The United States and China have reached a fundamental milestone in addressing the growing threat of cyber espionage, especially the theft of intellectual property and trade secrets for economic gains.

On Friday, during a joint news conference at the White House Rose Garden, U.S. President Barack Obama announced that he and China's President Xi Jinping have agreed to stop engaging in cyber espionage. This announcement comes on the heels of a study published by ThreatConnect and Defense Group Inc. linking People Liberation Army (PLA) intelligence unit 78020 with a hacking group known as "naikon."

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President Obama, who said cyberattacks from China has stop, suggested that if they persist, the U.S. is willing to impose sanctions and other punishments required by law against the perpetrators. He added that the sanctions would be against individuals, state-run companies or big businesses.

"It has to stop," Obama said to Xi, who is on his first state visit to the U.S.

"The question is now, are words followed by action...And we will be watching carefully to make an assessment as to whether progress has been made in this area."

The U.S. has accused China of sponsoring several cyberattacks against the U.S. These include the recent theft of millions of documents from the Office of Personnel Management. The Obama administration has also blamed China for other high profile cyber incursions targeting U.S. companies and individuals.

However, the Chinese government has consistently denied the allegations. China claims to be a victim of cyberattacks and has cautioned the U.S. to desist from making unfounded accusations.

At the press conference, both President Obama and Xi expressed their commitment to creating and enforcing a set of rules for cyberspace conduct.

President Xi said allegations of cyber theft between the world's largest economies are counterproductive and unnecessary. He added that they will only lead to both sides losing the cyberspace war.

"Confrontation and friction are not the right choice," Xi said. "Confrontation will lead to losses on both sides."

Xi also stressed the need for both China and the U.S. to abide by the newly established "norms of behavior."

Both leaders agreed that neither the U.S. nor China would consciously sponsor or support cybercriminals in their theft of trade secrets for economic gains.

Despite their affirmations to stop cybercrimes, both leaders did not mention refraining from cyber spying for government intelligence purposes.

China and the U.S. differ on several issues. However both countries have cooperated extensively in the fight against climate change.

Xi announced that China, the biggest emitter of greenhouse gases in the world, has promised to launch a national carbon cap-and-trade system in 2017. The carbon cap-and-trade system is expected to reduce and contain China's greenhouse gas emissions.

TagsChina U.S. Cyberspace Rules, China Cyberattacks U.S., Naikon, Project CameraShy, PLA Unit 78020, China U.S. Economic Espionage, China Carbon Cap-and-Trade System