In Beijing, Kerry cites frank cyberhacking talks with China; says US companies being hurt

BEIJING—U.S. Secretary of State John Kerry said Thursday that the United States and China had a frank exchange on the issue of cyberhacking during this week’s “Strategic and Economic Dialogue” in Beijing.

Kerry said the loss of intellectual property through hacking has had a “chilling effect on innovation and investment,” and said such activity is hurting U.S. companies.

He made no mention of a New York Times report suggesting significant Chinese hacking of information about U.S. government personnel.

Chinese foreign policy chief Yang Jiechi described cybersecurity as a “common threat facing all countries.”

Speaking through an interpreter, Yang said the issue required mutual trust. “Cyberspace should not become a tool for damaging the interests of other countries,” he said.

The two countries have been at odds over U.S. indictments of five senior Chinese military officials. Washington accused the officials of stealing trade secrets from U.S. companies and giving them to Chinese competitors.

China has rejected U.S. efforts to restart a working group on cybersecurity, which Beijing suspended after the indictments were unsealed.

Yang said it was up to the United States to first create the proper conditions for renewed dialogue on the matter.

Kerry and Yang spoke at the conclusion of the two-day talks, aimed at fostering closer co-operation between the world’s No. 1 and No. 2 economies. Kerry said close co-operation between the two was essential to deal with world problems such as Iran’s nuclear program, North Korea, and conflicts in Ukraine, Iraq and Syria.

He said the two sides discussed ways to advance a peaceful and denuclearized Korean peninsula. “We both understand that there’s more we can do in order to bring North Korea into compliance with its obligations to denuclearize.”

Also present was U.S. Treasury Secretary Jacob Lew, who said China had committed to reducing intervention in its currency “as conditions permit.”

“China is making preparations to adopt greater transparency, including on foreign exchange, which will accelerate the move to a more market-based exchange rate. These commitments will assist China in its reforms and will help level the playing field,” Lew said.

The only specifics announced were related to climate change. Announced Wednesday were eight joint projects aimed at capturing and storing carbon and setting up more efficient energy grids. They also agreed to set stronger fuel efficiency standards for cars and trucks and to study gas use in industrial boilers.

Kerry said Thursday that both countries were committed to low-carbon economic growth and significantly reducing their greenhouse gas emissions.