The (secret) plan to shame China into curbing cyber-espionage

Before Edward Snowden and what intelligence community denizens like to call the "recent unpleasantness," the U.S. government had a plan to deal with Chinese cyber-hacking. Fittingly, it was a secret plan, coordinated by the Department of Justice, the National Security Agency, the FBI, and the National Security Staff at the White House. Chinese cyber espionage had gotten so out of hand, per the premise of the plan, that only radical measures would suffice.

Cyber-hack them back? Nope. Shame them. Shame China. Here's something I wrote last year:

Now, though, the cumulative effect of Chinese economic warfare — American companies' proprietary secrets are essentially an open book to them — has changed the secrecy calculus. An American official who has been read into the classified program — conducted by cyber-warfare technicians from the Air Force's 315th Network Warfare Squadron and the CIA's secret Technology Management Office — said that China has become the "Curtis LeMay" of the post-Cold War era: "It is not abiding by the rules of statecraft anymore, and that must change."

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"The Cold War enforced norms, and the Soviets and the U.S. didn't go outside a set of boundaries. But China is going outside those boundaries now. Homeostasis is being upset," the official said.

In essence, the NSA will give American companies the ability to fight back. The idea is two-fold. One: Behavior modification by exposing Chinese tactics, which, in theory, would embarrass the Chinese. Two: This will force China will develop new hacking avenues, but this will take time, giving U.S. companies the chance to catch up.

K, well, that turned out to be a plan without follow-through. Snowden's revelations about SIGINT threw the NSA off-balance. A top secret cyber-espionage presidential directive was leaked on the day that President Obama planned to confront China's president about using the military for economic cyber-espionage, a practice that the U.S would never engage in. Reporting about the Snowden revelations conflated concepts.

The U.S. does not steal proprietary secrets to help U.S. corporations compete in the world. It does steal secrets to help the U.S., broadly, compete in the world.

China's policy to compete in the 21st century is predicated on a regime of aggressive, state-sanctioned spying, stealing technology from other companies to leap ahead of the Chinese industrial base's natural evolution. China is blunt about why this is necessary: they've got a billion plus people to take care, a growth rate that needs to be kept absurdly high in order to take care of them, and a political system that is barely legitimate because it can (barely) take care of the basic needs of enough people.

The U.S. does invade the internet servers and computers of foreign countries, looking to collect intelligence that will add value to American policy-makers' decisions about trade deals, sanctions, counter-narcotics, counter-trafficking, and counter-terrorism. It does so with the help of American countries. It does not, at least explicitly, steal secrets from, say, Chinese companies in order to directly benefit American companies working with the same technology. But it does create backdoors into state-owned or operated companies in order to spy. Maybe it is a distinction without a difference, at least in terms of how the world perceives U.S. spying.

Today, a year on, it looks like the U.S. policy to shame China is back on track. The Justice Department is indicting several officials in the People's Liberation Army and charging them with stealing specific secrets from American companies. This an action without real precedent. The upshot is that the U.S. believes that the economic damage to American companies — and perhaps to the unspoken "rules" of the road that keep the countries nominally cooperating with each other — is enough to warrant this action.