Category Archives: China -Follow the Money

U.S. Not Afraid To Say It: China’s The Cyber Bad Guy : NPR

American officials have long complained about countries that systematically hack into U.S. computer networks to steal valuable data, but until recently they did not name names.

In the last few months, that has changed. China is now officially one of the cyber bad guys and probably the worst.

“We know, and there’s good evidence … of very deliberate, focused cyber espionage to capture very valuable research and development information, or innovative ideas, or source code or business plans for their own advantage,” says Mike McConnell, a former director of national intelligence and before that, the director of the National Security Agency.

It’s the Chinese he’s talking about, though other countries — like Russia — also engage in cyber espionage to gain a competitive edge. China stands out as especially aggressive.

“China does not care what other people think,” says Richard Bejtlich, the chief security officer at MANDIANT, a company that helps firms deal with cyber intrusions.

“Culturally, they are very interested in being seen as responsible, but when it comes to their actual work on the ground, if you try kicking them out of your network on a Friday, they’re back on a Monday,” he says.

via U.S. Not Afraid To Say It: China’s The Cyber Bad Guy : NPR.


China Cyber Attack Threat

It is clear that cyber warfare will be part of any future conflict and we must become prepared for that type of combat here on the homeland front.

Two recent NPR stories highlighted the continuing potential for cyber attacks.  One focused on the threat that China poses and the other story on what we should be doing in general to legislate cyber defenses for the private sector and our critical infrastructure–the vast majority of which is owned and operated by private business.

It is clear to me that China is actively working to determine the how best to attack our military and industrial complexes.  The cyber war of the future has already begun.  Going back to my military training let’s consider what it is that they are doing.

via China Cyber Attack Threat.

Chinese price controls will hurt U.S. companies, says Lugar | MassDevice – Medical Device Industry News

Sen. Dick Lugar (R-Ind.) warns that China’s proposed price controls on med-tech products will hurt Chinese patients and American companies.


Sen. Dick Lugar (R-Ind.), the head Republican on the Senate’s Foreign Affairs Committee, warned Chinese officials that its proposed price controls for medical products would hurt American companies and Chinese patients.

The letter from Lugar comes as China decides how to best provide basic medical care to all of its 1.3 billion citizens by 2020.

The U.S. med-tech industry is eyeing the future market, but worries that China will opt for price controls that would dig into industry profits and make expensive American devices less competitive, according to

via Chinese price controls will hurt U.S. companies, says Lugar | MassDevice – Medical Device Industry News.

Hong Kong Exchange Hacked | Payback For -Operation Shady Rat

Hong Kong is a special administrative region of China. When someone goes for the Money Shot like this, it looks like a nation state to me. Maybe a message for “Operation Shady RAT.”. Call this a shoot across the bow China. Good Cyber Shot U.S.Seems like the McAfee is getting in the U.S. viewfinder.In a letter to Dmitri Alperovitch, vice president of threat research for McAfee and author of the report, Bono Mack requested a briefing with his research team and asked how the government and private sector could more effectively mitigate data breaches. Representative Mary Bono Mack, chairman of the House Commerce subcommittee with jurisdiction over cybersecurity, said she was alarmed by the report on a slew of cyber attacks that McAfee has dubbed “Operation Shady RAT.”Operation Shady RAT is an eye sour for the U.S government and China now is telling us that we should decrease our and reduce social programs. China is telling us how to be more financially prudent. Well I think someone in high places just kicked China in the financial teeth.

mEoW – gatoMalo

Charles Li, HKEx chief executive, said the collapse of the website on which local-listed companies announce price sensitive information appeared to be the result of “a malicious attack by outside hacking”. But he said it was unclear who the hackers were or what they hoped to gain from the attack. “We’re digging into that particular question right now.” This is big it makes China look weak so beware China will strike back soon. We should be ready…..

Computer hackers forced the Hong Kong stock exchange’s website to crash, prompting the bourse to suspend trading in the shares of seven companies including HSBC and the exchange operator itself.

The cyberattack, which deprived investors of important announcements from listed companies, came just hours before Hong Kong Exchanges & Clearing, the world’s largest by market capitalisation, announced its interim results.

HKEx is the second high-profile global exchange to admit to an attack this year after Nasdaq OMX, which owns the second-largest US exchange, said criminals had tried to penetrate a web-based service for customers. In both cases, the exchanges stressed that their trading systems had not been affected.

