On May 24, the United States made a diplomatic move in the Asia–Pacific region that strengthens the growing coalition against the Chinese Communist Party (CCP), deepens U.S. influence in the region, and expands the number of nations around China that are shifting away from pacifism and inaction.
The CCP’s response was to welcome the move, and declare it a healthy development for the world.
If that response seems uncharacteristic of the CCP, you’re right, but only because its interests rest much deeper.
The move in discussion is President Barack Obama’s lifting of the decades-old arms embargo on Vietnam. He met with Vietnamese leader Tran Dai Quang and declared, according to The Associated Press, “This change will ensure that Vietnam has access to the equipment it needs to defend itself and removes a lingering vestige of the Cold War.”
In response, Chinese Foreign Ministry spokeswoman Hua Chunying said, according to a transcript, that China is “happy to see Vietnam develop normal relations with all countries, including the U.S.”
With the CCP, all of its responses—whether through its Foreign Ministry spokesperson or its state-run news outlets—are going to be tightly regulated, and with something on this scale, also tightly calculated.
What’s interesting about this development is that the CCP seems to have assessed that it’s more in its interest to feign support for the development than to criticize it. And its likely interest is the potential that this could act as a springboard for it to begin lobbying the United States and the European Union to lift similar arms embargoes on China—which were set in place after its Tiananmen Square massacre in 1989.
Vietnam’s poor human rights record has been one of the deal’s main points of criticism, and the fact that Obama went ahead with the deal despite this likely has some Chinese leaders rubbing their hands together.
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The Chinese regime pushes an ideology in its form of diplomacy that human rights shouldn’t get in the way of politics. This policy has enabled it to forge alliances with some of the world’s most despotic regimes, and to build its own bloc of influence with countries the United States and European Union refuse to deal with.
This factor has brought strong criticism onto the CCP, since its support of countries like North Korea allows totalitarian regimes to sustain themselves when they would otherwise very likely collapse.
Of course, Vietnam isn’t as bad as North Korea, but it is run by a communist one-party government, and it also has some of the same human rights abuses as other communist states. According to a freedom ranking of countries by Freedom House, Vietnam scored 20 out of 100 with being the least free. It notes that Vietnam has almost no political freedom and few civil liberties.
What’s interesting about China’s response to the new deal is that its propaganda thinkers have apparently assessed that the benefit of a muted response outweighs the benefit of criticism—particularly since this will likely shift the tides further against its favor in the Asia–Pacific region.
The deal itself is more symbolic than anything. Its main impact will likely be much less on Vietnam’s military strength and much more on how Vietnam is perceived globally.
Vietnam was already buying military vehicles and equipment from Russia, and the shift in U.S. stance is unlikely to make Vietnam much more of a military threat to China than it already is. Vietnam has more military personnel than the United States, with close to half a million in active service and a reserve force of three million.
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But if recent history tells us anything, the CCP does view this new deal as a threat and is holding its tongue. When the United States began lifting its arms embargo on Vietnam in 2014, the CCP’s state-run People’s Daily criticized the deal and accused the United States of interfering with the “balance of power in the region.”
The “balance of power in the region” is what this new deal will likely impact most. What it changes is how the United States views Vietnam, and it may help Vietnamese diplomacy with other nations as well. As Japan Times reported, it will reduce the “political sensitivity” that nations would otherwise face when strengthening ties with Vietnam.

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One of the most important developments in recent history for China’s military took place last month, and it was easy to miss.
The Chinese Communist Party (CCP) ordered its military to abandon its business ventures over the next three years. The order applies to the People’s Liberation Army and the People’s Armed Police.
Those who follow Epoch Times reporting know the implications of this run deep. As my colleague Matthew Robertson pointed out, this will notably close the military-run hospitals which carry out the CCP’s forced organ transplants of prisoners of conscience—most markedly Falun Gong practitioners.
Robertson profiled the operations of one of these hospitals, Tianjin First Central, in an investigative piece in February, and noted “Epoch Times found sufficient evidence to throw into great doubt, if not demolish entirely, the official narrative of organ sourcing in China. This is simply due to the number of transplants: they are far too high.”
But the implications of the new order for the Chinese military run deeper still, as the order will very likely also impact the Chinese military’s use of cyberattacks for financial gain.
I’m not talking about the state-sanctioned cyberattacks, but instead the cyberattacks military commanders run to feed business ventures they have ties to, and the cyberattacks individual military hackers carry out to stuff their own pockets.
I mapped out China’s military-industrial complex in a September 2015 investigative report, and noted that until recently the Chinese military was expected to find external ventures to fund its operations.
I also detailed in March the DarkNet marketplaces that Chinese military hackers run to make money on the side. The hackers have been carrying out the state-run cyberattacks on behalf of the Chinese regime, but have also been stealing additional information they can sell personally.
Under the new orders, it’s likely these external ventures will gradually lessen, and we could see a significant drop in Chinese cyberattacks.
Of course, this doesn’t mean the state-sponsored cyberattacks will stop. It just means the military-led cyberattacks the Chinese regime doesn’t have a direct hand in could be coming to an end.
This process has actually been underway for some time. In September 2015, the leader of the Chinese Communist Party, Xi Jinping, announced he would cut 300,000 troops from the Chinese military. This was accompanied by a planned restructuring of the Chinese military.
I reported in November 2015 that there was more to this restructuring than meets the eye. A proposal for the new structure shows that it would move the military units that carry out the cyberattacks out from under strict military control, and put them under joint command between the Central Military Commission and the State Council.
In other words, the restructuring would give the “government” side of the Chinese regime–the state council–more oversight over the types of cyberoperations being carried out by the military.
Read MoreAgreement on Cyberattacks Will Not Stop China’s Economic Theft
On May 16, the Chinese regime also deployed “anti-graft” squads to different theater commands and “key military departments,” according to the state-run Global Times. Under the oversight of these 10 anti-graft squads, it states, these targeted commands and departments will “for the first time be accountable to top military authorities.”
This won’t all happen overnight, however. The state-run China Daily reported on May 10 that the People’s Liberation Army and People’s Armed Police have started by selecting 17 units to close their commercial activities.
With plans to complete this process within three years, it notes the 17 units are “tasked with exploring effective ways to shut down businesses.”

