Why do Chinese cyberattacks demand an aggressive response?

For the first time ever, the Justice Department is bringing hacking charges against another country.

Five members of the Chinese military are alleged to have stolen trade secrets from five American companies and the United Steelworkers, attacking with just a desk and a computer.

U.S. Attorney General Eric Holder said the military hackers stole information that would give Chinese companies and state run enterprises an unfair advantage and insight into American companies.

The Chinese government denies allegations, calling it "purely ungrounded and absurd."

What does this mean for China-U.S. relations?

How will an indictment like this legally play out?

What kind of economic impact will we see?

We consulted a panel of experts for the Inside Story.

This the first time the United States has brought hacking charges against a state actor. What does this do to China-U.S. future ties?

Martin Libicki: It’s a combination of things. It reinforces the message that President Barack Obama has been giving to the Chinese premier. Clearly China isn’t going to extradite these people, and the reaction from China isn’t surprising. The five people they indicted aren’t going to be taken to court in the U.S. anytime soon. 

Russian President Vladimir Putin basically put out a warning to his folks that if you’re in the hacking business where the U.S. may have indictment on you, you may want to be careful on the countries you visit. We’ve done this to the Russians as well. But when we did it with the Russians, it wasn’t against state actors. It was against cybercriminals. We are indicting people who are employees of the Chinese military, which is fairly unusual behavior in international relations.  It’s an insult to the Chinese. and it may be a true insult. But the Chinese can equally say there are lot of U.S. intelligence people looking at our stuff as well.

How will this work legally?

Once we do it, we tend to not undo it. In other words, it’s not going to be like in five years everyone will forget this. You've now started a long bureaucracy with a long memory. Unless the Department of Justice says forget about it, these people will be under indictment pretty much forever.
 

What kind of economic impact are we seeing in these operations?

If we had wanted to start a trade war, we would’ve started sanctions on Chinese productions and make a case against products made from stolen intellectual property. We didn’t. Instead, we took a stop against hackers themselves. And so that choice reduces the odds before becoming a trade war.

What is significance of this Department of Justice case?

Wenran Jiang: I think the American government is positioning itself as being proactive because with the [Edward] Snowden revelations, the U.S. has been in a weak position. The claims of Chinese spying are being seen as hypocrisy. This is the U.S. government showing U.S. companies they are willing to do something and at the same time to set up a case to intimidate or mitigate Chinese actions, though they know there is no chance these guys will be brought to the U.S.

The problem now on the Chinese side is that they already released a statement saying this is absurd. So clearly they are not going to come close to complying. And in addition, they withdrew from the bilateral working group on cybersecurity. Now they are going to have more confrontation.

Most of charges seem to be commercial. To what extent is Chinese spying commercial vs. security-based?

Well, Americans in fact distinguish between security and commercial espionage. When the Snowden revelations showed massive U.S. spying on the Chinese in everything, Americans admitted to it but basically said, "It is security-related spying, not commercial." The Chinese view it as hair-splitting. They do not buy it as purely security concerns. To what extent the Chinese are doing the same, I am not sure. I have not seen proof of this Chinese commercial theft.
 

What would be a productive way forward here?

In my view, instead of laying charges, which will lead nowhere, America should intensify its activities through the joint bilateral working group. What is being laid out in the charges could be conveyed at the working group level. It could be more effective than what is going on publicly. The Chinese look at this as American bullying. Policy-wise, it is not a good move. Americans have an interest in making an open case for purpose of showing they are standing up to the Chinese.

The above panel was assembled for the broadcast of "Inside Story" to discuss.

For future hard-hitting conversations, find Al Jazeera America on your TV.