Obama: China hears blunt message on hacking

US President Barack Obama said that China has understood his "blunt" warnings against cyber-hacking as he credited new leader Xi Jinping with accepting more global responsibility for Beijing. "We've had very blunt conversations about this. They understand, I think, that this can adversely affect the fundamentals of the US-China relationship," Obama told "The Charlie Rose Show" in an interview broadcast late Monday. Obama raised charges of a vast Chinese cyber-hacking campaign when he met Xi on June 7-8 at a desert resort in California. Xi insisted at a joint press appearance that the Asian power was also a victim of cyber theft. "I don't think you ever expect a Chinese leader to say, 'You know what, you're right, you've caught us red-handed. We're stealing all your stuff, and every day we figure out how we can get into Apple," Obama said. Obama, who has faced criticism at home for disclosures of US surveillance, said that every nation gathered intelligence but that China went beyond "standard fare" such as trying to "find out what my talking points are when I'm meeting the Japanese." "There's a big difference between that and a hacker directly connected with the Chinese government or the Chinese military breaking into Apple's software systems to see if they can obtain the designs for the latest Apple product. "That's theft. And we can't tolerate that," Obama said. Obama, calling the United States "the world's innovator" of products, said: "If countries like China are stealing that, that affects our long-term prosperity in a serious way." A private US report earlier this year said that hacking by China cost the US economy hundreds of billions of dollars per year through the theft of intellectual property. The Pentagon has charged that Chinese hackers have broken into both US companies and government agencies, including secret designs for sophisticated weapons systems. But Obama had favorable words for Xi, the 60-year-old son of a founding revolutionary who assumed the presidency in March. The leaders of the world's top two economies held this month's casual summit in hopes of forging a bond. "My impression of President Xi is that he has consolidated his position fairly rapidly inside of China, that he is younger and more forceful and more robust and more confident, perhaps, than some leaders in the past," Obama said. He said that China has taken a tougher stance on North Korea, while in the past "they would try to paper over" concerns about the isolated communist state. "We're seeing, I think, an interest and a willingness to engage with us in a strategic conversation around those things," he said. Echoing longstanding US concerns, Obama said that China at times wanted to be "free-riders and let the United States worry about the big hassles." But, he said, China is stepping up its role as nationalist pride grows. "So I'm optimistic about the future," Obama said, adding that he found it critical to show "candor, being clear about American values, pushing back when the Chinese are trying to take advantage of us." Xi's ascent offers a second chance for Obama to shape his relationship with a rising China after he grew frustrated during his first term by what US officials saw as a stilted, formal style by then president Hu Jintao. After initial outreach, the Obama administration took a harder tone on China following concerns by Southeast Asian nations and Japan over Beijing's claims to territories in the South China Sea and East China Sea. "We've got to get this relationship right and China does need to be a stakeholder. And I think that they recognize that," Obama said.