Accusations of Chinese Cyber Espionage Grow Increasingly Public

NPR’s “All Things Considered” discusses the cloak -and-dagger world of corporate espionage in the context of Chinese cyber attacks on American businesses, in which “China seems to to have the advantage.” The costs, the report says, have driven U.S. House Intelligence Committee Chairman Mike Rogers to ready legislation (expected to be proposed this week) that would encourage the government to share intelligence information with companies in danger of cyberthreats:

Rogers has actually spoken with executives from some of the American businesses hit by cyberattacks, and he says stolen intellectual property from just one hi-tech company cost them billions of dollars in research and revenue as well as thousands of U.S. jobs.

“Those are 10,000 jobs that would be in this economy, that would employ Americans, that are gone because of Chinese economic espionage,” he says.

New estimates put losses from intellectual property espionage at about a trillion dollars a year, Rogers says. And he says U.S. companies that deal in intellectual property fall into two camps: those that know they’ve been hacked and those that don’t know.

“There really is no other exception than that,” he says.

Awareness of the threat and tracing the attacks to a specific government are two of the problems with cyber-espionage, Rogers says. Though he’s confident they have evidence that China is actively involved in economic espionage, he says another issue is that companies that have been hacked are reluctant to come forward publicly.

Rogers urged action against Chinese economic cyber espionage during an October Intelligence Committee hearing into the issue, and again during follow-up interviews with CNN and MSNBC. Last week, the Intelligence Committee launched an investigation into whether the expansion of Chinese phone equipment makers Huawei and ZTE into the United States poses a security threat (see also the CNN interview with Rogers about the probe), charges which Huawei and China’s Foreign Ministry deny.

Evidence of state-sponsored and “patriotic” cyber espionage, chiefly as a means of stealing U.S. trade and technology secrets, has grown this year as multinational corporations and global security experts increasingly suspect China’s involvement in recent major hacking incidents. In October, The Financial Times discovered a Chinese tech company operating as a front for a People’s Liberation Army cybermilitia, and earlier this month an American intelligence report labeled China as the world’s most prolific perpetrator of economic espionage. China dismissed the report as “irresponsible.”

See also past CDT coverage of cyber espionage, including the invasion of a local investigative reporter’s e-mail accountattacks on Google and Yahoo accounts in the United States, and the alleged failure of Western information security companies to adequately guard against Chinese hacking.