One proposal would require foreign tech companies to agree to store data about Chinese users within the country, and maintain "secure and controllable" products, a phrase which may amount to a government request for intimate access to systems and technology deployed in China, The New York Times reported last week.
A national security law put forward this summer included some of the same stipulations about data localization, and would allow the Chinese government to levy fines against Internet companies that did not swiftly delete and report information that Beijing finds objectionable.
American tech companies have in the past gone along with the laws China imposes in order to preserve their access to the lucrative Chinese market. Chinese media reported earlier this year that Apple became the first foreign technology company to submit to Chinese "security checks."
But Obama has pushed the business community to back up the administration's positions by airing their own grievances with the Chinese government. "Don't tell us on the side, 'We've got this problem, you need to look into it, but leave our names out of it because we don't want to be punished' kind of thing," he told business leaders at a speech to the Business Roundtable last week.
"Typically, we are not effective with the Chinese unless we are able to present facts and evidence of a problem," Obama continued. "Otherwise, they’ll just stonewall and slow-walk issues."
When Xi heads to D.C., cyberespionage and cyberspace norms will figure prominently in scheduled meetings, which will come on the heels of negotiations between American and Chinese officials over the rules of cyberwar.
The White House is walking a tightrope in its relations with China, trying to simultaneously respond firmly to China's aggression while keeping lines of communication open and productive.
The administration has considered imposing economic sanctions on China to punish it for cyberattacks, but has made clear the distinction between the theft of trade secrets, which it says is an anticompetitive practice, and conventional espionage. "We have repeatedly said to the Chinese government that we understand traditional intelligence-gathering functions that all states, including us, engage in," Obama said at the Business Roundtable speech. "And we will do everything we can to stop you from getting state secrets or transcripts of a meeting that I’ve had, but we understand you're going to be trying to do that."
Government officials have placed the large-scale breach at the Office of Personnel Management in the category of traditional spying, pushing back against characterizations of the breach as a cyberattack. "That's a passive intelligence-collection activity—just as we do," said Director of National Intelligence James Clapper at a Congressional hearing this month.