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Snowden revelations hover over US-China talks

Reuters/ AFR | July 9, 2013
Revelations by former US spy agency contractor Edward Snowden will make it harder for the United States to confront China at talks this week over the alleged cyber theft of trade secrets worth hundreds of billions of dollars each year.

China's official Xinhua news agency last month said the Snowden case showed the United States was "the biggest villain in our age" and a hypocrite for complaining about Chinese cyber attacks.

China's stance appears to be bolstered by Snowden's revelations of widespread surveillance by the National Security Agency and his assertion that the agency hacked into critical network infrastructure at universities in China and in Hong Kong.

Snowden first fled to Hong Kong before his leaks to newspapers became public last month, and has subsequently gone to Moscow. He is believed to be holed up in the transit area of the city's Sheremetyevo International Airport and has been trying to find a country that would give him sanctuary.

'OUT OF BOUNDS' SPYING
Now in their fifth year, the annual US-Chinese talks, known as the Strategic and Economic Dialogue, will cover topics from US concerns about North Korea's nuclear weapons and expanding US-China military ties to climate change and access to Chinese financial markets.

China's exchange-rate policy is on the agenda, although it has receded as a issue with the gradual strengthening of the yuan and a reduction of huge current account imbalances.

This year Secretary of State John Kerry and Lew host Chinese State Councilor Yang Jiechi and Vice Premier Wang Yang for the first S&ED session since China's once-a-decade leadership change in March when Xi took over.

The meetings follow Obama's summit last month with Xi in California, where the two men developed what aides called a productive relationship. Nevertheless, Obama demanded Chinese action to halt what he called "out of bounds" cyber spying.

Civilian and military officials from the two countries discussed international law and practices in cyberspace at low-level talks on Monday. Cyber security is due to come up at other meetings throughout the week that will also likely address US accusations that Beijing gained access electronically to Pentagon weapons designs.

IP theft costs US businesses $US320 billion a year, equal to the annual worth of US exports to Asia, authors of a recent report say.

A bipartisan group of high-ranking former US officials known as the Commission on the Theft of American Intellectual Property said in a May report that China accounts for between 50 per cent and 80 per cent of IP theft suffered by US firms.

Cyber theft of industrial designs, business strategies and trade secrets is only a portion of IP pilfering.

IP theft more commonly involves "planted employees, bribed employees, employees who were appealed to on the basis of nationalism and all the traditional means of espionage, often accompanied by cyber," said Richard Ellings, president of the National Bureau of Asian Research think tank, who co-wrote the report.

 

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