Xi Jinping is starting his American sojourn by parading some of technology's biggest hostages. China's president is meeting the heads of Apple, Cisco, Microsoft and other firms. Kowtowing to the Middle Kingdom's leader may make sense as Silicon Valley's giants try to pry open that huge market slightly wider - or at least keep it ajar. The implication of Xi's visit is that targeted US sanctions on China for hacking may carry collateral damage.
Barack Obama's administration is considering penalties against Chinese companies and individuals for cyber attacks that have stolen secrets and intellectual property from American companies and the government. These claims aren't new, and they are continuing. Google alleged in 2010 that its source code was stolen in an attack originating in China. US officials said this year they suspect China stole personal information on 22 million Americans when hackers broke into a government database.
China has reasons to think Washington is being hypocritical. Chipmaker Micron shot down a $23-billion bid from China's Tsinghua Unigroup, saying the odds a deal would receive congressional approval were close to zero. America blocks exports of some high-technology gear to China. And Edward Snowden's pilfered documents showed the National Security Agency broke into the files of Chinese agencies and companies such as Huawei.
Many American firms find themselves caught in the middle. It's becoming harder to sell technology in China. Beijing has nudged state enterprises to stop using gear and software produced by the likes of Intel, Oracle and EMC in favor of local alternatives. It is pressuring companies that sell software to banks to disclose their source code and include back doors for easy access by authorities. Sensitive areas of the economy remain off limits for American companies. Facebook isn't even allowed to operate in the country.
The staggering size of the Chinese market - where technology purchases will reach $136 billion this year, according to Forrester Research - means American multinationals are willing to bow to Xi. It's just business. Yet China remains a relatively poor nation that could use US innovation to help the Communist Party's ambition of moving toward a consumption-led economy. Both countries have an interest in not harming these technology hostages.
