XI SHOW DOWN

AS BEIJING TIGHTENS ITS CONTROL, GLOBAL CEOS WEIGH THE RISKS OF DOING BUSINESS IN CHINA

- BILL POWELL

THE NATIONAL SECURITY agency got wind of the attack almost immediately. A massive cyber hack was underway last month into Microsoft’s Exchange email server, and within hours the NSA had determined where the assault had originated: the People’s Republic

of China. The PRC had over the years repeatedly forsworn any intention to hack into U.S. corporate computer systems and steal intellectual property. President Xi Jinping, in fact, had given Barack Obama his word, in September 2015, that China would not engage in commercial cyber espionage.

That had been a lie, and now the Biden White House was fed up. While refraining, for the moment, to impose new sanctions against Beijing, it immediately contacted key allies, led by Japan, and asked them to join Washington in issuing a formal joint complaint to Beijing, which they did in late July.

This marked a difference from the aggressively unilateral approach on trade that the Trump administration took, and was the first significant demonstration that the Biden administration meant it when it said it would work closely with allies to respond to China’s economic predations.

In government offices in Tokyo and in European capitals, the change was welcome. “Now, on cybersecurity, we will be working closely with the United States, as well as other like-minded countries, to take countermeasures,” Japanese Prime Minister Yoshihide Suga told Newsweek in an exclusive interview during the Tokyo Olympics. “This is going to be a public-private effort. And in that, we’ll be working closely with the United States.”