Chinese President Xi Met With Tech Executives in Seattle. Here's What He Wants

The White House has pub­licly cri­ti­cized China in re­cent months for ma­nip­u­lat­ing its cur­rency, en­ga­ging in cor­por­ate es­pi­on­age, pro­pos­ing re­stric­tions for U.S. tech firms that want to do busi­ness in the coun­try, and be­ing in­volved in a spate of cy­ber­at­tacks that tar­geted Amer­ic­an com­pan­ies and gov­ern­ment agen­cies.

Des­pite this ten­sion, however, Pres­id­ent Obama will greet Chinese Pres­id­ent Xi Jin­ping with a 21-gun sa­lute and a form­al state din­ner when he vis­its Wash­ing­ton this week. And while Obama has a long list of griev­ances he will likely want to take up with Xi, the Chinese pres­id­ent is com­ing with his own agenda.

Tech­no­logy and cy­bernorms will be a fo­cus of Xi’s state vis­it, which be­gins Tues­day in Seattle. There, Xi will com­mune with tech lead­ers—in­clud­ing the chief ex­ec­ut­ives of Amazon, Apple, Mi­crosoft, IBM, Google, and Face­book—be­com­ing the fourth con­sec­ut­ive Chinese lead­er to travel to the Pa­cific North­w­est tech hub.

The pres­id­ent’s vis­it comes dur­ing a tight­en­ing of re­stric­tions in Beijing on for­eign tech­no­logy com­pan­ies op­er­at­ing in China. Xi will likely try to con­vince Amer­ic­an com­pan­ies to com­ply with a series of drastic pro­pos­als that would change the way they do busi­ness in the coun­try.

One pro­pos­al would re­quire for­eign tech com­pan­ies to agree to store data about Chinese users with­in the coun­try, and main­tain “se­cure and con­trol­lable” products, a phrase which may amount to a gov­ern­ment re­quest for in­tim­ate ac­cess to sys­tems and tech­no­logy de­ployed in China, The New York Times re­por­ted last week.

A na­tion­al se­cur­ity law put for­ward this sum­mer in­cluded some of the same stip­u­la­tions about data loc­al­iz­a­tion, and would al­low the Chinese gov­ern­ment to levy fines against In­ter­net com­pan­ies that did not swiftly de­lete and re­port in­form­a­tion that Beijing finds ob­jec­tion­able.

Amer­ic­an tech com­pan­ies have in the past gone along with the laws China im­poses in or­der to pre­serve their ac­cess to the luc­rat­ive Chinese mar­ket. Chinese me­dia re­por­ted earli­er this year that Apple be­came the first for­eign tech­no­logy com­pany to sub­mit to Chinese “se­cur­ity checks.”

But Obama has pushed the busi­ness com­munity to back up the ad­min­is­tra­tion’s po­s­i­tions by air­ing their own griev­ances with the Chinese gov­ern­ment.

“Don’t tell us on the side, ‘We’ve got this prob­lem, you need to look in­to it, but leave our names out of it be­cause we don’t want to be pun­ished’ kind of thing,” he told busi­ness lead­ers at a speech to the Busi­ness Roundtable last week.

“Typ­ic­ally, we are not ef­fect­ive with the Chinese un­less we are able to present facts and evid­ence of a prob­lem,” Obama con­tin­ued. “Oth­er­wise, they’ll just stone­wall and slow-walk is­sues.”

When Xi heads to D.C., cyberes­pi­on­age and cy­ber­space norms will fig­ure prom­in­ently in sched­uled meet­ings, which will come on the heels of ne­go­ti­ations between Amer­ic­an and Chinese of­fi­cials over the rules of cy­ber­war.

The White House is walk­ing a tightrope in its re­la­tions with China, try­ing to sim­ul­tan­eously re­spond firmly to China’s ag­gres­sion while keep­ing lines of com­mu­nic­a­tion open and pro­duct­ive.

The ad­min­is­tra­tion has con­sidered im­pos­ing eco­nom­ic sanc­tions on China to pun­ish it for cy­ber­at­tacks, but has made clear the dis­tinc­tion between the theft of trade secrets, which it says is an an­ti­com­pet­it­ive prac­tice, and con­ven­tion­al es­pi­on­age.

“We have re­peatedly said to the Chinese gov­ern­ment that we un­der­stand tra­di­tion­al in­tel­li­gence-gath­er­ing func­tions that all states, in­clud­ing us, en­gage in,” Obama said at the Busi­ness Roundtable speech. “And we will do everything we can to stop you from get­ting state secrets or tran­scripts of a meet­ing that I’ve had, but we un­der­stand you’re go­ing to be try­ing to do that.”

Gov­ern­ment of­fi­cials have placed the large-scale breach at the Of­fice of Per­son­nel Man­age­ment in the cat­egory of tra­di­tion­al spy­ing, push­ing back against char­ac­ter­iz­a­tions of the breach as a cy­ber­at­tack. “That’s a pass­ive in­tel­li­gence-col­lec­tion activ­ity—just as we do,” said Dir­ect­or of Na­tion­al In­tel­li­gence James Clap­per at a Con­gres­sion­al hear­ing this month.

But as Wash­ing­ton braces it­self for the se­cur­ity pre­cau­tions that will ac­com­pany both Xi and Pope Fran­cis dur­ing their vis­its to the cap­it­al this week, some law­makers have ac­cused Obama of show­ing weak­ness in his deal­ings with China. Re­pub­lic­an pres­id­en­tial can­did­ates have piled on, too: Marco Ru­bio and Scott Walk­er last month called for Obama to down­play or out­right can­cel Xi’s vis­it.

Call­ing the U.S.–China re­la­tion­ship “the most con­sequen­tial in the world today,” Na­tion­al Se­cur­ity Ad­visor Susan Rice said Monday that on­go­ing en­gage­ment and ne­go­ti­ations are the only op­tion. “I know that some people ques­tion why we host China at all. That is a dan­ger­ous and short­sighted view,” she said at an ap­pear­ance at George Wash­ing­ton Uni­versity. “If we sought to pun­ish China by can­cel­ling meet­ings or re­fus­ing to en­gage them, we would only be pun­ish­ing ourselves.”

She ad­ded, “If Amer­ica chose to re­move it­self from China, we would only en­sure that the Chinese are not chal­lenged on the is­sues where we dif­fer and are not en­cour­aged to peace­fully rise with­in the in­ter­na­tion­al sys­tem that we have done so much to build.”