By Roberta Rampton and Lisa Lambert
WASHINGTON (Reuters) - President Barack Obama on Wednesday called for an international framework to prevent the Internet from being "weaponized" as a tool of national aggression, while holding out the prospect of a forceful U.S. response to China over hacking attacks.
With Chinese President Xi Jinping set to visit Washington next week, Obama said at a conference with business leaders that his talks with Xi would include cybersecurity, a topic that has become a point of friction in U.S.-Chinese relations.
A person briefed on the White House's thinking said on Tuesday the United States does not plan to impose sanctions on Chinese entities for economic cyber attacks ahead of Xi's visit to avoid what would be seen as a diplomatic disaster.
Obama discussed the issue at length in remarks at the conference held by the Business Roundtable, a lobbying group for corporate chief executives, saying that the United States has told China that traditional intelligence gathering is understandable.
But Obama said: "That is fundamentally different from your government or its proxies engaging directly in industrial espionage and stealing trade secrets, stealing proprietary information from companies. That we consider an act of aggression that has to stop."
He said the United States is preparing measures to show the Chinese "this is not just a matter of us being mildly upset, but is something that will put significant strains on a bilateral relationship if not resolved and that we are prepared to take some countervailing actions."
White House spokesman Josh Earnest later said Obama was "intentionally non-specific" in the comments but added that the economic sanctions the United States has used over cyber espionage have had a deterrent effect.
Last week, U.S. officials said Washington was considering sanctions against Russian and Chinese individuals and companies for cyber attacks against U.S. commercial targets.
With that as a backdrop, Obama called at the conference for a "basic international framework" on cybersecurity, perhaps resembling existing global nuclear agreements. At the same time, he said the United States is equipped to strike back.
"And if we want to go on offense, a whole bunch of countries would have some significant problems," he said.
"We don't want to see the Internet weaponized in that way. That requires, I think, some tough negotiations. That won't be a one-year process, but we'd like to see if ... we and the Chinese are able to coalesce around a process for negotiations. Then I think we can bring a lot of other countries along."
(Reporting by Roberta Rampton and Lisa Lambert; Editing by Kevin Drawbaugh and Grant McCool)