Of course, such a treasure trove of data erodes the competitive advantage of American firms and their legal position when suing their Chinese counterparts. This theft lead to the serious legal action taken.
According to Eric Holder, Washington sought to send a message, “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.” (3)
China’s Prolific Hacking
Taking such action is a step in the right direction, especially in light of China’s aggressive campaign of cyber theft against American interests. It is well documented how China has literally upgraded everything (4) from its military (5) to cell phone industry (6) all thanks to pilfered foreign tech and know-how. Absent a strong response, there is little to no incentive for China to mend its ways and abide by international laws and norms.
The lawsuit by Washington was meant to supply the impetus for change. Unfortunately, the mode of punishment chosen was wrong, and Washington will fail. The reason for this stems from cultural differences in how Chinese and Americans perceive themselves in relation to a group, especially when dealing with punishment.
Chinese culture is made up of relationships which define the people and country. In contrast to the West, Chinese do not consider themselves as individuals but part of a greater whole. Whereas Americans think of themselves as I, Chinese think of themselves as we. This belief has its origins in collectivism fomented by Confucianism over two thousand years ago.
Not surprisingly, legal action reflected this belief too. Thousands of years ago Chinese emperors slaughtered entire villages for the transgressions of one person. This punishment was legitimized by emperors who believed in ‘killing the chicken to scare the monkey’, or to make an example of anyone who did not conform.
This helped the emperor in his duties as each group then self-policed to avoid getting their heads chopped off or being buried alive. In Chinese culture, the group was held responsible for the actions of the individual (7). The same belief construct still exists in China today.
Collective Punishment Alive and Well in China Today
For example, even today teachers are held responsible if their students fail, companies are held responsible for the comments posted on their websites and in the extreme, and parents are punished for the actions of their adult children. In other words, the notion of individual responsibility is diluted in China when compared to the West.
According to some (8), this has lead to a culture which has blurred the conventional definition of responsibility and boundaries.
Consider these real life examples and the impact it has on the fabric of Chinese society. A key aide to China’s ex-leader Hu Jintao was demoted after his son wrecked a Ferrari (9) killing himself, another woman and crippling a third who eventually died in the hospital(10). The same thing happened to a police chief whose son killed a woman while driving as well (11).
Punishment of family members can even be more severe. Another man, Guangfu Chen can attest to this (12), as soon as he gets out of jail, of course. He is the brother of Chen Guangcheng the blind human rights lawyer (13). The only crime Guangfu committed was being the brother of a prominent civil rights lawyer.
Everyone in China knows that his crime was nothing more than being related to a guy who questions the authority of Beijing. The same is true of the wife of Liu Xiaobo, who was beaten and then denied treatment. She was apparently punished for being the wife of one of China’s two Nobel prize winners – a man who dared to write about democracy.
The message from Beijing is clear, accountability extends from the individual to the family. This strategy works as one knows that by stepping out of line they risk harming their family. Aside from this, out of fear of retribution, the family will also exert pressure on the individual to toe the party line.
China Crowdsources Good Behavior
At a practical level, this difference has an enormous impact on how punishment is viewed in both the USA and China. In the USA, it is up to each person to check their behavior, but in China this is crowdsourced. As a consequence of this, Chinese families and communities are hyper-vigilant about monitoring the behavior of those around them. They do this in order to avoid punishment by proxy. The group exerts pressure on the individual to conform.
The key to punishment in the PRC is to involve the family or community as opposed to the individual. This ties into the Chinese notion of the we and results in society shaming a person into behaving appropriately. In other words, blame the unit as opposed to a person. This is a thing America is loathe to do with China.
China, on the other hand, has no compunction against punishing the individual and group as well when dealing with America. For example, after posting exposes on the wealth of communist leaders both the New York Times and Bloomberg were blocked (14). Other American news sources were likewise punished, even though they had nothing to do with the stories.
American journalists who had no connection with the two companies also had problems obtaining work visas in China. One of these is still in limbo in Hong Kong and another was actually forced to leave. Beijing is crowdsourcing good behavior in dealing with the US.
When viewed with this lens, the optics of Washington’s decision to prosecute only five soldiers is doomed to fail. By focusing on the individual as opposed to the group, Washington sends the wrong message. Neither Beijing nor its citizens are being held responsible for the actions of its people and thus there is no need to change.
Think about it like this, we know that the stolen data was being fed to State Owned Enterprises (SOEs) which belong to the communist party. This information directly and indirectly helped them gain an unfair competitive advantage against US firms. Because they benefited from this theft, they should also be punished for their part in it.
Whether they played an implicit or explicit role does not matter. The fact is that they are being illegally enriched by data theft and should be held responsible. This is what they would do in China.
US Needs to Rethink China Strategy
Washington should not stop there, however. In keeping with the Chinese ideal of ‘killing the chicken to scare the monkey’, more is needed. Taking a page from the Beijing playbook, Washington could send a broader message. First on the list would be to punish Chinese SOEs.
These companies could easily be sanctioned. In addition, a tougher stance could be taken on Chinese firms investing in US capital markets. Chinese companies are flocking to list in America, and many of these are state-owned or backed. We could send a strong message by closing off the money spigot.
Another measure would be to refuse visa’\s to members of the communist party in general and individual businesses in particular. This is precisely what Beijing would do, isn’t it? Having their visa refused because of the actions of their compatriots would send a strong message to Chinese citizens and business people.
These proposals may seem illogical given the American paradigm and view of individual responsibility. When viewed from a Chinese perspective, however, they make perfect sense.
As long as the typical Chinese company or citizen does not feel the pain for the transgressions of the group, there is no impetus to change. If more people were held responsible for the actions of the collective, Beijing might clean up its act. After scores of companies were refused access to dollars and even entry into the USA, Beijing may reconsider its position. As it stands right now, there is no need for them to do so.
Carry out an execution before seeking the decree. – Chinese proverb
References & Image Credits:
(1) TSW: China’s Massive Cyberwar Against the United States
(2) TSW: China to Escalate Cyberwar War Capabilities
(3) Justice Department
(4) TSW: China Brags About Stealing Top Secret US Tech
(5) Fox News
(6) Hunger Marketing China
(7) Wikipedia: Sacred Edict of the Kangxi Emperor
(8) William Devenny among others, on file with author
(10) On file with author
(11) TSW: The China War on Laws
(14) New York Times