China cyber offensive triggers high alert

Amy Tian - International Reporter 4 March 2013

Security firm says hackers are operating inside 12-storey Shanghai HQ.

A recent report released by US computer security company Mandiant has revealed that a Chinese military unit based in Shanghai has been hacking a wide range of industries in the US, UK and Canada. This week Beijing authorities denied the accusations, calling the report “groundless”.

Mandiant identified a 12-storey office building in Shanghai as the headquarters of Chinese military hackers. The building is situated in a financial hub where people are highly educated in foreign languages, programming and finance. Most controversially, however, the building accommodates The People’s Liberation Army (PLA)’s Shanghai-based Unit 61398.

The role of PLA Unit 61398 in this regard remained secretive until the report was released. The body had previously been recruiting computer science graduates from China’s best universities. In a statement Mandiant said: “The nature of Unit 61398’s work is considered by China to be a state secret; however, we believe it engages in harmful computer network operations.”

In response to the report, some Chinese media outlets, which are essentially controlled by the government, described the news as propaganda. It was designed to exaggerate the danger and to be used to lobby for an increase in US military expenditure against China, they said. It has also been suggested that the United States itself has a history of hacking other states’ systems, including those of China’s.

The latest flurry of news, however, does not surprise Chinese students studying at Cambridge University. A second-year Chinese student told The Cambridge Student that it was a “shame” that the latest episode of cyber-hacking had been detected by a US company.

Meanwhile, speaking exclusively to TCS, Professor Stefan Halper, Director of American Studies at Cambridge University’s POLIS Department, and former Advisor on National Security Affairs to the White House, explained the international agreements on cyber warfare. He said: “It is not surprising that military organisations conduct cyber warfare. What is surprising is that PLA is conducting this warfare against non-military targets, the commercial space. They want to acquire commercial information. R&D process in China doesn’t compare to what is in Europe and US. So instead of putting money into R&D, it is easier to simply steal the information.”

Professor Halper also criticised China for its consistent lack of conformity to the law, including seizing land owned by its people and encroaching ownership in the South China Sea.

Apple recently admitted that it had been a victim of Chinese cyber infiltration. The story was supported by a sales manager from a famous IT company in China, who, speaking on the condition of anonymity, told TCS: “Violation of intellectual property rights is prevalent in China. It is easy to find a variety of ‘fake’ iPhones on the market.” It seems production based on stolen information has already contributed to a booming market in China, where cheaper copies of high tech products are freely being bought and sold. There is little doubt that the latest political cyber-attacks are seriously disrupting and damaging to the international order of fair trade.

Amy Tian – International Reporter