June 4 Tough talk from US on cyber attacks

SINGAPORE - Expectations were muted when United States defence chief Chuck Hagel went on stage at the Shangri-La Dialogue on Saturday to deliver his first major policy speech on Asia.

With less than a week to go before President Barack Obama hosts his Chinese counterpart Xi Jinping in an unusual presidential retreat in California, the general consensus among observers was that both sides would make nice, meaning Mr Hagel's speech would be polite rather than fiery.

"You don't want to poison the atmosphere," a veteran Asian diplomat said privately.

Mr Hagel stuck to that script for the most part, except in the concluding minutes of his speech where he accused Beijing of being behind some of the recent waves of online espionage.

"We are also clear-eyed about the challenges in cyber (security)," he told some 350 top defence officials, including representatives from the Chinese People's Liberation Army.

"The United States has expressed our concerns about the growing threat of cyber intrusions, some of which appear to be tied to the Chinese government and military."

It is true that Mr Hagel could have used far more hard-hitting language, and he is not the first American official to make such an accusation.

But the timing and location - the Shangri-La Dialogue is the premier security forum in the Asia-Pacific - all but guaranteed his comments would make global headlines and ruffle feathers in Beijing.

In recent weeks, the US media has also served up a steady diet of stories about the alleged threat from Chinese hackers.

Most prominent was a Washington Post report last week which cited a classified section of an independent report that said mainland hackers had used cyber attacks to glean data from nearly 40 US weapons programmes and nearly 30 other defence technologies.

Chinese officials have repeatedly refuted these allegations, insisting that China is itself the victim of cyber attacks.

Many are asking whether such a concerted public pressure campaign would work.

Is Washington better off perhaps eschewing such "public shaming" and relying instead on quiet diplomacy?

The jury's out, given the mixed track record of the two schools of thought on how best to deal with China when difficult or politically sensitive problems arise.

The first is the softly-softly approach, one that believes quiet diplomacy behind the scenes will help "save face" and in the end, produce a more amicable solution.

Activists have in the past relied on this approach to help free political detainees, though its recent effectiveness has been questioned.

The other course of action suggests that only persistent public pressure will compel Beijing to sit up and take real action. Relations could cool as a consequence, but the results would be worth it, so argue proponents of this approach.

They point most often to China's currency revaluation and reforms in 2005, which, while limited, came only after years of intense public pressure from the US, particularly Congress. This approach, however, has similarly seen diminishing returns in recent years.

On the growing issue of transnational cyber intrusions, the US has undoubtedly decided to go the second route.

The big question now is not whether Washington will keep it up - it will - but what action it is planning to take in response to further denials from Beijing.

US lawmakers recently passed a law that barred Nasa, and the justice and commerce departments from acquiring IT systems that did not first go through a cyber-espionage review for risks associated with Chinese-made products.

It is not hard to see Congress rapidly expanding such curbs against other Chinese companies and products, given the outrage American lawmakers have expressed.

All eyes will be on Mr Obama and Mr Xi this week to see if they can smooth over a problem that is about to get rapidly worse.