Chinese Hackers and Long-Term Jobs Protection

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While the ability of the President of the United States to create jobs for U.S. citizens is a source of constant debate, his ability to take action to protect jobs in the U.S. is more measurable. Monday’s federal indictment of five Chinese nationals on cyber-espionage charges is the culmination of years of accusations about state-sponsored hacking of U.S. entities, with the intent to benefit the Chinese economy.

These five individuals will likely never be in U.S. custody, and a trial will likely not occur, reports The Christian Science Monitor, but the “U.S. is signaling to China that its tolerance of economic cyber-spying, which results in loss of American firms’ competitive position on the world market, is at a breaking point.”

U.S. Attorney General Eric Holder, citing long-term goals, was quoted in the Monitor:

“Success in the global market place should be based solely on a company’s ability to innovate and compete, not on a sponsor government’s ability to spy and steal business secrets,” the attorney general said. “This administration will not tolerate actions by any nation that seeks to illegally sabotage American companies and undermine the integrity of fair competition in the operation of the free market.”

In trying to quantify the effects of cyber-espionage on U.S. jobs, the Center for Strategic and International Studies’ James Lewis says in an interview with PRI that one of the most damaging effects is that people “go from a high-paying job in manufacturing to a low-paying job in some kind of service industry. This hurts our economy.”

The effects of cyber-espionage cost the U.S. economy $100 billion per year, according to NBC News, citing a Center for Strategic and International Studies figure. The indictments specifically cite theft of trade secrets from corporations within the steel, nuclear power and solar power industries. And while discussions of cyber surveillance and spying bring up comparisons to the NSA’s activities, industry experts make a distinction: TrustedSec CEO David Kennedy explains the two separate issues to Business Insider this way:

“The major difference is [Chinese military hackers] are going after the actual companies in order to boost and promote their economy, …Easiest way to explain it would be me calling up the NSA and asking them to break into Chinese based companies in order to give me the competitive edge over another company. The NSA doesn’t function that way — instead their mission is understanding the attackers, and possible threats to the U.S.”

The New York Times suggests today that the indictments and public description of what the U.S. Justice Department based its actions on may lead to increased attacks targeting any U.S. companies that the Chinese government sees as bringing in third parties on free trade and other regulatory rules. This may happen, notwithstanding the increased scrutiny of any possible retaliation against U.S. governmental agencies, the U.S. companies named in the indictments or their employees working at home and abroad.