The cybersecurity crisis the US and China can no longer ignore

Once the hottest flashpoint in bilateral tensions, the “cyber problem” between Washington and Beijing has been pushed aside by a coercive diplomacy obsessed with trade imbalances and economic brinkmanship.

And the consequences of this neglect are growing more severe by the day. Instead of working with one another to find the necessary menu of cooperation, such as jointly going against cyber scams, that are going global, US and China have allowed such issues to slip through their grasp.

Such slippage has occurred even at the ASEAN Regional Forum in Kuala Lumpur on July 9-11, 2025. To be sure, from 2013 to 2015, there was cautious optimism that the world’s two largest economies could set rules of engagement in cyberspace.

The establishment of the U.S.-China Cyber Working Group and the 2015 Xi-Obama summit agreement on halting cyber-enabled theft of intellectual property hinted at a path forward.

Biden and Trump's anti-China approach has made well-nigh impossible to work together.

As of 2025, those efforts are ancient history—eclipsed by punitive tariffs, technological decoupling, and constant tirades of each other.

It is telling that the bilateral architecture meant to manage cyber tensions had collapsed just as the threat environment became more complex.

U.S. indictments of PLA cyber operatives in 2014, and China’s retaliatory suspension of cyber dialogue, marked the beginning of a breakdown.

Since then, cyberattacks have grown more sophisticated, more frequent, and more deeply entangled in both state espionage and corporate sabotage.

Yet Washington and Beijing remain locked in a cycle of blame, sanctions, and zero-sum gestures—refusing to see cyberspace as the common battlefield that demands uncommon cooperation.

Today, as the U.S. prepares to implement a new round of tariffs on August 12 against China, the cybersphere is once again being weaponized.

Both sides accuse each other of state-sponsored hacking. American officials point to persistent Chinese intrusions into defence contractors and critical infrastructure, while Chinese authorities claim to be victims of U.S. cyber aggression masked under the guise of "digital freedom." This mutual recrimination has become a substitute for genuine dialogue.

Even when opportunities for quiet cooperation arise, they are smothered by geopolitics driven by public humiliation and performative toughness.

The Pentagon’s recent outreach to Australia and Japan, asking how they would respond to a U.S.-China conflict over Taiwan, only underscores the deep strategic mistrust. Neither Canberra nor Tokyo offered firm commitments, but the very act of raising the question reflects how cybersecurity is being subsumed under broader war planning, rather than seen as an urgent domain in its own right.

This drift is dangerous. The lack of protocols and trusted communication channels between Washington and Beijing—akin to the nuclear hotlines of the Cold War—leaves cyberspace ripe for escalation, not resolution.

China, for its part, has long advocated “cyber sovereignty,” the idea that states should have absolute control over their digital domains.

The United States, in contrast, champions an open Internet governed by global norms and private sector stewardship. These conflicting philosophies are not irreconcilable, but the window for compromise is narrowing.

Ironically, China has shown recent signs of wanting to rebuild cyber confidence. Since late 2024, officials from Beijing’s Cyber Administration have floated trial agreements on cybercrime enforcement and AI ethics at UN forums.

Yet the U.S., consumed by tariff diplomacy and presidential elections, has offered little more than deflection. It is a strategic error to conflate economic leverage with strategic stability.

To be clear, improving U.S. cyber defenses remains critical. But no firewall can substitute for diplomacy. The U.S. must return to the negotiating table—not to reward bad behaviour, but to craft rules that reduce the risk of mutual destruction.

Formal dialogue, backchannel coordination, and even confidence-building measures on non-controversial fronts like spam, cyber hygiene, and civilian infrastructure protections must be revived. These do not require moral alignment, only mutual recognition of the stakes.

The current White House may see cyberspace as just another front in the economic war. But Washington must resist the temptation to reduce cybersecurity to a tool of pressure and punishment.

The long-term danger lies not in whether tariffs squeeze another billion from Beijing, but whether a miscalculated line of code leads to real-world chaos.

If the U.S. and China are indeed locked in strategic competition, then cyberspace is the theatre where restraint, not escalation, will define the future.

Trade can be renegotiated. Tariffs can be lifted. But once trust in cyberspace is shattered—once attribution fails, and escalation begins—there may be no summit, no side meeting, no sanction relief that can restore stability.

It is time to remember what the cyber problem was—and what it still is: not just a technical nuisance, but a fundamental test of whether two adversaries can coexist in a domain where borders are invisible and weapons move at the speed of light. Cybersecurity deserves more than silence. It deserves statesmanship. To jointly battle cybercrimes and scamdemics.

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Phar Kim Beng is Director of the Institute of Internationalization and ASEAN Studies (IINTAS), Professor of ASEAN Studies in International Islamic University of Malaysia (IIUM) and a former Head Teaching Fellow at Harvard University. ** The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the position of Astro AWANI.