Continued cybertheft would damage relations: Obama tells Xi

President Barack Obama confronted China's new President Xi Jinping with detailed evidence of Chinese entities engaged in theft of intellectual property from American firms and warned that continued cybertheft could be an "inhibitor" in bilateral ties, a top US official said.

Spread over two days - Friday and Saturday - at a picturesque desert resort in Southern California, Obama, 51, and Xi, 59, had several rounds of meetings and a candle-lit dinner spread over nearly eight hours on a range of bilateral, regional and global issues.

The summit, held just four months after Xi took office, was meant to launch a "new model" of close relationship with a new Chinese leader.

Obama had very good discussions in an informal atmosphere, uniquely informal atmosphere, with President Xi over the last two days," the President's National Security Advisor Tom Donilon told reporters.

"The discussions were positive and constructive, wide-ranging and quite successful in achieving the goals that we set forth for this meeting," he said, noting that the two leaders of the world's two biggest powers discussed human rights and military ties among other topics.

Obama, presenting detailed examples of cybertheft, told the Chinese delegation that the US has no doubt that the intrusions are coming from within China, Donilon said.
"The president went through this in some detail," Donilon said, adding that Obama told Xi that "if there continues to be this direct theft of US property that this was going to be a very difficult problem in the economic relationship and was going to be an inhibitor to the relationship reaching its full potential."

Cyber theft, Donilon said, "really now is at the center of the relationship. It is not an adjunct issue." The US has accused China of stealing billions of dollars of technical, financial, military and other data and intellectual property through cyber attacks. China denies the charge, insisting it is the victim of digital looting.

"We've undertaken, as you know, a systematic effort with respect to this issue. We have had conversations with the Chinese about it over the course of the last year or so. We've raised it publicly," Donilon added.

The "unprecedented" theft of American intellectual property is costing the nation a whopping USD 300 billion annually and the main culprit is China, according to a recent study.

On other issues, the US and China sides agreed for the first time to work together to "phase down the production and consumption" of hydrofluorocarbons, or HFCs, which are potent greenhouse gases linked to climate change. The gases are in refrigerators, air conditioners and industrial applications.

Obama and Xi discussed North Korea over their candle-lit dinner of lobster tamales, porterhouse steak and cherry pie.

Donilon said the two leaders also found "quite a bit of alignment" on North Korea, and a possible path for increased cooperation given the threat to regional and US security. Both agreed that North Korea should give up its nuclear weapons.

The Obama administration has welcomed China's new assertiveness with its neighbor and ally, Pyongyang, believing that it reflects a new calculation that a constant state of crisis on the Korean Peninsula is destabilising for Beijing as well.

Yang Jiechi, China's state counselor and former foreign minister, told reporters that the importance of the summit, the first since Xi assumed charge as Chinese President in March and as General Secretary of the ruling Communist Party in November last year, was to lay the groundwork for a new relationship, not in any specific accords.

Yang said cyber security "should not become the root cause of mutual suspicion and friction. Rather, it should be a new bright spot in our cooperation."

He said the leaders "blazed a new trail" away from disputes of the last 18 months over regional security and computer hacking. He called the session a "strategic, constructive and historic meeting."

Obama gave a one-word summary of the summit Saturday, his only public comment of the day. "Terrific," he replied when a reporter asked how the meetings had gone.

But in more detailed comments earlier, both leaders sought to downplay the possibility of tension, highlighting instead shared interests and opportunities for cooperation.
They pledged to expand official and informal exchanges on military affairs, economics and trade, cyber security, the environment and other issues.

"China and the United States must find a new path, one that is different from the inevitable confrontation and conflict between the major countries of the past," Xi said. If the two nations work together, he added, "we can be an anchor for world stability and the propeller of world peace."