U.S. President Barack Obama, left, and Chinese President Xi Jinping shake hands following the conclusion of their joint news conference at the Great Hall of the People in Beijing on November 12, 2014.
Photograph by Pablo Martinez Monsivais — AP
By Robert Hackett
August 31, 2015

When Xi Jinping visits the White House next month in what will be the Chinese president’s first state visit, he may receive a frosty welcoming gift.

The Obama administration is debating whether to slap a set of “unprecedented economic sanctions” on Chinese companies and individuals for conducting financially motivated cyber espionage against the U.S., reports the Washington Post, citing anonymous officials.

The sanctions are currently being ironed out, the Post says. And a decision about issuing them could come within the next two weeks.

China has been on the mind of many intelligence agents and federal investigators lately. In July, the Federal Bureau of Investigation fingered Beijing-backed hackers as the primary reason for a 53% spike in the number of economic espionage cases the agency is investigating. China, top FBI officials have warned, is “the most dominant threat” to U.S. industry.

The sanctions, if issued, would be the first exercise of new powers to punish overseas hackers, which President Obama granted to the U.S. Treasury in an executive order signed earlier this year. The expanded powers are one of the Obama administration’s latest tactics toward mitigating a growing surge in cyberattacks targeting U.S. institutions.

“It sends a signal to Beijing that the administration is going to start fighting back on economic espionage, and it sends a signal to the private sector that we’re on your team,” an anonymous administration official tells the Post. “It tells China, enough is enough.”

The sanctions would not, however, be considered a part of the U.S.’s retaliation for data breaches affecting its Office of Personnel Management (OPM), which exposed the personal records of tens of millions of federal workers—even though many officials have privately attributed those attacks to China, the Post reports. Instead, the sanctions are meant to curb China’s habit of hacking for economic gain.

The U.S. is reportedly devising a separate response to the OPM attacks. Still, those breaches did factor into the equation, the Post says, by helping to persuade officials that punitive actions are needed.

The sanctions, if passed, would follow a period of tumult in Chinese markets, including the devaluation of the Chinese yuan, which seem to have already weakened Xi’s image as a leader. They would also arrive at a time when tensions are on the rise due to China’s aggressive island-building in the South China Sea.

Whether or not the Obama administration decides to impose the sanctions—or, perhaps, it will wait until after Xi’s visit to pass them—President Obama has already stated his intention to broach the subject of cybersecurity during Xi’s trip.

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