When Roger Ebert reviewed the film Sleeping with the Enemy upon its release in 1991, he called it “a slasher movie in disguise, an up-market version of the old exploitation formula where the victim can run, but she can’t hide.”
When the Chinese government invited top executives from 15 Silicon Valley companies to attend its annual Seattle conference, those executives most likely didn’t consider themselves victims, but honored guests. They would shortly learn their error: by getting in bed with the Chinese government in order to promote their businesses, they set in motion the consequences they enjoyed on Wednesday: play with us under our new rules, or take a hike.
In past years the Seattle conference was directed at mid-level management at companies like Amazon, Apple, Google, IBM, Facebook and others. This year, however, the date was moved forward to allow Chinese President Xi Jinping to address the group, and inform them of the new rules in order to play in China’s backyard.
And it was not an invitation, but a command. As Atlantic Council Senior Fellow Jason Healey pointed out, “It’s not really voluntary. They [those senior executives] are absolutely expected to be there, and be there in force.”
Just in case they didn’t get the memo, or the message, the Wall Street Journal published this from Xi:
Together, China and the United States account for one-third of the world economy, one-fourth of the global population, and one-fifth of global trade.
If two big countries like ours do not cooperate with each other, just imagine what will happen to the world.
The threat was thinly veiled: we’re moving ahead, with or without you. Your choice.
And so they showed: Satya Nadella of Microsoft, Tim Cook of Apple, Jeff Bezos of Amazon, John Chambers of Cisco Systems, along with eleven other high-level executives.
Xi was nothing but sweetness and light. Despite the recent slowdown in China, he assured his guests that his country would maintain “relatively high growth” into the foreseeable future which would, in case some weren’t paying attention, create massive economic opportunities for those willing to play along under the new rules of the game. And ignore any of those rumored cyberwarfare attacks being waged by his henchmen against the very companies he was addressing.
In July Xi’s communist government issued a new rule that now requires any technology used by American companies doing business in China be “secure and controllable” – code for: open to inspection by his agents and spies. And any company wishing to continue to do business there must sign a pledge promising to store Chinese data within the country and to allow it to be “secure and controllable.” Otherwise, it’s been nice doing business with you.
This proves the rule: it’s easier to stay out than to get out. Last year American companies invested $60 billion in China, and the total trade between the US and China exceeded $600 billion. They’re so far in they can’t get out.
The cyberwarfare against those companies been going on at least since 2009, according to Google which first announced its discovery that the attack targeted at least 34 American companies, including Adobe Systems, Juniper Networks, Yahoo, Symantec, Northrup Grumman, Morgan Stanley and Dow Chemical. It is called Operation Aurora and its purpose, according to McAfee Labs, is to gain access to and potentially modify source codes at these companies so it could steal secret and vital intellectual property useful for the Chinese companies competing with them.
On May 19, 2014 the U. S. Department of Justice announced that a Federal grand jury had indicted five PLA officers in absentia for stealing confidential business information and intellectual property from those firms and for planting malware on their computers.
A Congressional advisory group has declared that China is “the single greatest risk to the security of American technologies” noting that “there has been a marked increase in cyber intrusions originating in China … targeting U.S. government and defense-related computer systems.” The Washington Post explained that those intrusions are so sophisticated that computer users are unaware that they are being spied upon: the infected attachment is disguised as an email from a familiar contact, fooling him into opening it and setting off a program that infects his computer. It’s so elegant that the malware is hidden by “rootkits” which prevent the user from being aware that his computer has been infected and vital data being stolen.
The American victims now find themselves facing the consequences, according to Adam Segal, a senior fellow at the Council on Foreign Relations:
U.S. companies have lots of conflicting interests. While they want the cyber hacking to end, they also do a huge amount of business in China and they want that to continue and grow.
As noted earlier, it’s easier to stay out than to get out.
The Hill: China’s Silicon Valley power play
Wall Street Journal: China’s President Courts U.S. CEOs
Chinese intelligence operations in the United States
Reviews of Sleeping with the Enemy