Beijing goes beyond 'standard fare'

Obama details China hacking talks with Xi


President Barack Obama said that China has understood his “blunt” warnings against cyberhacking, as he credited new leader Xi Jinping with Beijing’s acceptance of more global responsibility.

“We’ve had very blunt conversations about this. They understand, I think, that this can adversely affect the fundamentals of the U.S.-China relationship,” Obama told “The Charlie Rose Show” in an interview broadcast late Monday.

Obama raised charges of a vast Chinese cyberhacking campaign when he met Xi for a June 7 to 8 summit at a desert resort in California. Xi insisted at a joint news appearance that China is also a victim of cybertheft.

“I don’t think you ever expect a Chinese leader to say: ‘You know what, you’re right, you’ve caught us red-handed! We’re stealing all your stuff, and every day we figure out how we can get into Apple,’ ” Obama said.

Obama, who has faced criticism at home for disclosures of U.S. surveillance of Americans, said that every nation gathered intelligence but that China went beyond “standard fare,” such as trying to “find out what my talking points are when I’m meeting the Japanese.”

“There’s a big difference between that and a hacker directly connected with the Chinese government or the Chinese military breaking into Apple’s software systems to see if they can obtain the designs for the latest Apple product.

“That’s theft. And we can’t tolerate that,” Obama warned.

Calling the United States “the world’s innovator” of products, Obama said that “if countries like China are stealing that, that affects our long-term prosperity in a serious way.”

A private U.S. report earlier this year said that hacking by China cost the American economy hundreds of billions of dollars each year through the theft of intellectual property.

The Pentagon has charged that Chinese hackers have broken into both U.S. companies and government agencies, including accessing secret designs for sophisticated weapons systems.

But Obama had favorable words for Xi, the 60-year-old son of a founding revolutionary of China who assumed the presidency in March. The leaders of the world’s top two economies held their casual California summit in hopes of forging a personal bond.

“My impression of President Xi is that he has consolidated his position fairly rapidly inside of China, that he is younger and more forceful and more robust and more confident, perhaps, than some leaders in the past,” Obama said.

He noted that China has taken a tougher stance on North Korea, whereas in the past “they would try to paper over” concerns about the isolated communist state.

“We’re seeing, I think, an interest and a willingness to engage with us in a strategic conversation around those things,” he said.

Echoing long-standing U.S. concerns, Obama said those in the Chinese government at times wanted to be “free-riders and let the United States worry about the big hassles.” But, he said, China is stepping up its role as nationalist pride grows.

“So I’m optimistic about the future,” Obama said, adding that he found it critical to show “candor, being clear about American values, pushing back when the Chinese are trying to take advantage of us.”

Xi’s ascent offers a second chance for Obama to shape his relationship with a rising China after he grew frustrated during his first term by what U.S. officials saw as a stilted, formal style by then-President Hu Jintao.