Triangulating Cyberespionage for Better US Diplomacy

By Lawrence L. Muir, Jr.

August 22, 2014

Why the US should seek a meaningful trilateral treaty with China and Russia on cyberespionage. 

The United States is under significant diplomatic pressure. International turmoil that began with destabilizing events in smaller nations, such as North African coups and Venezuelan protests, has grown into the testing of boundaries by two of the world’s most powerful nations, Russia and China. As Russia tests American resolve with its actions in Ukraine, and China tests America with its actions in the South China Sea, foreign policy experts have expressed their opinions on what the United States needs to do to stabilize international affairs. An article in Foreign Affairs suggested that theUnited States must reach a “grand bargain” with Russia to stabilize Europe. An article in The Diplomatsuggested the United States must reach a “grand bargain” with China to stabilize Asia. These individual grand bargains with Russia and China are, however, the wrong efforts at the wrong time. Rather than pursuing grand bargains with each nation individually, the United States would secure a much-needed strategic diplomatic victory by triangulating the two nations and forming a trilateral treaty concerning cyberattacks.

American relations with both countries are failing, while relations between China and Russia are strengthening. China has reached an agreement with Russia to supply it with discounted energy at bargain prices, bolstering the economies of both nations going forward. The American government is too fractured to reach consensus on what a grand bargain with either nation should contemplate, and American diplomatic capital is too bankrupt to achieve the grand bargain even if the U.S. could frame it. Instead of negotiating separate grand bargains with each country, the United States should negotiate a small but important agreement between the three nations. By forming a trilateral agreement on cyber issues, specifically cybercrime, cyberespionage and cyberwarfare, American diplomats could resolve an important geopolitical issue, while strategically pulling Russia and China closer to America and further apart from each other. By opening diplomatic talks with a smaller issue, the cyberattack treaty would allow for a linkage of issues that could ultimately lead to stabilization.

The United States is on the brink of both a trade war and a cyberwar with each country. Chinese cyberespionage, for which China accepts no responsibility, has contributed to America’s economic malaise. McAfee estimates cybercrime reduces U.S. GDP growth by up to 0.8 percent. In response to Chinese hacking, the FBI indicted five officers of the Chinese People’s Liberation Army on cybercrime charges. This unilateral American effort, undertaken because bilateral diplomatic efforts failed to reach an accord on cyber-issues, has proven to be a foreign policy blunder. American companies have faced retribution from the Chinese government. The U.S. has retaliated with trade sanctions against Chinese solar companies. The Chinese, in turn, have stated that a promising bilateral investment treaty now faces serious difficulties. The two nations, so dependent upon each other for economic growth through exports, stand on the precipice of a trade war exacerbated by a cyberwar, due in no small part to the foolishness of an indictment that will never produce convictions.

While the Dragon receives the lion’s share of attention for illicit cyberactivity, one must not overlook the Bear. More specifically, the “Energetic Bear,” a Russian-linked form of malware that infected energy companies in the United States and Europe. The malware allowed the controllers to monitor energy consumption, another form of economic espionage directed against the United States. Moreover, Russian hackers recently stole 1.2 billion passwords from websites, further demonstrating Russia’s offensive cyber-capabilities. As with China, American bilateral diplomatic efforts with Russia have failed to achieve desired American outcomes. American sanctions against Russia over Ukraine have not only failed to retard Putin’s ambitions in the region, but they have led to Russian sanctions against American agricultural imports. These sanctions have pushed the two nations towards a trade war, with cyberthreats looming in the background.

Perhaps the simplest explanation for these bilateral failures is that both Russia and China pursue national interest diplomacy (the best interest of its nation) compared to America’s preference for collective security diplomacy (seeking multinational moral responsibilities). Russian Deputy Foreign Minister Sergei Ryabkov, responding to the American sanctions against Russia, taunted the United States. He chided the Americans for not appreciating that the Russians have a national interest in how they conduct foreign affairs, and proclaimed that the American foreign policy arsenal is not very rich. As to the cyber-issue with China, U.S. President Barack Obama wants to work with China to set rules that all nations can agree upon, language that rings hollow with Chinese diplomats in theory, and in practice has stalemated negotiations on the issue.