Charles Li, HKEx chief executive, said the collapse of the website on which local-listed companies announce price sensitive information appeared to be the result of “a malicious attack by outside hacking”. But he said it was unclear who the hackers were or what they hoped to gain from the attack. “We’re digging into that particular question right now.”

HKEx took the decision to suspend trading in the shares of the seven companies that were due to make announcements during the lunch break, including China Power International and Cathay Pacific, the airline. HSBC, the most liquid stock in Hong Kong, was also suspended.

The world’s largest exchanges have improved security following an attack on the Nasdaq, which sparked an investigation by the Federal Bureau of Investigation. Nasdaq admitted last month it faced “constant attack” from hackers every day.


Breaking into an exchange’s trading system would be extremely hard because of the multiple layers of security, according to experts. Many exchanges run their trading operations away from the internet on a separate private network, often with its own computing language.

When its news website was down, HKEx told market participants to obtain listed company announcements through its bulletin board, a back-up website.

The exchange is placing advertisements in Hong Kong newspapers to inform retail investors about the unprecedented situation.

If the website remains unstable on Thursday, the bulletin board will be used to disseminate information but stocks will be not suspended, said Mark Dickens, head of listing at HKEx.

The exchange has drafted in a team of external computer experts to work out how the website was brought down. It has reported the attack to the Securities and Futures Commission, Hong Kong’s regulator.

The exchange emphasised that its other systems were not affected and trading in its securities and derivatives markets continued to operate normally. The bourse’s core trading systems are not directly connected to the internet, it said.

Over the past few years hackers have been deploying increasingly sophisticated malware to attack the operating systems of companies, exchanges and governments. Sony, the Japanese electronics group, disclosed in April that more than 70m users of its online gaming network had theirpersonal details stolen by hackers.

McAfee, the computer security company, said last week that it had uncovered a five-year long campaign of cyber attacks on the networks of governments, organisations and businesses, including the UN and 13 defence contractors.

HKEx announced profits of about HK$2.6bn (US$333m) in the first half, an increase of 14 per cent compared with the same period last year, in line with analyst expectations. The company’s shares jumped 2.6 per cent before being suspended from trading during the midday break.



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AFP: China hit by 500,000 cyberattacks in 2010

BEIJING — China said Tuesday it was hit by nearly 500,000 cyberattacks last year, about half of which originated from foreign countries including the United States and India.

The news comes just days after US firm McAfee said it had uncovered a massive global cyber spying campaign it described as a “five-year targeted operation” by one unnamed actor — which many analysts said was China.

According to a government report, most of the attacks on China came in the form of Trojan software — a malicious programme that masquerades as an application — the official Xinhua news agency said.

Nearly 15 percent of the destructive programmes came from IP addresses in the United States, while another eight percent originated in India, said the report by the National Computer Network Emergency Response Coordination Centre.

China, which has the world’s largest online population with 485 million users, has itself been accused of spearheading online attacks on government agencies and companies, although Beijing has always denied this.

Chinese state media lambasted claims that China was behind the sophisticated hacking effort uncovered by McAfee, calling them “irresponsible”.

According to the US computer security firm, victims of the attack included the governments of Canada, India, South Korea, Taiwan, the United States and Vietnam.

In June, Internet giant Google said a cyber-spying campaign originating in China had targeted Gmail accounts of senior US officials, military personnel, journalists and Chinese political activists.

The computers of Australia’s prime minister, foreign and defence ministers were also suspected of being hacked in March, with China under suspicion.

via AFP: China hit by 500,000 cyberattacks in 2010.

Why is China really going after Facebook? | GlobalPost

NEW YORK — Sometime in early 2013, if current trends hold steady, the number of Facebook users worldwide should exceed the population of China.

Call it a coincidence, but now it seems China wants a piece of the action.

Last month, analysts who monitor China’s gargantuan sovereign wealth fund detected signs that a deal was in the works to buy a huge stake in Facebook. Nevermind that access to Facebook has been blocked in China since 2009.

The fund, known as the China Investment Corporation (CIC), is a $332 billion portfolio that seeks to earn money from the government’s massive export earnings. It operates in almost complete secrecy, as do many sovereign wealth funds in the Persian Gulf, Russia and elsewhere. These have grown into major economic players over the past 20 years.

But a number of high-profile investment websites have quoted “inside sources” describing efforts by Citibank to secure for China a stake in Facebook large enough “to matter,” according to Business Insider. Citibank, incidentally, is undertaking a major expansion in China.

The logic behind such a deal from China’s perspective is clear.

Politics aside, Facebook is one of the most sought after share offerings in history. The economics just make sense.

