China and Germany in a dust up over cybersecurity

Germany’s ambassador to China, Michael Clauss, didn’t hold back any punches in an interview with the South China Morning Sun, landing a few haymakers squarely on the People’s Republic of China’s (China) nose. China, however, smacked right back.

Germany’s view

Clauss noted that one of the primary issues that is causing discomfort in the bilateral relationship between China and Germany is the lack of follow through on the part of China in establishing the consulting mechanism (bilateral cybersecurity accord), which was agreed on in June 2016.

Clauss continued, saying the current requirements surrounding encryption and VPNs has caused German companies some discomfort. He specifically highlighted how Germany’s “repeated requests to have a meaningful dialogue on VPNs and cyber-related questions with relevant Chinese authorities have regrettably not yet received a positive response.”

The Chinese requirement for “forced technology transfers” has caused consternation among German companies. Clauss says, “More and more German companies approach the embassy and express their grievances about increasing discrimination and obstruction as a result of state intervention and administrative measures. Notorious complaints about forced technology transfers, compulsory joint ventures in some sectors or the inadequate legal protection of intellectual property have still not been remedied.”

China’s view

The Chinese foreign ministry spokesperson, Hua Chunying, said the ambassador’s comments were not very helpful, and he went so far as to call some of the ambassador’s statements wrong, according to the U.K.’s DailyMail.

Indeed, the spokesperson contradicted Clauss by saying, “Germany has been invited to send delegations for consultation but was reluctant.” And he closed with the admonishment that the German embassy “do something conducive to the development of bilateral relationship.”

Boiling cauldron

The direct and forthright comments from Ambassador Clauss come on the heels of the German intelligence services noting how the Chinese have been using fake social network profiles to target over 10,000 German nationals. These efforts continue, and German businesses have been informed as to the threat to their personnel and networks posed by China.

Prior to the revelation on the use of social networks by the Chinese intelligence apparatus in early December, the German Bundesamt für Verfassungsschutz (BFV – (Interior Ministry) warned German businesses in June 2017 that the Chinese threat to German industry was real and that the Chinese were focusing their attention on industry, research, technology and the armed forces. He noted, how the Chinese used social networks to recruit — specifically calling out LinkedIn, which is the same social network that was identified as hosting fake profiles of Chinese nationals.

Indeed, in April 2017, a  Siemen’s employee in The Netherlands was caught red-handed attempting to provide proprietary information that he, the trusted insider, had taken from his employer. What has not yet been revealed is how the Dutch employee was spotted and subsequently recruited to provide privileged information. This was followed in November 2017 by the Department of Justice identifying China as responsible for the cyber attack experienced by Siemens in the United States, an attack that ultimately resulted in 407 gigabytes of information being stolen from Siemens by China.