“The danger is pronounced,’ warns Charles Viar, chairman of the Washington, D.C.-based Center for Intelligence Studies. ‘In my view, no one is really doing enough to deal with the Chinese threat. It is too large, and by Western standards, too unconventional.”
On November 9th, before leaving his post, China’s Hu Jintao announced that China is speeding up its full military Internet technology IT applications and development, including new weapons and equipment.
With China being the world’s worst perpetrator of cyber-espionage and theft, this is a worrying prospect.
All nations have the right to protect themselves in all spheres of engagement, but the Chinese have taken it too far. They are recognized as the worst perpetrators of cyber-theft, and present the biggest threat to US national security. Hu Jintao’s pronouncement should be a concern for all Western nations.
“Irrespective of sophistication, the volume of exploitation attempts yielded enough successful breaches to make China the most threatening actor in cyberspace, ” -US Congressional Report on China
Hu’s pronouncement came before a leadership handover, which ushered in the newest generation of Chinese Princelings .
The timing of this proclamation is crucial, for it is through such decrees that China allows a peek into the opaque workings of its inner sanctum. Typically, communist party mandates are obtuse and lack precision. This ambiguity forestalls accountability, which in the communist system is essential.
By not being specific in their mandates, the party can manipulate ‘transgressions’ of those laws into something more benign. On the other hand, when the Chinese do come forth with a mandate like that made by Mr. Hu, it will receive full commitment and resources from the communist party, and will be enforced with an iron fist.
Beijing usually uses messages at such an pivotal time as a way to put the world on notice as to their intentions. The speech and declaration by Mr. Hu is a testament that for the next five years, China’s cyber army will ratchet up its presence, technology and presumably its theft as well.
The China Cyber Command Center
In order to make good on Hu’s proclamation, China has been constructing a Cyber Command center near the Communist Party School and Beijing University.
This command center appears to be the heart of the ‘network defense, attack and exploitation systems ’. While China had relied on brute force techniques in terms of hacking in the past, it is trying to up its game.
Beijing operates under the fear of revolution and foreign interdiction. This fear, coupled with their knowledge that China’s military is no match for that of the US, has caused the Chinese to focus on cyber capabilities in order to nullify US strategic advantages.
Mr. Hu’s proclamation, coupled with Beijing’s increased focus on IT capabilities means that Internet hacking and theft by China will only intensify in the coming years.
One could argue that China has a right to defend itself, which is true. The problem, however, is that by developing its cyber capabilities, Beijing can not only ‘defend’ its sovereignty, but continue its widespread theft of military secrets and intellectual property. It is this combination of factors that has caused China to be labeled “The Most Significant Global Cyberthreat ”.
In order to better understand the China threat, consider the following example.
On any given day, cyber attacks account for nearly 15% of all global internet traffic. During the Chinese holiday, when workers presumably take leave, incidences of hacking traffic declines.
A telling example is that during China’s national holiday last year, global traffic from hackers plummeted from 15% to 6.5% . If this figure is representative of China’s behavior, it shows the global scale of China’s hacking. It also reinforces the need for concern about China’s ability and intentions.
So What, Doesn’t the US do the Same Thing?
The first question you may be asking is whether China’s actions are really a big deal. After all, the US does the same thing, right? This is actually a two part question, with the first being true and the second not so.
The US is certainly active in cyberspace, and with the assistance of the NSA it has a powerful online presence. The proof of this is in the role of the US in using the stuxnet virus .
In that instance, the US in tandem with Israel, developed a virus to be used as a weapon against Iran. Due to the secretive nature of the NSA, however, we have little to no idea what else they may be involved with.
Irrespective of their presence, however, the NSA has done little to ebb the flow of secrets being stolen from US companies each year. It is this fact that proves that by increasing its cyber warfare capabilities, China will pose an even greater threat to US security in the near term.
It has been proven that China’s cyber aggression has been paying off in spades.
Recently Beijing stole the secrets of U.S. next-generation fighters, including the F-35 and F-22, missile technology, missile guidance systems  and much more.
