The whole world is watching closely the case in which two Chinese nationals are being charged by the U.S. for using malware to steal usernames and passwords from companies and government agencies in the U.S. and nearly a dozen other countries.

The U.S. government has alleged that the case is part of a hacking campaign on behalf of China's Ministry of State Security.

Without any concrete evidence, the American indictment sounds groundless. The Chinese government has denied the allegation, and very likely more spats will follow in the days to come.

In the absence of further details, it is fitting to scrutinize the case from a strategic, legal, and theoretical perspective.

To begin with, this indictment certainly fits into a much larger diplomatic picture. As the U.S. and China are presently in the middle of a truce in the trade war, and one big issue is about protection of intellectual property rights. The hacking accusation, as some commentators contend, should be viewed as a joint effort by the U.S. and its allies to contain China, and to strengthen the hand of the U.S. delegates in the imminent talks over trade issues and beyond.

There is no denying that, given the timing and contents thereof, such a prosecution is by and large politically and diplomatically motivated. But addressing the issue merely in light of political conspiracy only scratches the surface.

It should be made aware that there is deeper legal reasoning behind the case. Although there have been increasing clashes between the two countries in this field in the last few years, demarcating the four corners of cybercrime such as economic espionage and intellectual theft remains a conundrum. The increasing complexities of the Internet and related technology have exacerbated the situation.

That said, China has enacted a cybersecurity law in 2017 and e-commerce law in 2018 regardless, aiming to regulate online activity. The cybersecurity law grouped previous pertinent rules and regulations from various levels and fields into a “Basic Law,” which sets out legal liability for various forms of illicit conduct. The e-commerce law, on the other hand, provides guidance for e-commerce activities and guards against the abuse of power by public authorities. 

While China claims that these Internet enactments would lower the risk of cyber-attacks and safeguard national security, foreign critics believe that the acts will further erode Internet freedom in China and may not effectively enhance current Internet security.

This reminds us of the intricacies of hacking and its regulation by the state. From a theoretical point of view, the advancement of technologies is corroding the traditional conceptions of state, sovereignty and security, and calls for an omnipotent government to protect the people from harm and threats.

But with the government being greatly empowered, the private domains will experience much interference from the state, and personal freedom will be relegated to a weak position. This paradox is facing all countries now, and its solution remains unknown. 

For years, China has suffered from cybercrime, and as a victim of hacking, China is calling on all countries to take the problem seriously. In the era of the Internet, as two important countries in the world, China and the U.S. must not point fingers at each other, but work together to find a way out.