U.S. should stand up to China more: McCain

WASHINGTON (Reuters) - The United States should adopt a tougher stance with China on issues ranging from persistent cyber espionage to its economic claims to the South China Sea, a top Republican senator said on Tuesday.

Senator John McCain, the senior Republican on the Senate Armed Services Committee and former presidential candidate, said the Obama administration needed to send a clear message to China that it could not "do whatever they want."

McCain, a former Navy pilot, took issue with China's aggressive claim to the South China Sea, calling it "a violation of every principle of freedom of navigation of the seas that we have fought wars for," as well as repeated cyber attacks on U.S. computers that were traced back to China.

His comments at the Reuters Washington Summit came a week after a U.S. intelligence report identified China as the most active and persistent nation using cyber espionage to steal U.S. trade and technology secrets.

McCain stopped short of calling for a direct confrontation with China, but said the United States should leverage its alliances in Asia to act as a "brake to China's ambitions."

With regard to escalating cyber attacks on U.S. computer networks, McCain said the United States first needed to develop its own capabilities and improve coordination within the government and Congress on cyber issues.

But it should also be firm with China, McCain told the summit, saying; "we have to make it clear to the Chinese that there are costs to engaging in this kind of activity."

"We ought to make it very clear to the Chinese that their past and present behavior is unacceptable," he said.

U.S. NOT PREPARED FOR THREATS

McCain said he was alarmed by the lack of cyber expertise in Congress and lack of coordination given the overlapping oversight by five or six congressional committees.

Cybersecurity was "of the utmost seriousness," but the United States was "not only not aggressive enough but totally not prepared" for the rapidly changing threats in this area, McCain said.

James Miller, the No. 2 official in the Pentagon's policy shop, this week underscored the importance of beefing up U.S. defenses against cyber espionage, which he said is costing U.S. industry and government hundreds of billions of dollars each year, and the increasing threat of destructive attacks.

The Pentagon's advanced research arm, the Defense Advanced Research Projects Agency, on Monday disclosed new efforts to build offensive cyber weapons for possible keyboard-launched U.S. military attacks against enemy targets.

U.S. defense officials and diplomats are working with a range of international partners to establish codes of conduct for the new domain of cyberspace.

McCain said it was crucial to plot out how the United States would respond to "certain scenarios."

For instance, he said, Washington should explore the possible use of offensive cyber capabilities to respond to Iran's efforts to develop nuclear weapons, such as the Stuxnet virus that snarled Iran's enriched-uranium-producing centrifuges last summer.

Experts say that virus was likely created by the United States or Israel.

"That's something the Israelis probably know a lot more about than I do, and maybe our intelligence agencies know more than I do," McCain said.

(Reporting by Andrea Shalal-Esa; Editing by Jackie Frank)