China Flexes Tech Muscles Before a State Visit

HONG KONG — As President Xi Jinping of China prepares for his first state visit to the United States this month, Washington has warned that it could hit Chinese companies with sanctions over digital attacks for trade secrets. Beijing is now pushing back in an unorthodox way: by organizing a technology forum to demonstrate its own sway over the American tech industry.

The meeting, which is set to take place Sept. 23 in Seattle, is planned to feature China’s Internet czar, Lu Wei, the overseer of China’s restrictions on foreign technology companies.

A number of Chinese tech executives, including Robin Li of Baidu and Jack Ma of Alibaba, along with executives from top American tech companies including Apple, Facebook, IBM, Google and Uber, have been invited, according to people familiar with the plan who spoke on the condition of anonymity because they were not authorized to speak about the meeting.

Some invitees, including Apple’s chief, Timothy D. Cook, plan to attend, according to one person. The forum is being co-hosted by Microsoft, said another person with knowledge of the matter.

The meeting is rankling the Obama administration by veering off the script agreed to for Mr. Xi’s carefully stage-managed visit, two American officials said. There are also concerns the meeting could undercut President Obama’s stern line on China by portraying its leadership as constructively engaging American companies about doing business in China, even as the administration suggests American companies are hurt by anticompetitive Chinese practices.

For many American tech companies, the invitation is hard to turn down because of the vast opportunities of China’s tech market. Google and Facebook are among those blocked by China’s web filters from doing business in the country, which is the world’s biggest Internet market.

While the tech companies have not taken positions opposing American sanctions and some are conflicted about how to approach China, their appearance at the meeting would signal how much leverage China wields. “The meeting is mostly to discuss the industry cooperation of the two countries, and big companies from China and the U.S., like Google, will all be there,” Mr. Zuo said.

At stake is how the global Internet will be managed. While the United States supports an Internet in which companies are allowed to operate worldwide and users are given free online expression, China has said countries should be allowed to force web companies to follow local laws, including censoring content, monitoring users and hosting data about Chinese users within China.

By dangling the carrot of market access to American companies that follow its rules, Chinese officials like Mr. Lu want to influence global Internet governance and have its model more widely adopted. Uniting most companies, however, is a fear that sanctions imposed by the Obama administration could lead to a Chinese response that would hit bottom lines and growth prospects alike.

Administration officials have made clear they are considering imposing economic sanctions against China for breaches by using an executive order under which President Obama has the authority to freeze financial and property assets of foreign companies that engage in commercial digital theft. The order, signed in April, is not specific to China but is meant for use against Chinese entities, among others.

During a 2006 visit, the Chinese president at the time, Hu Jintao, met with Mr. Gates in Seattle. In an exchange during the trip, Mr. Hu said he used Microsoft Windows every day, and Mr. Gates offered personal tech support if he ran into problems. In the nine years since, things have changed. Beijing is developing its own operating system and has placed government procurement bans on Microsoft’s Windows 8.

Other companies, like Qualcomm, have faced antitrust investigations in China. Several American business groups also lashed out this year at a Chinese law they said would prevent tech companies based in the United States from selling hardware and software to China’s banking industry.

Fast forward to today:

China And U.S. Reach Agreement On Cyber Security

9/12/2015 5:21 PM ET

China and the United States have reached an agreement on combating cyber crimes, the official Xinhua News Agency reported on Saturday.

The agreement was reached during a visit by President Xi Jinping’s special envoy Meng Jianzhu, a member of the Political Bureau of the Central Committee of the Communist Party of China (CPC) and head of the Commission for Political and Legal Affairs of the CPC Central Committee.

During the visit from Wednesday to Saturday, Meng exchanged in-depth views on tackling outstanding issues of law enforcement and security, including cyber crimes, with U.S. Secretary of State John Kerry, Secretary of the Department of Homeland Security Jeh Johnson and U.S. National Security Advisor Susan Rice.

Meng reportedly said China and the United States are both countries with highly-developed Internet technology. Against the backdrop of frequent incidents and ever-increasing security threats in cyberspace, it is especially important for the two to enhance mutual trust and cooperation in the sphere of cyber security.

by RTT Staff Writer

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