

We cannot look back years from now and wonder why we did nothing in the face of real threats to our security and our economy. That’s why, earlier today, I signed a new executive order that will strengthen our cyber defenses by increasing information-sharing and developing standards to protect our national security, our jobs, and our privacy.”

So the Obama administration is certainly focusing more specifically on China, after mounting evidence that the vast majority of cyber-attacks come from a single building in China, which houses Chinese military activities.

It is good that the Obama administration is taking a tougher stance on China. If you remember back to the 2012 presidential campaign season, Obama was generally seen as “soft on China” compared to Mitt Romney, who was “tough on China”. But like most of Mitt’s ideas, his ideas on China we’re outdated. As I highlighted in a previous post, there is no “being soft” or “being tough” on China. China is one of our largest trade partners and an increasingly important partner in issues that require global coordination. Romney wanted the U.S. to be harder on China for currency manipulation, which is simply no longer a legitimate issue.

We must work with China, and that means picking our battles. We need China to come together and work on global environmental and security issues. China has done a good job so far dealing with its wayward ally North Korea, agreeing with the U.N. to strengthen sanctions following North Korea’s third nuclear test this past February.

China must also play fair in trade relations. Lack of transparency makes it difficult to determine when China is “dumping” goods (or over-subsidizing certain goods past what is considered acceptable by international standards) into other countries and when it is simply taking advantage of a more efficient production process. Luckily the W.T.O. exists to handle such trade disputes, so the U.S. and China do not have to have a direct political face-off when addressing such issues (there is an impartial dispute settlement process).

But cyber-attacks, either perpetuated by or simply ignored by the Chinese government, are unacceptable:

“The nation’s top intelligence official [James R. Clapper Jr., the director of national intelligence] warned Congress on Tuesday that a cyber-attack could cripple America’s infrastructure and economy and suggested that such attacks pose the most dangerous immediate threat to the United States, more pressing than an attack by global terrorist networks.”

America is generally insulated by physical attacks due to geography and military technology. 9/11 also served as a wakeup call, leading to much stricter counter-terrorism security measures. America is a safer place today from physical attacks, but remains vulnerable to cyber-attacks.

Safeguarding American economic and infrastructure information will come to be a defining issue in Obama’s legacy. As Obama said in his State of the Union address, “we cannot look back years from now and wonder why we did nothing”. Countering cyber-attacks will take a mixed approach of better security at home and tougher penalties to deter those who would seek to steal our intellectual property / national security secrets.    

This also highlights why Obama was prudent in not addressing China as a currency manipulator. Chinese-American relations are always a sensitive matter; had Obama taken a hard stance on Chinese currency manipulation, he would have used a considerable amount of diplomatic capital on a non-issue, and would not have been able to be so assertive on the much more important issue of cyber-security.

Getting tough on China is the right thing to do, as long as we’re getting tough on the right issues.