In light of these bilateral failures, triangulation may provide the United States with an opening to achieve diplomatic success with both nations. Though the cyberattack issue is significant, cyberattacks are less threatening to geopolitical stability than the events in Ukraine and the South China Sea have been. The reduction in significance enables open discourse on a less volatile subject, thereby allowing the United States to find areas of cooperation and agreement between the three nations, while also exploring potential diplomatic fault lines between Russia and China.

Despite the energy deal, Russia must have concerns about Chinese interests toward Russia, and must worry about becoming the junior partner in their blossoming geopolitical romance. Russia and China have a long-standing historic rivalry, including skirmishes in the Border Conflict of 1969. Russia has significant energy resources in Siberia, a region over which China has staked historic claims. As China makes investments in Russia, while populating Siberia with ethnic Chinese immigrants, Russia must watch its partner closely for signs of assertiveness in that region. Moreover, as Russian energy fuels Chinese economic expansion, it reduces the Russian share of the balance of power between the two nations, which is a significant problem for Russia’s bid for greater Asian influence.

The cyber-issue highlights the growing economic disparities between Russia and China. The United States invests 2.9 percent of its GDP in research & development. China invests 1.7 percent of its GDP in the same way. This gap is partially explained by the fact that China has been stealing American intellectual property, skipping the expensive costs of economic growth and heading straight to production. As stolen American intellectual property fuels Chinese economic growth, Russia becomes more subordinate to China, thus providing Russia with a national interest in preventing Chinese cybertheft of American intellectual property. If Chinese economic growth falls below 7 percent, it cannot maintain full employment, which would create internal problems for the Chinese government; problems that could work to Russia’s favor in pursuing its Asian strategy.

Cyberattacks emanating from Russia provide America with an opening for rapprochement with Russia, wherein they may realize their mutual national interests in reducing Chinese cyberespionage, thereby drawing America and Russia closer. The outcome of the discussions should be inviting China to negotiate a trilateral treaty on cyberactivity, setting ground rules for cybercrime, cyberespionage, and cyberwarfare amongst the three nations.

China would seemingly have no interest in curtailing cyberattacks against the United States, but there are two reasons China should come to the negotiating table. First, as China has leveled reciprocal accusations at the United States, entering into a treaty on cyberattacks would seemingly vindicate Chinese feelings of victimization. Moreover, as the U.S. has produced damning evidence of Chinese cyberespionage, China must either join the treaty for its own protection from foreign cyberattack, or risk signaling to the rest of the world that its cries of American cyberespionage ring hollow. Second, as roughly five percent of Chinese GDP comes from exports to the United States, China cannot afford a trade war with America. China will not be able to hit its economic growth targets or full employment measures without continuing to maintain a robust trading partnership with the United States. America must make China aware that if it wishes to continue its upward economic trajectory, it must maintain a close relationship with the United States. That relationship should hinge upon China entering into the cyber treaty with Russia and the United States. Should China refuse to negotiate, it risks escalating the trade war with the United States, and risks American support of an Asian balance of power that includes stronger Russian influence, as well as continued support for America’s long-standing regional allies.

Some experts believe the Russian economy is near collapse, with Ukraine-related sanctions expediting the decline. If true, then a prolonged trade war with the United States and Europe could threaten Putin’s regime. Russia could use rapprochement on the cyber-issue to provide the diplomatic room to extract itself from its expedition into Ukraine. The cybertreaty enables Russia to use a legitimate issue between the two nations to mask the more important discussions of Russia’s economic relationship with Europe and the United States. For the present good of the Putin regime, and for Russia’s long-term goal to be an Asian power rivaling China, Russia should work with the United States on cyber issues.

The U.S. must be prepared to stake out its national interest in reducing both the volume of cyberattacks and the resultant damage. By approaching Russia and demonstrating why it is in Russia’s national interest to work with the United States on the cyber-issue, America will demonstrate its foreign policy arsenal is indeed rich. As the United States warms its frosty relationship with Russia on this issue, it puts pressure on the Chinese to work with America. If the United States finds agreement with China on the cybertreaty, the cooperation may flow over to the bilateral investment treaty and other foreign policy initiatives, such as reversing the course of the U.S.-China trade war. But if those days are to come, they will come only if America leads. American leadership begins with a meaningful trilateral treaty on the cyber-issue, leaving grand bargains to be negotiated only after American diplomatic capital has been fully replenished.

Lawrence L. Muir, Jr. is an adjunct professor of law at Washington & Lee University School of Law, where he teaches cybercrime law.