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This news analysis was originally dispatched as part of Epoch Times China email newsletters. Subscribe to the newsletters by filling your email in the “China D-brief” box under this article.
With a hope to end the onslaught of Chinese cyberattacks on U.S. businesses, President Barack Obama announced a deal with the leader of the Chinese Communist Party (CCP), Xi Jinping, on Sept. 25, 2015, to end cyberattacks meant for economic gain.
The next day, the Chinese cyberattacks on U.S. businesses continued as usual.
The impact of Chinese economic theft was the focus of a new segment on “60 Minutes,” which aired Jan. 17. It highlighted an environment where Americans are being spied on by a foreign government, and where U.S. CEOs are doing business with China while knowing they have only five or six years to do business before their products are stolen.
“The CEO knows that by going into business with China, he is committing long-term suicide,” said Richard Bonin, who produced the story for “60 Minutes,” in a CBS News video.
What was probably most interesting was that despite the noise around Chinese economic theft, there is an air of quiet tolerance among businesses, with government procurement, and with international regulation.
If the cyber agreement between the United States and China has shown us anything, it’s that the CCP will not cooperate when it comes to stopping economic theft. For them, the risk of these attacks is negligible, the benefits of the attacks are too great, and the Chinese economy has come to rely too heavily on theft to just switch it off.
One of the key problems is that the United States still doesn’t have a real strategy for dealing with cyberattacks. This issue was highlighted by Gen. Michael Hayden, the former director of the NSA and CIA, during a recent speech at the S4x16 ICS/SCADA cybersecurity conference in Miami.
“We lack a legal policy framework,” Hayden said, according to cybersecurity news website Dark Reading. He added, “People ask how come government isn’t doing something about it … Government will be permanently late to the need in providing cybersecurity.”
This ties back to the cybersecurity agreement with China. One of the key problems with cybersecurity, in general, is that the United States has not yet demonstrated that using cyberattacks for economic gain is a risky endeavor.
Cyberattacks are often carried out from countries that have no extradition treaties with the United States, U.S. businesses are not allowed to launch counterattacks, and the business environment often has CEOs petrified of making the attacks public for fear of lawsuits and angry investors.
It’s a crime with high profit and little risk, and as the “60 Minutes” segment highlighted, even businesses with alleged stolen products are still able to sell these products freely in the United States.
Daniel McGahn, the head of American Superconductor, spoke about his experience of having his software stolen in China. He said in the “60 Minutes” segment that he had to then fire 600 of his nearly 900 employees, and his company lost “well over a billion dollars.”
Sinovel, the company partly owned by the Chinese regime that allegedly robbed him, now exports wind turbines running on his technology. They were even able to sell one of these turbines to the state of Massachusetts, which was paid for with federal stimulus funds.
The case is a clear example of what a cyber agreement with China needs, yet still lacks: sanctions that can discourage theft.
Obama signed an executive order giving himself the ability to sanction companies that commit economic theft, and the threat of sanctions was believed to be one of the key tools used to nail down the cyber agreement in September. But as I reported at the time, the sanctions were not mentioned directly in the agreement.
In other words, the cyber agreement lacks teeth. It still gives the Chinese regime no real reason to stop its attacks—and instead just gave it a platform of dialogue where it can continue pretending it has no part in the problem.
The other key problem is also one I’ve mentioned before. Economic theft is not just a cyber problem, and the Chinese regime—in particular—still uses a large number of conventional spies to carry out its work.
This was also highlighted in the “60 Minutes” segment, with American Superconductor.
McGahn noted in the segment that when he started doing business with China, he made sure his systems were locked tight. They used strong encryption and had a solid system for cybersecurity.
Then, in 2011, they tested their software on Sinovel’s turbines. The system had been programmed to shut down after the test, but the blades kept spinning. The Chinese company had successfully broken his encryption.
It turned out the breach took place through one of their employees—an Austrian named Dejan Karabasevic, who would later spend a year in jail for his crime. McGahn said the Chinese regime “offered him women. They offered him an apartment. They offered him money. They offered him a new life.”
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And all it took for McGahn’s company to lose its key product to China, was for Karabasevic to say “yes.”
The problem of economic theft seems complicated on the surface, but when you boil it down, it’s pretty simple: the Chinese regime and its state-run companies will use any means they have to steal U.S. intellectual property, and gradually push U.S. companies out of the global market.
To solve the problem, the United States needs to broaden its view of economic theft past cybersecurity. And it needs to find a solution that turns what is currently a highly profitable, and generally safe, operation into something that isn’t worth the risk.

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