Tuesday, September 22, 2015

Technology companies, the first stop of Xi Jinping in the US – The Wall Street Journal Americas

The visit of Chinese President Xi Jinping to the United States begins tomorrow, not with government officials in Washington, but with meetings with technology industry executives in Seattle. Anyway, the policy remains the central theme.

According to several experts in relations between the US and China, the purpose of Xi will be to convince the top executives in the technology sector to help- . persuade the government of President Barack Obama not to retaliate China against alleged years of invasion and theft of intellectual property

The effort will be made through a private meeting with 15 CEOs of American companies – including the executive leader of the Apple Inc, . AAPL 1:55 % Tim Cook, and Satya Nadella, the Microsoft Corp . <-! -> MSFT 1:45 % – and 15 CEOs of Chinese companies technology.

There is a lot at stake, since authorize or American companies are prohibited from doing business in China operating in the country, to determine whether the US government will follow through with its threat to impose restrictions on imports of Chinese technology. These sanctions are an attempt to prevent the estimated theft $ 300 billion per year in intellectual property, largely crime committed by Chinese hackers breaking into the most sensitive data systems of US companies, according to the Commission report on American Intellectual Property Theft .

The Chinese Embassy did not respond to requests for comment.

Sundar Pichai, CEO of Google Inc, . GOOG 0.98 % was not invited, according to a person familiar with the matter. As in public diplomacy, symbolism matters, and perhaps the decision not to include the executive has meaning, since, in 2010, Google trumpeted his decision to leave China rather than give in to government censorship requirements, and since last year comes stealthily trying to get back operating in the country

. Facebook Inc. FB 1:22 % would not confirm if Mark Zuckerberg was invited. If they participate, will be the only executive at the meeting whose company is currently prohibited from doing business in China. Ginny Rometty, chief executive of International Business Machines Corp . IBM 1:36 % was allegedly invited, but IBM declined to confirm his presence.

“Companies that are there are going [to the meeting] to hear Tim Cook,” says Alec Ross, former adviser to Hillary Clinton technology during his tenure as secretary of state. “Xi will turn to Tim Cook and say, ‘We are so pleased that you are doing business in our country.’ And what Apple is is that American companies can enter the Chinese consumer market and come out winning.”

In fact, Cook said in an Apple event in September that, in the last quarter, the growth in sales of iPhones in China soared 75% over the same period last year. In a letter to Jim Cramer, host of American network CNBC television, sent last month, Cook said. “I still believe that China represents an unprecedented opportunity in the long run”

Apple does not respond to requests for comment.

This is the kind of opportunity that American technology companies would like to take advantage of, especially as they seek growth outside the world’s developed markets. There are a number of barriers in the way, including the requirement of China that US companies keep their data within the country and submit to the laws of China giving the government unfettered access to this data.

There are also other obstacles:. The Obama administration is ready to impose economic sanctions on China if the country does not hold the Chinese hackers attacks on American companies, pirating all their valuable secrets

The problem, says Ross, is China basically see this kind of piracy as a trade issue. As such, it is necessary for continued growth and profitability of state-owned and affiliated companies of the Chinese government and therefore it is crucial to maintain the growth engines, which Beijing also sees as essential to maintain order in a country of 1 , 3 billion people.

The US, on the other hand, sees the issue as a threat to national security.

The convening of a meeting with technology companies that are highly dependent China for both the manufacturing-like Apple – and for its future growth – like Apple, Facebook, IBM, Microsoft and Google – is a way to remind the Obama administration that any ban or sanctions on Chinese imports could lead to a loss opportunity and direct consequences for some of the crown jewels of US innovation economy.

“The timing of this meeting is strategic, the location is strategic, the simple act of convocation was strategic,” says Peter Singer , academician of International Relations, describing the meeting as a courageous act, almost arrogant. “Diplomacy is not merely actions, it is also sending signals to create or undo coalitions and alliances,” he says.

In this case, an alliance is unlikely between China’s leaders and many of the companies that have been victims of cyber attacks positioning itself against those in Washington who are determined to stop the alleged theft of intellectual property by China.

Not everyone agrees with this assessment of the meeting. Kenneth Lieberthal, academic of the Brookings Institutions, says that she is a mere continuation of previous meetings of the US-China Internet Industry Forum, which is exactly in this way that the meeting is being officially presented. The forum has brought together representatives of the Chinese government and US technology companies, although never before had included the president of China and many prominent business leaders.

Lieberthal also believes that the US and China may issue a statement joint on an agreement not to use cyber weapons so that damage critical infrastructure, such as power plants, although this agreement does not solve the kinds of piracy for commercial purposes apparently continue to occur.

Regardless of the goals of Delegation of China, the message that they have managed to pass is both exciting and ominous time: China is ready to allow the entry of more US technology companies if they are willing to play by the rules of China

Because of this diplomatic symbolism, says Singer, “this meeting is a success for China before they happen”

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