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Why China’s Hacking is Different

One of the responses that keeps coming up as everyone discusses Mandiant’s report on APT1 is, “yeah, but China isn’t the only threat, and even the U.S. engages in offensive hacking”.

That is completely true, but there is a key difference.

China is one of the only nations which uses government resources to steal intellectual property and provides it to domestic business for competitive economic advantage. Of the countries that do this (France and Israel come to mind, according to rumor), China is the only one operating at such a massive scale and scope.

Most countries engage in cyberattacks for traditional espionage or, on occasion, in offensive actions like Stuxnet designed to support or obviate a kinetic (boom) response. (“Cyber Missiles” as Gal Shpantzer called it in our research meeting today). China is using the power of the government, at scale, to steal from private businesses in other countries and provide the spoils to its own businesses.

This is an important difference, and the reason the response to Chinese hacking is so complex. We can’t treat it like traditional criminal activity because there isn’t anyone to arrest. We can’t treat it as normal government espionage because private businesses are both the targets and the beneficiaries. We can’t treat it like war or offensive operations like Stuxnet, since we sort of can’t go to war with China right now. We can’t stick it back to them and do the same thanks to a combination of our laws and the different natures of our economies. We can’t write it off like we do certain other countries which also steal our IP, because the scale is so massive and the consequences (losses) have grown to measurable levels.

In other words, China is different, so the potential responses are more complex. The threat is also greater than many of the other cybersecurity (and I use that term advisedly) problems we face – again due to the scope and losses.

There are ulterior motives all over the place right now, and little is as it seems on the surface. There are vested financial interests, both at agency budget levels and within private corporations, manipulating the public dialogue.

But that doesn’t mean the threat isn’t real, or that doesn’t need a response. We just should avoid being naive about it.

(As a side note, in the same meeting today Gunnar Peterson reminded us that China isn’t doing anything that the US didn’t do back when we were a developing nation. I believe his exact words were, “the US stole everything from Britain that wasn’t nailed down”. We are seeing a natural political progression, but that doesn’t mean we should take it up the ….).

—Rich

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By josh  on  02/22  at  02:54 AM

If enterprises really had issue with Chinese hacking they could boycott the Chinese economy (fight economic activity with economic actions). Every business (Google most publically) have decided that the economic disadvantages of not consuming Chinese goods or avoiding selling in the Chinese market are too great to stand on principle.  That’s fine, but in doing so they should recognize Chinese IP theft as the tax for a relationship with China.

Why on Earth should China stop if everyone still works with them? Until the economic repercussions are greater than the advantages it is in their best interest to continue.

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