China, Canada vow not to conduct cyber attacks on private sector

(Reuters) - China and Canada have signed an agreement vowing not to conduct state-sponsored cyber attacks against each other aimed at stealing trade secrets or other confidential business information.

A man holds a laptop computer as cyber code is projected on him in this illustration picture taken on May 13, 2017. REUTERS/Kacper Pempel/Illustration

The Canadian government, under pressure to show it is not being too soft on China, described the deal as a step toward dealing with Chinese espionage, the Globe and Mail reported on Monday.

“This is something that three or four years ago (Beijing) would not even have entertained in the conversation,” an unnamed official told the paper, which first reported the agreement.

Some countries, including the United States, have long accused Beijing of sponsoring hacking attacks on companies in an effort to acquire sensitive foreign technology. China denies those accusations, and says it is also a victim of hacking.

The new agreement between Canada and China covers only economic cyber espionage, which includes hacking corporate secrets and proprietary technology. It does not encompass state-sponsored cyber spying for intelligence gathering.

The Liberal government of Prime Minister Justin Trudeau wants to boost trade with China, in part to lessen dependence on exports to the United States. In return, China is pushing Ottawa to reduce strict security-related restrictions on Canadian assets that China and other nations can buy.

Ottawa recently allowed Hytera Communications Corp Ltd 002583.SZ to buy Canadian satellite communications firm Norsat International Inc NII.TO.

Canada’s main opposition Conservative Party - long suspicious about Chinese investment in sensitive sectors - says the deal should have been vetted more thoroughly.

“These are steps the Liberals are doing to appease the Chinese government,” party leader Andrew Scheer told CTV television on Sunday.

The new agreement was reached during talks between Trudeau’s national security and intelligence adviser and senior communist party official Wang Yongqing, the Canadian government said in a statement issued on June 22.

Representatives of Trudeau did not immediately respond to requests for comment.

In 2015, China and the United States came to a similar understanding on corporate cyber espionage, after the Obama administration had mulled targeted sanctions against Chinese individuals and companies for cyber attacks against U.S. commercial targets.

U.S. cyber security executives and government advisers said breaches attributed to China-based groups had dropped around the time of that agreement.

China this month implemented a new cyber security law designed to strengthen critical infrastructure, even as many global tech companies and lobbies said the rules skewed the playing field against foreign firms.

Reporting by Subrat Patnaik in Bengalore and Michael Martina in Beijing; Additional reporting by David Ljunggren in Ottawa and Ben Blanchard in Beijing; Editing by Amrutha Gayathri and Matthew Lewis