China’s Cyber Espionage must be STOPPED!

From U.S. Trade Secrets to Federal Employee Secret Security Clearance Data, China is Stealing it ALL!


China, most would argue, is the world’s superpower when it comes to cyber espionage. China has devoted vast governmental resources and has even outsourced their cyber espionage endeavor (to criminal entities), all in an effort to rebuild their industries and stimulate their economy. All this was done in an effort to reestablish China as the world power. Some U.S. political leaders refer to this cyber espionage as economic espionage (I’m not sure why they are reluctant to refer to it as cyber). China is specifically attempting to illicitly acquire technology from western companies in order to create stiffer competition and undercut their western competition. China accomplishes this in two ways; either, western companies knowingly hand over information because of binding contractual agreements, or China hacks into western companies’ mainframes and steals this vital information.

Now, I know you’re asking yourself, “Why in the world would U.S. based companies hand over their valuable insider trademark information to their Chinese competitors?” The answer is rather simply, since China lacks anti-trust laws, any U.S. based companies entering into business agreements with China are forced contractually to divulge excessive amounts of insider information. The Chinese based companies with governmental backing, in turn, utilize this information to create a competitive base against these western companies and eventually underbid them. This tactic affords China the ability to manufacture and sell products at much cheaper prices than their U.S. competitors. Western companies unfortunately view this paradigm shift as the cost of doing business with China. U.S. base companies calculate that their gains outweigh, any and all losses, which will result from the competition of China.

The other method utilized by the Chinese Government/Chinese based companies, is employing cyber-attacks via the internet. China specifically targets U.S. companies and governmental agencies, all in an effort to illicitly acquire western technology. Stealing western technology is a major component of China’s economic strategy, and has become a normal part of China’s business practices.

What are China’s primary targets?

China’s foreign intelligence and state sponsored hacker organizations have penetrated numerous U.S. computer networks, including government, private/corporate businesses, academic institutions and private sector entity’s data bases.[1] China targets these institutions in an attempt to collect sensitive U.S. national security and economic information.[2]

China has specifically targeted:

  • U.S. military manufactures, not only to steal our technology, but also to learn how we utilize it.[3] A prime example of this would be the use of stealth technology.
  • Manufacturing companies in the U.S., in order to steal product ideas. China then manufactures their own competitive products with the ability to sell at a much lower cost than U.S. based companies. China is capable of underbidding the U.S. based companies because they have no money tied up in research and design, whereas the U.S. based companies were forced to spend large sums of money on product research and design.
  • Confidential business information, to create a competitive edge in the business world. A good example of this would be the theft of oil exploration data, sensitive business negotiation data or insider stock information. This information is used against the U.S. based companies thus creating a negative impact on American businesses.
  • Semiconductor and solar energy companies.

China is directly targeting U.S. institutions and acquiring information pertaining to our national security. This information is being used against the U.S. by, “undermining our economic and technological advantages, and seeking to influence our national policies and processes covertly.”[4] China has personally, “hindered U.S. policy objectives in Iran, Syria, Afghanistan and North Korea.”[5]The outcome China hopes to gain for this gamble is greater economic and political influence in Eastern Asia.

What are China’s motivations?

China has an overwhelming desire to catch up with the U.S., and ultimately surpass us as, “the world power.” China believes that it needs to perform this cyber espionage in order to stimulate its economy. China’s political leaders believe that rapid economic growth is politically essential for the communist party to maintain its dominance. They fear they have lost the capability to innovate and must rely on stolen technology to stay competitive. This stolen technology helps build Chinese industries and helps accelerate military modernization.

China uses the excuse that they need to resort to cyber espionage due in part to the, “Century of Humiliation” — a time when China was carved up by European powers. They also cite the overwhelming poverty issue China faces as justification for their use of cyber espionage. And, finally, they use their belief that the U.S. engaged in similar practices to achieve its superpower status as yet another excuse. China believes it is still in the dark ages, and for political, economic and military reasons, they need to steal technological information from western companies and governmental agencies to stay competitive with the other world powers.

China views this cyber espionage as a moneymaking activity — hackers work directly for the government of China, selling competitive information to Chinese companies to undermine U.S. based companies. It is merely a profit-generating machine for the Chinese government.

Another reason why China is committed to cyber espionage is because of their resentment towards other countries. China sees these countries as nations of assemblers, responsible for assembling the products/technologies produced by other countries. As a result, China looks to illicitly steal these products/technologies so they can develop them as products for China. Currently, the bulk of profits generated from China’s assembling of products for non-Chinese companies, goes back to these foreign companies. China wants to change this by creating their own products and keeping the profits in China.

What is China’s impact on homeland security in the United States?

China is a threat to the U.S. homeland security in many ways. China has not only stolen U.S. military secrets, but they also studied how these technologies work. Why is this important? Well, if there came a time that the U.S. was engaged in military action against China, this stolen technology could now be manipulated, neutralized and undermined. The stolen technology creates vulnerabilities to the U.S. defense plan. China is very interested in U.S. aerospace technologies, stealth, submarines, missiles and nuclear capabilities. Since China is very profit-driven, why would they not consider selling this information to enemies of the U.S.? This would compromise almost all of our non-U.S. based military institutions.

Institutions that are contracted solely for military purposes are not the sole target in China’s sight-line. Some strategists would argue that China already has the capabilities to sabotage the U.S. power grid, financial institutions and air traffic control systems. Again, you may ask, if they do have this capability, why haven’t they used it against us yet? Well, the U.S. and China are trading partners, and a collapse to these systems would negatively impact the U.S. economy, which in turn, would negatively affect China’s economy. So, while we currently enjoy free trade, there may come a time when relationships break off and China uses this information against us.

While a full break with China wouldn’t be in either countries best interest, China’s use of cyber espionage to further its quest for economic superiority is a threat, not only to national security, but also to our own economic growth. Cyber espionage negatively affects the U.S.’s ability for trade, decreasing our capability to export goods, as our goods are no longer desired due to Chinese price gauging. The lack of trade and exports results in the increase in U.S. job loss and unemployment, an increase in insurance claims, and recovery costs for companies that were victim to this espionage and consumer fraud. These outcomes, coupled with the potential for stolen military information and technology, all negatively affect the U.S. Homeland Security Initiative and need to be addressed. The U.S. needs to stop China now.


[1] James R. Clapper. “Statement for the Record Worldwide Threat Assessment of the US Intelligence Community Senate Select Committee on Intelligence. March 12, 2013.” URL:http://www.intelligence.senate.gov/130312/clapper.

[2] Ibid.

[3] James A. Lewis, “Cyber Espionage and the Theft of US Intellectual Property and Technology,” Testimony Before the Committee on Energy and Commerce, US House of Representatives, July 9, 2013. P.5.

[4] James A. Lewis, “Cyber Espionage and the Theft of US Intellectual Property and Technology,” Testimony Before the Committee on Energy and Commerce, US House of Representatives, July 9, 2013. p.8.

[5] Ibid. p. 21.


CHINA, HOMELAND SECURITY, CYBER SECURITY, CYBER WARFARE, CYBER ESPIONAGE

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