US, China exchange concerns on hacking in "cyber working group"

WASHINGTON (AFP) - The United States and China on Monday aired out concerns about hacking, which has emerged as a major irritant between the world's two largest economies.

US and Chinese officials met in Washington for a first "cyber working group," two days before the countries hold their main annual talks.

"This first meeting, we're hopeful, will enable the two sides to share perspectives on international laws and norms in cyberspace," State Department spokeswoman Jen Psaki told reporters.

Ms Psaki voiced hope that the talks, which included a Pentagon official, would "set the tone" for future exchanges on cyber security.

Another State Department official, speaking on condition of anonymity, said that the United States had raised concerns about economic-related hacking.

"Both sides made practical proposals to increase our cooperation and build greater understanding and transparency," he said.

Officials declined to offer further details but said that they would say more at the conclusion of talks.

The United States has accused China of waging a vast hacking campaign against the US government, military and companies, with a private study recently concluding that cyber-theft costs the US economy hundreds of billions of dollars a year.

China has hit back that it is also the victim of cyberattacks, charges that gained ammunition when the intelligence leaker Edward Snowden said US spies had hacked into the prestigious Tsinghua University, one of six centres that routes all of China's Internet traffic.

President Barack Obama has insisted that there is a distinction between intelligence gathering, which he said all countries conduct, and the theft of trade secrets for commercial gain.

Hoping to ease the rift, Secretary of State John Kerry and State Councilor Yang Jiechi, a key figure in setting China's foreign policy, in April announced the creation of the cyber dialogue.

Yang and Vice-Premier Wang Yang will visit Washington for the Strategic and Economic Dialogue on Wednesday and Thursday, the main annual meeting between the two nations.

The US side was supposed to be chaired by Kerry and Treasury Secretary Jacob Lew, although officials said that Mr Kerry's schedule was still being determined after his wife, Teresa Heinz Kerry, was hospitalised for an apparent seizure.

In a sign of the importance that the United States draws to the relationship, Vice-President Joe Biden will open the talks on Wednesday.

Mr Biden led administration efforts to cultivate a relationship with Chinese President Xi Jinping, who took office in March and will likely be in charge of the rising power for the next decade.

Mr Xi and Mr Obama spent a weekend together last month at a desert retreat in California, with both sides saying they wanted the two leaders to develop a personal rapport.

Economic policy will figure prominently in this week's dialogue, with the United States pressing China to open its giant market further to foreign competition and to allow the value of its currency to rise from levels that critics say are kept artificially low to boost exports.

"From everything that we've been hearing, both in our private conversations as well as what we've seen in senior-level statements... there is a strong commitment to move forward with reform" by China's new leadership, a US official said.

"Of course, how they go about doing those reforms will matter greatly for us. How quickly they do it, I think, is still a question as well," she said.

Last year's Strategic and Economic Dialogue was overshadowed when leading activist Chen Guangcheng escaped house arrest for the safety of the US embassy days before Hillary Clinton, then the secretary of state, arrived in Beijing for the talks.

The United States and China eventually negotiated an agreement under which Mr Chen, a blind self-taught lawyer who exposed forced abortions, was allowed to go to New York to study.

A US official said that Mr Kerry "feels deeply" about human rights in China and would raise issues including the status of ethnic minorities.

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