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Can China Be Deterred in Cyber Space?

Can China Be Deterred in Cyber Space?
By Joseph Nye
If we look at the cyber realm, the effectiveness of deterrence depends on who (state or non-state)
one tries to deter and which of their behaviors. Ironically, deterring major states like China from acts
of force may be easier than deterring non-state actors from actions that do not rise to the level of
force. The threat of a bolt from the blue attack by a major state may have been exaggerated. Major
state actors are more likely to be entangled in interdependence than are many non-state actors, and
American declaratory policy has made clear that deterrence is not limited to cyber against cyber but
can be cross domain with any weapons of our choice.
Along with punishment and denial, entanglement is an important means of making an actor perceive
that the costs of an action will exceed the benefits. Entanglement refers to the existence of
interdependences which makes a successful attack simultaneously impose serious costs on the
attacker as well as the victim. This is not unique to cyber. For example, in 2009, when the People’s
Liberation Army urged the Chinese government to dump some of China’s massive holdings of dollar
reserves to punish the United States for selling arms to Taiwan, the Central Bank pointed out that
this would impose large costs on China as well and the government decided against it.
Similarly, in scenarios which envisage a Chinese cyber attack on the American electric grid imposing
great costs on the American economy, the economic interdependence would mean costly damage to
China as well. Precision targeting of less sweeping targets might not produce much blowback, but the
increasing importance of the Internet to economic growth may increase general incentives for self
restraint. At the same time, entanglement might not create significant costs for a state like North
Korea which has a low degree of interdependence with the international economic system.
Even among major powers, there may be situations, such as August 1914 where various actors
believe that the benefits of attack exceed the costs to entanglement. European states were heavily
entangled in trade and finance, but still chose to go to war. Most incorrectly envisaged a short war
with limited costs, and it is doubtful that the Kaiser, the Czar and the Austro-Hungarian emperor
would have made the same decision if they had foreseen the loss of their thrones and
dismemberment of their empires. Norman Angell who wrote that war had become too costly
because of entanglement was correct in that sense, but miscalculation can affect any type of
deterrence. Trade between the U.S. and Japan did not prevent the Japanese attack on Pearl Harbor,
but in part that was caused by the American embargo that manipulated the interdependence in a
way that led the Japanese to fear that failure to take a risky action would lead to their strangulation.
Deterring state actors from attacks that do not reach the level of force is more difficult. For example,
deterring China from cyber theft of intellectual property for competitive commercial advantage has
proven more difficult than deterring an attack on the electric grid. Yet even here, the American
threat of economic sanctions seems to have changed the declaratory policy of Chinese leaders at the
time of the September 2015 summit between presidents Xi and Obama. The American indictment of
five PLA officers for cyber theft of intellectual property in 2014 initially seemed counter-productive
when China used it as a pretext to boycott a previously agreed bilateral cyber committee. But the
costs of naming and shaming plus the threat of further economic sanctions seems to have changed
Chinese declaratory behavior. Previously, China had not recognized the American distinction of
espionage for competitive commercial purposes as a distinct category, but they accepted it in 2015.
Whether the threat of sanctions and loss of face will deter actual behavior of the complex
organization we summarize as “China” remains to be seen. Skeptics argue that the declaratory policy
change did not alter behavior of cyber theft originating from some actors in China. Optimists point
out that deterrence requires clarity about what one is trying to deter, and the Chinese president’s
declaration at last provides a clear baseline for behavior that China can be held to.
If there is no progress, further sanctions with credible consequences could include using the dispute
settlement mechanism of the World Trade Organization, but such cross domain deterrence can be
problematic if it involves issue-linkage which is resisted by trade bureaucracies and corporate groups
that do not wish to see their interests damaged by reprisals. Options such as naming and shaming
corrupt officials by disclosing hacked information about their behavior can attack a country’s soft
power but it sometimes resisted as over escalatory. The jury is still out on the extent to which China
can be deterred in cyber space, but the evidence suggests it would be mistaken to totally discount
the possibilities.
Joseph S. Nye, Jr. is University Distinguished Service Professor and former Dean of Harvard’s Kennedy
School of Government. This article has previously been published on the EastWest Institute’s Policy
Innovation Blog.
Tags;
Cyberspace; Cyberwar

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