Chinese Hackers Charged; Trade Fight Continues - Butler Financial, LTD


Chinese Hackers Charged; Trade Fight Continues

Washington Policy Analyst Ed Mills discusses what the indictment means for the ongoing U.S.-China trade conflict.

December 20, 2018

Two Chinese hackers, Zhu Hua and Zhang Shilong, have been charged by the United States Department of Justice for “extensive campaigns of global intrusions into computer systems.” The hackers are said to be part of a group known as APT10 and, according to U.S. officials, hacked a “who’s who” of companies around the world. The indictment comes with the support of a broad group of U.S. allies. At the press conference announcing these indictments, Deputy Attorney General Rod Rosenstein stated that the coordination with U.S. allies was meant to send a message that China cannot pretend that these actions have not happened, and he called for the two indicted actors to face action under U.S. law.

Pessimistic Case from Here

New fronts continue to open up in the ongoing U.S.-China trade fight, making a near-term resolution increasingly difficult. Both sides have struggled to earn the necessary trust to engage in proper negotiations, and time is very short to accomplish the March 1 deadline. The push to have two Chinese nationals extradited to the United States and tried in U.S. courts will be a new demand of the Trump administration, complicating talks.

Optimistic Case from Here

These charges were limited to two individuals and no companies were indicted, nor were any sanctions against China announced. There are press reports that Treasury Secretary Mnuchin convinced the Trump administration not to implement any sanctions as part of today’s announcement, despite reports that sanctions related to the “cyber economic espionage” were expected in the Washington Post. This was done to protect the ongoing negotiations in the overall trade fight.

Overall Impact

Trust and sustained momentum have been lacking in the U.S.-China trade fight. Today’s announcement was a reminder of how much the Trump administration is targeting technology and intellectual property theft. It is unclear if China is willing to meaningfully address these issues. The inclusion of U.S. allies in this indictment shows how the Trump administration is trying to ring-fence China and send a message that time is not on their side.

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