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Guilt or Competition? Winning the Cyber Espionage War
by Prof. Michael R. Czinkota
2014-06-06 10:52:07
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During the Cold War, the Allies protected Germany’s Fulda gap against a possible Soviet invasion. In today’s environment of cyber vulnerability, surely all major parties have developed a plan of defense against cyber aggression. If not, they should do so. Yet even good plans may not fulfill the hopes of their fathers.

Remindful of Emile Zola’s ‘J’accuse’ about anti-semitism in France, the United States has charged five officials in the Chinese People’s Liberation Army of hacking into U.S. commercial computers and stealing top-secret trade information. The hackers stand accused of taking confidential nuclear and solar technology data for the benefit of their firms, thus giving Chinese businesses an unfair competitive advantage.  Chinese officials have vehemently denounced these “fictitious allegations” and claim that they threaten the established mutual trust between China and the U.S.

Is this just another stalemate or what is the news here? The Chinese have collected information from the United States for quite some time, just as the Russians, Germans, and French have. It is also now common knowledge that the U.S. gathers extensive information from China as well as Germany and many other nations. Why, then, is this kerfuffle taken more seriously than routine hacking?

Some speculate that this entire affair is  “running a new pig through town,” a European way of referring to new actions designed to move attention away from policy failures. Perhaps we are witnessing a plan designed to distract from the current criticism of Obamacare or Veterans Affairs.

Or is this Chinese incident truly more serious than regular cyber espionage? America’s displeasure seems to be based on its discovery of a linkage between security measures and industrial espionage. Security espionage benefits from an international consensus that governments have the responsibility to learn about any measures taken abroad which could endanger their own citizens. Industrial, or economic espionage however, is seen as much more unacceptable if governments intervene abroad for the sake of their businesses. The U.S. differentiates accordingly, and in light of the now great importance of international business, shares its view with other nations. The difference is also well expressed in a terminology, which clearly separates intelligence agents from spies.

If all this is a competitiveness issue, then of course proceeding against the hackers is not enough. Steps must also be taken against the users of the maliciously obtained information, since it is the use not just the possession, which causes the greatest damage.  

Is America hypocritical in charging the Chinese with cyber-espionage?            When the U.S. was still a young nation and the U.K. was the world leader in innovation, America also participated in espionage (and did not pay for intellectual property) in order to advance technologically. Perhaps China will ensure its protection once it has enough of its own property to protect.

Is all this only a U.S. – Chinese problem, or is industrial espionage a key problem around the world? Does the punishment reflect a special fear of Chinese reverse engineering capabilities?

There may be a new era of knowledge acquisition and distribution where military/political insights are either linked to economic/production knowledge, or are kept separate from each other. Right now, the world trend seems to be in the direction of obtaining information in all areas of human activity, and to use it for any advance possible.

The U.S. can be the key bulwark separating military and business knowledge. Sanctions against five Chinese individuals will not produce any major direct curtailment of information acquisition and use. But there can be a clear symbolic effect.

This dispute over espionage is just another demonstration of the ultimate clash between the U.S. and China. They have different perspectives of the role of the State and business. If the sanctions bring a change in the global differentiation between types and use of information, then the actions taken against the five individuals are well worth the effort. If not, we’re witnessing the erasure of another line in the sand.  For the sake of an internationally level playing field and the encouragement of fair competition and market driven activities, let us hope that this wake-up call stirs new thinking around the world.


Michael Czinkota researches international marketing issues at Georgetown University. He served in trade policy positions in the George H.W. Bush and Ronald Reagan administrations. His International Marketing text (with I. Ronkainen) is now in its 10th edition. Alice Lu participated in drafting this work.


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Emanuel Paparella2014-06-06 14:46:00
One begins to wonder if Machiavellian geo-political maneuvers, and fierce “patriotic” cyber space competition are all there is to this issue of espionage. It hardly that clear cut. What about invasion of the privacy of the common citizen, identity theft, hackers proud of their code-breaking skills; are they criminals or enterprising market entrepreneurs? Those related but crucial issue don’t even get touched upon in the above piece. Are there real victims here? The issue, as it turns out, seems to be a bit more complex than mere competition among nations; all one needs to do to realize the ethical complexities of those issues is pick up an enlightening book on the subject by Misha Glenny titled Dark Market, Cyberthieves, Cybercops and You. A must for those who wish to delve into the ethical complexities of this matter.

Leah Sellers2014-06-08 18:39:31
Was Billy-the-Kid a Regional Criminal or an Eneterprising Entrepreneur when he robbed those Trains and
Banks, ransacked people's lives, and shot up a few
folks ? Hmmm...now that's a Question to Hack away at that's full of Ethical Complexities !
Good article, Sir. Thank you.

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