US may hit China with sanctions over alleged cybertheft

The Obama administration is developing a range of "unprecedented" economic sanctions against China over online espionage, the Washington Post is reporting, citing several administration officials who spoke on the condition of anonymity.

In particular, the sanctions would be "against Chinese companies and individuals who have benefited from their government's cybertheft of valuable US trade secrets," the Post reported. It quoted an administration official as saying the possible sanctions move "sends a signal to Beijing that the administration is going to start fighting back on economic espionage, and it sends a signal to the private sector that we're on your team. It tells China, enough is enough."

While the US government has not yet made the call on whether to issue these sanctions, a final decision is expected within the next two weeks, the sources said.

The update to the Obama administration's policy toward cyberthefts underscores an apparent rising tide of cyberwarfare. Over the last several years, the US, China, Russia and others have criticized one other for allegedly hacking networks and computers to steal sensitive information. There is also a growing concern over foreign hackers breaking into sensitive networks or servers and taking down critical infrastructure.

The relationship between the the US and China over cybersecurity concerns has been especially rocky. "I think these possible sanctions are going to affect our relationship with China long term ... the problem of cyberattacks is just getting worse," said Scott Schober, cybersecurity expert and CEO at New Jersey-based Berkeley Varitronics Systems -- a company that sells wireless cyberthreat detection tools to US Department of Defense agencies.

"Many wonder what the big deal is as governments have been spying on one another for years, but this government-sponsored cyberspying takes it to a new level in that the Chinese hackers are using advanced technology to accumulate massive databases on US military personnel that could be used for espionage and effectively recruit spies," Schober added. "The end result could be catastrophic to US military secrets and thus affects the security of US citizens."

US officials have frequently pointed to China or to Chinese hackers as the suspected sources behind a number of cyberattacks, such as this year's incursion on the US government's personnel office compromised the data of millions of current and former federal employees.

China has denied any involvement in such incidents, instead accusing the US government of its own attempts to target Chinese officials and companies through cyberattacks.

In early April, President Obama signed an executive order establishing a sanctions program that would allow the administration to impose penalties on individuals overseas who engage in destructive attacks or commercial espionage in cyberspace.

Later that month, the US Defense Department outlined a new strategy to combat cyberthreats from other countries -- China being one of them.

"We like to deter malicious action before it happens and we like to be able to defend against incoming attacks as well as pinpoint where an attack came from," the secretary said in a statement in late April, unveiling the Defense Department's cyber strategy. "But in addition to the dangers there are great opportunities to be seized through a new level of partnership between the Pentagon and Silicon Valley," he added, "opportunities that we can only realize together."