Cyber Espionage ? Paranoia or a Valid Threat?

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The end of the Soviet Union bought the Cold War to an end. Somehow the U.S. does not seem to be happy until another one is created. Maybe it is a way to keep a check on itself. The accused villain is China and the latest crime it is charged with is cyber-espionage.

Dozens of countries, companies and organizations, ranging from the US government to the UN and the Olympic movement, have had their computers systematically hacked over the past five years by one country, according to a report by a leading US internet security company.

The report, by McAfee, did not openly blame any country but hinted strongly that China was the most likely suspect.


McAfee disclosed the findings on Tuesday. The US security firm, which had won access to a server used as a point of control in the attack and reviewed records going back to 2006 showing connections from the server to computers inside the United Nations, more than a dozen defence contractors and other targets.

McAfee then contacted many of the victims to determine what had been lost. The victims include the UN, International Olympic Committee and governments of the US, Taiwan, South Korea, Vietnam and Canada. McAfee said the targets included six US government agencies and 13 defence contractors.


Experts have said the campaign appeared among the largest hacking efforts to date but was far from isolated.

China has previously been implicated in a range of alleged incidents of cyberspying ? a practice Beijing vehemently denies ? including a concerted attack on Google and several attempts to pries secrets from computers at the Foreign Office.

After Google came under a so-called “advanced persistent attack” in 2009 which it said originated in China, the US secretary of state, Hillary Clinton, asked Beijing for an explanation. This year William Hague said a “hostile state intelligence agency” ? identified by UK sources as China ? had penetrated the Foreign Office’s internal communications system.

In response to the Google incident the ministry of industry and information technology told the state news agency Xinhua: “Any accusation that the Chinese government participated in cyber-attacks, either in an explicit or indirect way, is groundless and aims to denigrate China. We are firmly opposed to that.”

“phishing” email

According to the UK guardian the McAfee report is among the most thorough attempts yet to map the scale and range of such data-theft efforts.

The study traced the spread of one particular spying malware, usually spread by a “phishing” email which, if opened, downloaded a hidden programme on to the computer network. Through tracing this malware and also gaining access to a “command and control” computer server used by the intruders, McAfee identified 72 compromised companies and organizations. Many more had been hacked but could not be identified from the logs.

“After painstaking analysis of the logs, even we were surprised by the enormous diversity of the victim organizations and were taken aback by the audacity of the perpetrators,” said Dmitri Alperovitch, the company’s head of threat research and the author of the report.

Global economy

The hackathon which we have witnessed in the past months seem to pale in comparison to methodical, industrial scale attempts to seize commercial and state secrets, presumed to be carried out by many countries.

Alperovitch said state-orchestrated hacking was so endemic and ambitious it could reshape the workings of the global economy.

“What we have witnessed over the past five to six years has been nothing short of a historically unprecedented transfer of wealth,” he said. If only a fraction of the stolen data was used to gain commercial or technological advantage “the loss represents a massive economic threat not just to individual companies and industries but to entire countries that face the prospect of decreased economic growth in a suddenly more competitive landscape and the loss of jobs in industries that lose out to unscrupulous competitors in another part of the world”.

Beyond even this, he added, were the national security implications of stolen intelligence or defence files. Such was the endemic scale of this problem, Alperovitch said, that he divided large corporations into two camps: “Those that know they’ve been compromised and those that don’t yet know.”

He said: “This is a problem of massive scale that affects nearly every industry and sector of the economies of numerous countries, and the only organizations that are exempt from this threat are those that don’t have anything valuable or interesting worth stealing.”

Washington challenged

News of the newly discovered effort will put additional pressure on Washington policymakers grappling with the challenge posed by such espionage. The White House recently set out an international cyber strategy that included a directive to establish norms of conduct with regard to digitized intellectual property.

Early talks between non-governmental US and Chinese groups, observed by officials from both countries, have made limited progress, participants said.

?There may be ways to get understandings between and among adult nations,? former CIA director Michael Hayden told the Financial Times this week. ?Once you have got nations with enough skin in the game, they may be able to impose their will on others.?

The Pentagon has complained that the advantage in cyberspace always belongs to the attacker, who needs to find only a few flaws. In addition, western governments have not moved to fund the defensive measures necessary to protect private companies against the resources of other world powers.

?The government has something to offer and we want to make that available,? Robert Butler, US deputy assistant secretary of defence for cyber policy, told the FT. But Washington has yet to pass legislation that would formalize or fund such arrangements.

Not China?

Dave Clemente, a cyber security analyst from the Chatham House thinktank, said it was likely China was also targeted by hackers acting on behalf of other countries.

“It’s going in both directions, but probably not to the same extent,” he said. “China has a real motivation to gain these types of industrial secrets, to make that leapfrog. There’s probably less motivation for the US to look to China for industrial secrets or high technology. But certainly there’s things China has which they’re interested in, maybe not for commercial advantage but in a geopolitical sense.”

Clemente said McAfee’s characterization of such hacking efforts as a wholesale theft of intellectual property and secrets was “fairly reasonable”: “It’s confirmed not just by this report but by so many dozens of other incidents which build up to an overall picture.”

The effects, however, were harder to quantify: “The blueprints are only part of the picture. The technology for, say, how to build a sophisticated jet engine is one thing, but there’s a whole set of other processes ? the logistics, how to manage the supply chain to build more than one, the long-term management of a really advanced manufacturing process.”

While basic security or human errors often made hacking easier than it should be, Clemente said, even the biggest organizations struggle to stop sophisticated attacks: “There’s not much even Google can do if China’s really determined to get inside its networks. It’s not a fair fight in that sense.”

We have to wait and see if the U.S. is simply paranoid or it really does have a threat in its hands.

Source: Financial Times, Economic Times, The UK Guardian

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