January 18, 2011

Gillibrand Urges President Obama To Press Chinese President On Cybersecurity And Rare Earth Elements During State Visit

China Behind Cyber Attacks On U.S. Defense Industry and Private Sector Businesses

Washington, DC – U.S. Senator Kirsten Gillibrand, a member of the Senate Foreign Relations Committee, is urging President Barack Obama to press his Chinese counterpart on China’s role in cybersecurity matters and China’s stronghold of rare earth elements (REE) next week. The President of the People’s Republic of China, Hu Jintao, is scheduled for a state visit with President Obama this week.

Strong evidence suggests China was responsible for a number of cyber attacks against the U.S. Department of Defense and other federal agencies, defense-related think tanks and contractors, and other private U.S. companies, including Google.

China also accounts for more than 95 percent of the world’s REE production, materials that are critical to our high-tech, clean energy and defense industries that help fuel our economy, but China uses that stronghold to restrict export shipments to the U.S., costing the U.S. jobs and hurting our economic development in emerging industries.

In her letter to President Obama, Senator Gillibrand wrote, “Cybersecurity and REEs greatly affect both the national and economic security of the United States, and I continue to be concerned about China’s policies regarding these two strategic interests.”


January 18, 2011

 

The President
The White House
1600 Pennsylvania Avenue, N.W.
Washington, DC 20500

 

Dear Mr. President,

As you prepare to welcome President Hu Jintao of the People’s Republic of China at the White House this week, I write to bring to your attention two specific items - Cybersecurity and rare earth elements (REE). I trust that these issues will be part of the agenda of your bilateral meeting among the other pressing issues such as the nuclear programs and proliferation activities of North Korea and Iran, Taiwan’s security, and a myriad of trade and financial issues.  Cybersecurity and REEs greatly affect both the national and economic security of the United States, and I continue to be concerned about China’s policies regarding these two strategic interests.  

I recently wrote to you expressing my concern over the government of China’s involvement in activities to undermine our nation’s cybersecurity.  The potentially devastating consequences to the United States illustrate the need to engage this issue at the highest levels of government.  In 2007, computer networks operated by the U.S. Department of Defense, other federal agencies, and defense-related think tanks and contractors were targets of computer network intrusions apparently originating in China. Prominent U.S. companies operating in China, such as Google Inc., have been subject to cyber attacks over the past several years, culminating in Google’s curtailing its activities in China in early 2010.  According to the New York Times, a California-based company filed suit last year alleging that two Chinese companies stole software code and then distributed it to tens of millions of end users as part of Chinese government-sponsored filtering software. Academic researchers found that portions of the company’s software code had been copied and used in initial versions of the Chinese software.  China is now the number one foreign supplier of computer parts to the United States, impacting both military and civilian U.S. Government procurement chains.  I urge you to make clear in your meeting with President Hu that cybersecurity is among the top issues in our countries’ relationship. 

I am also troubled by China’s apparent intent to use its stronghold on rare earth elements extraction to restrict export shipments, as well as to require end user companies to relocate to China.  REEs are used in a number of military applications, the clean energy and auto industries, to name just some of the reasons for their importance. As of 2009, China was responsible for 97 percent of the world’s annual production and possessed 59.3 percent of the world’s reserve base of REEs.  In the past year, there have been reports of plans by China’s Ministry of Commerce to significantly curtail REE export shipments.  There have also been reports that China withheld shipments of REEs in response to a maritime dispute with Japan.  The United States’ reliance on imported REEs makes us very vulnerable to disruptions in the global supply chain threatened by Chinese actions in the future.   

I was pleased that your administration raised this issue with the Chinese leadership in recent conversations and has taken it up in the G20 talks, and I strongly encourage you to continue to press this issue at this opportunity. 

I applaud the approach of your administration toward constructive engagement of China on issues of vital importance to our country’s security and economic development.   I believe that this State Visit provides an excellent opportunity to continue to strengthen the U.S.-China relationship based on mutual interests and shared priorities, while also making clear that the relationship must be based on fairness, accountability, and security.