WASHINGTON — When the Obama administration circulated to the nation’s Internet providers last week a lengthy confidential list of computer addresses linked to a hacking group that has stolen terabytes of data from U.S. corporations, it left out one crucial fact: Nearly every one of the digital addresses could be traced to the neighborhood in Shanghai that is headquarters to the Chinese military’s cybercommand.
That deliberate omission underscored the heightened sensitivities inside the Obama administration over just how directly to confront China’s untested new leadership over the hacking issue, as the administration escalates demands that China halt the state-sponsored attacks that Beijing insists it is not mounting.
Administration officials say they are now more willing than before to call out the Chinese directly — as Attorney General Eric H. Holder Jr. did last week in announcing a new strategy to combat theft of intellectual property. But President Barack Obama avoided mentioning China by name — or Russia or Iran, the other two countries the president worries most about — when he declared in his State of the Union address that “we know foreign countries and companies swipe our corporate secrets." He added: “Now our enemies are also seeking the ability to sabotage our power grid, our financial institutions and our air traffic control systems."
Defining “enemies" in this case is not always an easy task. China is not an outright foe of the United States, the way the Soviet Union once was; rather, China is both an economic competitor and a crucial supplier and customer. The two countries traded $425 billion in goods last year, and China remains, despite many diplomatic tensions, a critical financier of American debt. As Hillary Rodham Clinton put it to Australia’s prime minister in 2009 on her way to visit China for the first time as secretary of state, “How do you deal toughly with your banker?"