Couple this with the fact that China began pilfering American nuclear weapons  and technology  over ten years ago, and one can get an idea of the depth and scope of China’s thirst for stolen US secrets.
However, stealing US military tech is only part of Beijing’s plan. They can also plant and activate trapdoors and logic bombs  in military use gear that is made in China.
Even more troubling is the fact that Chinese companies provide technology that is fundamental to US infrastructure. Many of these companies are closely aligned with the red army.
It has also been shown that the Chinese have accessed trapdoors like the one mentioned above, and may have the ability to bring down the US telecommunications infrastructure even before military engagement .
When viewed from this perspective, it is obvious that China poses a credible and imminent threat to US security.
Why it Matters- Jobs and Technology
“Every major company in the United States has already been penetrated by China.”- Richard Clarke
The incidence of cyber attacks increased by 44% in 2011 alone , and that figure has only been increasing.
As a consequence of these attacks and IPR theft, US companies lose hundreds of billions of dollars per year. Last year, for instance, US companies lost more from stolen tech than Wal-Mart made in sales all year .
The impact of such theft is undeniable. The result of this is not only the decay of America’s technological superiority, but jobs as well. It is estimated that IP theft has cost tens of millions of American  jobs , and China has played a significant role in that theft.
When viewed in this light, China’s announcement becomes even more worrying.
The problem is that communist regimes restrict the flow of information, which depletes creativity. In communistic and other dictatorial regimes, people do not ‘add value’ in the conventional sense of the word. Instead of taking risks, they toe the party line and adhere to ancient principles.
Consequently, such regimes do not innovate as the ‘value added’ is not in creation, but in ‘containment’. China realizes their innovative impotence and has relied on theft of technology so that they do not fall dangerously behind .
So, What’s New?
At this point, you may be wondering why the US is doing so little to confront this foreign threat. The unfortunately reality is that one of the biggest impediments in dealing with the China threat is US corporations – those who are most at risk.
Firstly, companies do not like to admit that their systems have been breached. They reason that by announcing their vulnerability, they will suffer further attack. But this is only part of the story.
Corporate greed also plays a role as well. With a market size of 1.34 billion people, companies are loathe to confront the ‘Chinese dragon’ out of fear of reprisal. Companies would rather convince the US public that doing business in China is not that different from doing business back home, and that China threats can be managed.
Corporate heads can then rest assured that stockholders will not question their involvement with China and the risks therein. By remaining mum, these corporate directors can smirk all the way to the bank as they cash in their options and buy a new home, thanks to that fat bonus check.
As far as the U.S. government is concerned, they acknowledge that the problem exists, but have no coherent plan of defense. Chalk this up to equal measures of greed, ignorance and ‘politics as usual’.
Various governmental officials have been wooed by the Chinese and their cash. These politicians figure that by selling out our security and land , they can secure a few more years in office and perhaps a nice consulting gig with a Chinese company upon retirement.
Their actions may be out of ignorance of how things work in China. Perhaps they truly believe that irrespective of all the data that exists to the contrary; China truly wants to increase American prosperity, economy and jobs.
On a positive note, it appears that the US Congress is now calling for a comprehensive assessment of Chinese cyber-spying. They would then seek to impose penalties on companies that benefit from this espionage . The act by Congress is a good start, but is it enough?
With China literally stealing our competitive edge from right out of U.S. computers, something has to be done. At an individual level, citizens of Western nations can get educated about the hacking threat China poses, and then spread the word.
References & Image Credits:
 The Diplomat
 Free Beacon
 Communist leaders who are sons of the revolution.
 Free Beacon
 ARS Technica
 CNS News
 NY Times
 Smithsonian Mag
 Business Tech
 Smithsonian Mag
 The Cable
 Top Secret Writers
 KCS Group
 Security Affairs
 Some would argue that China is innovative and points to patent generation in order to support this theory. See the article on the myth of Chinese innovation.
 Security Affairs
 Foreign Policy