US Tech Executives Serve Up Complaints To China’s Xi Jinping

As China’s president, Xi Jinping, met with United States tech leaders earlier this week in Seattle, he urged cooperation between the two countries in developing an Internet that is in line with China’s “national realities,” The New York Times reported Thursday (Sept. 24).

Xi’s audience included such Internet and technology notables as Facebook’s chief, Mark Zuckerberg, Tim Cook of Apple, Amazon CEO Jeff Bezos and Alibaba’s Jack Ma. The group gathered as part of an Internet forum jointly sponsored by Microsoft and China.

As NYT noted, Xi’s embrace of China’s “national realities” indicates a phrase at odds with what critics say is the Western ideal of an “open” cyberspace. The Chinese leader said that a “secure, stable and prosperous” Internet concerns all nations, which could be seen as a nod to what the newspaper termed “severe disagreements” between the U.S. and China over how to manager cyberissues.

Both the Chinese leader and several of his top advisers faced criticism over government policies in place that have fostered a level of discrimination against U.S. companies as they attempt to bring their operations to China.

At an earlier round table discussion with U.S. business leaders, which included the tech execs, as well as Warren Buffett and U.S. Commerce Secretary Penny Pritzker, the latter told Xi that U.S. enterprises had complaints about issues ranging from cybertheft to what is known as “forced technology transfer.”

NYT noted that the commerce secretary had joined the Seattle discussions ahead of Xi’s visit to Washington, D.C., which subsequently began on Thursday, for more intense discussions on alleged Chinese theft of U.S. business secrets. Pritzker told Xi at the Seattle meeting that “these issues certainly have a negative impact on American firms and create an unlevel playing field for foreign companies. They also hurt Chinese businesses and make it harder for us to unlock mutually beneficial commercial opportunities.”

In another volley of criticism lobbed at the state of U.S./China technology relations, Dean C. Garfield, president of the Information Technology Industry Council, said at the tech forum that China “shouldn’t obscure the fact that there are real challenges in China where the rhetoric and the vision doesn’t meet the reality.” As NYT reported, Garfield was in a position, as head of an association rather than a company, to make direct public criticism of the country and its practices. Garfield said that draft regulations would place U.S. companies in the position of having to face audits and “create back doors” into hardware and software technologies. And those regulations do not merely safeguard Chinese national security, said Garfield, but also make it possible for China to favor its own domestic players over U.S. entrants.

The tech forum held jointly by Microsoft and the Chinese had been seen by many foreign policy and technology industry observers as a way for the factions to repair relations, according to NYT. The meetings themselves were widely anticipated as a way to broach the subject of cybersecurity.

And while Facebook and Google may face continued censorship and firewalls from China and Microsoft has seen the lingering effects of piracy and other activity from the country (even as Microsoft signed agreements this past week with both Baidu, the Chinese internet giant, and the Sichuan provincial government), almost all tech players want to step up their presence in that nation, NYT said. Apple, for its part, has gathered more than a quarter of its revenues from the country, buoyed by a burgeoning middle class, and China remains an important market for growth across mobile and payments.

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