But many believe China has more than profits in mind.

As a factor hastening the revolutions raging across the Middle East, Facebook and other social networks represent a real threat to the Chinese Communist Party’s monopoly on political power.

Minxin Pei, a China expert at the Carnegie Institute, says the Arab Spring, combined with the coming Communist Party leadership transition in 2012, has pumped up the paranoia in Beijing and led to the current crackdown on domestic dissent.

GlobalPost in Beijing: How China silences its fiercest critics

So, would a major Chinese stake in Facebook inoculate China from a “Facebook revolution?” Not likely.

When Facebook finally goes public, the company is expected to be valued at over $100 billion. That’s a daunting sum, even to the portfolio managers of China’s war chest.

But the non-voting stock Facebook’s IPO is offering is all that China could obtain. This would hardly allow it to steer corporate policy or even to get a look behind the curtain of Facebook’s software developers.

China’s leadership would dearly love such a portal into the social networking software, but even in the unlikely event that voting stock were ever offered, Congress would never allow a Chinese takeover of Facebook.

Starting in 2005, when China’s state oil firm, CNOOC, tried to buy financially strapped California oil producer Unocal, American politicians began question what constituted an appropriate Chinese investment in the U.S. economy.

Not all China’s proposed investments have risen to the level of political fights — China State Construction Engineering Group, for example, is a major contractor on the reconstruction of San Francisco’s Bay Bridge and has won contracts for work on New York City’s subway. But China’s foreign direct investment in U.S. corporations remains tiny – a paltry $791 million in 2009, compared with over $43 billion invested in China by American firms that same year.

There is, however, a second benefit to getting a foot in the door at Facebook, from China’s standpoint: the chance to fund the one force on Earth, other than the Communist Party’s censors, which have taken software giant Google down a peg.

Google’s brave decision in 2010 to close up shop in China — leaving untold billions in potential profits on the table — deeply embarrassed Beijing, which had sparred with the software giant over censorship of its search engine results.

Sergey Brin, Google’s founder, told reporters his upbringing in the Soviet Union had definitely influenced the decision. A “hack” of Google China’s database apparently was the last straw. “Our objection is to those forces of totalitarianism,” Brin said at the time.

GlobalPost in Beijing: China vs. Google

Facebook, growing at a pace of about 100 million new users every five months, will plateau sooner or later. There are only so many internet users on the planet.

And the competition is heating up with the launch of Google+, an innovative effort by Facebook’s primary digital rival to stake a claim in the world of social networking. It is far too early to know if the new Google initiative will take off, or if it does, whether it will rival Facebook or just complement it.

China, of course, has plenty of other investment options. But Facebook has good reasons to tolerate a Chinese stake. China represents something of a last frontier for Facebook, whose website has been blocked by Chinese censors since its value as an organizing tool became clear during Iran’s 2009 Green Revolution.

Mark Zuckerberg already had China in his sights long before rumors of the possible stock deal arose. Last December, Zuckerberg toured the headquarters of Baidu, the native-grown Chinese search engine that benefitted most from Google’s decision to leave the country.

Zuckerberg has been studying Mandarin, and during a speech last year he asked, “How can you connect the whole world if you leave out 1.6 billion [sic] people?” (China’s population is actually 1.33 billion.)

So far, speculation that a strategic partnership is in the works has proven unfounded. But China’s investment in Facebook implies an open door to the Chinese market, which Google has now officially eschewed.

Thanks to China’s “Great Firewall” that allows most people to connect only to state-approved sites, Facebook has a relatively small footprint in China. But growth has taken off since the New Year, going from 100,000 in January to approximately 700,000 today.

Analysts believe Zuckerberg’s visit, combined with the software’s notoriety in recent Arab uprisings, has driven a particularly motivated digital elite in China to “vault” the Great Firewall using virtual public networks, which Western nonprofits have made available in their cat-and-mouse battle with the censors.

This is small potatoes in China, of course, which has 450 million internet users. But Facebook marches on. At 700 million users and rising, particularly in Asia and the Middle East, Facebook’s “community” towers over anything previously unleashed by the creative mind of global capitalism.

With its chief commercial rival now moving to counter its dominance of social networks and a spotty history of protecting its users privacy, just how much would Facebook be willing to compromise to get access to China’s 1.3 billion people?

At this point no one knows, but you can be sure that China’s twitchy leadership isn’t about to unblock the social network that rocked the Middle East unless its security officials know exactly how to track down troublesome users bent on speaking their minds.

via Why is China really going after Facebook? | GlobalPost.