- - Sunday, March 10, 2013

President Obama two years ago rejected a series of tough actions against China, including counter-cyber attacks and economic sanctions, for Beijing’s aggressive campaign of cyber espionage against the U.S. government and private businesses networks, according to administration officials.

Meanwhile, China recently issued a veiled threat to the United States about U.S. accusations of Chinese military cyber espionage. China told U.S. officials that continued U.S. public accusations of cyber espionage would render future bilateral discussions unproductive during recent U.S.-China talks following the release of a security firm’s report linking the Chinese military to cyber spying.

On plans to deter Chinese cyber attacks, senior administration officials turned down a series of tough options designed to dissuade China from further attacks that were developed over a three-month period beginning in August 2011.

According to administration officials familiar with internal discussions, the options were dismissed as too disruptive of U.S.-China relations.

The president’s closest advisers feared that taking action would potentially undermine U.S. relations with China, a major economic trading partner that currently has holdings of $1.2 trillion in Treasury debt, the officials told the Free Beacon.

Government security and military officials under the White House Interagency Policy Committee, a working group directly supporting the National Security Council, developed the options.

The committee is made up of representatives from the Pentagon, intelligence community, law enforcement, homeland security, and foreign affairs agencies.

Caitlin Hayden, a White House National Security Council spokesperson, declined to comment. “I am not going to discuss internal deliberations, but we have been clear that we have substantial and growing concerns about the threats to U.S. economic and national security posed by cyber intrusions, including the theft of commercial information,” she said in a statement.

Hayden said because China and the United States are major “actors” in cyberspace “it is vital that we continue a sustained, meaningful dialogue and work together to develop an understanding of acceptable behavior in cyberspace.”

“We have repeatedly raised our concerns at the highest levels about cyber theft with senior Chinese officials, including in the military, and we will continue to do so,” she added.

Disclosure of the administration’s failure to take a tough stance on Chinese cyber intrusions is likely to further upset U.S. industry, which has been pressing the government to do more against China for the hacking.

The interagency group was tasked in August 2011 with developing options for Obama to deter China in cyberspace, as evidence mounted for years that China’s government, despite repeated public and private denials, is continuing a highly damaging program of stealing U.S. secrets and proprietary economic information that has helped China’s industry and its military to leapfrog technological hurdles and more favorably compete against the United States.

The options that eventually were presented included using bilateral and multilateral diplomacy, conducting covert computer network attack operations, levying economic sanctions, and taking legal action against the Chinese government and military.

The officials said the options developed by the committee covered the full spectrum of statecraft, including diplomatic, military, intelligence, and economic measures designed to pressure China into halting the cyber attacks.

Hayden, the White House NSC spokeswoman, defended administration cyber security efforts. “We are taking an active approach to addressing cyber theft,” she said. “We regularly release technical information intended to improve the ability of the private sector to defend against cyber intrusions.”

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