China Trade Talks: Cyber Foxes in the Henhouse

Paula LaBrot

I really want to have chickens again, but Topanga is a tough place to have them. There are so many clever predators. No matter how careful you are, it seems impossible to protect them perfectly. Did you know there are the cyber-foxes? These global predators have been raiding cyber-henhouses all over the world despite super efforts at protection. All kinds of treasures are being hijacked.

China is a super cyber-fox. So super that a prominent item in the present trade showdown with China is a demand for a cessation of state- sponsored cyber theft. It includes consequences like sanctions for non-compliance and is strongly supported by the international community.

The Huffington Post reports, “Chinese actors are the world’s most active and persistent perpetrators of economic espionage…even hacking into satellites.” Billions of dollars’ worth of original, expensive, sensitive, personal, classified information is illegally siphoned to China from around the world every year.

What are the Chinese stealing?

Well, let’s look at some examples. In terms of research and development, Time magazine reports, Chinese “hackers…stole solar panel technological innovations and manufacturing metrics from Germany-based SolarWorld AG, enabling Chinese solar panel makers to hawk American- and German-developed research that had taken scientists years to bring to fruition.” 

More than 22 million people had their personal information hacked from the Office of Personnel Management in Washington, D.C, including Standard Form 86, which the Christian Science Monitor reports, “includes information perfect for blackmail—records of financial trouble, drug use, alcohol abuse, and adulterous affairs. The records could allow Chinese counterintelligence agencies to identify spies working undercover at U.S. embassies around the world.”

Edward Snowden reported the Chinese had hacked the plans for the F-35 stealth jet and built their knockoff from the blueprints with no investment in R&D. They were also able to build state-of-the-art nuclear reactors with stolen technology from Westinghouse Electric Company in Pennsylvania.

What else are they stealing?

According to Time, “The United Steelworkers, a major U.S. labor union, saw their computers hacked and had e-mails stolen from employees—including its president—that included sensitive strategic information with internal discussions of how the USW would push its strategy to slow unfairly traded Chinese imports.”

George Kurtz, the CEO of CrowdStrike, a private security firm that tracks Chinese government-backed hackers, is quoted as saying, “Pick a Fortune 1000 and they’ve all had it happen. They’ve all been targeted in one form or another or had an incident. There are two types of companies: ones that know they’ve been hacked and the ones that just haven’t figured it out yet.” 

The Washington Post reported that Chinese hackers are believed to have stolen the designs for “more than two dozen major weapons systems,” potentially weakening the U.S. military advantage over China. And then, there are all the pharmaceutical breaches.

Intellectual Property Theft

According to Politifact, “Intellectual property refers to creative concepts such as inventions, literary and artistic works, designs, symbols, names and images used in commerce…Its creators and owners are protected legally through patents, copyrights and trademarks, but cross-border theft of intellectual property is hard to police.” This includes movies, music and books, hacked and sold with no compensation for the producers and artists.

China is king of the knockoff marketers. “Market Watch” estimates the financial losses due to theft of intellectual property to be $225-600 billion dollars a year. Who knows? Maybe they have even hacked this column.

Both presidents, George W. Bush and Barak Obama brought this problem up in diplomatic conversations, but neither put any teeth into the negotiations. The threat of sanctions does rattle China, but it is a nation impatient and dedicated to rapid development. If that means using other people’s work to speed things up, so be it. They are determined to take the lead as a world power and are willing to break any international rules to do that.  

China’s state-sponsored (always denied by their leadership) Shanghai-based PLA Unit 61398 was discovered in 2006 by the Mandiant Corporation, a cyber-security firm.  

CNN reported Mandiant documenting the shadowy Unit 61398 building that holds up to 2,000 workers and is heavily secured. The Department of Homeland Security has identified 141 other military hacking units in China.” China wants world leadership, and they will take any shortcut to get it.

The Christian Science Monitor quotes Gen. Keith Alexander saying “China’s hacking practices have created the greatest transfer of wealth in history.”

So, listen. As G always says, “Don’t take it personally, even if it’s meant personally.” China is doing to it everybody…even to the Dali Lama to get information about dissidents in Tibet. But guess what? Everybody is doing it back. We’re good at hacking, too! Global cyber hostilities are like the 24/7 news cycle…relentless.

Foxes are loose in the cyber-henhouse and everybody is crying FOWL! The best we can do is wait and see what comes of the trade talks.

Vamos a ver!


Paula LaBrot

Paula LaBrot is a 30-year resident of Topanga, a futurist with a special interest in the uncharted waters of cyberspace.

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