Trump administration says China broke Obama-Xi hacking agreement

The Trump administration explicitly called out the Chinese government Thursday for having hacked U.S. companies to steal business secrets in recent years.

The disclosure means the U.S. government believes China broke a 2015 agreement reached by then-President Barack Obama and Chinese President Xi Jinping that was aimed at curbing economic cyber-espionage between the two countries.

A Department of the Treasury investigation detailed in a 215-page report published Thursday finds multiple cases where China had continued to conduct economic cyber-espionage after the 2015 arrangement was announced. The report does not, however, explain these incidents with any specifics.

“After a major debate in the private sector cybersecurity community over the past three years about the level of Chinese cyber activity directed against U.S. organizations and its meaning related to China’s commitments, the 301 report can be read as effectively ruling that China is in violation of the 2015 Obama-Xi accord on cyber IP theft,” said Paul Triolo, practice head for geo-technology at the Eurasia Group, an international risk consultancy.

Though the Obama administration vocally criticized China for testing redlines outlined by the agreement, the latest denunciation is far more “explicit,” foreign policy experts say. And it comes after a series of research reports by private cybersecurity companies showed how Chinese hacking groups have targeted American companies. These reports came from the likes of FireEye, PwC, CrowdStrike and others.

“This looks like first official statement saying the agreement is not holding,” said Adam Segal, director of digital and cyberspace policy at the Council on Foreign Relations. “All the previous statements have been China is exploiting the gray area, but this looks to be explicit.”

In the past, experts familiar with the Xi-Obama agreement have said that China’s continued attacks on private defense contractors fell into a “gray area” of the agreement. The 2015 agreement hoped to dissuade IP theft, but did nothing to impede everyday spying for political gain.

“The United States has been closely monitoring China’s cyber activities and the evidence indicates that China continues its policy and practice, spanning more than a decade, of using cyber intrusions to target U.S. firms to access their sensitive commercial information and trade secrets,” the report reads.

The Treasury Department analysis followed an announcement by the White House that Trump would impose tariffs on China in an effort to help U.S. companies compete domestically.