Obama to Xi: Hacking of US companies must stop

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US President Barack Obama warned Chinese President Xi Jinping Friday that the Chinese hacking of US companies must stop as the two leaders agreed not to engage in government-sponsored theft of intellectual property and business secrets in cyberspace.

“I raised, once again, our rising concerns about growing cyber-threats to American companies and American citizens. I indicated that it has to stop,” Obama said at a press conference after talks in the Oval Office with Xi, who was welcomed to the White House with military honours on the South Lawn and would receive a rare state dinner later Friday.

The US and China agreed their governments will not “conduct or knowingly support” cyber-theft of intellectual property or other business information and will try to work together to develop “appropriate norms of state behaviour in cyberspace within the international community.”

The US has long raised concerns about Chinese government-backed hacking of US companies and more recently Beijing has been blamed for the mass hacking of millions of US government personnel records.

Friday’s announcement however falls short of an agreement that had reportedly been under consideration on cyberspace arms control.

Still, Obama called the developments “progress,” but noted China would be judged by its actions.

“What I’ve said to President Xi and what I say to the American people is, the question now is, are words followed by actions?” Obama said. “And we will be watching carefully to make an assessment as to whether progress has been made in this area.”

Xi spoke of his desire to make cyber-security an area of cooperation rather than confrontation.

“We have broad interests in the field of the cyber, but we need to strengthen cooperation and avoid leading to confrontation, and nor should we politicize this issue,” he said.

The leaders also announced progress on fighting climate change, Xi and Obama – who preside over the world’s two largest producers of carbon emissions – signalled their determination to push for an ambitious world climate deal in December with new goals.

Xi confirmed China’s long-expected plan to take its localized carbon trading system to the national level by 2017, and committed to matching the US contribution of about 3 billion dollars to help poorer countries adapt to global warming.

The US and China also agreed to implement new fuel efficiency standards for heavy-duty vehicles by 2019 – a sector of the transport branch that has not yet been widely addressed.

On the economic front, the leaders agreed to step up efforts to reach a bilateral investment treaty to level the playing field for US companies seeking to invest in China.

Xi agreed to accelerate market reforms, avoid devaluing the yuan and help to uphold the international rules based system.

The meeting of the leaders of the world’s two largest economies comes at a time of increasing economic uncertainty for China. Concerns about its health have rippled across the globe.

The benchmark Shanghai index recently lost all the gains it had made in 2015, sparking a round of panic selling by investors around the world, while the country’s surprise devaluations of the yuan in August raised fears of a currency war.

The honouring of Xi with a state visit had prompted outrage from human rights groups, and protesters in a nearby park could clearly be heard during the press conference in the White House Rose Garden.

Obama said he had raised US concerns, including about the treatment of Tibetans, freedom of assembly and expression, freedom of the press and religion and the importance of allowing nongovernmental organizations and journalists to work freely.

The men also disagreed on China’s actions in the South and East China Seas, with Xi pointedly declaring islands there “China’s territory” and vowing to uphold its interests and Obama saying the US stands by the territorial claims of its regional allies.

The men began their meetings late Thursday with a private dinner at the start of a state visit set to be dominated by concerns about cyber-security, the Chinese economy and climate change.

Xi arrived from Seattle where he was meeting with US technology industry leaders, and Tuesday defended China’s right to impose its own regulations on the internet.

Obama’s welcoming of Xi highlights his efforts to rebalance US foreign policy toward Asia and is bookended by visits by Japanese Prime Minister Shinzo Abe earlier this year and South Korean President Park Geun Hye next month.

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