Are Obama’s New Cyber Sanctions Powers Directed at Chinese Companies Who Benefit From Chinese Cyber Espionage?

Robert Farley

April 4, 2015

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The new executive order from the Obama administration significantly increases the stakes for Chinese and American firms. In the belief that private Chinese companies often benefit directly from industrial espionage (both state supported and privately conducted) against U.S. firms, the administration has determined that individual Chinese companies will be subject to financial and legal reprisal.

As several commentators have noted, the Chinese government may respond to this order by sanctioning U.S. firms working in China. This could dim the prospects of a wide swath of U.S. companies that depend on integration with the PRC, especially given that China has already evinced a willingness to respond to U.S. sanctions, and that U.S. companies face a tough environment with Chinese local government in the best of times.