US President Barack Obama is treading a fine diplomatic line after announcing sanctions against Chinese companies and individuals. These people, he alleges, are Chinese hackers engaged in espionage, tacitly supported by the government.

The announcement serves as a warning to the Chinese government who are alleged to be using cyber attacks to steal government and corporate information.

The new sanctions will operate as an extension to current US policies.

The Chinese government has consistently denied any wrongdoing, even though five of its top military figures had charges brought against them by US companies. These companies claim they had been deliberately targeted by hackers working for the Chinese military.

The US has accused China of sharing stolen data with its civil sector after evidence emerged through its own program of cyber spying.

The US government claims its spying was solely for the purposes of national security and boasts it does NOT share the information with anyone outside its security agencies.

The timing of Obama’s announcement couldn’t be worse: China’s president Xi Jinping is due to make his first visit to the White House in a few weeks. At the same time the Chinese government is resisting what it refers to as America’s bully-boy tactics, hoping to project its own strength and autonomy.

Some within the US government have called for Obama to snub Jinping altogether.

A further complication is the role of Australia in the dispute.

China is one of our biggest trading partners. US sanctions against China will likely impact on our exports to them: Sanctions limiting the amount they sell means lower production, lower production means lower imports are needed.

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