The July 10-11, 2013 US-China Strategic and Economic Dialogue (S&ED) made major strides in stabilizing and moving forward US-China relations, building upon the momentum spurred by the June presidential summit between US President, Barack Obama, and his Chinese counterpart, Xi Jinping, in Sunnylands, California. The US and China have hosted the annual S&ED since 2009, and before then as a separate Strategic Dialogue and Strategic Economic Dialogue, which were initiated in 2005 and 2006 respectively. These talks are seen as a strategic channel to boost mutual trust, cooperation, and settlement of differences.
In taking concrete steps to build upon what President Xi termed a “new type of major power relations” in June, the two countries used the 2013 S&ED to expand the number of joint working groups and dialogues from about 90 to over 100, many of which were switched to year-round meeting cycles. In addition to reaching an unprecedented number of joint-agreements during the S&ED, the sheer breadth of topics covered—from trade and investment to climate change to military affairs—was a testament to the systematic effort between the US and China to cooperate.
Over the past three decades, the relationship between the two major powers has developed from hardly any economic ties to a highly interdependent web. However as both countries continue to grow, the snags where commercial and strategic interests do not align continue to pose a threat to bilateral relations and must be addressed. In particular, one joint-working group met prior to the S&ED in response to urgent recent events and accusations raised during the June presidential summit: the Cyber Working Group.
While the issue of cybersecurity has jumped to great significance in US-China relations, tangible steps to resolve it remain superficial at best. On April 13, 2013, and again at the presidential summit, the joint civilian-military Cyber Working Group was announced, spearheaded by US Secretary of State John Kerry. Two days before the S&ED, the CWG met for the first time. The two sides merely propped open the gates, committing to “cooperative activities and further discussions on international norms of state behavior in cyberspace,” and agreeing to reconvene before the end of 2013.  After the S&ED, the US and China formally pledged to “promote an open, cooperative, secure, and reliable cyber space.”
During the June presidential summit, President Obama specifically addressed the topic of cyber theft of corporate intellectual property—which Washington has long accused of Beijing—calling for an “international economic order where nations are playing by the same rules.”
However on the eve of the presidential summit, former US National Security Agency contractor, Edward Snowden, revealed the extensive US federal surveillance system called PRISM employed by security authorities on US citizens. Snowden was stationed in Hong Kong at the time of his disclosure. Although the US demanded that Chinese authorities extradite the whistle-blower, they were disappointed to discover that the Chinese had allowed Snowden to leave Hong Kong and escape to Moscow. Deputy Secretary of State, William Burns called China’s handling of the case “not consistent with … the new type of relationship that we both seek to build.” 
Yet rather than cause a rift in US-China bilateral relations, the Snowden affair offers an opportunity to create a more level playing field while revealing a fundamental ethical difference surrounding cybersecurity that can now be addressed openly. On one hand, the exposure of the US’ widespread surveillance system helps to take America off its moral pedestal in the eyes of the Chinese, and allows more validity to China’s counter accusations in the eyes of the Americans. It uncovered the hypocrisy and accusatory nature of both countries in terms of cyber attacks, leaving room for recognition and higher discussion.
On the other hand, the abstention of capturing an American criminal — especially following the strategically key June summit — reveals the clear lack of a system of norms and protocols for an increasingly influential realm of cyberspace. Who is considered a criminal? But what measures are they judged? In multinational issues like cybersecurity, “there is not even an agreed-upon definition as to what the problem is,” explains Henry Kissinger, former US Secretary of State under Nixon. 
In forming the “rules” proposed by President Obama, it is imperative that the US and China begin with a common analysis of the international system to identify the “problem” and from there, a common ethical future so as to develop parallel policies. The difficulty of this issue lies in the fact that it touches upon economic, political, and military questions regarding topics—intellectual property, intelligence gathering, and defensive or offensive governmental responses to sometimes untraceable attacks—that are as much rooted in political strategy as they are in ethics. China has long struggled with governmental invasion of cyber privacy, and the Snowden affair has brought the same issues of privacy violation to the attention of the US as well. Both countries have yet to define their own ethical solutions to these issues. Even then, given the deep-running historical and cultural differences between the two US and China, it is unrealistic to expect identical policies regarding cyberspace, especially in the practical near future.
Cybersecurity and cyber warfare are new and uncharted territories, where appropriate and actionable responses remain to be discussed. However as a first step, the mistrust and hypocrisy surrounding cybersecurity between the US and China must be quelled if either hopes to strengthen overall relations at best, and to avoid a spillover of suspicion into other bilateral issues at worse. With the possibility of improved relations on the line, it is in both country’s best interest to keep cyberspace discussions progressive.
Perhaps more importantly, US-China bilateral cooperation on cybersecurity will serve as a critical step towards promoting multilateral efforts to ensure a more secure global cyberspace. Though a transnational issue, the US and China, as the two most significant players in the international digital realm, have the opportunity to chart the establishment and enforcement of norms.
The road ahead towards common cyberspace norms and regulations on digital privacy and government interference faces an uphill battle. However as an external actor leveling the playing field, the Snowden affair offers a face-saving opportunity for both countries to switch from finger-pointing to joint collaboration. Whether the US and China make good on this opportunity remains to be seen.
Finally, it is important to take the issue of cybersecurity in stride; while undoubtedly a crucial matter to unravel, it must not override other bilateral tensions that are of more pressing concern, including the liberalization of trade of goods and services, and investments. As a new issue with direct a connection to individuals, it can be easy to falsely inflate the impact of cybersecurity. However the scope of US and China’s bilateral relationship runs back over three decades and has grown as wide as it is deep, meaning cyberspace is only one playing field for this relationship between the two most powerful nations in the world.
 US-China Strategic and Economic Dialogue V, Strategic Track Select Outcomes, July 12, 2013. http://www.state.gov/r/pa/prs/ps/2013/07/211862.htm.
 Matthew Pennington (Associated Press) “US-China talks exchange remarks on Snowden case,” South China Morning Post, July 15, 2013. http://www.scmp.com/news/hong-kong/article/1280871/us-china-talks-exchange-remarks-snowden-case
“Dr. Henry Kissinger’s remarks at China Development Bank’s International Advisory Council Meeting 2013,” April 24,2013, Beijing, China. http://www.chinausfocus.com/wp-content/uploads/2013/06/Foreword.pdf.